Wednesday, 24 August 1988 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Debate resumed from 23 August, on motion by Mr Barry Jones: That the Bill be now read a second time. upon which Mr Sinclair had moved by way of amendment: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House is of the opinion that: (1) the Government has misled exporters; and (2) the amendments in this Bill constitute fundamental changes to the Export Market Development Grants Scheme and as such are a breach of the undertakings given by the Prime Minister and the then Minister for Trade during the 1987 election campaign that the scheme would be allowed to run its full course'. Mr CLEELAND(McEwen)(10.01) —When the Export Market Development Grants Amendment Bill 1988 first came into this House the right honourable member for New England (Mr Sinclair) led for the Opposition. During a wide-ranging debate the right honourable gentleman talked about what he and the late Sir John McEwen did in terms of economic management and exports. Quite frankly, coming from a yesterday's man, a forgotten figure in Australian politics, what the right honourable member for New England said was quite amazing. After all, it was Sir John McEwen and the National Party of Australia that gave this nation tariffs and damn near ruined our manufacturing industries. It is the National Party and the coalition that, as Mr Ian McLachlan, the President of the National Farmers Federation, said recently, have cost the Australian farmer $2.5 billion per year. That is straight from the farmers themselves. It is always a pleasure for someone on my side of politics to speak in this House following a forgotten figure, a yesterday's man like the right honourable member for New England. After all, who is the driving economic force today in the Opposition? It is a former Treasury official, John Stone. He is another yesterday's man, a man who did nothing for the economic wealth and health of this nation and who today drives the economic nonsense of the coalition. Of course, John Stone did nothing whatsoever to assist exports or export enhancement. The reality is that in this nation there is only one party, one government, which can achieve the export demand and enhancement the country needs. We shall not forget that it was John Stone who tried to destroy the Industries Assistance Commission's impact economic modelling project. We shall not forget his desperate attempts to sway the Campbell Committee of Inquiry into the Australian Financial System away from financial deregulation. We shall not forget his opposition to foreign bank entry, his opposition to the price of government paper being set by auction rather than by Treasury fiat. We shall not forget his support for daily bureaucratic administration of the exchange rate. After all, it was the fixed exchange rate which destroyed Australian farmers; an overvalued fixed exchange rate which increased the value of commodities on the export market; a fixed exchange rate which those opposite still will not admit was their fault and which caused such damage to our Australian exporters. Now we have John Stone and the right honourable member for New England advising the coalition parties on what to do about immigration. The reality of exports is very simple: this nation thrives on exports. This nation must export. We are one of only eight net exporting nations in the world. Exports drive our internal economy; they fix our place in the world. Without exports there is no future. This Bill is designed to improve the export capacity of small business in this country. Yet the Opposition has recently done so much damage to our capacity to export to our near neighbours. The very reality of the matter is that Australia is a Pacific-Asian nation. Geographically we cannot run away or hide from that fact. Our near neighbours, the mass economic drive in the world today, are in those regions. The Leader of the Opposition wants to be seen as a responsible Australian politician but he has publicly drawn a racist attitude towards our near neighbours. Yet at the same time he expects our near neighbours to view Australia favourably as a trading export nation. This behaviour leaves a great deal to be desired. We live in an increasingly international environment in which successful business transactions are determined not solely on financial criteria. Among other things, they also depend on cultural considerations. The ability to communicate effectively with all of our trading partners-not only English-speaking countries-is obviously an important advantage. This Bill will provide assistance in language and cultural training to ensure that our small exporting businesses have the capacity to have those cultural training and language skills which will enhance their export capacity. The recent debate in this country on immigration has received headlines in our near neighbours in Asia and the Pacific. Singapore, Malaysia, Thailand and Burma-all those countries-through their media have publicly wondered aloud what Australia's attitude is to exports. They have wondered aloud why a nation which increasingly is aware of its place geographically in the world wants publicly to say that certain sectors of the world, because of racial origin, are not regarded equally in this country. They have wondered in fact-- Mr Peter Fisher —They are big on civil rights. Mr CLEELAND —We have just had a National Party member support that: the Burmese, he believes, are second rate citizens. That is the sort of attitude we get from the National Party. It wants to throw it in all the time. National Party members stand here and talk about farmers and their exports but they do not know where their exports go and they are not prepared to treat people equally against a non-racial background. I have not heard anyone from the opposite side of the House stand up and say to John Stone, `You are damaging this nation; do not talk about racism. Do not say to our near Asian friends to whom we want to sell our agricultural goods that they are second rate citizens'. I have not heard anyone who supposedly represents farmers and the exporters stand up and tell John Stone, `You do not represent farmers'. I was at a function last Sunday at Warrenbayne-Boho planting trees in one of this Government's great conservation programs which it has funded. We planted 1,800 trees to repair some of the ravages of past agricultural practices, a dry land salinity problem. In planting those trees with some 70-odd farmers in the morning, as we bent over planting the trees and filling the holes in with dirt, we were talking about Australia's agricultural problems and the problems farmers face. Honourable members opposite would be horrified to know that the farmers there understand very well that John Stone is damaging them. They know that our markets are in Asia and the Pacific. They were horrified to think that a party that said that it represented farmers is now doing such great damage to this country's export potential. It is unarguable that Asia is moving ahead very rapidly. Those in this House who ignore that economic reality do so at this nation's great peril. In the Australian only yesterday, Tuesday, 23 August, there was reference to Thailand as the latest economic miracle. I chair the Australian-Thai parliamentary friendship group. I will lead a delegation of Australian parliamentarians to Thailand in January of next year. It is the first time a group of backbenchers will go to Thailand and meet with Thai parliamentarians on the simple basis of gaining a better understanding of the differences between our two nations. The visit is designed for politicians of this country and of Thailand to talk together about mutual agreements and the mutual problems we face as a result of distorted trading practices. Mr Peter Fisher —I was there 10 years ago. Mr CLEELAND —Again, we cannot stop these National Party people from making foolish mistakes. The honourable member says that it was done years ago. The reality is that the Australian-Thai parliamentary friendship group was an initiative started only two years ago. We have never had a parliamentary friendship group between Thailand and Australia on a formal basis. Honourable members on the other side never get their facts right. Mr Peter Fisher —I have been there. We have had back bench visits. Mr CLEELAND —I would not be at all surprised if the honourable member had been to Bangkok. Thailand has one of the great growth economies of Asia. It is running a current account surplus; has had a growth in gross domestic product for over five years in a row; and is a nation which, like Australia, is a net exporter. It quite willingly joined Australia when Australia commenced the Cairns Group to try to stop some of the distorted trading practices which are occurring around the world. I have been to Thailand some five times now. I understand that Thailand is very anxious, both in a political sense and in a trading sense, to have better relationships with this country and to form greater export and trade relationships. That is an unarguable proposition. Thailand is a nation of some 50 million to 60 million people. With its enormous engine of growth, it has the potential to buy agricultural and technological goods and services from this country. It is looking to this country to provide those services. Yet, what does this Parliament do? What do those people on the other side, who are supposedly concerned about the economic growth of this country, do to that kind of relationship? They raise in this nation a divisive, bitter racist debate. They cannot say that they did not. The Leader of the Opposition cannot say anywhere that he did not raise the question of race and he did not raise the issue of the percentage of Asians living in this country. Then we had remarks made by John Stone. The right honourable member for New England, who again supposedly supports the farmers of this country, who is supposedly concerned about where the exports of this nation are going and is supposedly concerned about the economic health of this country, stood up at the National Party Conference in Western Australia and blatantly and publicly called Asians the sort of people that we do not want to have too many of in this country. What kind of damage does that do? What kind of damage does it do to our trade? How can one possibly go to Thailand next year, leading a delegation of people seeking better understanding between our two nations and seeking better trade relationships? What can one expect from an Asian group of people after they have read and heard about the attitude or the Opposition and the coalition in this place? The reality is that Thailand does not need us. It does not need this country. Thailand has a faster economic growth than we have. It relies more upon the United States and Europe for imports and exports. That is a simple fact. Australia is the nation which is trying to go out and create a better cultural understanding in our region. It is the nation which desires and desperately needs new export enhancement programs and new export markets. It is the nation which has those difficulties. We have a domestic market of only 16 1/2 million people. In New Zealand, with the closer economic ties, we have a market of some three million people. Ours is a limited market. It is a market which does not enable Australian companies to expand sufficiently to get to a size to allow it to compete internationally. We need to be able to trade with countries which have a population of 50 million to 60 million people and which have growth economies. But, again, we have almost treasonable actions on the part of Opposition members. I do not say that lightly. It is not a statement based upon the morality of immigration or whether this country has a social problem. It is a purely pragmatic statement. Mr Carlton —I take a point of order on the subject of relevance, Madam Speaker. The honourable member for McEwen has only five minutes left and he has not spoken on the subject of the Bill yet. Madam SPEAKER —The honourable member will use the rest of his time speaking to the Bill. Mr CLEELAND —I was ranging far and wide because the right honourable member for New England did so when he opened this debate yesterday. We on this side of the House do not take frivolous points of order when Opposition members are ranging widely. However, having heard your ruling, Madam Speaker, I am happy to come back to the subject matter-the Export Market Development Grants Amendment Bill and the enhancement of our export capacity. I have been speaking all the morning on the availability of exports and the damage that is being done to our markets by Opposition members. The right honourable member for New England also criticised the Government for changing the current scheme. He suggested that these amendments would not improve the accessibility of our small business firms to international export markets. I reject that totally; it is a nonsense. It is a typical nonsense coming from an Opposition which has no economic credibility and which, after last night's Budget, should perhaps dig a hole in the ground and forever hide itself from the Australian people. The Opposition should never again embark upon an economic debate. This Bill will undoubtedly help small businesses, such as Horticultural Holdings Ltd, which is a new firm in Melbourne. It is a small business opening up new markets in Asia in products such as flowers and proteas. It is also lending expertise to Asia on tropical plantations and management. This Bill will give great heart to firms such as Horticultural Holdings Ltd which are providing expertise and service in the marketing of goods and in the arrangements between Australia and our Asian neighbours for the provision of horticultural expertise. This Bill will give them the necessary expertise and financial assistance to improve their market position. Export activities covered by the scheme must involve goods with an Australian content of at least 50 per cent or certain specified service activities or industrial property rights and know-how which are substantially the result of research or work performed in Australia. The scheme is administered by Austrade and will terminate in 1990. It is often difficult in this place to sustain a reasoned debate with the Opposition on exports. It is often difficult because this Government is pragmatic in its approach to the world and the changing economic needs we desire in order to improve our export facilities and performance. Against this we find a fair degree of nonsense and very little fact coming from the Opposition. But this country will survive and its exports to Asia will improve as a result of Bills such as this because this Government is export driven. It will ensure the future of our children and it will ensure the business in this country will be enhanced. Against this, we have the stone age mentality of the Opposition, led by men of yesteryear who are not relevant to Australia today. Their views are not relevant to the international approach that we take to our trade. That is the tragedy of this place today. We have the stone age mentality of yesterday's men and the sooner we can actually get a decent debate going on our exports, the sooner we get apologies from some of those people opposite who have slandered and criticised our Asian neighbours and markets, the better the future of this nation will be. Mr DOWNER(Mayo)(10.20) —To hear the honourable member for McEwen (Mr Cleeland) rambling on with that sort of whining rhetoric is reminiscent of one of my favourite television programs where I see on Sunday nights Kylie Mole appear with her continual whining and moaning. It is very reminiscent of that and just about as relevant. Here we have a member of the Australian Labor Party doing nothing more in a debate on export market development grants than attack the coalition for being what he described as racist and almost treasonable. Everybody knows in the first place that that is not true, but it is sheer irony, rich irony, for the Labor Party to be saying that. As honourable members may recall, if they have a sense of history, this is the party that campaigned against the Liberals in 1901 in the first election to the Federal Parliament, for a white Australia policy. What a rich irony! This is the party which was led for so long by Arthur Calwell, the man who said that no red blooded Australian wanted a chocolate Australia. That was the leader of the Australian Labor Party, the party that decided to try to kick out refugees in 1977. Mr Humphreys —Madam Speaker, I raise a point of order. This is irrelevant to the debate. I do not mind a little bit of latitude, but the honourable member is really going too far now. Let us get back to the debate. Madam SPEAKER —I suggest to the Minister that the member has not been speaking for very long. I will listen with some interest. Mr DOWNER —Thank you, Madam Speaker. I think you would appreciate, Madam Speaker, that if we are going to be called racists and treasonable, we have a right to some sort of response, whether it is relevant or not so relevant. But my concluding remark on that point is that this allegation comes from the party that tried to kick out the refugees in 1977 who were so humanitarianly and proudly accepted by the Liberal Government and, indeed, by the Minister for Immigration and Ethnic Affairs at the time, who sits in this House today, the honourable member for Warringah (Mr MacKellar). We are proud of that. The Labor Party should be ashamed of what it did and said about those Indo-Chinese refugees in 1977. So let us hear no more cant and hypocrisy from the other side. I will get back to the Export Market Development Grants Amendment Bill. Exporting is a major priority, perhaps the major economic priority, for today and one would concede that the export market development grants scheme does make a very small contribution to the export performance of Australian industry, particularly the small business sectors. This Bill comes out of a series of studies, in particular a study by the Bureau of Industry Economics, which pointed out that the export market development grants scheme was a positive scheme. As a result of that study the Government has accepted three changes. They are quite significant changes incorporated in this Bill. They are changes which, at one stage during the last election campaign, the Government promised it would not make. The Government is going to exclude exports to New Zealand from the scheme; it is going to increase the expenditure threshold from $5,000 to $10,000; and it is going to tighten the export performance test which, as a result will decrease over time the percentage of export earnings which will be eligible for this grant. As I have said, this contradicts a commitment that was made by the Government during the last election. I think that is unfortunate because not only is there the issue of making promises and not adhering to them but also industry and business in Australia must have consistency and predictability in government policy if they are to be able to get into export markets and successfully remain in those markets. By continually changing these programs, and breaking promises in the process, the Government is creating uncertainty in an area of our economy where we desperately need certainty. The Leader of the National Party of Australia, the right honourable member for New England (Mr Sinclair), reminded the House of things that the then Minister for Trade, Mr Dawkins, said during the last election campaign. I will repeat his quotation of the Statement made by the then Minister for Trade on 23 June 1987. He stated: I have also assured them- that is, the export community- that we will not undermine that effort by chipping away at the spearhead of Australia's export drive . . . He meant the export market development grants scheme. That is exactly what the Government is doing. It is chipping away at it and allowing fewer people to be eligible for the scheme. As a consequence, I suppose it is saving money. The Government is saving $51m in 1988-89 and $59m in 1989-90, but that means less money and less support for Australian exporters. As I have said, consistency must be a key theme of government policy in this area but that is not what the Government is doing. It is a scheme that has proved helpful for small business. I remind the House that in 1986-87 Australia received $41 of export income for every grant dollar paid under this scheme. So it is an enormous cost effective scheme and one which is well worth continuing. But as a nation we still need to be doing much more to encourage our exporters and to encourage the overall export performance of Australia. One only has to look at the latest revised balance of payments figures which came out yesterday-they received no publicity in the media today; I suppose the media were overwhelmed by the Budget-to see how serious our problems are. The balance of payments deficit for the last financial year was nearly $12,000m. Honourable members might recall that the Treasurer (Mr Keating) predicted $11.51 billion. Indeed, two or three week ago he boasted that the initial provisional balance of payments figures showed his prediction to be precise. In terms of our economy it was a disastrous prediction. It seemed to be right according to the provisional figures. The revised figures that came out yesterday showed that it was over $400m more than had originally been believed. When one looks at what is happening with our balance of payments, one must, as an Australian, worry about the performance of this country. Let us get this into our heads: exports over the last year grew by 4 per cent in volume terms, while our imports grew by 9 per cent in volume terms. The only reason that our balance of payments deficit has slightly improved over the last 12-month period is the enormous improvement in commodity prices world-wide. If one looks at the figures for the change in the value of our exports one sees that it has increased by about 14 per cent. It is only because of a bonanza in commodity markets that we have avoided a really deleterious decline in our balance of payments over the last 12 months. If the terms of trade had remained at the low level of the December quarter 1986, it is estimated that the balance of payments deficit would have been approximately $4,600m greater than it turned out to be last year. In other words, it was a deficit of around $16 1/2 billion. That is how lucky we have been. Those figures show that the underlying performance of the Australian economy in export markets is still exceedingly weak. Worse than that, our underlying performance has been deteriorating, not improving, over the last year. There are two aspects to how we must try to improve our balance of payments situation. First, we must look at changes to the way we manage our domestic economy. Second, we must look at the way we, as Australians, will be able to operate in the international marketplace. As far as our domestic performance is concerned, I think those arguments are fairly well known. I think there is now broad acceptance of the fact that we need to reduce the taxation burden throughout the community, including the business sector, to make it more competitive. That is not only Federal taxes but also many very regressive State taxes because the State taxation system bears particularly heavily on the business sector. We have to do something to improve labour productivity in this country. We do not want to slash people's wages; we want to improve the output per man or woman in the work force in Australia, as has been successfully done in countries such as the United Kingdom. We must go down that path. We must concentrate on improving productivity. We have to continue with the process of deregulation and getting rid of many restrictive work practices. Deregulation is urgently required in export related activities, in particular in our ports and in our shipping industries. They have enormous priority for Australia and nothing has been done about it over the last five years. Something must be done to deregulate and make more competitive our ports and our shipping industries. Also I think that Australian firms will have to continue to work towards achieving greater economies of scale than they have done so far. I should think that that will create considerable controversy in the years ahead as there is more and more pressure for takeovers and mergers so that Australian companies will be more able to compete in the international marketplace. However, we also have to look away from our domestic economy to the way we as Australians are going to be able to operate in the international trading environment. As a nation we are faced with a very serious international trading climate. We are not a big nation and we have a sense of powerlessness in what we can do about that very difficult international trading environment. Our rural industries, really since 1973 when Britain joined the European Community, have been very seriously threatened by a loss in access to what were very important markets. When we went out and looked for new markets we were pushed out of those by the subsidies paid through the common agricultural policy to European Community exporters. That policy of export subsidies has only been made worse by the export enhancement program of the United States Administration. Also we live in a world in which, whilst tariff barriers have tended to decline, non-tariff barriers have grown and grown. All sorts of restrictive international trade practices have been thrown up to replace tariffs as a way of obstructing international trade. As a small country, both economically and in terms of population, at almost the southernmost point of the globe, we have had to live with a rise of economic regionalism, really since 1958 when the European Community was created. In 1992 the European Community is going to create what it describes as a single market. That will really be the culmination of efforts since 1958 to create a proper regional trading bloc within Europe. The United States and Canada have recently signed a free trade agreement. There are other moves towards regional trading arrangements in other parts of the world. So far we have been left out of those negotiations towards regional trading arrangements. If the Uruguay Round does not work successfully-and I am rather pessimistic about it myself-there will be an accelerating move towards regional trading blocs. We have to be well aware of that trend and we have to look very carefully to see what we can do to make sure we do not become completely isolated in the world of international trade. I would have to say that the establishment of the Cairns Group has been a positive initiative by this Government. I very strongly support that. The efforts of the Cairns Group to make the Uruguay Round a successful round of negotiations to create a much more liberal international multilateral trading regime is, of course, the ultimate objective that we should have and should continue to pursue. I say only that I am not very optimistic that we will achieve that sort of outcome as a result of, particularly, the protectionist policies of the European Community towards countries outside the Community and, in particular, because of the enormous growth in export subsidies in the European Community and the United States, as well as in other parts of the world. If the Uruguay Round fails, or if the outcome of the Uruguay Round is profoundly disappointing-if it does not meet the expectation of the optimists-then I think that we have, as I said earlier, to face the reality that there will be a greater move towards regional trading blocs and that Australia itself, if it is not going to become isolated, will have to go out and promote a bold and constructive initiative to ensure that our region becomes one of the world's most dynamic economically. We must ensure that in terms of international trade we are probably involved in and integrated into the Asia-Pacific region. If the Uruguay Round does not succeed, we will have to go to the Association of South East Asian Nations (ASEAN) and talk with some of the Pacific Rim countries about creating an Asia-Pacific common market. That will involve building on the closer economic relations arrangement with New Zealand. It will involve building on the South Pacific Regional Trade and Economic Cooperation Agreement with the South Pacific countries, including particularly as a first stage, the ASEAN countries, in an arrangement that would provide for free trade in the longer term, perhaps in regard to all products, with some sort of customs union in the way that the European Common Market has evolved since 1958. We are not talking about some move towards political union, as some people in the European Community are, although I note that Mrs Thatcher regards it as airy-fairy, pie in the sky talk, and she is probably right. We are not talking about that in Australia; we are talking about economic integration through a common market arrangement with the Asia-Pacific region if the Uruguay Round turns out to be unsuccessful. That will require an enormous amount of vision and a degree of successful diplomacy on the part of Australia. More than that, I think Australia should take the lead. Australia should go out into the Asia-Pacific region and remind the countries of that region of the consequences of the evolution of regional trading blocs. It should be saying to those countries, `We are dynamic, we have a wide variety of resources and an enormous degree of complementarity between our economies. Let's get out there and work together and not be left behind by the rest of the world as it formulates its international trading blocs'. If the Uruguay Round is unsuccessful, I think a regional common market will do a great deal to give the Australian economy the opportunities it deserves and avoid the isolation which otherwise we could slip into economically. It will also do a great deal to bring to our region a degree of coherence and direction-a degree, if you like, of political mutual understanding. They are not just empty diplomatic words, even if they may sound a little like that; they are words that mean we must bind ourselves together more closely politically. We live in the same region. We cannot avoid that, whether we want to or not. It is a fact of life. We must work together as a region. That is our future as a nation. We have to face up to that whether we like it or not. I am not in any way alluding to the immigration debate or in any way being critical of the Opposition's stand in the immigration debate. I support what the Opposition has said in that debate. For all the rhetoric one gets from the honourable members on the other side of the chamber about how the immigration debate somehow will damage our relations with countries in the Asia-Pacific region, let me remind the House that all those countries, without exception, have an immigration policy similar to, and in many cases rather more draconian than, the immigration policy proposed by the Federal Opposition. We know that our immigration policy is not racially based. We are saying that to our Asia-Pacific neighbours and they accept it. But they also retain the right, within their own countries, to determine who can and who cannot enter their countries. If we said anything other than that, they would be enormously surprised. I do not accept a word of all the rhetoric as to how Opposition immigration policy and the debate generally in Australia will damage our relations with our region. There is no evidence that that is the case, and I am certain that it will not be the consequence. Quite to the contrary, if as a Parliament we are prepared to go out and say to our regional neighbours, `We want to work more closely with you economically, and if the General Agreement on Tariffs and Trade talks-the Uruguay Round-do not work, we will have to consider some sort of regional trading arrangements among ourselves, otherwise we shall all become isolated', I think that would be warmly welcomed in our region. Instead of our getting involved here in some sort of partisan debate about whether or not discussion of immigration in this country will damage relations with other countries, let us get out there and do something constructive that will be relevant to them. Let us say to them, `If the Uruguay Round fails, we have to learn to work together in some sort of regional trading arrangement'. I think the export market development grants scheme will provide a little assistance to us in trying to improve our balance of payments, but we must look at the bigger issues if we are to succeed into the twenty-first century. Mr COURTICE(Hinkler)(10.40) —The Treasurer (Mr Keating) and the Minister for Science, Customs and Small Business (Mr Barry Jones) indicated at the time of the May economic statement that there would be changes to the export market development grants (EMDG) scheme. These changes were recommended after investigations carried out by the Bureau of Industry Economics and the firm Price Waterhouse evaluated the entire program. Grants are awarded on the basis of 70 per cent of eligible expenditure in excess of $10,000. The grants are not paid where export earnings exceed $20m in a grant year. In addition there will be a reduction in the maximum grant which can be claimed from the present $200,000 to $150,000 for recipients of more than eight grants and $100,000 for those who are in receipt of a tenth or subsequent grant. There is also a requirement that new claimants submit an export market plan. Most studies, including one carried out by the Australian Institute of Management in 1987, have found that an export plan is a key feature of the approach of successfully established exporters. The closer economic relations (CER) agreement signed with New Zealand has also forced changes in this scheme. The agreement views Australian trade with New Zealand as a one entity arrangement and the EMDG scheme would appear to have better application where there is least knowledge of costs and benefits. Reviews have suggested that arrangements between Australia and New Zealand are very well known. The Government has recognised the need for continuing progress in developing an export orientation in manufacturing. Certainly my contacts with Austrade at a local level lead me to believe that the Department of Industry, Technology and Commerce is well respected by the business community. I have had the privilege of hosting two Austrade seminars in my electorate, one in Gladstone and the other in Bundaberg. Both were well attended and business people have said to me that the departmental contacts made at those seminars have been ongoing and beneficial. Austrade sets aside a major part of its seminars to explain the export market development grants scheme. The information kits that Austrade makes available on its wide range of services are proving very popular. One of the problems in provincial areas is, of course, the lack of access to information because of geographic location. The seminars are proof of a growing interest by manufacturers and small businesses in developing and exploring the export potential of their product. A guest speaker at the Austrade seminar held in Bundaberg, a Mr Cliff Fleming of Electra Breweries (Bundaberg) Pty Ltd, pointed out that he had explored the idea of exporting soft drinks to New Zealand. Under these new arrangements such development would not qualify for a grant. However, his operation has now grown into a $3m export business which earns revenue for Australia. As a direct result of both his New Zealand experiences and meeting with Austrade officials he is now seeking to expand his commercial enterprise into the South East Asian market. The horticultural industry in Bundaberg is emerging as the great growth industry in terms of income earned for primary producers and employment growth for workers. One large tomato producer recently received a $20,000 grant from Austrade to help in the study of refrigeration techniques for exporting tomatoes. There has been enormous interest in the region particularly from the Pacific Rim group of nations in both investigating and developing export markets from the region. I would like to see government at all levels give emphasis to the value adding of primary industry products. For too long we have taken the view that we should just export raw commodities but in so doing we have been virtually exporting jobs. In the provincial cities of Queensland there is a need to create diversity and not just concentrate on our great primary products. The creation of employment from value added primary industry products will assist in the revitalisation of some provincial cities. It will add to the vibrancy of places such as Bundaberg. It will assist small business and it will assist employment growth. It is true to say that Queensland provincial cities have had an unemployment rate higher than the State average. The creation of value added industries, particularly with an export emphasis, will do much to assist in this process. For this reason I would encourage senior officers in the Department of Industry, Technology and Commerce and in the research departments to continue to undertake seminars and discussion groups in regional cities. The results may not be immediate. However, in due course, people-and I believe there are many enterprising people in rural and provincial Australia-may run with and develop one idea. If one idea leads to an export market it is well worth the effort and time. I would like to spend a few moments speaking about the development of exports out of the city of Gladstone in my electorate. The decision to build a gas pipeline from the Denison Trough to Gladstone has meant a great investment for this region. Already major multimillion dollar investments have been announced. ICI Australia and Minproc are establishing plants in Gladstone. There is talk of a third potline being established at the Boyne Island smelter. This is positive news for Queensland and good news for Australia. Gladstone is a manufacturing oriented city in central Queensland and the announcement that these large companies are coming to Gladstone will focus more attention on the region. It is my hope that in time there will be a number of downstream small business set up as a result, with one feeding on the other. Small businesses can certainly learn and pick up expertise from the larger manufacturing industries that are already established. It is these small to medium companies which benefit most from the export market development grants. Small companies may well often feel overawed at the prospect of undertaking export for the first time. Inevitably, concerns arise as to whether they will get paid or whether the ship will arrive on time. There are a whole maze of concerns which affect small business. However, small business can obtain confidence from watching larger firms in action, particularly when the large firm is located in the same provincial city. This is the hope I have for the continuation of the EMDG scheme. I think it will be in the long term best interests of Bundaberg if the city has increased economic, social and cultural ties with the city of Gladstone. If Gladstone is to develop and expand, as I am certain it will, then it makes sense to have an orientation towards that success. There are inevitable spin-offs. If the cities are now playing sport against one another and are involved in social links, then clearly economic considerations would follow. Above all, it makes good sense to be tied to economic winners. Gladstone is a winner in manufacturing and Bundaberg is certainly a winner in agriculture. To date, 326 companies throughout Queensland have received EMDG grants. In my electorate Austoft Industries, Bonel Brothers Pty Ltd, Central Qld Producers Co-operative Association Ltd, Fritz Niklaus Isenring in Gladstone, Gulf-Ag Pty Ltd, in Bundaberg, and the Golden Mile Holdings Pty Ltd in Mundubbera have all received grants under the scheme. Austoft, a locally owned company-as I mentioned in my maiden speech, it has bought out an American company, Mustang-is leading the world in expertise in industrial relations. It is showing what can be achieved in provincial cities and has overcome many of the problems we face with unemployment. It is a great credit to people like Leo Mulcearns. Indeed people could learn from the example of companies such as Austoft. I am pleased to see the close association that Austrade and Austoft have had over the last few years as well as the direct benefit to the 288 men and women that are employed in Bundaberg through Austoft. It is fair to say that the EMDG scheme, as well as the restructuring of Austrade, have developed an exporting ethos which is shared by a number of companies in my electorate. Importantly, this is occurring in the manufacturing sector. The Queensland manufacturing sector has taken a hammering throughout the 1980s. Queensland has had high unemployment and the overvalued dollar and high protection left many companies defenceless against full blooded competition. Employment in manufacturing in Queensland is still the lowest in Australia, there is still a long way to go. It was quite distressing to read the Australian Bureau of Statistics figures which showed the continuing decline. The bright spot is that last month's figures showed an increase over the previous month for the first time in a long time. It is still too early to say whether this is an aberration or the start of a long climb back for Queensland manufacturing. There is still a tendency in Queensland to engage in featherbedding of new industries. The quicker we can respond to the challenges of new and alternative technologies the better placed we will be to compete internationally. The world does not owe us a living; we have to get out there and do it ourselves. The Government has in place a number of initiatives, including education and training. In provincial cities it is important to give students the widest possible choices in education, and I was pleased to see the initiatives brought down in the Budget last night. Bundaberg, Gladstone and Gayndah are served by technical and further education (TAFE) colleges. Both Bundaberg and Gladstone are now offering the first year of a degree course in business studies. The Government's White Paper on higher education offers some hope for expansion of these services. The electorate of Hinkler has one of the lowest percentages of people with tertiary qualifications in Australia. It is a great pity that the State Government has never shown great concern for knowledge, learning and education. If we are going to become competitive and encourage manufacturing and high technology we need people with qualifications to take up those positions. It would be a tragedy if we needed to encourage people from other countries to take up positions when we have so many young talented people in our own nation. That is why I am so pleased with the initiatives of last night's Budget in regard to higher education and the link with employment that it has under the Minister for Employment, Education and Training (Mr Dawkins). Obviously, any measures to increase the opportunity for students to study will increase the skills base in provincial cities. That is very important for employment once firms introduce these new technologies and undertake those exports. In line with the need to update technology has been the need to upgrade our research and development base. In an excellent series of articles the Minister outlined the performance of the nation compared with Organisation for Economic Cooperation and Development nations when it came to research and development. The latest information suggests that in 1986-87 research and development in Australian business exceeded $1 billion and has increased in real terms by 85 per cent over the level of 1981-82. This is a further indication of the vision and direction in which the Federal Government is taking employment opportunities. It is in stark contrast to those people who were running this country prior to 1983. Business research and development as a percentage of gross domestic product has risen from 0.24 per cent to 0.42 per cent. This policy framework, as well as a sensitive tops down reduction in tariffs, will give Australian manufacturing its best chance to carve out international markets. This year for the first time we saw the tariff monkey taken off the back of manufacturers and farmers. I think that taking away those input costs is the best way to go. Subsidies have never been and never will be the answer. All that Australian manufacturing and agricultural industries need is a competitive environment, and that initiative has created the best environment we have seen for 40 years. People in the TAFE sector have said to me that there is still a huge reluctance by firms to undertake joint venturing arrangements when establishing business enterprises. It is hoped that with more exposure on international marketplaces the whole business sector will be more dynamic and entrepreneurial. I believe we are seeing that to the degree-this was pointed out last night, and we welcome it-that Australian manufacturers and businesses are earning money overseas, investing in other nations and those profits will come back to Australia. That trend will continue to grow as the health of the economy improves, as it surely will. We will see Australian businesses given the best opportunity to take the ball and run with it. A continuation of the EMDG scheme will signal to business people that the Government is willing to provide them with the incentive to undertake exports. The information that is available is what is needed. The changes introduced by the Minister will assist in the cost effectiveness of the scheme. At this stage I wish to thank personally the Minister and his staff for the consideration they have shown to me and to my electorate when difficulties have arisen. He has sensitively responded and the industries in my electorate have been the winners as a consequence. I would also like to comment on the closer economic relations arrangements. I think CER is a wonderful initiative. As a consequence of the signing of CER we are seeing two nations, who together have a pool of some 20 million people, having a greater opportunity to take on the world in trade and to win. It involves not just the domestic markets of both nations but also the joining of expertise of marketing that we can use in breaking down the barriers overseas. Australia has demonstrated that we do not need high walls of protection. We do not have to hide behind the subsidies of the European Economic Community. We can prove that we can go out and beat the world. I believe that the grants under this scheme are a great benefit to smaller manufacturers and businesses who want to take up the challenge for themselves, the men and women who will be employed as a consequence and the nation. As I said, I think the Budget brought down last night has been the most positive development this year. It gives the greatest opportunity for anyone who wants to get involved in manufacturing and exporting and it gives them a chance. Everybody should be confident that we have turned the economy around. We need this incentive to get out and beat the world. Mr PETER FISHER(Mallee)(10.56) —The debate on the Export Market Development Grants Amendment Bill indicates clearly that trade and increasing our export performance are and will of course remain the lifeblood of this nation. The Bill is an integral part of developing both new products and markets. While I acknowledge the very positive contribution just made by the honourable member for Hinkler (Mr Courtice) and, in particular, a little earlier by the honourable member for Mayo (Mr Downer), I believe the comments made by the honourable member for McEwen (Mr Cleeland) were a disgrace to the name of his electorate. History shows us that Sir John McEwen was a powerhouse of Australian politics, particularly in trade. This House should acknowledge that McEwen opened up the Japanese market and started the Australian-Japanese trade agreement. The Australian Labor Party (ALP) fought that tooth and nail. I also remind the House that through incentives to industry back in the 1960s, which is many years ago now, John McEwen was basically responsible for the enormous regional development that took place throughout Australia, particularly in the Murray valley area. If there is any criticism of the earlier policies, it does not rest with McEwen; it rests with subsequent governments which did not take action to change circumstances to meet the changing needs of world trade. I also remind the House that the former Leader of the now National Party of Australia, Doug Anthony, opened up the beef market in Korea that was subsequently sabotaged by this Government when it later took away preferred status to protect the interests of the Broken Hill Proprietary Co. Ltd. As the honourable member for Hinkler has mentioned closer economic relations, I remind the House that Doug Anthony, against fairly severe opposition at that time from his constituency, instigated CER arrangements between Australia and New Zealand. Incentives to industry have been a part of this Parliament's role for many years. A range of incentives were instigated many years ago in the form of export market development allowances and payroll tax rebates which were subsequently handed over to the States. In 1973 the ALP reviewed some of those incentive measures. Changes were made. Some of them were very positive in overcoming shortcomings by which benefits accrued to large companies and did not cover statutory boards, cooperatives and some of our small businesses. Those changes were welcomed, but they were also made in an effort to reduce costs. In 1978 the then coalition Government introduced a new scheme, the export trade expansion grant scheme, which was extended to cover some of our most rapidly developing industries, particularly the travel and tourist industries. The aim was to increase exports by giving direct financial incentives. In one year those incentives reached some $200m. Why are incentives important to industry? Looking in depth at the Budget last night we realised why such incentives are absolutely essential to this country. I commend Paul Kelly, the lead writer for the Australian, on his very perceptive commentary on the Budget of last night. He said that it depends very much on God, who is probably the only one who can ensure that commodity prices stay at the level they are and continue to contribute to our national well-being-and of course on Bill Kelty, who has to hold the wage package! Without these two factors I am quite sure that the very rosy comments in relation to the Budget of last night will not be justified. We still have a massive foreign debt of $115 billion at June of this year, which was up $10 billion on that of the previous year. We know that this equates to $7,000 for every man, woman and child in Australia. We recognise that in an eight-year period this debt has grown from $1,000 to $7,000 per head. There is no doubt that the growing size of this debt poses a foreboding significance to current and future generations of Australians. If left unchecked by the Government or by this Parliament, more and more of our farms, properties and industries will move under the control of overseas interests. As I said, exports are the lifeblood of our nation. In 1987-88 exports grossed $40.8 billion, which was up $5 billion over the figure for the previous year. We should recognise and not cloud the facts that average export prices, while they increased by some 9.5 per cent, represent a real increase of only 4.5 per cent, and export growth in 1988-89 could well be affected by any possible downturn in commodity prices. Neither the honourable member for Hinkler nor the honourable member for McEwen referred in any great detail to this Bill. The reason is obvious: as a result of the May statement very significant changes have been made to the export market development grants legislation. I refer in particular to some remarks made in June last year by the Prime Minister (Mr Hawke). I quote from a speech he made on 16 June: Stability and certainty in the formation and implementation of industry policies are crucial. Industry assistance policies must therefore be allowed to run their course. Export assistance programs are particularly valuable to small and medium-sized businesses attempting to enter foreign markets. The then Minister for Trade, Mr Dawkins, in a media release on 26 June, moved to reassure Australian business that a third term for the Hawke Government would ensure the maintenance of all functions of the Australian Trade Commission, Austrade, and the continuation of the export market development grants scheme. He said that he had written to all recipients of the grants assuring them that the Hawke Government regarded the scheme as an integral part of Australia's export effort. He said: I have . . . assured them that we will not undermine that effort by chipping away at the spearhead of Australia's export drive, Austrade. Of course, that is exactly what this Bill does: it chips away at our export drive. Probably only one of the amendments proposed in this legislation has any really positive effect: foreign language training will be allowed as an eligible expenditure. I acknowledge that while some of the other amendments will put greater accountability into the scheme, the others basically reduce the level of assistance that can be applied. I refer, for example, to the minimum expenditure that a person must incur before being eligible for a grant. This has been increased from $5,000 to $10,000. Export promotion expenditure in and export earnings from New Zealand are excluded from the scheme. The maximum grant payable as a ninth grant has been reduced from $200,000 to $150,000 and tenth and subsequent grants have been reduced to $100,000. Neither the speech by the Prime Minister nor the media release by Mr Dawkins have been honoured. Once again, many of the promises that have been made have been overturned in subsequent changes. I will not refer to the comments that have been made by my Leader, the right honourable member for New England (Mr Sinclair), and the honourable member for Mayo. However, I will refer in more detail to the changes, some of which, as I have said, are positive, but most of which are negative. The thinking that most concerns me and most of the industries in my constituency is the fact that many of these changes have been made without consultation and, in my view, have a major element of retrospectivity. I would like to give the House one example. Last year the Australian dried fruit industry, which operates almost entirely out of my electorate, contributed in excess of $100m to the Australian economy. In 1987 it lost $110,000 from a previous allocation of assistance which it received from the Overseas Trade Promotion Committee. As a result of this piece of legislation, the industry will suffer a further loss of $100,000. I believe that this will seriously hamper our export effort. The Australian Dried Fruits Corporation spends some $800,000 on promoting its industry. Here, of course, is a situation where a small horticultural industry in terms of our total economy is being disadvantaged by a legislative change. This Government asks business to run its operations efficiently and effectively, but the action that was taken in May will seriously hamper business in the next financial year-after all the marketing and promotion planning for the industry was carried out early in 1988. We can relate the Government's treatment of rural industry, particularly the dried fruit industry, to similar incentives that are given in the United States of America. Some $10m annually is put into the United States raisin industry, and 90 per cent of this amount comes from the Government. No mention was made in last night's Budget of the proposed changes which will further reduce export assistance by an additional $52m in the next financial year. We also notice in last night's Budget that there is quite a significant decline in Government funding for the Commonwealth Scientific and Industrial Research Organisation, which has had a major impact on the diversity and quality of our export drive, particularly as it relates to rural commodities. We see substantial reductions in respect of Austrade activities and reductions in support for small business, innovation and technology development programs. I conclude by referring to a letter that I have received from the Australian Manufacturers Export Council. I genuinely believe that only by maximising the potential of our export industries will we be able to ensure that the glowing words read last night by the Treasurer (Mr Keating) in relation to our future will ultimately be realised. The Australian Manufacturers Export Council is extremely disappointed at the Government's action in the legislation now before us, particularly as it applies to eligibility criteria for the scheme. The Council believes that fundamental changes are being made. Those changes are considered by the exporting community in particular as a breach of an undertaking given by both the Prime Minister and the then Minister for Trade during the 1987 election campaign. Bodies which are represented on the Manufacturers Export Council have had very limited opportunities to compile and present their side of the case on this very important issue because, as I said, action was taken without consultation. Of course, this Parliament would be aware that the scheme under discussion provides one of the only positive forms of assistance specifically aimed at assisting exporters, large and small alike, to overcome many of the difficulties in the highly competitive international marketplace. As I have already said, the decision taken in this Bill effectively reduces maximum grant levels from $200,000 to $100,000 for those exporters who have received grants for over nine years. Mr Tim Fischer —It is a breach of contract. Mr PETER FISHER —It is a breach of contract. Of course, the most significant thing is that these exporters are the consistent ones. They have been in the market and the export trade for a long period. As the honourable member for Farrer says, it is a complete breach of contract to take the grant away from the people which this legislation is supposedly assisting. Of course, more importantly, this decision ignores the vital need both to sustain effective promotion in existing markets and to develop new ones. In the context of this Bill we could refer to many of the exciting developments that are taking place across Australia in rural industry and in small manufacturing industry. We could refer to the incredible diversity of crops that have been developed throughout Australia in the broad acre area with new products such as chick peas and faba beans commanding high prices and being introduced into new markets throughout the world. We could talk about our horticultural industries and such new crops as cut flowers. We could talk about the massive expansion in my electorate in particular in table grape exports, which have increased over the last three or four years from a very small number of containers to South East Asian markets to a very large number of containers-up to 1,100 containers-this year to South East Asia and Europe. I have no doubt that the future of this country is going to depend very much on the capacity of our rural exports to meet the rapidly changing circumstances of world trade and to counter the very corrupt trading practices under which our exporters have to operate. Mr BARRY JONES(Lalor-Minister for Science, Customs and Small Business)(11.12) —I thank honourable members for their contribution to the debate. The Leader of the National Party of Australia (Mr Sinclair) claimed that the amendments to the export market development grants (EMDG) legislation made no recognition of the contribution of the rural and mining industries to Australian export performance. It is apparent and self-evident-nobody has ever denied it-that for the foreseeable future we will have to rely very heavily on the exports of raw materials, particularly minerals, wool and foods. But we still need to diversify the range of our exports. The fact that there is a reduction in the proportion of total exports that have come from the primary sector is not a sign of weakness. It is actually a sign of strength because, as I have said so often in the chamber, the fastest growing areas of world trade have been for many years in manufactured goods, brand name goods and goods with high added value. I commend the honourable member for Mallee (Mr Peter Fisher) for what he was saying, because he emphasised that, even within the agricultural sector, there is a movement away from bulk commodities and towards high added value exports. I remember being staggered a few years ago when talking to one of the senior Ministers from the Netherlands, who pointed out something that I was not then aware of. He told me that in dollar terms the Netherlands came second to the United States of America in the value of its primary exports, not just relatively, but in absolute figures. If we were talking about volume expressed in tonnes, Australia and Canada would, of course, be far ahead of the Netherlands. But the Netherlands is exporting such things as seeds, corns, cut flowers, cheeses and a whole number of high value added farm products. This means that a tonne of primary exports from the Netherlands might be measured in terms of tens of thousands of dollars-- Mr Peter Fisher —They get a lot of subsidies. Mr BARRY JONES —Not in the case of the Netherlands because that country is exploiting very specific markets which are prepared to pay very high value. Of course, Australia has the problems of distance, but we are making an effort in that direction, as the honourable member for Mallee was saying. I also point out to the honourable member that it is perhaps not quite fair to invoke the Federal election of July 1987. A lot of funny things were said in that election campaign. It is true that at that stage the Liberal Party and the National Party were not in coalition. They were not the terrific mates then that they are now. It is worth while pointing out that the contribution of the Liberal Party to the economic debate last year in relation to the export market development grants scheme was to say that it should be abolished. In the Liberals' election policy John Howard said that as a `major contribution to getting the level playing field' there should be the restriction of railway subsidies, the reduction of industry bounties to the corporate sector, the abolition of fertiliser dumping assistance, the termination of the export market development grants scheme, the abolition of the petroleum products prices scheme and the reduction of the role and cost of Austrade. I am not sure that we would get a ringing endorsement from National Party members on that particular line. Mr Peter Fisher —No; no way. Mr BARRY JONES —No, I did not think so. Nevertheless, the point is very well made. The Government has recognised the vital role of exports in fostering general improvements in the economy. The EMDG scheme has been maintained and the essential elements of it remain unchanged. The honourable member for Mallee referred to the important role of God in determining commodity levels, but that is the AMDG scheme! Mr Mildren —You have to have a classical education to know that. Mr BARRY JONES —Yes, and the honourable member is the only one who recognises that. As I said, the essential elements of the scheme remain unchanged. But no government has unlimited funds for any purposes. The amendments contained in the Bill now before the House will target export market development assistance more precisely to where it is most effective-that is, towards small and medium-sized firms which are developing new export opportunities. In a sense I think there was a fallacy in what the honourable member for Mallee was saying. He suggested that people should be rewarded because their past performance has been good. He suggested that if people had been exporting and doing well for nine years they should not have the amount of their subsidy reduced. I would have thought that what we are really striving to do in this scheme is to try to provide assistance to those people who are trying to make their first successful sale, their first export, rather than simply continuing to reward those who have had a long period of good performance. That does not mean that the Government has forsaken its commitment to the export community. Given the allowance for growth in the amended scheme-there is no cap provided on the scheme-it is expected that the Government will provide about $150m to support export market development in each of the two remaining years of the scheme. That is considerable. These amendments specifically address the areas for potential improvement in the scheme while they do not pre-empt the outcome of the announced full scale review of the program to be completed by 1990. The proposed amendments are aimed at providing more cost effective and measurable assistance to committed, newly emerging-that is the emphasis-small and medium-sized exporters. Furthermore, under the new arrangements, the Government will make available an additional $5m in each of the next two years to establish new discretionary export market development activities to operate in conjunction with the scheme. I thank honourable members and the right honourable member for New England for their contributions to the debate. I wish the Bill a speedy passage. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Barry Jones) read a third time. Debate resumed from 25 May, on motion by Mr Peter Morris: That the Bill be now read a second time. Mr MOORE(Ryan)(11.20) —The legislation we are debating here today is the Taxation Laws Amendment Bill (No. 3). The coalition will not oppose this Bill. Overall, the changes proposed are basically non-controversial and seek to remedy some anomalies. To the extent that the motivation for the Bill is to ameliorate the burdens of taxation on certain activities, we have no objections to it. Nonetheless, this Bill consists of a further 54 pages of amendments to the previous legislation. It represents yet another example of the Government's ill-considered and slipshod drafting in the past. The Bill seeks to change substantiation and fringe benefits tax rules to ease documentation requirements. And, as with most taxation laws, the amendments proposed can be technically complex. Mr Braithwaite —And this is the simple tax Bill they were telling us about. Mr MOORE —Yes, as the honourable member for Dawson would know from his profession as an accountant. A case in point is the proposed amendments to the capital gains tax law to extend the roll-over relief provisions. The roll-over relief provisions-and that was not from the beer excise change last night-in the capital gains tax area basically ensure that no tax liability arises as a result of transactions-- Mr Punch —That is about the best joke of the year! Mr MOORE —I thought the best joke was making you a Minister! As I was saying, no tax liability will arise as a result of transactions where no change in the ownership or the nature of the asset occurs. There is one area of the Bill dealing with this topic which I would like to take a few minutes to cover. In the past the conversion of crown leases of land to freehold, and this is well known to Queensland, was considered to have created a new asset for capital gains tax purposes, such that a pre-20 September 1985 lease-that is, the date on which the Government introduced the capital gains tax-that was converted to freehold after that time and sold would be subject to capital gains tax. Those who come from Queensland will recognise that until fairly recent times the vast majority of grazing lands in that State were held on a lease basis. There were homestead leases and grazing leases and the encouragement by the State Government to convert to freehold has been taken up, to the considerable benefit of those landholders. Now, through clause 37 and others of this Bill, the conversion of a crown lease to freehold will not be subject to capital gains tax if the freehold area covers the same, or substantially the same, area of land. The coalition welcomes these changes because the nature of the changes reflects the true position. The land has not changed hands; it has merely changed title in relation to its continuing ownership. However, we have received various representations pointing out the possible creation of new anomalies in this area. For example, we have received other representations from Queensland. Under the Land Act of Queensland people can be granted leases which are not strictly, but almost, identical with the tenure of crown leases under that Act. Such leases, for example, apply to tourist islands which operate resorts. These resorts are subject to strict government control akin to crown leases. Indeed, a tourist lease on an island can come under very severe constraint from government, as my experience tells me with Great Keppel Island. The crown leases on that island were multiple-there was a pastoral lease, a tourist resort lease and a Commonwealth Government-held lease over an airstrip. As a consequence, it would appear that those leases are not eligible for the exemption introduced within this Bill. I ask the Treasurer (Mr Keating) to examine this apparent anomaly of the exemption applying to a case where the conversion has been granted for pastoral leases but not to leases which apply to resort developments on crown islands. Similarly, there has come to our attention a case from Victoria. On this occasion a company has done a business deal with the Victorian Government which has resulted in only part of its pre-September 1985 purchased land being converted from crown lease to freehold. Because the Victorian Government wished to resume part of that land it compensated the company by passing to it part of an adjacent freehold. As the new part obviously had not been acquired pre-September 1985 it will be subject to capital gains tax. Yet this parcel of land is not substantially different from the original crown land. I ask the Treasurer to look at the fairness of this case if he has not already done so. I would be only too happy to supply him with the documents that relate to it. These problems highlight the budgeting mess that has arisen since the Treasurer's much touted tax reform in 1985. Beyond the hype-and we certainly got plenty of that last night-and the rhetoric we have seen in Parliament, about 700 pages have been added since 1983 to the already ridiculously complex taxation laws. If I remember rightly, when I was doing taxation law, the Income Tax Assessment Act was probably no more than 700 pages and today it is something like 1,700 pages, which is quite remarkable. Taxpayers around Australia have seen less in their own pockets and had the highest taxing government in Australia's post-war history. Last night's Budget will be looked upon as one of the great disappointments of the bicentennial year. We were given some tinkering with the ramshackle indirect tax system which goes only a couple of paces down the long road to reform in this area. It will help the Treasurer obtain his otherwise questionable 4 1/2 per cent inflation forecast. It will not help the living standards of all those Australians waiting for significant personal income tax relief. The living standards of Australian families stand to benefit much more considerably from cuts in personal taxes. The Hawke-Keating Government has used inflation in a cowardly way to move taxpayers, particularly low and middle income earners, into higher tax brackets. The Government's surplus will be primarily based on taxes. I will quote some figures from last night's Budget. The total individual tax take in the coming year is forecast to rise by some $5.7 billion or 13.6 per cent. To get the comparison as to where this stands, it has to be considered against average weekly earnings. In the same period, average weekly earnings are to rise by 5.75 per cent. It does not take a Rhodes scholar to work out that all Australians will be paying more tax. Average weekly earnings are substantially higher than the basic wage earned by the majority of Australians. On top of that, as a proportion of total revenue from the Budget, we find that the contributions of the pay as you earn taxpayer have risen from 38 per cent to in excess of 40 per cent of total revenue. If honourable members look more closely at the figures in the Budget Papers, they will find that the total amount that individuals will pay will go up by a staggering 13.6 per cent representing 54.4 per cent of total government revenue. This is the highest contribution by taxpayers which has been implemented by any government since the war. Honourable members can readily understand why Australians are concerned about their general standard of living. Those sorts of figures give a total lie to any attempt the Government is making to bring in an equitable system of taxation. The ordinary taxpayers of Australia are paying through the nose at present. The figures I have mentioned point that out. There has been a rise of 13.6 per cent in the current year against a rise of 5.7 per cent in average weekly earnings. That sort of contribution ought to be well known in the future, particularly by constituents in Australian Labor Party electorates. We certainly will be doing our bit to ensure that it is. The Hawke-Keating Government has failed on fiscal policy. It has failed because it taxes Australians in an outrageous manner and savages their standards of living. For instance, a family on average weekly earnings with a dependent spouse and two children would need a minimum tax cut in July 1989 of $56 per week to restore household income to its March 1983 level, when the Labor Party came to power. I make a bet right now that the Treasurer's much anticipated cuts will go nowhere near matching that. Australians need more than the tinkering we were given last night. In short, income taxes must be cut to protect the living standards of all Australians in the face of the Treasurer's continuing tax grab through bracket creep. The Treasurer simply displayed his lack of understanding of people's predicaments when he said a few weeks ago, `People don't want tax cuts now'. After hearing him saying last night on television that he lives on the high side of the road, I am not surprised that he does not understand what people need in relation to tax cuts and the full impact of the falling standards of living of people throughout Australia, particularly those who live in Labor electorates. After last night we face another year of high inflation and high interest rates. Despite the fact that the Government is taking away the statutory reserve deposits (SRD), a relatively small amount that is held with the Reserve Bank of Australia, the claim that the return of that money to the banking system will result in lower interest rates is simply erroneous. At the same time, merging the savings banks and the trading banks into the one licence, with a one per cent requirement to deposit with the Reserve Bank, will go nowhere at all to easing pressure on money supply and, therefore, a claim of low interest rates resulting from the SRD removal is highly fallacious. Lower real wages are the prospect in the future for Australians with the inflation rate exceeding the increase in average weekly earnings. There will be higher unemployment. There is nothing in the Budget which suggests to me growth in employment and, as I have just indicated, there will be higher taxes. That is not much of a record when we look at what has been promised: higher inflation, higher interest rates, lower real wages, higher unemployment and higher taxes. Instead the Government should be offering tax cuts in this financial year along the lines of our policy; that is, a flatter two-tier personal income tax schedule with the corporate rate tied to the top personal rate. Our personal tax proposals will give priority to assisting families with children, particularly lower and middle income families. As well, we would announce other tax reform measures that are directly related to this Bill; that is, we would announce the abolition of Labor's capital gains tax as this tax discourages longer term savings and investment. Shorter term gains will, however, be taxable on a sliding scale over five years. After five years there will be no tax on capital gains. As a result, the sorts of specific problems I mentioned earlier would not appear if the investments were of a legitimate long term nature. In other words, a nation such as Australia badly needs capital investment and a flow of money to the many projects necessary to create employment and drive. These are seen in the current context as straight income tax revenue. We accord high priority to assisting families and bringing about general reductions in the level of business taxation. We would, therefore, announce the abolition of Labor's fringe benefits tax. However, benefits which are clearly provided as a substitute for cash income will be taxed in the hands of the recipient. That is the sort of tax reform that is needed. It will significantly reduce the real tax burden of Australians. Such relief would follow a bold integrated economic reform program which would provide a large measure of expenditure restraint. We believe that there is a plethora of areas where expenditure can be cut while at the same time making ample provision for the disadvantaged, such as pensioners and the aged. We will also implement comprehensive labour market reform and privatisation programs which, besides improving the efficiency of the Australian industry, will help to bring down government expenditure. It is not until such time as a properly based privatisation program can be introduced that we will see any real attempts to make efficient moves in many government enterprises. Today we have heard calls from Government owned enterprises such as Qantas Airways Ltd, Australian Airlines and the Commonwealth Bank of Australia which are all in need of more capital. At the same time, they are denied it by this Government. Board members of Qantas regularly say that it must have more capital. The Government's response is purely to say, `Well, you must raise it yourself.' At the same time Qantas is proposing to buy 35 per cent of Air New Zealand Ltd. Where is the money coming from? If the Government refuses to properly capitalise Qantas in terms of buying its aircraft and equipment, where will it find the money to fund the proposed acquisition of 35 per cent of Air New Zealand? On top of that, the Commonwealth Bank has clearly indicated that it needs $600m in the very near future. The Reserve Bank of Australia is known to have said that the Commonwealth Bank has failed to meet its statutory reserve deposit requirements. These matters fall to the owner, the proprietor. The proprietor, in this case the Government, has refused to meet the capital requirement. At the same time, it takes the dividends from both Qantas and the Commonwealth Bank. Yet those corporations are not given the requisite capital base. In future they will not be able to meet the competition that is certainly to hand in the banking community and very certainly is at hand in the international airline business. The failure of the Government to come to grips with the privatisation program will inevitably lead over a period of time to the demise of great Australian institutions which have made a significant contribution to the development of this nation but which are now failing because of Government inaction and because of the Government's dithering about priorities within the Party. For example, our industrial relations reforms should eventuate in a decline in the rate of unemployment and, of course, a reduction in the number of unemployment benefit recipients will yield significant savings on Government expenditure. The current unemployment rate is well above that achieved in the late 1960s and 1970s. This additional unemployment cost about $2.7 billion in Government expenditure last year. We aim to start bringing unemployment, and therefore the drain on the Budget, down. In addition, we would also announce a comprehensive program for the deregulation and privatisation of a number of Government enterprises. In Budget terms, the use of asset sales to pay off Government debt will reduce expenditure and commitment to public debt interest, currently amounting to around 10 per cent of the Budget or, in other words, basically the same as that spent on defence and more than is spent on education. People should not duck those questions. I point to the figures released last night. The total amount paid in public debt interest in the coming year's Budget of $7.6 billion compares with a total amount of $7.6 billion spent on defence-roughly the same figure-and $6.3 billion spent on education. All of those who look at the huge deficits run by governments over the years see that they have built up this massive payment of interest which comes about in this area. Just to put it into context: on top of the interest paid on public debt of $7.6 billion, an amount of $5 billion has been paid for total economic services-in other words, transport, communications, industry assistance, labour, employment and other economic services. The total amount spent on defence is $7.6 billion and education, $6.3 billion. That is the massive amount drawn on those figures issued last night in meeting the interest on public debt. Together with other hard work and Budget cuts this will therefore pave the way for the delivery of genuine tax cuts that are not simply paying back what has already been confiscated in the form of bracket creep. That is all we have in prospect as far as 1 July 1989 is concerned. There is a clear alternative to what the Government has offered Australians in the area of taxation and economic policy generally. It offers tightened belts and a lower standard of living. Our strategy, by contrast, is based on the belief that the standard of living can be improved while, at the same time, strengthening the economy to cope with our foreign debt situation. In the light of this, I move the following second reading amendment which has been circulated in my name: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House notes that: (1) this is the highest taxing Government in the post-war history of Australia; (2) the Government has mainly relied on bracket creep through the various personal income tax brackets, and also on the introduction of new incentive-sapping taxes such as the fringe benefits tax and capital gains tax to fund its Budget surplus; (3) such new taxes represent increased complexity and uncertainty in the administration of the taxation system and so decrease efficiency and equity; (4) the Government has lost sight of the needed direction for Australia's future; and (5) the Government should accept that the highest priority needs to be given to reducing the enormous tax burden, so that the standard of living of Australians can be improved while at the same time addressing the nation's external economic problems'. Integral to our policy is the need for tax cuts to stop the decay in the living standards of so many low and middle class income earners in Australia. Cuts in Government expenditure will curb the growth in public sector demand, permitting a rise in private sector demand without risking a further blow-out in our imports. Cutting the size of the public sector will release labour and capital to the private sector, including export and import replacement industries. The extent of Australia's foreign indebtedness is jeopardising our sovereignty; that is, our control over our own affairs. Quite clearly, a country which owes so much to the rest of the world is not fully in command of its destiny. It is imperative that the economic policies that we advocate are put in place to speed the pace of adjustment to our external accounts. Mr DEPUTY SPEAKER(Mr Mountford) —Is the amendment seconded? Dr Harry Edwards —I second the amendment. Mr JENKINS(Scullin)(11.44) —The Taxation Laws Amendment Bill (No. 3) which is before the House consists largely of fine tuning of the Government's taxation system. The Bill will extend capital gains roll-over relief in a number of ways: in relation to some forms of business reorganisation; in relation to transactions concerning crown lands; mining and prospective rights; in relation to voluntary disposals; transfer of assets to wholly owned companies; public trading unit trusts; marriage breakdowns; unit trust companies; and the transfer of assets to non-resident companies. The substantiation rules are also amended in a number of respects in relation to overseas travel expenses, motor vehicle fuel and oil expenses, car hire expenses, and reimbursements. There are other changes to exemptions from fringe benefits tax of the cost to employers of compassionate travel. In this respect, the exemptions will apply broadly where an employer meets the cost of an employee's travel to visit a seriously ill spouse or child or to attend a family funeral. This is, as has been indicated by the honourable member for Ryan (Mr Moore), a Bill that is non-controversial. I note that, whilst moving a second reading amendment, the Opposition is supporting the Bill. I also recognise that the honourable member for Ryan, in making his early remarks, made some comments about this legislation in general, and was concerned about the amount of tax legislation that has been required to be introduced. I say to the honourable member that one of the reasons for the growth in tax law is the Government's recognition of the need for a fairer, more equitable, tax system. Unfortunately, governments of the persuasion of the other side of the House have tended not to meet these problems directly. If anything, this Government can look back on its taxation record in the knowledge that at least it has taken the hard decisions and set out to attack many of what can be described as rorts or inequitable features of the tax system. It was interesting to note an article in the May 1988 edition of Taxation in Australia by Robin Speed, of Speed and Tracey, Sydney. In opening the article, Mr Speed said: If all the taxpayers in America filed complete and accurate returns and paid all the taxes they owed, the American budget deficit for 1987 would have been halved. This tax gap is estimated to have reached US$100 billion per year. That is indicative of the problem in the American system. It is indicative of the problem that the Australian Taxation Office and this Government have set out to counter. The Tax Office has expressed its future direction in a statement as one of maximising the level of voluntary compliance with the tax laws. It hopes to be able to do this by improving the way in which the Tax Office is run; by improving its relations with taxpayers; by detecting and bringing to account those who do not pay the correct amount of tax; and by improving the tax laws. Mr Speed suggests also that for our tax collection system to work taxpayers should accept that: Taxes are an essential part of maintaining and developing Australia. He qualifies this by saying: Australia is a free country and one price of this freedom is the expenditure of taxes on some matters which some taxpayers oppose. He adds: There are legitimate avenues to influence and if necessary, remove Governments which permit wastage of taxes or the expenditure of taxes in unacceptable areas. He concludes this section of his article by saying: Tax cheating is not in a taxpayer's own interest. I think that many of the measures that this Government has taken are an attempt to bring to account many areas of income or in-kind remuneration that have, in the past, not attracted tax. I was perhaps somewhat put off to find that I was not to follow the honourable member for Kooyong (Mr Peacock) in this debate because, in general, when he enters into debates on tax laws he has a fairly predictable theme. I was even more put off when, in his opening remarks, the honourable member for Ryan displayed some concern about specifics of this legislation and raised some matters that he felt that the Minister Assisting the Treasurer (Mr Peter Morris) could take account of. I thought that that was a reasonable viewpoint and one which allowed for proper discussion and investigation of tax laws. But, lo and behold, when I picked up a copy of the proposed second reading amendment, I was not so surprised to see that it represented the same, predictable sort of tack. Again after last night's Budget, a Budget that has the Opposition perplexed, perhaps even green with envy because it knows that this Government has set out and succeeded where it failed, it has brought out the same sort of trite nonsense it has in the past. Paragraph (1) of the proposed Opposition amendment states: this is the highest taxing government in the post-war history of Australia; However, never does the Opposition adopt the tactic of at least comparing, as would be appropriate, our level of taxation with those of other Organisation for Economic Co-operation and Development (OECD) countries. When that is done we see that in comparison with other OECD countries Australia always is identified as a low taxing nation. The Opposition always avoids this aspect of the argument. I have no recourse but continually to remind the Opposition of those facts, because it is a nonsense to portray the situation as being in any way different. We then come to paragraph (2) of the amendment, which states: the Government has mainly relied on bracket creep through the various personal income tax brackets, and also on the introduction of new incentive-sapping taxes such as the fringe benefits tax and the capital gains tax to fund its Budget surplus. Today the honourable member for Ryan again has repeated this promise that the Opposition claims it will hold to if ever it is elected to government: that it will abolish the fringe benefits tax. However, that promise is always put with the rider that the Opposition will look at alternative ways of converting the fringe benefits to equivalent cash income and taxing them in the hands of the receiver. It is necessary to remind members of the Opposition that the tax laws that this Government inherited-the tax laws that the Opposition administered when in government-would have enabled it to tax these in-kind remunerations in the hands of the receiver. However, the administrative complexities of that were such that the Opposition did not try that when it was in government. It was for that reason that this Government decided there was a necessity to introduce the fringe benefits tax because that was a way in which these types of remunerations could be taxed. It seems to me a complete nonsense for the coalition, at present led by the former Treasurer, the honourable member for Bennelong (Mr Howard), to suggest that suddenly, if the Opposition were to be elected, it would revert to the type of legislation it had before and which it was never able to put into practice. Therefore, it is with great regret that we hear in this chamber honourable members opposite again claiming that they will abolish a form of tax that has been very successful and which, in fact, perhaps has had greater success than even the Government could have envisaged, which indicates the amount of tax avoidance that was going on with people using the device of fringe benefits. It is perhaps appropriate in the context of this debate to make mention of last night's Budget, an historic Budget which demonstrate that this Government is continuing to exercise responsible control of the economy. In 1983 there was a prospective deficit of $9.6 billion. Last night the Treasurer forecast a surplus of nearly $5 1/2 billion. That is a $16 billion turnaround. The surplus will be delivered with the total government revenue share actually falling. It is interesting to note again that in this debate we have the claim that the only element in achieving this surplus has been increased tax revenue-increased tax revenue that can be homed in on bracket creep. However, if we look at Budget outlays-I quote from the Treasurer's speech last night-we see: Budget outlays this year will represent . . . 25.6 per cent of GDP, compared with more than 30 per cent four years ago. He went on to say: As a result, in dollar terms outlays will be over $20,000 million lower each year than they would have been if the 1984-85 spending share had remained unchanged. The Treasurer said further: No major OECD country has reduced the size of its government sector on such a vast scale. Again, these are economic achievements by this Government which the Opposition knows that it has no hope of ever achieving. It has not the will or the means to go about that type of turnaround. The surplus exceeds the combined borrowings of all public sector enterprises and State and local government authorities. This means that in 1988-89 the public sector borrowing requirement will be zero. As has been stated, this is an achievement without precedent in our history. The Government has achieved this historic turn- around in the economy from the dark Howard years by significant real cuts in government spending. Through these cuts average working Australians have made more than their share of sacrifices towards the goal of economic recovery, and this needs to be recognised. This has been done in full knowledge that at no stage can it ever be said that either the Prime Minister or the Treasurer has ever said anything different. It has been with the full co-operation of the trade union movement, and this also must be recognised. It is the special relationship that this Government has with the trade union movement which has enabled us to be in this position. That has to be repeated in an attempt to get through to the Opposition. The turnaround has also been achieved through the reform of the taxation system. The Government has restored integrity to the tax system from the rorts and inequities of the previous Government. The Government has delivered tax cuts to Australians in the past through its broadening of the base of the taxation system. It also announced last night prospective tax cuts from 1 July next year, and that is important. It is important also to emphasise that the Treasurer has highlighted the need for those tax cuts to be directed to those who most need them: lower and middle income earners. I welcome an indication that that is the direction in which the Government will be looking in formulating the tax cuts to be delivered next year. Again, in the delivery of these tax cuts the Government will be asking for and seeking the co-operation of the organised labour movement-the trade unions through the Australian Council of Trade Unions. It needs to be emphasised that the tax cuts-and again there is no hiding this fact: it will not be sprung upon the union movement and the Australian workers at some later stage; it has always been up-front-will be dependent on wages growth during 1988-89 and the quality of the wage-tax trade-off to be negotiated. So the position is clear. The parameters have been set. Nobody can suggest that in any way the Government is trying to deceive Australian taxpayers. I welcome the Government's commitment to tax cuts, and especially the commitment that they will be directed to the bottom end of the PAYE scale and that those people will be the first to have the cuts delivered to them. The Opposition complains about increases in the level of individual taxation. Two points need to be made about that growth. First, this increase is in large part due to a rise in the level of employment and reflects the Government's achievements in reducing the dole queues created by the current Leader of the Opposition as Treasurer when the Fraser Government was in power. We need perhaps to pick up and dwell on some of the comments made in the Budget statements in outlining the prospective taxation revenue for 1988-89. In regard to PAYE instalment deductions-I refer Opposition members to page 313-the estimates are based on employment growth of 2 3/4 per cent, which helps to explain some of the increase, and on an increasing average weekly earnings of about 5 3/4 per cent. If we take into account a number of these factors, the real reasons for some of these increases are more understandable. As has been indicated previously by the Minister for Finance (Senator Walsh), these increases are to do with increases in business activity and with more people being in work. That is important and needs to be understood. The second point about total individual taxation levels, or the amount of taxation revenue, is that it needs to be noted that total taxation revenue will remain constant at 25.7 per cent of gross domestic product. That again is important. It can be related back to the general economic activity that this Government has created and nurtured. The Opposition has offered no credible alternative to the Government's handling of the economy. The Bill before the House seeks to fine tune the fringe benefits tax and the capital gains tax. Again and again the Opposition advocates that they be scrapped. Again today the Opposition, through its amendment and through the speech of the honourable member for Ryan, indicates that they would be scrapped. Honourable members opposite evoke the emotive term `new incentive-sapping taxes'. It is a nonsense, because estimated receipts for the fringe benefits tax in 1988-89 amount to $1 billion, and estimated receipts for capital gains tax amount to $100m. What quality of tax cuts would the Opposition be able to deliver to ordinary Australian workers if it allowed those two aspects of our present tax legislation to be removed? It would take the rug from under its own feet in being able to deliver genuine tax cuts to genuine Australian workers, and it is a nonsense for those opposite to suggest otherwise. They always put into place promises that are very good for the top end of town. The Opposition would squander this revenue, which has provided the capacity for tax cuts and for meaningful social justice programs such as the family allowance supplement. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! the honourable member's time has expired. Dr HARRY EDWARDS(Berowra)(12.04) —I see that the honourable member for Scullin (Mr Jenkins) is leaving the chamber. I would like to let him know that I shall have something to say about his comments on the fringe benefits tax. The proceeds of the fringe benefits tax increased last year by 64.5 per cent! That is a prime example of the greedy grab for tax revenue-similarly petroleum and other excise taxes increased by 63.1 per cent-that characterises this Government. The Taxation Laws Amendment Bill (No. 3) implements a number of measures which will have the effect of increasing even further the vast inflow of tax revenue into this Government's coffers and the terrible weight of taxation on the average Australian. As well, it introduces simplified procedures to facilitate the gathering in of this vast harvest of tax revenue by this Government. The Taxation Laws Amendment Bill (No. 3) deals specifically, in the first place, with certain aspects of the capital gains tax. My colleagues have gone into that; so I will say nothing other than that this is a tax which, in the view of the coalition, certainly has to go. It discourages the long term savings and investment which are so desperately needed if we are to reduce our great dependence on overseas borrowings, our great balance of payments vulnerability. We have a continuing vast balance of payments deficit. It has not gone away. I notice that the balance of payments estimate trumpeted so loudly at the end of June has been revised; it has now been increased. It has not gone away. Neither has our overseas debt, which is still in excess of $100 billion. That is a frightening level of debt which imposes a heavy burden not only on this generation but on future generations. Mr Webster —For many years to come. Dr HARRY EDWARDS —Yes, it will do so for a very long time to come. For that reason the capital gains tax has to go. Particularly in order to change from our present situation of great vulnerability, there is a key role for new small innovative and often high technology businesses which are so important in fostering the robust and dynamic economy we need. It is all right on certain theoretical grounds to look at a case for the capital gains tax-but many of those who have advanced those grounds have never in their lives risked a quid investing in production activities. This tax has to go in order to protect and encourage the building up of new businesses; to protect and encourage long term investment by, in particular, small businesses, farmers and the like. Another point is that the incentive to take up shares in very small risky companies that might not pay dividends for many years is heavily blunted by this capital gains tax. The Opposition will certainly abolish Labor's capital gains tax. I take this opportunity to remind the House of the Opposition's policy. We will abolish Labor's capital gains tax; however, shorter term gains will be taxable on a sliding scale over five years, but after five years there will be no tax on capital gains. Assets held for up to one year will continue to be taxed according to section 26aaa. For assets held for more than one year and up to two years, 80 per cent of real capital gains will be treated as income and therefore subject to the appropriate marginal tax rate for individual taxpayers; so 20 per cent of real capital gains will be tax free. For assets held for more than two years and up to three years, 60 per cent of all real capital gains will be treated as income and taxed accordingly; for assets held for more than three years and up to four years, 40 per cent of the gains will be taxed; and, for assets held for more than four years and up to five years, 20 per cent of the real capital gains will be treated as income and taxed. Thereafter, no tax is to be paid. It is a realistic and sensible proposal to ensure that the risky investment in the development of this country that we so urgently need will not be discouraged. I say also that the fringe benefits tax in the form imposed by Labor will be most certainly abolished by the coalition. I repeat: I wonder just how many of the people out there are aware that the proceeds of this tax increased last year by 64.5 per cent. What a rip-off. We can be sure who pays that tax in the end-the average Australian battler through higher prices. The honourable member for Scullin referred to the first part of our amendment, which states: whilst not declining to give the Bill a second reading, the House notes that: (1) this is the highest taxing Government in the post-war history of Australia; Does the honourable member seek to deny that? Mr Webster —No one is denying that. Dr HARRY EDWARDS —Honourable members on the other side seek to deny it. Let us look at some of the facts. According to the very Budget Papers now before the House, Commonwealth tax revenue totalled a record 25.7 per cent of gross domestic product last year-the highest level ever-and, according to the estimates of the Treasurer (Mr Keating) himself, that level will remain for 1988-89. Taxes rose by $8.5 billion in 1987-88, or 12.9 per cent-a real increase, of the order of 5 1/2 per cent-while Australians' real income on average fell, and lower to average incomes fell the most. That is a measure of the impact of this Government's tax take last year. Today the average taxpayer is paying 22.8 per cent of his income in tax. In March 1983, when this Government came to power, that figure was 17.5 per cent. So it has gone up from 17.5 per cent to 22.8 per cent. In the present situation the average taxpayer pays 40c for every extra dollar he earns. The fact that 40c tax is paid for every extra dollar earned increases the average rate, and that is what is contributing so substantially to this Government's vast revenue harvest. It is referred to as bracket creep, and that bracket creep brought in about $1.5 billion of additional revenue in 1987-88. It made up the main bulk of the Budget surplus of nearly $2 billion that was actually realised last year. The projection last year was for a balanced Budget, but in fact a Budget surplus of nearly $2 billion was achieved. That can be virtually equated to the $1.5 billion of bracket creep. That is where it came from. That is how bracket creep rakes in the money, to the delight of the Treasurer-with never a thought in his mind for the plight of the average battling family that has to hand over the money. Over this coming year the average taxpayer will pay in the order of at least $900 extra in tax-$18 to $20 a week. That is an increase of nearly 14 per cent over 1987-88, and it will end up making the average rate of tax about 24 per cent. Compare that, as I said, with the level in March 1983 of 17.5 per cent. So, our amendment draws attention to the fact that this is the highest taxing Government in the post-war history of Australia. Indeed it is. The actual total projected increase in income tax on individuals, mainly pay as you earn taxpayers, is $5,694m. That is the projected increase from ordinary PAYE taxpayers. The Treasurer then has the gall to come in here and trumpet forth a projected surplus in this Budget, an excess of the revenue over the expenditure he proposes to make, of $5.5 billion. The increase in the tax burden on the PAYE taxpayer is $5.7 billion. The trumpeted surplus is $5.5 billion. Who is paying for it? Mr Webster —The ordinary taxpayer. Dr HARRY EDWARDS —Yes, the ordinary taxpayer. We end up with a situation where by the end of this coming year-that is, the end of 1988-89-the average family will require about $56 a week to restore its real disposable income to the March 1983 level. Thus has this Labor Government savaged Australians' living standards. I cannot resist saying that in the Budget Speech the Treasurer used this phrase: `Our sound fiscal management has delivered this Budget surplus'. What utter tripe and bull- dust, if I might use a rough saying. The embattled Australian family has delivered it via the deadweight burden of this additional taxation. We suggest to the Government that if ever there was a case in equity for tax relief now is that time: the case for reductions in taxation on that equity ground in terms of the welfare of the average Australian is compelling. But there is also a proper argument on overall economic policy grounds. A better execution of fiscal policy is necessary in the interests of coping with the whole vulnerable situation of Australia, with its vast balance of payments deficit and frightening overseas debt. It is entirely appropriate that we should be forcing the pace of adjustment in that respect. While things are looking a little rosier-now with reasonably favourable commodity prices, that is not something we can count on continuing. It is imperative that we push the pace of the adjustment of this economy to a situation where we greatly reduce the balance of payments deficit and and begin to cope with the effects of the overseas debt. What is really required to do that is to give tax cuts and, in addition, run a Budget surplus, by some real restraint in government expenditure. Quite a lot has been said about the Treasurer's Budget Speech. I will not turn my speech into a speech on the Budget, but the honourable member for Scullin also made reference to the way in which this Government has restrained expenditure and reduced the proportion of expenditure to gross domestic product. Mr Cleeland —Don't argue with me. Dr HARRY EDWARDS —There are plenty of arguments; the honourable member should look at where this alleged restraint has occurred. It has occurred by the reduction of payments to the States some reduction in public debt interest, and in assets sales. But actual Commonwealth outlays increased last year by in excess of 7 per cent, broadly in line with the rate of inflation. There was no real cutting at all. So to some extent it would have been perhaps irresponsible for this Government to have proceeded immediately with tax cuts, but that is because it has done nothing effective in the area of cutting government expenditure. It should be cutting that expenditure, thereby curbing the Government's demands on resources and making `economic room' for the additional investment-the Treasurer has exercised great optimism about an increase in real investment of the order of 12 per cent and, hopefully, it will come; if the rest of the policy hangs together it could, otherwise it will not-and making economic room, freeing up resources for that additional investment and for increased export and import replacement industries. At the same time tax cuts would increase the incentive of both employees and business to increase productivity and therefore the production base for additional investment and export-import replacement production. Again at the same time tax cuts would give a genuine incentive to employees to moderate their demands for additional wages. Of course, we do not have the tax cuts. Prior to last night one used to say that there was a hidden agenda in raking in and hanging on to all this tax revenue. It has now been blatantly revealed that there will be no tax cuts until 1 July next year, preceding an election later that year. That hidden agenda is now clear and open. Hidden agendas are part and parcel of this Government, and I make passing reference to the misleading, deceptive and fraudulent approach to the referendum proposals that are currently before us. We have four seemingly simple questions which cover 33 changes to the Constitution. Mr Cleeland —I rise on a point of order, Mr Deputy Speaker. The white light has come on and the honourable member has exceeded his time. What is more, he is being totally irrelevant. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member has more time. Dr HARRY EDWARDS —I conclude my remarks by supporting the amendment, particularly the first proposition that this is the highest taxing government in the post-war history of Australia. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Before the honourable member for McEwen seeks the call, I invite his attention to the light. It is a warning light; it is not a signal that the time has expired. The Chair does monitor the time quite closely. Mr CLEELAND(McEwen)(12.24) —One factor that emerges from this debate is that, despite being in opposition for a number of years, the Opposition has not changed its approach to the economic management of this country. The Opposition was a failure for most of the time it was in government. It left this country with a $9.8m deficit. It increased the dollar rate by fixing it and it nearly destroyed the economy of this country. Members of the Opposition never learn, despite the fact that they are in opposition. One would think that by watching the way the Government has achieved a drastic change in economic management in this country they would learn something from it, but the honourable member for Berowra (Dr Harry Edwards) revealed in his speech that they have not. All we know about the Opposition's economic policy is that it has learned a few more catchphrases, such as bracket creep. We are going to hear about bracket creep through the media, on television and radio. Opposition members all sat in their party room somewhere and a party strategist said, `The only hope we have to defeat this Government is to run on catchphrases; so let us use ``bracket creep''. It is a wonderful phrase to use'. We will hear a lot about bracket creep. The next catchphrase we will hear is `largest taxing government'. Opposition members will ignore the figures in the Budget. They will ignore fact and reality. Taxes as a percentage of gross domestic product have not risen. They will ignore the economic reality but they will still run with the nonsense that we are the highest taxing government. They will ignore the fact that it is a Labor government that has given the largest tax cuts in post-war years. They have never delivered tax cuts to the Australian people. They ignore the fact that announcements have been made that there will be tax cuts next year. Fact they ignore; fiction they like. No one likes paying tax but we all recognise that without taxes there would be no government services. The Opposition's approach to government services is that it would not have any. In the last election campaign Opposition members claimed they would cut government services-no one believed them, thank heavens, so they stayed on the Opposition benches-by $16 billion. Mr Lamb —By $13 billion. Mr CLEELAND —The figure is closer to $16 billion when they are costed out. The Australian people realised very quickly that if government expenditure was cut by that amount there would be no child care, no education, no age pensions-nothing whatsoever. Yet that is the nonsense Opposition members went on with in the last election. Australians are quite prepared to pay their way if they believe the taxation system is fair. Achieving fairness has been the outstanding hallmark of this Government, especially achieving fairness in taxation. When we came to office in 1983 the tax system was riddled with absolute rorts and was wide open to cheating. The previous Government, despite unprecedented pressure from the Australian Taxation Office, and even ignoring advice from its own departments, had been very tardy in acting to eliminate the notorious bottom of the harbour tax evasion schemes and other tax avoidance practices. That is the Opposition's record on tax and it cannot run away from it. Part of the reason for the slowness of the previous Government to act was the opposition of sections of the Liberal Party of Australia to any measure that would crack down on the bottom of the harbour schemes. At that time John Stone was Secretary to the Treasury. It was the Howard age and the Stone age. The Leader of the Opposition (Mr Howard), then Treasurer, was led by John Stone, now one of the Opposition's great economic advisers. He led the Stone age of Australian economic policy. It is in the past and I hope it will stay there. A report commissioned by the previous Government which was not published until 1984 blamed the Fraser Government for letting the whole taxation problem get totally out of hand. The bottom of the harbour scheme special prosecutor, Mr Roger Gyles, described in his report how the level of bottom of the harbour tax evasion had risen in the late 1970s and early 1980s to `extraordinary' and `incredible' heights. He said: If there had been an adequate administrative, judicial and political response in the first place the situation would never have arisen. Under the weight of enormous political pressure, the Fraser Government finally acted towards the end of its term of office to recoup some of this evaded money. And who was the Treasurer? The Leader of the Opposition. In any other political system in the world someone with that kind of record in public office would have been thrown out-not elected to lead the party which caused the damage in the first place. But even apart from tax evasion, all sorts of tax avoidance schemes were rampant. Every Australian can recall vividly how all the tax schemes used to be advertised in newspapers. The advertisements claimed that if one went along to firm X one could reduce one's tax. There were many such offers. It was very `clever' at the time for the well-off not to pay their tax. The whole climate of compliance with the tax law had been undermined and the whole system was on the verge of breaking down. That had two very important side effects. First, it led to widespread and justified resentment amongst ordinary pay as you earn (PAYE) taxpayers who did not have access to the clever schemes that allowed the rich to avoid their tax. Of course, it was those people who were carrying the burden escaped by the well-off. Second, it made it especially hard for people working in the Australian Taxation Office. They have a difficult time at the best of times but they found it even more difficult to carry out their task in a climate where avoiding tax was considered the right thing to do. The Government has fixed all that: it has made the tax system fair by closing off the loopholes and passing all the proceeds back to taxpayers in the form of tax cuts. When members of the Opposition talk about the increase in tax revenues of this country they forget that the increase in revenues is coming from the creation of a fairer tax system. It is coming from the fact that the people who under the reign of the previous Government had a total option on how much tax they paid now are paying their full measure of tax. If the Opposition had remained in government, that change would not have occurred. Its only approach to solve Australia's terms of trade crisis would have been to increase the rate of unemployment, put ordinary PAYE taxpayers out of work and maintained a fixed exchange rate, which would have caused an inflationary blow-out. This is its standard attack on problems of this kind. These policies would have been devastating on the ordinary wage earners and families of this country. It never ceases to amaze members on my side of politics when we listen to the carping comments of people in the Opposition on taxation matters that they now find some kind of purity or integrity in their approach to taxation. This is their approach only in opposition; they would never adopt such an approach in government. As long as they maintain their current viewpoint they will stay in opposition. At the same time as creating fairness in taxation, this Government has given the Australian Taxation Office the proper resources to do its job. We have toughened up tax penalties to provide the Australian Taxation Office with a proper backup. Right from the start we announced that we would act retrospectively against any new tax avoidance schemes that were set up. In other words, we wiped out the professional tax avoidance industry which had made a living out of thinking up schemes and then exploiting them while the previous Government dragged its heels on actions to close them off. We have now introduced two substantial tax reform packages designed to improve the efficiency and fairness of the tax system. The 1985 reform package introduced the fringe benefits tax, which ended the old unfair system whereby some people could gain untaxed benefits by taking their income in kind instead of in cash. But most ordinary workers had their tax taken directly out of their pay packet each week, whether they liked it or not. The fringe benefits tax is now generating about $1,000m-$1 billion-a year, all of which has been paid out in tax cuts. The whole lot has gone back to those people who never had the chance to avoid paying tax. I listened with interest to the honourable member for Berowra when he pointed out that fringe benefits tax revenue has gone up by 64.5 per cent. Well so it should. If there was ever a tax that should increase it is the fringe benefits tax. The Opposition in its comments in this House neglects to mention that the fringe benefits tax is an optional tax. No-one in this country has to pay a fringe benefits tax because it is paid on fringe benefits given only at the option of the employer. If the employer does not want to pay the tax, he does not give any fringe benefits to the employee. For anybody in this House to criticise the Government because of an increase of 64.5 per cent in fringe benefits tax revenue when business is voluntarily paying the tax is a total nonsense. It shows how ignorant such a person is of the total tax system and the reality of the fringe benefits tax. No employer has to pay a fringe benefits tax. If an employer wishes to pay a benefit to an employee to avoid the proper rate of tax, he gets caught. It is an absolute nonsense to suggest that the increase is a result of bracket creep, and the honourable member knows that. The capital gains tax ended the old unfair system whereby some people who took their income by making capital profits instead of by earning a wage or salary paid no tax at all. The new capital gains tax is now contributing about $400m a year to the revenue. Who can forget the headline news when one of the great entrepreneurs of Australia, one of the raiders, in 1984-85 made a raid on a company in Adelaide and was defeated but in the process picked up a $13m profit on the value of his shares and paid no tax? Who can forget those kinds of arrangements under which multimillionaires made multi- millions simply by raiding share markets and totally avoided paying any tax on those profits? That is the sort of system the Opposition supported; it is the sort of system it still supports. As I have said, honourable members opposite have learnt nothing from their stay in Opposition. They say in this House that the fringe benefits tax will go, that they will change the capital gains tax. Honourable members opposite should go out and tell the families, the PAYE taxpayer, the workers, what the results of those policies are going to be. Members of the Opposition in the one breath tell PAYE taxpayers that they support the family and say that they would give tax cuts. We know where those tax cuts will go. They will go to the privileged and the wealthy. The worker will not see them. The PAYE taxpayer will get nothing out of them. That is what the Opposition stands for historically and it is what it still stands for today. The denial of deductions for entertainment as a business expense ended the old unfair system whereby some people could have free lunches paid for by the taxpayer but most people had to pay their own way. A whole variety of the more specific fairness measures has been implemented. This includes the stopping of private companies entering arrangements with public sector companies to avoid tax. It also includes action against sales tax avoidance schemes which will recoup $400m a year. Let us have a look at this. There will be $1 billion from fringe benefits tax, $400m a year from defeating sales tax avoidance-avoidance, do not forget; not new taxes but existing taxes which the Opposition supported in government and never enforced-and another $400m-odd from capital gains tax. We are close to collecting $2 billion in increased revenues just because of changes to the system and the creation of fairness and honourable members opposite sit there and talk about bracket creep. How numerically ignorant can one get? How ignorant of the facts can one be to make such nonsense statements in this House? All the money, and more, from the 1985 tax reforms has been paid back in the form of $4 1/2 billion of income tax cuts. It does not carp and it does not stand in this House and talk about delivering cuts. None of the honourable members opposite can stand in this House and tell us when taxes were cut in the 30 years when they ran this country. They cannot tell us of one instance in those 30 years when they cut taxes. I am pretty proud to stand on this side of the House and say that we can point to two instances already where we have cut taxes, and to tell honourable members that next year we will cut them even further. That will be three occasions on which we can say we have cut taxes, unlike the Opposition with its record, history and current policies. Our 1988 reforms have followed the same pattern, with the business tax base being broadened by eliminating various tax concessions and the proceeds being paid back in the form of a tax cut-again, a tax cut-from 49c to 39c in the company tax rate. I heard the honourable member for Berowra say that business is bleeding. When did the coalition ever cut company tax rates? When has it ever suggested as an opposition or a government that it would cut company tax rates? It never did. We on this side of the House can say that we did not just talk about it-we did it. It is now on the record books that the company tax rate has been cut to 39c. This simply means that the company tax system will stimulate investment based on the underlying profitability of projects rather than on whether or not they qualify for tax breaks. That is a good thing for the economic future of this country. But it needs to be understood that because company tax collections are lagged by one year, this cut in the company tax rate will not impact on the Commonwealth Budget until the 1989-90 financial year. This is the same year in which the Government has committed itself to making further substantial personal income tax cuts. Both personal and company tax cuts will be paid for at the same time. Some people ask why we cannot use the Budget surplus this financial year, which the Treasurer (Mr Keating) announced last night would be $5.5 billion, or next financial year to pay for personal income tax cuts now. The reason is very simple: this money must be used to get Australia off the hook of its foreign and domestic debt. In other words, we are going to pay the debt back. The very thing that the honourable member for Berowra was criticising us for this Government is tackling. We are paying back the debt. We are relieving the future generations of this country from that burden. Mr Braithwaite —You should. You created it. Mr CLEELAND —It is sometimes difficult to believe the inane interjections that are made. The honourable member says that we created it. The Opposition left us with a $9.8 billion deficit. Mr Braithwaite —You lie on that too. Mr CLEELAND —The Opposition would turn this country into a banana republic if it ever had the chance, but it will not. Mr Braithwaite —You couldn't lie straight in bed. Mr CLEELAND —It will not get the chance. The honourable member can sit back and carp all he likes. The Australian people are a wake up to his inefficient lot. They will stay on the Opposition benches for a long time, where they deserve to be. This Government has made more fundamental reforms to our economy than any other since World War II. It is unarguable. No-one can argue about that. We are now not so dependent on a narrow base of commodity exports. We have expanded into such things as manufacturing, services and tourism while at the same time making our traditional commodity exports more competitive by wage restraint through the accord, the depreciation of the Australian dollar and cutting import protection. Let us not forget that. The National Party of Australia imposed tariffs on this country. Sir John McEwen must fairly and squarely carry the blame for the tragedy which farmers have had to suffer ever since. The National Party has done nothing for farmers. It never has and it never will, because its members are economic illiterates. They are the sorts of politicians represented by people such as Joh Bjelke-Petersen-good at making pumpkin scones but no good at running a country or having any integrity in government. The reforms that the Government has made will stand future Australians in good stead, make no mistake about that. But to begin to really assert our financial independence, Australia must begin to pay back a debt that is the legacy of the bad years when the lot opposite, in government, did not initiate one single reform. Some misguided people also make the claim that this Government has been more generous to companies than it has to personal income tax payers. The truth is that we welcome the recovery in business profits that has accompanied the resurgence of economic growth, because those profits have in turn generated more than one million new jobs and cut the unemployment rate to 7 1/2 per cent. That rate is still falling. At the same time, companies have been paying a greater share of the tax burden in Australia. Between 1983-84 and 1987-88 PAYE receipts as a percentage of total income tax have fallen from 66.2 per cent to 59.9 per cent. So that gives the lie to the nonsense that we have heard so far. At the same time, company tax receipts have risen from 14.8 per cent to 16.8 per cent. So PAYE taxpayers have not suffered an increased burden. The reality is that the total tax revenue from those taxpayers has in fact decreased. Mr Deputy Speaker, I think that without much effort at all I have given the lie to the nonsense that we have heard from the honourable member for Berowra. We must not forget that the honourable member is a well qualified economist. I am not, but I can stand here and expose totally and easily the sort of nonsense that speakers on the other side go on about with their economic jargon. I am extremely proud of this Government and the Budget that was announced last night. The whole labour movement is extremely proud of the Budget, because it is directed to the people whom we represent-the ordinary Australian wage earner. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! Before the honourable member for Capricornia seeks the call, I ask the honourable member for Dawson, in relation to the interchange that took place a moment ago, whether he used the words `You lie on that'. I may not have heard clearly and I ask for clarification. If he did use those words, I would ask that, in deference to the Chair, he withdraw them. Mr Braithwaite —I may have used them, Mr Deputy Speaker. I thought I was using the expression, `the matter is a lie'. However, if I did use that expression, I will withdraw it. Mr DEPUTY SPEAKER —I am not sure whether the other words are appropriate either. Although I hear the word `lie' used in a number of ways, I must say that I rather discourage the imaginative use of the word in any context. It being almost 12.45 p.m., the debate is interrupted in accordance with sessional order 101a. Sitting suspended from 12.45 to 2 p.m. Mr HAWKE —As a courtesy, I inform the House that the Minister for Employment and Education Services, Mr Duncan, is representing the Government today at Vanuatu Day at World Expo 88 in Brisbane. He will be absent from Question Time today and questions which would normally be addressed to Mr Duncan should be directed to the portfolio Minister, Mr Dawkins. Mr PEACOCK —I refer the Treasurer to page 46 of Budget Statement No. 2, which states: Although the recent lift in export prices has provided helpful relief to the external accounts, it would be imprudent for policy purposes to count upon its sustainability. I also refer the Treasurer to the fact that net exports are projected to make a negative contribution to gross domestic product for the second year in a row. I ask the Treasurer: Is not the forecast rise in the terms of trade of 9 per cent in 1988-89 masking a further deterioration in the underlying balance of payments? Mr KEATING —No. The fact is that the Deputy Leader of the Liberal Party, the shadow Treasurer, does not understand this point. In referring to a 9 per cent improvement in the terms of trade, he thinks that we require the terms of trade to improve by 9 per cent. We do not. The improvement is already there. It is a description of year average terms. If one looks at the very vast improvement last year-by about 15 per cent from a low base-the average of that improvement was about 9 per cent across the year. With commodity prices rising not one cent beyond where they are now, we would have for the year average of that year, compared to these prices, a 9 per cent increase in year average terms. The implication in the question that we need to continue with a rise in export prices is wrong because of a misunderstanding by the Deputy Leader of the difference between through the year figures and year average figures. The fact is that they are in the bag already. That is why the 9 per cent figure is a very conservative estimate. I refer the Deputy Leader to other tables in the Budget dealing with the inventories. On page 32, chart 15 of Statement 2 gives the inventories of major commodities which the Treasury has charted out. One finds that the inventories of aluminium, copper, nickel, zinc, lead and wool are down markedly, so there is a much better balance between demand and stocks and therefore the likelihood of these prices being maintained is implied in the question. I also make the point that the Organisation for Economic Co-operation and Development (OECD) was most clear about this last week in its world round-up. It said that on the basis of the projected growth of industrial production at its trend rate of 3 to 4 per cent in the second half of 1988 and in 1989, the average non-oil commodity prices in US dollar terms were projected to remain roughly unchanged in real terms and that, given high prices at the end of 1987 compared with the average for that year, this would imply an average 1988 level that is 15 per cent higher-the very point that I have just made to the Deputy Leader of the Opposition-than that which prevailed in 1987 and an increase of a little less than 2 per cent in 1989. I can only say that if the Deputy Leader has been believing his own comments of the last 24 hours about the Budget, that it is predicated on some needed 9 per cent increase in the terms of trade, that means that all his utterances to date have been wrong, that his talk about the risk of our requiring a lift in the terms of trade to validate the Budget assumptions is wrong. That means that his comments about them have all been wrong. The terms of trade lift is already there and we need commodity prices to remain only where they are with strong world growth and low stocks, and these are endorsements by the OECD of that same attitude to commodities. Mrs DARLING —I refer to the Government's concern at the plight of people who are out of work for a long period. Can the Minister for Social Security explain the significance of the new start program for long term unemployed workers-or potential workers-in Australia? Mr HOWE —The new start program is about this Government breaking down the major barriers that have faced long term unemployed workers and their families. To understand the need for the new start program, the House must understand the history of macro-economic policy since 1982 and the way that unemployment benefits are administered by my Department. One needs to understand these matters because the new start program builds on the synthesis of our macro-economic reforms, our labour market restructuring and our reform of social security administration. In 1982, when the Leader of the Opposition was Treasurer-- Mr Tuckey —I raise a point of order, Madam Speaker. Quite clearly the Minister is now about to make a statement. This Parliament adjourned early last night. Quite clearly this is a Budget matter and the Minister might have done the House the privilege of explaining these important matters in time other than Question Time. Madam Speaker, I draw this to your attention on the ground that you consult with these gentlemen and instruct them to use the proper times in Parliament, particularly when the sittings close down early. Madam SPEAKER —Order! The Minister is answering a question put to him by the honourable member for Lilley. Mr HOWE —I do not know whether the honourable member for O'Connor visited some of the areas of high unemployment in 1982 or whether the Leader of the Opposition went to places such as Wollongong and Newcastle and saw the kind of devastation caused by unemployment at that time. A total of 190,000 jobs were lost. This may make Opposition members uncomfortable but that was the picture. At the high point in their careers, people had their lives devastated by the failure of the Opposition's economic policies during that period. Madam Speaker, you would certainly understand, as other honourable members should, the terrible reality of long term unemployment. It means that people with outdated skills are unable to attract an employer. It means people living in poverty-25 per cent of families in which the principal is not employed and in which there are dependent children. It means people whose self-esteem is damaged. It means people who are reliant on the social security system at a time when they would much prefer to be in the work force. In pursuing a strategy to deal with unemployment, particularly long term unemployment, this Government has introduced a number of elements to its policy. First of all, we have been concerned to create jobs and our success in creating one million jobs has provided the economic platform for continued job growth. There is not a more Labor thing to do than to ensure real growth in decent jobs with decent wages and working conditions. The contrast is clear. Early in 1984 when unemployment peaked, there were 619,600 unemployment beneficiaries. Today there are 466,000. That represents a fall of 150,000 in the number dependent on unemployment benefit. However, the disabling effect of long term unemployment has meant that thousands have been excluded from the benefits of the economic growth. In May 1984 there were 150,000 people aged 21 to 55 who had been on unemployment benefit for more than 12 months. By May 1988 there were 126,700 long term unemployed. So the percentage of those who had been unemployed for more than 12 months had gone from 25.8 per cent to 26.9 per cent. The new start program is the next step in the strategy of dealing with the legacy of John Howard as Treasurer. It is not a program that throws money away at the problem. Mr Howard —You have been in office for five years. Mr HOWE —I can understand the Leader of the Opposition's embarrassment because there are very few people who do not contrast the performance of this Government with his performance as Treasurer. The program will harness the joint resources of my Department and the Department of Employment, Education and Training. The Department of Social Security and the Commonwealth Employment Service (CES) will jointly interview beneficiaries to help them decide on employment, education or training options. Unemployment benefits will continue when people engage in improved CES training programs. Waiting periods will be adjusted, so taking a job for a short period does not mean risking weeks without income. An employment entry payment will be available for people commencing work to help them with that period of adjustment. The Department of Social Security and the Commonwealth Employment Service will work together at a local level to raise the awareness of employers and unemployed workers to ensure smooth service delivery and effective training for each long term unemployed worker. Mr Tuckey —How are you going to manage that? Mr HOWE —I heard the interjection, `How are you going to manage that?'. One achievement of this Government is that we have been prepared to adjust ministerial arrangements and the bureaucracy and develop programs on a basis which will mean that the focus of our policies goes to the needs of the individual. Above all else, the new start program will mean that people who are in that unfortunate category will receive individual attention and the resources of two departments working together, and progressively it will ensure that this very serious problem of inequity is overcome. Mr PEACOCK —My question is directed to the Treasurer. I will just say by way of brief preamble that the question I asked him of course referred to the forecast rise masking a further deterioration. I am not questioning the figure. I now refer the Treasurer to an article in last Friday's Melbourne Herald in which the Minister for Finance is reported to have said: . . . the Opposition can quite legitimately argue that the pace of adjustment might be faster . . . As can be seen from last night's Budget, the pace of adjustment is undoubtedly slow and accordingly I ask the Treasurer whether he agrees with Senator Walsh that the pace of adjustment `might be faster'. Mr KEATING —I think Senator Walsh's remarks have always got to be seen in the context in which they are put. The great achievement of the Government has been to adjust the current account deficit of Australia from a peak of nearly 8 per cent of gross domestic product, a peak recorded as 6 per cent, down to 3 per cent of GDP forecast for this year without jamming the Australian economy into recession. Frankly, if those opposite were trying to handle it, with a draconian monetary policy and without any wages policy, they would have tried to repair the current account by decimating business, sending cities and regions to the wall and escalating unemployment. That was not an option for us and we have done what no other country in the world has done; that is, adjust the current account deficit in the context of strong employment and economic growth. We hear some guffaws on that side of the chamber, but surely those opposite would not deny that 2 3/4 per cent to 3 per cent employment growth per year is strong; it is three times the world average. We have had high rates of economic growth in those years despite the fact that we have adjusted the current account deficit down from 6 per cent of recorded GDP to a forecast 3 per cent this year. The interesting thing is that we keep hearing from the Leader of the Opposition and his Deputy that the pace of adjustment ought to be faster. Presumably they mean that the surplus ought to be bigger, fiscal policy ought to be playing more of a role and interest rates ought to be higher. But, at the same time, illogically they say, `We want fiscal policy tighter, a bigger surplus, but we want to provide tax cuts now'. Mr Peacock —Yes. Mr KEATING —The honourable member says yes. He does not understand what he is saying. He is saying, `What we want is a bigger surplus, but we are going to have big tax cuts as well now.' Does it not just occur to him that maybe he has jumped off the rails in his thought processes somewhere and that he cannot have a bigger surplus, a so-called `faster pace of adjustment', and, at the same time, big tax cuts which would just stimulate demand and import pressures and turn back the repair of the current account? The other rubbish we hear the Deputy Leader saying is that there ought to be a wage-tax trade-off now while in the next breath he says, `What we want is a deregulated labour market where it fixes its own price.' He wants a regulated market to get a wage-tax trade-off to overcome this empty, cynical rhetoric about tax cuts now, but in the next breath he says that he wants a deregulated labour market. The fact is that he does not know what he wants. Perhaps he wants a hot bath and to sit in a draught. The fact is that the Opposition has no idea about the so-called pace of adjustment. Is it any wonder that the Organisation for Economic Co-operation and Development in its report said that this is a novel and unique change in Australia, a massive external transformation of our external accounts without a massive recession, high unemployment or the decimation of business? Do those opposite think that the business community does not understand that? It has been able to keep growing despite the fact that we have been bringing the current account down. Do those opposite think the business community does not understand what they would have done to it with their dull, morbid policies which are to tighten up interest rates, try to cut fiscal policy-which they have never done in the past before-jam the place into recession and destroy businesses? The business community knows all that and that is why those opposite rate where they do in the opinion polls of people in business. They think those opposite are beyond help and they are pretty right. Mr GEAR —Can the Minister for Employment, Education and Training explain to the House the role his portfolio will play in the Government's strategy to assist the long term unemployed? Mr DAWKINS —I want to support the remarks made by my colleague the Minister for Social Security about this important new program. The important thing about tackling the problem of unemployment is to see that more jobs are created in the economy. The Minister referred to the fact that during this Government's period of office there has been an expansion of job opportunities in excess of one million. However, he also referred to the often quite tragic circumstances of those who have been out of the labour market on unemployment benefits for some considerable time. I do not think either of us underestimates either the importance of assisting these people or the difficulty that we will face in trying to secure places for them back in the labour market. Many of these people have been locked in a cycle of unemployment, locked into a rut and locked into a fairly depressing situation. Therefore we are trying to have a coordinated approach which will involve officers of both his Department and mine. A very important part of this program is actually to change the way in which these people see the world, to try to give them the confidence and the enthusiasm to tackle the labour market once again. The Minister for Social Security mentioned the fact that intensive interviews will be conducted by officers of his Department and of mine which will involve about 40,000 interviews in a year. During those interviews we will be trying to identify the kinds of labour market programs that might assist these individuals back into the work force. We will be doubling the number of places in our labour market programs from 25,000 to 50,000 to accommodate this particular group of people. We believe that the training and work experience that can be provided for them during these programs will assist them to find a permanent job. The program will cost in the region of $114m over 3 1/2 years, of which $78m will be expended through my Department. This is evidence of the way in which two departments can work together effectively not only in terms of producing a policy to assist a particularly disadvantaged group in the community but also to try to find proper solutions and programs to assist these people in a very practical way. Mr PEACOCK —My question is directed to the Treasurer. According to the Budget Papers, the forecast for pay as you earn (PAYE) tax revenue is based on employment growth of 2.75 per cent and a rise in average weekly earnings of about 5.75 per cent. This implies a growth in the tax base for PAYE tax revenue of less than 9 per cent. I remind the Treasurer that net PAYE tax revenue is projected to rise by 13.8 per cent. I ask the Treasurer how bracket creep, which comprises the bulk of the gap between 9 per cent growth in the tax base and 13.8 per cent growth in PAYE tax revenue, could be dismissed as making only a minor contribution to the increase in revenue as he so constantly described it during interviews last night? Mr KEATING —The Department of the Treasury calculates bracket creep this year at $1.5 billion-that is on the PAYE scale-again confirming the point of view I put last night. But offsetting that is $1.4 billion of tax handbacks by the Government this year: $400m in beer; $250m in abolishing the 2 per cent revenue duty on imports, which gives benefits to all consumers; $110m reduction in first year effects of the company tax; $130m reduction in the tariff paid on passenger motor vehicles benefiting, again, the taxpaying public; and $110m loss of revenue from a general tariff reduction. Those, plus some other measures found on page 302 of the statement, amount to $1.4 billion. On top of that, we have lowered revenue by $700m from lower oil prices which also benefits consumers and we have lost $1 billion of Reserve Bank of Australia (RBA) profits. So there is a loss to the revenue of $3 billion offsetting a $1.5 billion increase to the revenue from so-called bracket creep. Where does that leave the little-with the emphasis on little-argument of the honourable member for Kooyong? It leaves it in pretty poor shape. The fact is that the great bulk of the increase in tax came from the growth in employment because there are more people out there and it came from higher average weekly earnings of about 6 per cent at which it has been running for the last few years. So it produces more revenue. What one sees here is simply the reflection of the strength of the economy. But we have these trite statements from the honourable member for Kooyong and the Leader of the Opposition who talk about how the surplus has been built on this bracket creep. Mr Sinclair —That is right. Mr KEATING —No, I will not start, I must be abstemious. We had tax cuts in 1984, 1986, 1987 and we will have them in 1989. We will deal with the matter then. That is the right time to have the tax cuts. This is the other point: the Opposition argues that it will cut outlays. We make the just claim-it is in the Budget Papers; I showed the Deputy Leader of the Opposition the reference last night-that the revenue to gross domestic product (GDP) ratio is the same now as it was in 1984-85 yet the Budget balance has changed by five percentage points of GDP from deficit to surplus. That is 5.5 times 323 billion-five per cent times 3.3-which is about a $16 billion change in the deficit to surplus balance carried exclusively by cuts to outlays. Yet we have the size of the economy, with all of the demands since the early 1970s such as child care, aged care, more money for schools, higher costs in health and higher quality health provisions. We have all of these things but a public sector on the Commonwealth's account of the same size as that of 1973. Yet the honourable members opposite still have the temerity to say that there is room for further massive cuts in public expenditure. Every time they say that we say, `Well if you think that, tell us where they are'. Tomorrow night the Leader of the Opposition will have his opportunity for 20 minutes to tell us-one third or nearly halfway through this Parliament-where he thinks he can make cuts to outlays. He will be able to put some words to the figures. We will hear what he says. We will have the outlays of the Commonwealth's GDP at 25 1/2 per cent of GDP this year and 24 1/2 per cent next year. Are honourable members opposite saying that we should take the Commonwealth back to Menzies' levels of outlays; that we should just rip and tear at the transfer system which supports the weak, the poor and the unemployed? We have made all those changes and we have looked at the priorities. We have been through 10 fiscal statements-10 major budgetary reforms. The same group of Ministers has done this for 5 1/2 years. That is why the fiscal policy of the Commonwealth is in the shape it is. The reduction has been carried exclusively on cuts to outlays. But this tawdry, shabby claim that we have a surplus built on some bracket creep is given the lie by the $1.5 billion-- Opposition members interjecting- Mr KEATING —Opposition members can go on lying and telling stories if they want to. Madam SPEAKER —Order! the Treasurer will withdraw the word. Mr Spender —Madam Speaker, I raise a point of order. The Treasurer should have been asked to do so without my having to get up and ask you to do so. Madam SPEAKER —No, you just got up a bit fast. I was doing it anyway. I take it the Treasurer has withdrawn? Mr KEATING —Yes. The fact is that the Opposition trafficks in untruths that are demonstrated by the Budget documentation. Let me provide the reference. Let me kill the story once and for all in terms of the Budget balance. On page 349 of the Budget Papers we find table 1 relating to aggregates which shows that in 1984-85 revenue as a proportion of GDP was 27.2 per cent. In 1988-89 it was 27.3 per cent. In other words, the revenue base was the same. But what is the difference in the Budget balance? From a deficit of 3.2 per cent of GDP to a surplus of 1.7 per cent-a 5 percentage points change. That demonstrates once and for all the nonsense that the Opposition continues to parrot about how this has been done by bracket creep, with its tawdry political line. But let honourable members opposite tell us tomorrow night where they will cut outlays as the honourable member for Kooyong said they should. Let him tell us, through the speech of the Leader of the Opposition, where he will cut outlays and slash public expenditure by this vast amount which he says is lying waste in the public expenditure system. Mr JOHNS —Why does the Minister for Employment, Education and Training refer to the Budget decisions on higher education as the higher education package? What are the key elements of that package? Mr DAWKINS —About 12 months ago this Government undertook to provide Australia with a bigger and better higher education system. In the course of that 12 months, there has been a major policy review. Last night, of course, the Treasurer announced in the Budget a package of measures which will support that larger and better higher education system. It will involve the additional expenditure of some $843m during this triennium and will create 40,000 new places throughout the system. In other words, the system will expand by a massive 10 per cent by 1991. Funds for the general operating purposes of universities and colleges will increase as well as our providing specifically targeted funds through the Australian Research Council for research activities primarily, but not exclusively, within universities. By 1991, $140m will be expended in that way. But perhaps one of the most important aspects of this package is the $450m that we will spend on capital during the course of this triennium. That is to be compared with the last Howard Budget, which provided a miserly $32m for capital for the higher education system. Because there was a series of years of that kind of neglect, that led to the substantial run-down in the infrastructure of the universities and colleges in Australia-a run-down which we are determined to reverse. Of course, we have a major preoccupation with equity because we want to see in this larger and better higher education system more opportunities for those people who have traditionally not been large participants within the system. There are some specific equity measures which we have undertaken as well as an enhancement to Austudy which will see another 48,000 students enjoy its benefits. For those people over 21 years of age with dependants there will be very substantial increases in the amount that they receive. Overall, there will be a 16 per cent real increase in funding over the next three years. However, what needs to be seen is that we do not believe that this massive expansion should be carried entirely by the taxpayer. That is why we propose to introduce the higher education contribution scheme, which will see the abolition of the higher education administration charge and its replacement with a scheme which requires no up-front compulsory payment but rather provides the opportunity for students to make their contribution later when they are in a position to do so. However, it is important to realise that this must be seen as a package. The Government is committed to this major expansion but it is similarly committed to introducing this scheme, which will pay for about half the cost of the expansion now and in the future. Those who might want to oppose the contribution scheme should remember that if they do so they put at risk much of this new funding that we are providing to higher education. Dr WOODS —I ask the Minister for Community Services and Health whether he is aware of just how many Australian suffer from alcohol-related diseases and the load that this places on the health system. Is it not a fact that the taxation cuts for beer will result in increased consumption of alcohol and an increase in alcohol-related diseases? What is the forecast of the additional cost to the Australian taxpayer and the Australian public for treatment of the increases in alcohol-related diseases, social security payments and time lost to Australian industry? Dr BLEWETT —I would have thought that, given the professional background of the honourable member for Lowe, he would have realised that the decision made last night was something for which those in the health areas have been arguing for a long time-that is, a distinction between low alcohol and high alcohol beer. These changes will reduce the overall cost of beer as an anti-inflationary measure. But the major effect will be to reduce the cost of a case of 2.2 per cent, low alcohol beer by an estimated $5.50 compared with only $2.20 for full strength beer and to create for the first time in this country a very clear differential between standard and low alcohol beer. In fact, these factors are expected to lead to a swing, both in consumption and production, away from the higher strength beers. I know that honourable members opposite have difficulty in understanding these very simple concepts but they will lead to a swing away from both the consumption and the production of higher strength alcohol beers towards those of lower strength, thereby discouraging excessive alcohol consumption, in line with the policies of the campaign against drug abuse. It is extremely important that over time-we have now established that period-we have a tax regime which directly relates the level of taxation to alcohol content. Of course, I expect the alcohol producers to act responsibly in response to this initiative, with their promotional activities reflecting the economic, as well as the health, advantages of low alcohol beer. Ms FATIN —My question is directed to the Minister for Community Services and Health. I ask: What evidence is there to show that publicly funded child care produces social and economic benefits for Australian families? What action is being taken to ensure that a greater number of needy families have access to the children's services program? Dr BLEWETT —I thank the honourable member for Brand for her question, which, of course, reflects her continuing active involvement in the child care area. Of course, the achievements of this Government in child care are unparalleled in the history of this country. Since we came to office we have increased spending on the children's services program from $62m to over $222m in the last financial year. In that time we have raised government funded child care places from the 46,000 we inherited to the 110,000 we will have in early 1989. The honourable member for Brand asked about the economic benefits. Research work now done suggests the government funded child care does produce substantial taxation and, of interest to the honourable member, welfare savings to government which could, in fact, outweigh the total cost of the children's services program. The initiative we have taken this year is to provide in the coming four years a further 30,000 child care places, building on the enormous progress that we have already made. The national child care strategy for these 30,000 places will provide 20,000 outside school hours care places; 4,000 centre-based care places; 4,000 family day care places; and 2,000 occasional day care places. The strategy will overcome a weakness in the children's services program which has been caused by the relatively low coverage of the needs of working parents with school age children. It will extend the existing very successful partnership arrangement with the States, Territories and local government. But it goes beyond that in introducing an innovative new partnership with industry. Employers are being invited to apply for Commonwealth assistance in establishing and operating child care facilities for their staff. Under these unique arrangements employers will fund the building of child care facilities and the Commonwealth will share the operational costs with parents and industry. This involvement of industry recognises the value of child care services to employers and maximises the potential for increasing the efficiency and effectiveness of the children's services program. It is important to recognise that the children's services program brings very real benefit to employers. The talks which have already taken place with business leaders about this initiative are expected to ensure that our proposals will prove particularly attractive to industries which have a high proportion of women employees-industries such as clothing, textile and footwear and manufacturing companies. Overall, the national child care strategy on which we are now embarked will increase the number of government funded places from 110,000 to 140,000, which is 100,000 more places than we inherited from the previous Government. Each one of those places is a real investment in the social and economic well-being of Australian families and, of course, the continuing prosperity of Australian industry. Dr WOOLDRIDGE —I direct my question to the Minister for Community Services and Health. Is it not a fact that the Minister has previously stated that alcohol and tobacco are the two major drug problems in Australian society? In view of the increases in alcoholism and alcohol related diseases that will result from cuts in taxation on full strength beer, how does the Minister justify the 5.5 per cent cut in funding to the National Campaign Against Drug Abuse? Furthermore, how does the Government's sponsorship of the interests of the major breweries and increased alcoholism square with its so-called commitment to better public health and its establishment of the national better health program? Dr BLEWETT —I have already indicated to a previous questioner that I regard it as a major advance in the taxation system of this country to establish for all time a taxation regime which distinguishes between low and high alcohol beer. I believe that now it is established and built into the system it will be maintained, and I believe that that has very real health benefits. Ms McHUGH —Is the Minister for Social Security aware of an alarmist report in this morning's Sydney Morning Herald headlined `Thousands to Lose Pension'? Can the Minister explain what the changes to the treatment of investment income will really mean for pensioners? Mr HOWE —I am aware of the report, and I agree that it is alarmist and could cause some pensioners to worry unnecessarily about their pension. Let me say first that the vast majority of pensioners will not be affected by the changes referred to. It should also be pointed out that there was an error in the report. After the pensioners' income test free area has been filled, the pension is reduced by 50c for every $1 of income, not $2 for every $1 of income. The article mentions that the changes announced in the Budget are to close loopholes in the system. The changes will ensure that pensioners' investments are treated more equally. Just as in the taxation area various means are chosen to avoid the taxation system, in the social security area there are various devices and measures adopted similarly to avoid the impact of the income test. In social security we have always had a fundamentally different definition of income from the tax system-and for a very good reason. The tax system taxes people on the basis of their aggregate income over the past year. In social security our concern, which I am sure is shared by the Opposition, is to assess people's situations to a point where the pensioner is paid on the basis that we should target payments towards need. In social security we operate on the basis of current rate of income rather than the tax system's basis of historical amounts of income. We have been working very closely with the investment industry over the last two years to develop policies to make the income test based on this current rate approach work. A recent High Court case highlights the issues we have had to deal with. In that case the pensioner had invested in a capital growth trust. Each year the pensioner was issued with bonus units to account for the return on her units in the trust. The pensioner was able effectively to cash the units in with the fund manager at any time. That arrangement in practical terms was not much different from a traditional investment producing dividends or interest on a regular basis. So we announced in last night's Budget a set of policies which will achieve a fair and equitable income test-a test based on the current rate of income so that pensioners get pension when they need it, but also an income test which cannot be circumvented in the way suggested. The changes are nothing more than a commonsense way of measuring the current rate at which a pensioner is getting income. For existing investment products the average rate of return over a period of up to three years will be taken as the rate of income from those investments. For new investment products my Department will look at the advertised rate of return, the rate of return from similar products, and other relevant matters to work out the current rate of income of the pensioner. I repeat that for the vast majority of pensioners these changes will have no impact, but the Government is determined in respect of pensioners to ensure that payments are directed in accordance with need and that the income test operates fairly. We will implement these changes in consultation with the relevant industry to ensure that there is understanding of the changes and that people do not get misleading advice. Mr HUNT —I refer the Treasurer to his press release of Friday, 12 August in which he described the Opposition's concerns with the legality of the compulsory elements of the now current 1988-89 household expenditure survey looking at family home budgets as a phoney campaign and as nonsense. Does he still hold to that view? Mr KEATING —I do. The household expenditure survey is identical to the one which was supported and signed off by Senator Messner in a government which the questioner served. There was some question about legality. I am told by the Australian Statistician that he has since had the Attorney-General's Department look at the matter and there is no cause for any concern there. I regard the whole episode, including all the earlier charges by the honourable member for Moreton about blood tests and the rest of the stuff, as being part of the cheap politics of smearing a necessary part of the database of this country upon which decent social and economic policies can be based. That is the point of such surveys. I think it ill-behoves the Opposition to carry on in this way in which it has about a survey which it itself has supported for years. Opposition members interjecting- Mr KEATING —The honourable member for Lowe keeps chipping in. These professional empty-heads come into public life with the silly old head nearly bobbing off. He beat a really decent member, Michael Maher, who cared about his electorate. This joker has probably never been through the pastures. Up and down the Boulevard at Strathfield would be as far as he would go. He has never made any contribution that matters. All his questions have no basis to them. Mr Shipton —I raise a point of order, Madam Speaker. The Treasurer is out of order and not complying with the Standing Orders in his attack on the honourable member for Lowe. Madam SPEAKER —The Treasurer has finished his reply. Mr RONALD EDWARDS —My question is addressed to the Minister for Industrial Relations. Opposition members interjecting- Madam SPEAKER —Order! I cannot hear the honourable member for Stirling. The honourable member for O'Connor will resume his seat. He is totally out of order. Mr Tuckey —Madam Speaker-- Madam SPEAKER —I warn the honourable member for O'Connor. Mr RONALD EDWARDS —Opposition members have been very unhappy since last night's Budget, Madam Speaker, and we know why. Is the Minister aware of the reports that the Government had nothing to say on labour market reform in last night's Budget and that it had given away any real intention to reform the labour market? If so, are these reports correct? Mr WILLIS —I am aware of a statement by the Leader of the Opposition on radio this morning in which he said that the Treasurer had nothing to say in his speech to the House last night on labour market reform, or indeed on any long term structural reform at all, and that the Government had therefore given all that away. Of course, that was not true of the Treasurer's statement, which said quite a few things about structural adjustment, and totally overlooked Budget Paper No. 9, headed `Labour Market Reform: The Industrial Relations Agenda'. Given that we had a Budget related paper on that topic last night, it is a bit rich for the Leader of the Opposition to be saying on radio this morning that we said nothing about this subject. It is understandable that he was so traumatised by the Budget that he completely missed the Budget Paper. Nevertheless, it was a totally incorrect statement by him. For his benefit, I indicate briefly that the paper clearly states the importance to the Government of greater labour market flexibility. It notes particularly the need for greater flexibility within enterprises. We have a very flexible labour market as between enterprises but we lack flexibility within those enterprises. It says that this will be best achieved by award restructuring and associated measures. It spells out what is meant by award restructuring and the advantages that flow from it to all parties-particularly, of course, to management, because it provides the opportunity for greater efficiency through the more flexible use of the work force, and to workers by opening up career paths and providing increased job satisfaction. It emphasises that award restructuring will be achieved satisfactorily only in a cooperative environment, and especially that the achievement of proper and accepted accreditation requirements is impossible without the cooperation of unions and employers. Finally, it notes the support that exists for this approach from the unions, employers and the Australian Conciliation and Arbitration Commission. All of that stands in remarkable contrast to the desperate labour market policies of the Opposition, which seeks to jettison wages policy entirely and to bring back exploitation in the sweatshop. It proposes an approach which would be certain to meet much opposition and which would result in frustration and non-achievement. I suggest that this paper will bring about an approach which will get much greater flexibility into the labour market in a way which will improve equity and safety in the workplace, and will have great support for all the parties. Mr BEAZLEY(Swan-Leader of the House) —Papers are tabled as listed in the schedule circulated to honourable members earlier today. Details of the papers will be recorded in Hansard and the Votes and Proceedings. The schedule read as follows- Precious metals, gems and jewellery-Industries Assistance Commission Report No. 412-3 May 1988. Mining and minerals processing plant and equipment; construction, earth moving, materials handling and agricultural equipment; railway rolling stock; pumps and compressors; and certain associated service industries-Industries Assistance Commission Report No. 413-24 June 1988. Ships, boats and other vessels-Industries Assistance Commission Report No. 414-29 June 1988. Australian Broadcasting Tribunal Annual Report 1986-87-corrigenda to the Annual Report of the Australian Broadcasting Tribunal 1 July 1986 to 30 June 1987-section 28 of the Broadcasting Act 1942. Northern Land Council-Annual Report 1986-87-section 37a of the Aboriginal Land Rights (Northern Territory) Act 1976. Tiwi Land Council-Annual Report 1986-87-section 37a of the Aboriginal Land Rights (Northern Territory) Act 1976. Dr BLEWETT —Madam Speaker, with your indulgence I wish to add to my answer to the question from the honourable member for Chisholm (Dr Wooldridge). He made the allegation that there had been a reduction in the National Campaign Against Drug Abuse (NCADA) funding. I was puzzled by that because I was quite sure there had been no reduction. I checked it, and there has been no reduction in funding. In fact, there has been an increase in funding for NCADA. The honourable member, in obtaining his figures, used the reduction in Appropriation Bill (No. 1), but forgot to check the increase in Appropriation Bill (No. 2). Mr SIMMONS(Calare) —Madam Speaker, I seek your indulgence to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr SIMMONS —Yes, Madam Speaker. Madam SPEAKER —The honourable member may proceed. Mr SIMMONS —In the Australian of 23 August, under the heading `Wheat industry riled by Lib privatisation policy', written by Mr Julian Cribb, the following statement was made: The Prime Minister's Country Task Force has also recently supported the GCA view- that is, the view of the Grains Council of Australia- that the Wheat Board should retain monopoly control over the home market. I point out that at no time, as Chairman of the Country Task Force, have I had anything to do with Mr Cribb, and there is no substance at all to his allegation. Madam SPEAKER —Order! The honourable member is not making a personal explanation. He will resume his seat. Madam SPEAKER —I have received a letter from the honourable member for Kooyong (Mr Peacock) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Hawke Government's failure to cut the current high personal income taxes and to improve the standard of living of Australians. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the Standing Orders having risen in their places- Mr PEACOCK(Kooyong)(2.53) —We bring before the Parliament today this matter of public importance, and the need to do so is underlined particularly because the Hawke-Keating Government is trying to convince this nation that last night's Budget is a carefully drafted and responsible triumph. The harsh reality is that, while the Budget surplus is $5.5 billion, it has been overwhelmingly achieved by increases in taxation. I remind the House of what the Australian Financial Review editorial said on this point this morning: It is a revenue driven, taxpayer-funded Budget-a Budget driven largely by further increases in tax revenue rather than cuts in government expenditure. Indeed, the Budget Papers of the Treasurer (Mr Keating) show that this is the highest taxing government the country has ever known. In fact, an extra $5.7 billion-an interesting figure in view of the surplus-in income tax is being collected from individuals. That is a 13.6 per cent increase, and is even higher than the 10 per cent growth of the previous year. The share of individual taxes in the total tax revenue has now jumped to over 54 per cent, and low and middle income earners are unquestionably being poleaxed by Labor's tax rip-off. Last night's Budget has cemented lower living standards in Australia. We saw, of course, some tinkering with the ramshackle indirect tax system but that goes only a couple of paces down the long road of reform in that area. However, unquestionably, it will help the Treasurer obtain his otherwise questionable 4.5 per cent inflation forecast. Those it will not help, though, are those Australians waiting for significant personal income tax relief. The Treasurer can come in here all he likes and allege, as he did in this very capital city only a matter of weeks ago, that Australians do not want tax relief. The reality is that those of us who move in the community, those of us who see people and who participate outside this building-a feature that is not part of the Treasurer's life-know differently. I pause on that point. I heard some interviewer commenting on the Treasurer's intrusion into election campaigns and I recalled, as every member in this chamber would have recalled, that the Treasurer's intrusions into election campaigns are always in the antiseptic atmosphere of a press conference. We never see him in a supermarket; we never see him out in the streets. He had a go at the honourable member for Lowe (Dr Woods) earlier about moving through a constituency, but he stays away from people all the time. A few of us are blessed with being asked to sign autographs during election campaigns. One can imagine what the people would be asking the Treasurer to do if they got their hands on him during a campaign. He is never sighted in the streets of any capital city-never. He has always hidden behind four walls. His intrusions are limited to press conferences. This is the man who alleges he knows what low to middle income earning Australians want. There is no person more detached from mainstream Australia than he. There is no person more out of touch with what Australians want than this man. For him to come to this capital city and say that Australians do not want tax relief indicates how he does not comprehend the impact of his high taxes, his high inflation rates and his high interest rates on Australians today. It is those people whose living standards have been attacked by this man in this, as the Financial Review calls it, revenue driven, taxpayer funded Budget. The fact is the Treasurer will not give us the tax cuts that Australians need, and indeed that the economy requires now, and he will not do so for two reasons. He thinks that the manipulations in which he has engaged for some time to move the current incumbent of the prime ministership out of the way will allow him to bring in the tax cuts next year and then, as leader, go to an election. Forget the needs and the requirements of hard-working Australians, the salt of the earth, who are struggling to make ends meet. Forget about them; he is slotting in his carefully crafted, cynically oriented election policy rather than giving the genuine relief that is required. The second reason he cannot give tax cuts is that he cannot deliver on expenditure cuts. Next July, when we may-underline `may'-receive our anticipated tax cuts, Australians ought not to expect genuine tax relief; all they can expect, after all that time, is the paying back of what has already been confiscated in the form of bracket creep. Of course, there is a clear alternative to what the Government has offered Australians in the area of taxation and economic policy. If the Treasurer thinks he is throwing down some gauntlet to the Leader of the Opposition (Mr Howard), he need have no worry about it being picked up tomorrow night. He is offering tightened belts and lower living standards. By contrast, as the Leader of the Opposition will describe, our strategy is based on the belief that the standard of living of Australians can and must be improved while at the same time we strengthen the economy to cope with our foreign debt situation. We ought not to forget how precarious that situation actually is. Net foreign debt stands at $88.7 billion. One has to look pretty hard in this Budget to find mention of that figure. The reality is that the Hawke-Keating Government has lost its direction. This is a high risk Budget and has been described by many in that vein. I will read a few of the comments of those who have detached themselves from grovelling at the feet of the would-be emperor. The verdict of the Australian Financial Review on last night's Budget is quite ominous. The editor wrote: In short, the economic foundations of this Budget may be built on quicksand and even a slight fall in commodity prices could send the whole scenario into disarray. He went on to say: . . . there is still an eerie feeling of tightrope walking about the whole strategy. The editor of the Melbourne Age noted: But, foreign debt remains dauntingly high, restructuring is depressingly slow and the economy is at the mercy of international influences beyond Australia's control. The editorial in the Sydney Morning Herald says that the Treasurer `is taking a calculated risk that the world economy will not slow, and catch Australia wrong-footed'. Those statements are correct. This Budget has failed Australia because it has failed, as I have indicated time and time again about the policy of this Government, to force the pace of adjustment in the face of our external imbalances. The fact is that the pace of adjustment is slow. It matters not what the Treasurer said at Question Time. The pace of adjustment in the face of these external imbalances is too slow. Senator Walsh agrees with that. Mr Keating —Don't be absurd. Mr PEACOCK —The Treasurer says that that is absurd. In fact, the evidence is that it is so. He should look at three of the facts. Fact 1: net exports are forecast to make a negative contribution to gross domestic product in 1988-89, as they did in 1987-88. Fact 2: the latest Australian Bureau of Statistics data show that investment in the vitally important mining and manufacturing sectors is forecast to show little, if any, real growth in 1988-89. Fact 3: imports of capital goods actually fell as a share of total imports in 1987-88. These three facts certainly cast doubt on the much touted restructuring of the economy. Rather than addressing the slow pace of adjustment, the Budget represents unquestionably a high risk strategy which could, in the event of adverse world developments, be detrimental to Australia's economic future. Australians have been implored to tighten their belts while the balance of payments figure is being improved. In the last few years the living standards of many Australians have been savaged, and for what? The current account deficit in 1987-88 exceeded the Budget forecast despite the unexpected increase in commodity prices. Without that increase in commodity prices the Australian economy would be in very poor shape. There is a very interesting comment in Budget Statement No. 2. Concerning this point it states: Although the recent lift in export prices has provided helpful relief to the external accounts, it would be imprudent for policy purposes to count upon its sustainability. Treasury itself says that it would be imprudent to count upon its sustainability. Yet just a little further on there is the Budget forecast that the terms of trade will increase by 9 per cent in 1988-89. I doubt whether anyone could consider it prudent to base an economic policy strategy on an unduly optimistic outlook for commodity prices. It reveals that the Australian economy is unquestionably vulnerable to any downturn in commodity prices. Instead of setting fiscal policy to reduce that vulnerability, instead of getting the house in order, the Treasurer's Budget relied unduly on an optimistic outlook for the terms of trade. Once again, the economy is being needlessly put at risk because the Government cannot deliver the goods. It cannot force the pace of adjustment, as Senator Walsh argued it should. Of course, the Leader of the Opposition was right when he said that the Government was not directing attention at labour market reform. Where was the talk of privatisation in the whole restructuring of this economy? Micro-economic reform, which was to be the hallmark of the third term of the Hawke Government, has gone. It has flown out the window like the rhetoric that has preceded this Budget. This country has one of the highest government-owned business sectors in the whole of the Organisation for Economic Co-operation and Development. If the Government were fair dinkum about restructuring, if it were fair dinkum about looking at where resources of capital and labour were being applied, it would embark on a scheme of privatisation. I know the Treasurer wanted to, but on this occasion he could not bludgeon those behind him into it, and they turned on him. The Australian economy, and Australians as a consequence, will suffer. I know the Treasurer says that privatisation is not part of the main game, but privatisation is about the more efficient use of capital and labour resources. It is about delivering more effectively. Privatisation will assist in winding back unnecessary government expenditure, which will assist in raising Australian living standards. If Australian standards of living are not part of the main game then I do not know what is. In relation to the rest of the micro-economic reform, I say, `Forget it'. The Leader of the Opposition was absolutely right when he said that the Treasurer could not address labour market reform because he cannot carry it out. We have an economy in which the Treasurer has made the worthwhile moves, which we have endorsed, in freeing up capital. He has mobility of capital now to a greater extent in this economy, but what we need is mobility of labour and his Government cannot produce that. Let us not lose sight of what the ultimate objective of a Budget should be. It is primarily an economic document, but with significant social overtones. This Government has lost its sense of purpose in regard to Budget policy as such. It has lost sight of the need to improve the standard of living for all Australians. As I said before, contrary to the Government, we maintain that it is possible to address living standards at the same time as addressing our external economic problems. Integral to our policy is the need for personal tax cuts to stop the decay in the living standards of many low and middle income earning Australians. Cuts in Government expenditure will curb the growth in public sector demand, which will permit a rise in private sector demand without risking a further blow-out in our imports. Cutting the size of the public sector will release labour and capital to the private sector, including export and import replacing industries. As the newspaper editorials said, this is a risky Budget that offers little comfort to those suffering under a crippling tax burden. In many ways it could be described, to borrow the title of a film, as the year of living dangerously. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr KEATING(Blaxland-Treasurer)(3.08) —Getting a speech from the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), is like being belted with a warm lettuce. Denis Healey said something about being mauled by a dead sheep. That is the quality of speech we heard. I am very interested in the Liberal Party's interest in me. Mr Eggleton is interested in me these days. He is always propounding the Opposition's faith about my public standing. I will bet that those opposite did not like the opinion poll amongst the business community that downed the lot of them, including their mate Elliott. Mr Peacock —How many votes? Mr KEATING —Enough votes to keep the Deputy Leader of the Opposition where he belongs-that is, in opposition. Mr Peacock —You are screaming, absolutely screaming-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! Mr Peacock —You cannot cope with that; you know you cannot. Mr DEPUTY SPEAKER —I warn the Deputy Leader of the Opposition. If necessary, I will warn his colleagues. Mr KEATING —They were heard in silence, Mr Deputy Speaker. I am interested in the misinformation campaign by Mr Eggleton. He has picked up the polling. He understands where the missile is heading. It is heading right for the Opposition's electoral demise as it was in 1987. I will be there to put the Opposition back where it will remain in 1989 or 1990. The charade of this paltry proposition by the honourable member for Kooyong involves tax cuts. On the one hand he talked about improving the adjustment process; that is, building a bigger surplus, making fiscal policy more tight. On the other, he said that when this Government has devoted all of the proceeds of the revenue system of the Commonwealth to the surplus, that is no good. On the one hand he says that he wants a tighter adjustment process, but when the Government devotes it fully to the surplus he says that that is no good. How do Opposition members cope with that kind of nonsense? They do not seem to understand that they cannot say things like that and mean anything. People outside might want to follow the argument. Does the Opposition think that the Government should devote the revenue to the surplus, that we should have tax cuts now? Therefore, how are we going to speed up the adjustment process? Opposition members have to make up their mind on what they really want and what their policy is. I know why the honourable member has proposed this: because he does not have a policy. The honourable member for Kooyong talked about me and shopping centres. In a debate on the Budget he talked about me and shopping centres. This is the fellow in the grey top hat and tails who knocks the champagne over at a Melbourne racecourse on Melbourne Cup day talking to the rest of us, in Labor seats, about whether or not we get around the community. God, he would make a cat laugh, honestly! The biggest laugh is how Opposition members always want to cut tax rates. For years they had the great poultice out of Bass Strait after the oil prices went up in 1970. They spent it. They left a 60 per cent marginal tax rate for all of those years. There was no dividend imputation. They taxed companies twice. They taxed ordinary Australians with penal marginal rates. They never tried to reduce them. They had the 46 per cent rate sitting at the $19,500 income level. They had the tax system in chaos and disarray. It was haemorrhaging everywhere. There was no morale in the tax administration. There was no political mandate for the Commissioner of Taxation to pull the revenue in from those who were avoiding it. There was no background in tax law. There was no decent tax administration. There was no decent revenue base and therefore no decent fiscal policy, just high tax rates. Mr Tuckey —People paid less tax. Mr KEATING —The Opposition was heard in silence. That is the structure which the Opposition bequeathed to this Government. We have crocodile tears now about tax rates. It is revealing that the great charge against us is that we are sticking to fiscal drag; that is, we do not have automatic indexation of the tax thresholds each year. Listen to this: this morning, on radio, Mr Vincent Smith asked the Deputy Leader of the Opposition: You'd be able to provide a surplus similar to that provided by Mr Keating with getting your house in order as you put it? The Deputy Leader of the Opposition replied: Well you phase your tax cuts over a 3 year period, based on cuts in government expenditure, then you achieve a surplus and tax relief and by cutting expenditure, you get your house in order. He was then asked: And you'd give the tax cuts? The reply was: Yes, but I wouldn't be able to live on what is required in one year, I would have to phase it over the three year period because it's a very significant sum of money that's required to get sort of dispos-able income . . . In other words, the honourable gentleman would stick to the fiscal drag for the intervening two years. He is not going to give it back but he is not going to stick to the fiscal drag. The honourable gentleman is damned out of his own mouth on a radio program this morning for making the same proposition that he charges the Government with. He is saying that he cannot give the tax relief immediately; it has to be over three years because he could not afford it. He would just let the tax harvest pile up with fiscal drag and he then just might cut taxes over three years as he cuts expenditure. On expenditure, further in the interview-here is a little beauty-when asked what programs he would cut, in the great sten-torian voice and with all of the passion and feeling he could muster, he said, `Well, of course, Medicare. You are talking about billions of dollars there'. What sort of health system would we have if billions of dollars were taken out of the hospital or medical system? Billions of dollars! What do Opposition members think they are talking about? We have Commonwealth outlays back to 1973 levels-25 1/2 per cent of gross domestic product from 30, heading to 24 1/2 per cent-and the honourable gentleman says, `Oh, there's billions in Medicare'. Who is he going to put out in the streets from the hospitals to reap the billions? Which doctors is he going to denude of income? He ought to tell his mate the honourable member for Lowe (Dr Woods)-he is a doctor-about the way in which he is going to rip doctors' incomes around by taking billions out of Medicare and public financing of the health system. In other words, the honourable gentleman is not going to find expenditure cuts and he is going to phase in the tax cuts over three years. In other words, he is going to stick to the fiscal drag. What kind of credibility or honesty is there in the proposition of his getting up and attacking the Government for sticking to $1.5 billion of fiscal drag when he is saying that he would phase tax cuts in over three years? He says these things because he has no thought through position. It is just empty chatter from a cursory briefing which fills up a slot on a radio show because there is no structure, no discipline, no concept and no understanding. The honourable gentleman talked about our not looking after low income people. He had the years to put in a family income scheme, as we have. He never did it. He had the chance to improve the social security system, as we are doing. He never did it. Australia's position is unique in the world: business investment at 12 per cent; a public sector borrowing requirement of zero; and consumption moderate. And he says, `Oh no, that is not good enough. What we need is tax cuts now. Blow demand out of the water. Watch the imports rise, the current account progress abate and interest rates rise'. That is the solution he wants. He knows the tax cuts are not capable of being paid now. We could not get any demand trade-off with the work force to pay them now. In a year's time with the economy one year further down the adjustment path, with inflation one year lower, with the current account lower, then and only then could we think about this kind of change. But no, for just the most crass political reasons the honourable gentleman is in here today saying that what he wants is tax cuts now. Yet on the same day in a radio program he said, `Oh no, if it were us we would phase them in over three years'. We are promising them in 10 months' time and the honourable gentleman has the temerity to say: `Oh, you would have to phase them in over three years. Yes, I would not be able to live with what is required in one year; I would have to phase them in over a three-year period'. The honourable gentleman has more front than Mark Foys. He is here putting a proposition to us saying, `How dare you stick to fiscal drag' and on the same day he is on a radio program saying that he would keep to it for three years. Where does one go after that? Game, set and match. However, I have five minutes; I will go on a bit further. It is like taking candy off kids, Mr Deputy Speaker. It is a point of amusement. We all have to get our fun where we can. The Deputy Leader of the Opposition used the Treasury quote from Budget Statement No. 2 about the terms of trade. He said that we cannot rely on rising export prices indefinitely for further adjustment in the current account, which of course is a statement the Government entirely endorses because it is in the Government's documents. But the honourable gentleman then goes on to challenge the Treasury view on alternative trade forecasts. He quoted the Treasury one second and in the same paragraph of his address a few moments ago then challenged the forecast. He messed the forecast up. It is a 9 per cent average improvement. He does not even understand the difference between through the year and average figures. We do not need a commodity price increase beyond the commodity prices which now exist. The question of risk is a figment of the honourable gentleman's imagination or a result of poor advice from his advisers. The terms of trade are already in the bag. All we need to do is to maintain the present price levels broadly. I indicated in Question Time the stock and inventory charts which the Treasury had put together in Statement No. 2 showing a much better balance in supply and demand for these commodities and the quote from the Organisation for Economic Cooperation and Development report of just three weeks ago about the terms of trade and the trade balance. There is no reason why such a proposition should be supported-why we should think that there is some imminent decline in the terms of trade which would threaten our economic strategy. Australia, for the first time in the post-war years, has a proper economic mix-really strong investment, moderate consumption and the total public sector borrowing requirement pulled down by five percentage points of GDP in the last four years. All of those savings are now going where we really need them in this huge structural shift towards the import replacement and export sectors, which will cure our current account problem, break the back of inflation, and over time provide scope for further nominal falls in interest rates. That is what will continue to promote change within this sector of the economy. We have had paltry pleas from members of the Opposition for tax cuts when they themselves tried to deliver in 1987 an unfunded tax cut of massive proportions which would have destroyed economic policy in this country in the last 12 months. Here they are back again to the political well to draw a bit more by saying that we should do it now. I reject absolutely the proposition articulated by the Deputy Leader of the Opposition. I just remind him of the incredible remarks which he made this morning on a radio program when he talked about sticking to fiscal drag, with tax cuts being phased down over a three-year period. He had the temerity a couple of hours later to propose this shabby and shonky proposition against the Government. Mr BLUNT(Richmond)(3.22) —We have just had a very interesting performance by the Treasurer (Mr Keating), who comes in here and struts around the parliamentary stage like a rat with a gold tooth. He thinks he can be very smug. He can come in here and regurgitate the briefings that the Treasury officials give him about the Budget and the budgetary process, but what he forgets is that the Australian people are not mugs. What my colleague the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), said is true. The Treasurer has never been seen in a supermarket. He does his campaigning at press conferences. He is not prepared to get out and talk to the people. Australian families know exactly what the Treasurer's policies have done to them. They know that they are going backwards. The one thing that they live in fear of is having the Treasurer as Prime Minister. Of course, this Budget is all about getting the Treasurer up as Prime Minister. It is a political Budget. It is a Budget designed to enhance the Treasurer's chances of knocking off the incumbent Prime Minister and replacing him; of bringing in tax cuts some time next year that will not be adequate-they will not be anything like the amount of money that he has ripped off the average Australian wage earner over the past five years-and of taking the Government to the people and, hopefully in his mind, getting it re-elected. But this will not happen, because the man has absolutely no standing in the Australian community. If he were prepared to go out and talk to housewives, the people who are trying to balance a budget under his tax regime, he would know exactly how poor his standing is. It would be a good idea if he had a look at the qualitative research and perhaps talked to a few of his back bench colleagues about their perception of him in the Government. They talk to us in the lobbies and say, `Oh, my goodness, Paul has real problems. We will have to do a lot of work on Paul. He needs a lot of help'. Let me tell honourable members that he does need a lot of help because out there in the community he really is on the nose. He is on the nose because the average Australian is dead unimpressed with macroeconomic jargon. What they are on about is how much money is in their back pocket after they have paid their tax bills. This Budget has a projected surplus of $5.5 billion, but how is that going to be achieved? Government revenue is going up by 10 per cent this year, and the Government says that average weekly earnings are going to go up by 6 1/2 per cent. The Government's revenue is going up by 10 per cent and the average family, if it is lucky, can count on an increase of 6 1/2 per cent. Let us look at what the average family is going to contribute to the Treasurer's 10 per cent. Personal income tax is going up by 13.6 per cent. I say again that average weekly earnings are going to go up by 6.5 per cent if wage earners are lucky. The tax rate is going up by almost twice that percentage. Families are not mugs. They know exactly who is going to pay for this increase. They know the net result of that increase will be less money in the back pocket. Less money will be given to the wife to go to the supermarket to buy the food, to provide the money for the kids to go to school and to buy uniforms. Things are going to be quite a bit more expensive when one goes to the supermarket, are they not? We hear about the cut in the price of beer. That is marvellous! I reckon the average family would rather have cheaper petrol when it fills up the station wagon than cheaper beer. Sales taxes on supermarket items and articles such as new football boots for the kids are going to go up by 14.4 per cent. The first thing we have to realise is that average weekly earnings are going to go up by 6 1/2 per cent. That is absolutely marvellous! But tax revenue is to go up by 13 1/2 per cent, so one will have considerably less in one's pocket. But when we go to spend our earnings we will find that sales taxes have gone up by 14 per cent. Families are not mugs. They know who is going to pay for this $5.5 billion surplus. Of course, the expectations of the community about this Government have completely changed from what they were a few years ago. This Government came to office on the basis that it was warm and compassionate. Let us look at how warm and compassionate it is. Those opposite were ranting and raving at Question Time today about the long term unemployed. It would be a good idea if the Minister for Social Security (Mr Howe) came in here and told us how many long term unemployed have actually been unemployed for five years. That is how long honourable members opposite have been in government. How many of the people the Government is trying to save have been unemployed for five years? The Government put them there; it cannot blame us. It cannot pull that stunt any more. It is the Government's failed policies and hopeless welfare system that have created poverty traps left, right and centre. It is the Government's labour market policies that freeze people out of work. That is what they do. Let us look at the compassion of this Government. I refer to a program that assists isolated children to get an education. I am sure that the Minister for Science, Customs and Small Business (Mr Barry Jones), who is at the table, knows about this program. I am sure he recognises the value of education. Does he know what his Government did in the Budget? It cut funding for this program. In isolated areas in Australia 4,500 fewer kids are going to get help next year. What is the Government going to tell those kids? Why cannot they have an education? The Minister knows that education is important. This is the Government that is going to tax graduates' incomes. Mr Spender —They don't live in marginal seats. Mr BLUNT —My colleague the honourable member for North Sydney is right: they do not live in marginal seats. They live in seats that are not held by the Australian Labor Party and that is why the Government does not care about them. That is why it has cut back on their funding. That is why it has an assets test for Austudy that will make it harder for people who live in isolated regions to support their kids getting an education. Those children have to leave home to go to school and get a technical or tertiary education. That is why the Government has no compassion. The statement by the Treasurer last night about this Budget being a commitment by the Labor Party to its constituency was exactly right. As I said when I began my remarks, this is a political Budget. It is about getting re-elected. It is about getting the Treasurer up as Prime Minister. Heaven help those who are not among Paul's chosen few because they will get nothing out of this Government-not a thing. Look at what the Government has done to the farm sector. Today in the House the Treasurer talked ad nauseam about commodity prices. The fact that commodity prices are up has saved his political and economic neck, but what has he done to the farm sector? He is ripping money off it left, right and centre. Farm levies are going up by about $105m. He is cutting back on wool promotion. Wool prices are up now and demand is strong, but if that does not continue, what does the Government think the cutback in promotion is going to do? The price of wool is going to drop faster than a lead balloon. But, of course, the Government would not understand the need to shore up one's market position when the times are good. No assistance is provided for the sugar industry. The Government is cutting back on the Commonwealth Scientific and Industrial Research Organisation. What does the Minister for Science, Customs and Small Business think about cuts of $2m this year and $6m the next? He more than anyone else knows the importance of research, of improving productivity and of making sure that we are in the forefront of the development of new techniques. The Minister probably was not even consulted in the budgetary process. He has seen a cutback in Government support for what is a fundamentally important part of our national effort to make sure that we have a competitive international position. As I mentioned, the Government has managed to cut the excise on beer. Despite the protestations of the Minister for Community Services and Health (Dr Blewett), the excise on high alcohol beer has been cut. We know what the demand curve for beer is like and we know the macho image that is involved. If the Government brings the price of high and low alcohol beer down we will see an increased demand for and consumption of both of these commodities. But in this Budget is any more money to be spent on roads? No; $32m less will be spent on roads in this coming year as compared with last year. So there are going to be more drunks and worse roads for them to drive on. That is a great sort of priority for a government, is it not? It is absolutely great! It is a wonder that government supporters can sit in this place. It is no wonder that there is hardly anyone on the Labor back bench. Labor backbench- ers are a bit embarrassed, particularly those from the country who know what the roads are like. I reckon that families would much prefer to pay a lower price at the petrol bowser than buy cheaper beer. I reckon that that would be an appropriate priority for a government, not the priority that it has shown in trying to buy back some support in the blue collar areas by chopping the price of beer. I hope that the Minister for Science, Customs and Small Business will not try to interject because he knows that this policy is fundamentally wrong and that it is immoral to do what his Government has done. We have heard some talk today about the Government's `great' policy in child care. Senator Walsh was right; it is a pity that his policy was not adopted. The Government will coerce, through union pressure, some private sector firms to provide funding for child care but it has frozen out people who would voluntarily invest their capital to provide child care places. As for the 30,000 child care places, let me just remind Government members of the Prime Minister's promise almost six years ago that there would be 20,000 new child care places. Only 10,000 of those have been delivered at present, so I wonder when the next 30,000, plus the backlog of 10,000, will be delivered. There is no way around it; this budget is a high taxing Budget which will be paid for by the average family whose standard of living will drop. The Budget is all about getting the Treasurer into the Prime Minister's chair and giving him some sort of springboard to run into the next election. This entire Parliament knows, and the community knows, that the Treasurer needs the greatest springboard of all time because, as I said, out there in the electorate he is on the nose. He has no compassion, he is regarded as ruthless and he is prepared to sacrifice the living standards of the average Australian family for his political ambitions. He is climbing into the Prime Minister's chair over the backs of Australian families and in the process he is driving them into the ground. Mr DEPUTY SPEAKER(Mr Rocher) —Order! The honourable member's time has expired. Mr RONALD EDWARDS(Stirling)(3.32) —It is strange to see the National Party of Australia come slipping and sliding in here to try to join the Liberal Party of Australia in a short term rev up as to how they might manage the economy. However, the big test will come tomorrow night and we will see how the Leader of the Opposition (Mr Howard) fares on that occasion. We have had one or two scouts running around today putting forward a few associated propositions, but on this side of the House for almost six years now, in terms of our May and August economic statements, we have been running the country responsibly. However, what we have had from the Opposition has been the same each year. Opposition members have two turns each year; they get a go in May and another one in August. My colleagues and I sit on this side of the chamber and wait for them to deliver some kind of cohesive economic policy. The Australian public has been waiting all that time, but the Opposition still has not got it right. We even had a situation this morning in which the Deputy Leader of the Opposition (Mr Peacock) said that he would not make policy on the run. In a radio interview he said, `I will not be making policy on the run, I will not be led into that. The policies will be developed towards the end of the year.' There are two problems with that. First, we have had an exercise in policy-making on the run just now by the honourable member for Richmond (Mr Blunt), who conforms to that classic National Party role of spend, spend, spend, so long as it is in his area but when he is dragged into the joint party meeting he suddenly becomes some kind of economic rationalist who will cut, cut, cut. The problem is that the Australian community is now wise to the National Party's position. We always see the same thing with the Leader of the National Party, the right honourable member for New England (Mr Sinclair). He runs round the country wanting to spend here and spend there, then he gets into the joint party room with all the economic rationalists, such as Senator John Stone, and the would-be economic rationalists, such as the Leader of the Opposition, who say, `But we must have some cuts.' The dilemma faced by National Party members is that they cannot be spenders in their own electorates and then turn out to be economic rationalists at the national level. That will not gell. We have an historic testament to that-the Howard $9.6 billion deficit. We have always had that on the record. Now, in terms of this current Budget, we have a $5.5 billion surplus. That is the general picture of the politics we are facing. We have a disordered, disreputable Opposition, with the National Party in one position and the Liberal Party in a series of positions. It is interesting to note that there will be one test for the Liberal Party tomorrow night, but John Elliott has already set Liberal members a few tests. At a Liberal Party Council meeting last April, John Elliott told John Howard to tell all his shadow Ministers that their policies must be finalised by August this year in order to give the party at least 14 months to clearly communicate the Liberal's plans before the next election. John Elliott said that all policies must be finalised; that was the dictum from the Federal President. The trouble is that no policies have been finalised. The Leader of the Opposition even tried to score on immigration and multiculturalism this week, but he did not make it because there are some members of the Opposition who are people of principle and who said they could not go along with that inherent racism in policy. The Opposition then got into difficulties in economic policy. This morning on 3AW in Melbourne, the Deputy Leader of the Opposition said that it would be a few months before the Opposition could get its economic policy together. But John Elliott said that the policy would have to be ready by August. What kind of policy formulation is that? In the absence of policy, people must remind themselves of the history. The history the Opposition must face is that when the honourable member for Bennelong was Treasurer in the Fraser Government 250,000 people were put out of jobs in the final year. So the Opposition should not come into this place and tell us how tremendously compassionate it is because a quarter of a million people were tossed out of jobs in the last year that Mr Howard was Treasurer. We know that. We also know that there was the Howard $9.6 billion deficit which is also on record. We must contrast that with the $5.5 billion surplus projected in this Budget. Let us keep the contrast going. More than one million jobs have been created in the five years of this Government, yet the Liberals wiped off a quarter of a million jobs in the last year they were in office. They worked hard at getting rid of those quarter of a million jobs and they succeeded. We have created more than a million jobs in the time that we have been in office. So the Opposition should not go down any path of compassion because it will not work. As I said, there is a test to be faced tomorrow night and that test will be on what the Opposition has to offer. We have not seen the Opposition pass that test yet, but it will be interesting to see what comes up tomorrow night. Perhaps the Leader of the Opposition will say, `Well, we will not make policy on the run; we will have to go back and tell John Elliott that our policies will be a few months late. We have not quite got it ready yet because we have not been able to convince Senator Stone and the rest of the National Party and its followers.' That is the sort of dilemma that the Opposition faces and we are all conscious of it. When one looks at the sums in last night's Budget, the projected $5.5 billion surplus and restraint in terms of consumption, one must then look at the question of tax cuts because that is what this debate is all about today. From time to time the Opposition comes up with unfunded tax cuts. Last year it came up with them at the time of the election. Those cuts would have taken us back to the economic performance that the Opposition left us with, the mess of 1983. Secondly, the Opposition takes Margaret Thatcher as its great model. She was over here recently revving up all the Opposition members and putting a little bit of steel into them. It is not surprising that that did not last long but she came here to put a bit of steel into this wishy-washy Liberal Party. In Britain Mrs Thatcher produced tax cuts without the proper structural reform and the money generated went into spending on imports so that that country's balance of payments has now gone substantially into deficit. Our policy is to get the structural adjustment going, to get the import replacement industries in place and the exports going. That is what is happening and the investors have told us that they are prepared to put on the table a 12 per cent increase in actual investment. Industry believes that the figure will be higher that that. The investors are prepared to go through the structural adjustment process and when all that is in place we will then have funded tax cuts and the result will be a substantial change in economic activity. We will not go down the path of Thatcher which the Opposition so admires by which tax cuts are introduced and they go straight into imports-imports are dragged in from overseas. We will introduce tax cuts as a sensible set of economic policies. The Australian electorate will not be conned by this either. The Australian people remember that when the honourable member for Bennelong went out of office the 60c rate was still in place. They will not be deluded by these matters either. Let us look at the general picture. People such as Mr Elliott have told us that the Opposition's policies will be in place by August. They are not in place. The real test comes tomorrow night when we will see whether the economic policy is in place. We have sat here for some five years now and we have not seen the Opposition's economic policies put in place. They have not gelled; there has not been that reasoning. Then the Opposition says, `Let us focus on wages policy because we think the Government might not be able to keep its wages policy in place'. This comes from an Opposition which has not yet developed a wages policy in more than five years that it has had to do so. Its wages policy consists of simply getting stuck into the trade unions and trying to bad mouth them. We know what the experience of that was in Australia-record levels of industrial disputes. It did not work. The Opposition does not have a wages policy. We have got a wages policy in place. People saw that recently in the decisions of the Australian Conciliation and Arbitration Commission. But what we have said will come into place in calendar year 1989 is a series of tax cuts as part of a wage tax trade-off. That is a substantial contribution towards the management of the Australian economy. It is not some grab bag, we are not running around suggesting anything to the trade union movement and we do not have a wages policy. What we are saying is that there should be a substantial approach to wages. To sum up, the picture that has been presented to us from the Opposition, is as follows: Firstly, members of the Opposition have not been able to develop a set of fiscal policies over the time that they have had in Opposition. Nothing has come out of it. We have the Deputy Leader of the Opposition running around and saying on radio programs, `There will be some policies. We will not make them on the run, but they will be made by the end of the year'. It conveniently ignores the fact that John Elliott said, `I want them by August'. So members of the Opposition failed that test. Secondly, the big test will be tomorrow night. Will the Leader of the Opposition be able to produce policies? It has not happened before and it did not happen in May. We sat and waited for it when we were down in the old Parliament House. We also watched on several other occasions, and it never came good. What happens when he really faces the test? The memory is the $9.6 billion dollar deficit, the 250,000 jobs lost in the last year of office, the absolute destruction of the Australian tax system and the loss of confidence in government when he was part of the government. If he can get over that psychological hurdle he might be able to reach some level of performance. But we have a Budget on the table that projects at least an improving standard of living for the Australian people and tax cuts which will come through next year. That is the record that we can stand on. I think those facts speak louder than all the rhetoric of the Opposition. Mr DEPUTY SPEAKER(Mr Leo McLeay) —The debate is concluded. Bill presented by Mr Hand, and read a first time. Mr HAND(Melbourne-Minister for Aboriginal Affairs)(3.42) —I move: That the Bill be now read a second time. Today I place before the House legislation to establish the new Aboriginal and Torres Strait Islander Commission, commonly known as ATSIC, a statutory body which represents a radical and timely change in the administration of Aboriginal affairs in this country. Today, 21 years after the 1967 referendum which gave the Commonwealth the power to legislate for Aboriginal and Torres Strait Islander people, I present legislation which, for the first time, will ensure the place of the indigenous peoples of this country in the decision-making processes of government. Before I proceed to the substance of this Bill I would like to recount a story which I believe illustrates very vividly what ATSIC is all about. It is a story about a meeting, held in February this year, in a dried up creek bed at a place called Wingellina on the borders of Western Australia, South Australia and the the Northern Territory. There were between 200 and 300 people at this meeting, many of whom had travelled long distances from some of the most remote areas of this country. It was familiar land to them, it was the land of their ancestors, their home country. They had gathered together to discuss a new proposal-a proposal which would allow them to have, for the first time, a direct involvement in the decisions which affect their own lives. In their own language, over three days, they worked through the proposal. The chairman of the meeting, a man named Yami Lester, well known and respected by all who know him, guided the meeting through the details. The proposal these people were considering was the setting up of the Aboriginal and Torres Strait Islander Commission. For the Ngaanyatjarra and Pitjantjatjara people, the new body would mean they would be charged with setting the priorities for their own people in their own regions. It would also mean their own elected representative, one of their own people, would be part of a commission which would have the power to formulate and implement policies for all Aboriginal and Torres Strait Islander people. The people who attended the meeting decided that such a body would be a good idea and they voted unanimously to support it. That meeting in far away Wingellina was just one of hundreds of meetings around the country held to discuss this new proposal. The decision taken at that meeting in favour of the new proposal was similar to the overwhelming majority of decisions taken by Aboriginal and Islander communities around the country. It is therefore with confidence and great pride that I now bring before the House legislation which will give effect to the proposals which have been considered and endorsed by that overwhelming majority of Aboriginal and Torres Strait Islander people. The legislation will establish the Aboriginal and Torres Strait Islander Commission, a statutory body amalgamating the Department of Aboriginal Affairs and the Aboriginal Development Commission and incorporating Aboriginal Hostels Ltd and the Australian Institute of Aboriginal Studies. The proposal to establish ATSIC was first announced in a statement I made to the Parliament on 10 December 1987, called Foundations for the Future. The philosophy underlying ATSIC was that it was to be a solid foundation-a foundation that Aboriginal and Torres Strait Islander people could use and build upon in their quest for self-determination and self-management. In proposing the establishment of ATSIC, the Government recognised and accepted the persistent demands of the Aboriginal and Torres Strait Islander people of this nation to become involved in the decision-making processes of government. ATSIC is an acknowledgment by all of us that it is no longer acceptable for governments to dictate what is best for the Aboriginal and Torres Strait Islander people; they should decide for themselves what needs to be done. And that is exactly what will happen when this legislation is enacted. The people from Wingellina, like the people from Melbourne, from Broome and from Torres Strait, will all begin to have a real say in the running of their own lives. In this regard, ATSIC represents a significant and major step towards the achievement of self-determination for the indigenous peoples of Australia. In case there are those who are fearful of the concept of self-determination for the Aboriginal and Torres Strait Islander people, there is no cause for alarm. Self-determination does not imply separate nationhood or the granting of sovereignty; rather it embodies the ambitions and aspirations of the indigenous communities to play their role in and make their contribution to the development and advancement of this nation. They seek to do this in a way which is meaningful to them and by way of mechanisms and programs over which they exercise significant control. ATSIC provides a means by which this contribution can be made. It must be remembered, however, that the constitutional responsibility of Aboriginal and Torres Strait Islander affairs is a concurrent one shared between the Commonwealth and the States. Nothing in this legislation detracts from the responsibility of State governments to make provision for the needs and requirements of the Aboriginal and Torres Strait Islander citizens of those States, particularly in relation to basic services such as water, sewerage and education which all other Australian citizens take for granted. As I stated earlier, this legislation is the product of a great deal of consultation with Aboriginal and Torres Strait Islander communities. In January of this year, more than 21,000 copies of my parliamentary statement, Foundations of the Future, and 1,000 copies of a video were distributed to more than 1,000 separate Aboriginal and Torres Strait Islander organisations and communities throughout Australia. In the order of 537 preliminary meetings were held involving some 14,500 people to discuss the proposals outlined in Foundations prior to my meetings with communities and organisations. Between 23 January and 10 March of this year, I personally visited and spoke with some 6,000 Aboriginal and Torres Strait Islander representatives at 46 separate meetings. Subsequently, an options paper was prepared which identified a range of alternative proposals based on suggestions and recommendations received as a consequence of my consultations with the Aboriginal and Torres Strait Islander people. That paper was widely circulated and was discussed at another 88 meetings involving some 2,700 people. Some people suggested at the time that these consultations were not serious and alleged that Aboriginal and Islander people were unable to understand the ATSIC proposal. My answer to those people is simple: look at what happened at Wingellina and the many other meetings to which I have referred as well as the response of this Government in making changes to the original proposal as requested by those communities. This legislation is the product of that comprehensive and I might say, exhaustive consultative process; a process which has no precedent in the Aboriginal affairs portfolio. As a consequence, there is nothing of major significance in this legislation that has not already been discussed at length with the Aboriginal and Torres Strait Islander community, and upon which they have already indicated their general support. I turn now to the main elements of the Bill. Preamble In my statement of 10 December I indicated that it would be fitting, particularly in this our bicentenary year, for the legislation establishing the Commission to contain a declaration, in the form of a substantial preamble, which sets down the Australian people's commitment to the recognition and protection of the rights of Aboriginal and Torres Strait Islander people and to measures to overcome their disadvantage. In addition, I made it clear that the preamble would contain a significant and historic recognition by the Commonwealth Parliament that Aboriginal and Torres Strait Islander people of Australia were the prior occupiers and original owners of this land. Since making that statement, much has been said and written about the proposal to have the Commonwealth formally recognise what the vast majority of Australians have been prepared to acknowledge for some time as historical fact. There has been considerable discussion amongst Aboriginal and Torres Strait Islander groups, and between them and the Government, about the wording of the preamble. In particular, I wish to inform the House of consultations which have taken place on recital three of the preamble and the role of these consultations in the formulation of recital three. During the consultations some Aboriginal and Torres Strait Islander groups expressed concern about the Government's original formulation of recital three. They feared that it could lead to certain Aboriginal and Islander groups being disadvantaged in current litigation. The Government's intention has, by contrast, always been that the language of the preamble would be neutral and have no legal consequences for present or future litigation in relation to land claims. The language was, and is, in no way intended to recognise land rights claimed to exist, to create new rights for land or compensation or to remove or qualify rights under existing law. Nor was it, or is it, intended to restrict any future developments in the law. Accordingly, the Government was prepared to agree to amend the original language of recital three to meet the perception by some groups of a possible negative impact upon current litigation. I emphasise the neutrality of recital three, conscious of the fact that the courts can, in certain circumstances, have regard to second reading speeches and other extrinsic material to assist in ascertaining the Parliament's intention with regard to relevant legislation. Recital three, as now written, is intended simply to record the historical fact that up to the present time the Australian courts have not recognised Aboriginal and Torres Strait Islander property rights in land except in relation to title granted by Federal, State and Territory governments. When endorsed by the Parliament in the name of the Australian people, the preamble will stand as an historical expression of philosophy and principle. The intention that the preamble has no legal consequences in no way detracts from its importance as a statement of those facts. I am happy to state that the preamble has the support not only of the vast majority of the indigenous groups of this nation but also will, I am confident, enjoy the support of the wider community throughout Australia. Aboriginal and Torres Strait Islander Commission The Aboriginal and Torres Strait Islander Commission Bill provides for the establishment of the Aboriginal and Torres Strait Islander Commission. The functions of the Commission are set out in the Bill and include the formulation and implementation of programs designed to advance the social, economic and cultural condition of Aboriginal and Torres Strait Islander people. The Commission will also prepare policy proposals to meet national, State and regional needs and priorities of Aboriginal and Torres Strait Islander people. In addition, it will have the important role of advising the Government, through the Minister, on the coordination of the activities of other Commonwealth bodies that affect the interests of Aboriginal and Torres Strait Islander people. I want to emphasise that the legislation will ensure that the Commission will not be merely an advisory body. It will exercise significant executive powers and have responsibility for the administration of those programs currently undertaken by the Department of Aboriginal Affairs and the Aboriginal Development Commission. Moreover, the Commission will be assisted by, and be responsive to, the regional councils established by the legislation, and which are an integral part of ATSIC. The Commission will comprise a chairperson and 14 other commissioners. Twelve of the commissioners will be elected by regional councillors to represent each of the twelve zones established around Australia. The two remaining commissioners and the chairperson will be appointed by the Minister. Regional Councils The linchpin of the new Commission structure will be the establishment of 60 regional councils, each of which will comprise up to 20 councillors elected from within their respective regions on the basis of one person, one vote. As honourable members will be aware, my original proposal provided for regional councils based on existing regional office structure of the Department of Aboriginal Affairs and would have comprised representatives of each incorporated Aboriginal and Torres Strait Islander organisation in their respective regions. However, as a consequence of my consultations with Aboriginal and Torres Strait Islander communities, the proposals now embodied in the legislation, involving elected councils for areas determined by Aboriginal and Torres Strait Islander communities themselves, are clearly preferred as being more equitable and appropriate. Regional councils provide the means by which people at the grass roots are able to have their views and decisions flow through to the centre of government in a way which has never been available to them before. It is here, at the regional council level, that the Aboriginal and Torres Strait Islander people of this country will start to influence the programs and policies which impact upon their lives. It is here that the success of ATSIC will ultimately be determined. The creation of the Commission, based on the network of regional councils, will ensure a much more effective and responsive administration than has hitherto existed in the Aboriginal Affairs portfolio. In addition, it provides for the first time since the demise of the National Aboriginal Conference (NAC) for a formal means by which the voice of the indigenous peoples of Australia will be heard at a national level. Torres Strait Islanders I know honourable members will be aware that Torres Strait Islanders have made clear in recent times their discontent and concern at what they allege to have been the lack of interest shown by governments, both at State and Commonwealth, in relation to meeting their needs. While this Government does not wholly accept that criticism, it does recognise that there is a need to focus more clearly upon the needs and priorities of the Torres Strait Islanders. It is for this reason that the legislation provides for the establishment of a Torres Strait Islander Advisory Board which has as its function advising the Minister, the Commission, and the Torres Strait Regional Council, on matters relating to the furthering of the social, economic and cultural advancement of the Torres Strait Islanders. The advisory board will be made up of a chairperson being the commissioner elected by the Torres Strait regional council, and six Torres Strait Islanders living on the mainland. This is intended to take account of the fact that more than three-quarters of all Torres Strait Islanders now live on the mainland. In addition, the legislation provides for the establishment of an Office of Torres Strait Islander Affairs within the Commission. The office will ensure that attention is given to the development, conduct, and effectiveness of programs aimed at alleviating the disadvantage suffered by Torres Strait Islanders throughout Australia. Lastly, the regional council for the Torres Strait will be given direct access to the Minister at those crucial times when estimates of expenditure are being prepared and approved. This statutorily guaranteed access is not given to other regional councils; it is meant to offset the fact that there is likely to be only one Torres Strait islander on the Commission. This provision fulfils a commitment I gave to the Torres Strait Islanders in the Torres Strait with a view to overcoming their concern that they would be disregarded in the Commission's processes for developing estimates and the making of decisions on funding allocations to regional council areas. This combination provisions will ensure that the Torres Strait Islanders can be confident that their interests, needs, and priorities can be placed before the Government without fear of intervention or clouding by bureaucratic or other interests. Aboriginal Economic Development Corporation The legislation provides for the establishment of a statutory corporation, under the control of Aboriginal and Torres Strait Islander people, with a broad charter to engage in commercial and financial activities. The Corporation's capital base will comprise the $20m which has been allocated to the capital fund of the ADC since its establishment plus an additional $40m to be allocated over this and the next three financial years. As a consequence, the Corporation will have a very significant capital base. The Board of Directors of the Corporation will comprise a chairperson, a deputy chairperson, and seven other members all of whom will be appointed on a part-time basis by the Minister on the recommendation of the Commission. At least three of the directors will be members of the Commission. The Corporation's primary function is to engage in commercial activities in accordance with sound business principles. In performing its functions, the Corporation is required to have regard to various matters which might be summarised as advancing Aboriginal and Torres Strait Islander economic interests. The Government expects that the Corporation will enhance the opportunities for Aboriginal and Torres Strait Islander people to begin to break free from the web of dependency and achieve a significant degree of economic independence. It is only when Aboriginal and Torres Strait Islander people are able to take up the challenges of commercial development, and exert influence in the private sector as well as the public sector, that they will be able to participate fully as equals in the nation's economic and political life. Institute of Aboriginal and Torres Strait Islander Studies This new body replaces the Australian Institute of Aboriginal Studies (AIAS), established by an Act of this Parliament in 1964. In large measure, the legislation enables the new Institute to operate very much as the AIAS currently operates, undertaking similar functions, but with a new emphasis on Aboriginal and Torres Strait Islander control and participation. The Council of the new Institute will consist of four persons elected by the members of the Institute, one person who is a Torres Strait Islander appointed by the Minister, and four other Aboriginal persons or Torres Strait Islanders appointed by the Minister, of whom at least three will be Commissioners. The Council will therefore comprise a majority of Aboriginal and Torres Strait Islander members, and will determine the policy of the Institute with respect to all matters. There will be a research advisory committee with a majority elected by the membership of the Institute. Membership of the Institute will be made up of those persons who are now either members, associate or corresponding members of the AIAS, plus such other persons appointed by the Council to be members. The provisions of this legislation in no way compromise or remove the academic freedom or scholastic excellence which is very much a part of the operation and history of the AIAS and which has led to the Institute being a nationally and internationally recognised focus for study and research related to Aboriginal and Torres Strait Islander affairs. Aboriginal Hostels Ltd The new Commission will not have any major impact upon the operations of the Aboriginals Hostels Ltd (AHL) which, as honourable members will be aware, is a highly successful company providing accommodation for Aboriginal and Torres Strait Islander people. The Board of AHL will however, be reconstituted to provide for at least three of the directors to be Commissioners of ATSIC. This will ensure that, as a subsidiary of ATSIC, the company will operate in a way consistent with the general policy directions set by the Commission. Miscellaneous, Consequential and Transitional Provisions The Bill also provides for a number of miscellaneous matters such as the declaration of certain bodies as Aboriginal corporations, the remuneration and allowances payable to certain office-holders under the legislation, review of certain administrative decisions, the audit of subsidiary companies, and the making of regulations. There are also a number of consequential amendments to other legislation, and detailed provisions for the transitional arrangements in the establishment of the Commission. Honourable members will be interested to hear that the Bill, although quite complex in structure, has been drafted throughout in plain English. I wish to acknowledge the highly professional assistance provided by the Office of Parliamentary Council in the drafting of the Bill. Conclusion I said at the beginning that this legislation represents the product of a very extensive and exhaustive consultative process. And that is how it should be. The establishment of ATSIC will lead to a very significant change in Aboriginal Affairs and in the way the portfolio will be administered in the future. It is important, however that this change be looked at not in isolation, but as part of a series of changes aimed at bringing about long overdue reforms. These reforms can and should only occur with the proper participation and involvement of Aboriginal and Torres Strait Islander people. The implementation of reform in Aboriginal Affairs depends largely on how governments, the bureaucracy, the Aboriginal and Torres Strait Islander communities and the broader community tackle the challenges that now confront them. At a government level it is important to maintain the political will to follow through the changes. The challenge for the bureaucracy is to adapt positively to changes in their roles in a responsive and constructive way. It is equally important that the broader community builds on the understanding and support that currently exists in society to bring about far-reaching reform. Finally, in order to realise the philosophy of self-determination and self-management-demands Aboriginal and Torres Strait Islander people have been talking about since well before the 1967 referendum-it is crucial that Aboriginal and Torres Strait Islander people take up the challenge and provide the direction for all of us. I have great pleasure in commending the Bill to the House. I present the explanatory memorandum to the Bill. Debate (on motion by Mr Connolly) adjourned. Debate resumed. Mr WRIGHT(Capricornia)(4.07) —I welcome the opportunity to speak on the Taxation Laws Amendment Bill (No. 3) 1988 as it is further evidence of this Government's willingness to listen to constructive suggestions brought to it by interested groups in our community. It is evidence of the Government's willingness not just to listen but also to act. A very important part of this Bill to which I want to refer relates to an issue that was brought to my attention by members of the Cattlemen's Union and the United Graziers Association and other organisations involved in the rural sector in my electorate. I refer to that part of the Bill which will change the application in law of the capital gains provisions as they relate to leasehold land. As I said, I have received representations from a number of people about a special problem-a problem that I think was never meant to occur. This is a problem that seemed to be anomalous, but nevertheless a very real one, which has had an unintended impact on so many people-those people involved with crown land on a leasehold basis. It is proper therefore that the law be amended. It is proper that the law should be fine-tuned. I do not think that the capital gains tax was ever meant to catch up people who simply renegotiated an existing lease. However, that has been the unfortunate result of the capital gains legislation that we introduced in a previous parliament. That difficulty has been faced by hundreds of rural producers with crown land leases. The situation has come about because, as we all realise, leases at one point or another have to expire. These leases have to be renegotiated. Such leases can be extended. They can be reduced or they can be expanded. The land in question can be subdivided. It can even be consolidated with another piece of crown land. However, because of a legal interpretation, if the legal status of the old asset was changed in some way so that the land improved in value, then that change in status could attract a capital gains tax. That was irrespective of the fact that the same people had owned the land prior to September 1985. With this new legislation we have a new roll-over provision which will eliminate the problem. It will remove the doubt. It will create certainty and, as I would see it, create, consistency in the law. It will allow land held by way of a crown lease prior to 20 September 1985 to be regarded as an old asset and to keep that legal status provided that-this is an important provision-it is held by the same owner. I note also-I thank the Minister Assisting the Treasurer (Mr Peter Morris) for moving even further down the track-that we have an amendment that will address a similar problem that could arise if crown land were converted to freehold status or to a lease in perpetuity. The final test will be whether the new lease or new arrangement is the same or substantially the same. We now have a clarification of that definition. We also have a clarification of the exemptions that will prevail, particularly as they relate to the principal residence on land subject to a lease. In all, it is an important amendment, an important change that must help rural producers. It will help the lessees, of whom there are thousands throughout this country, of crown lease land. It is a roll-over provision, so there is no massive cost to government. It will not create any legal dilemma. It will simply allow the old status to continue. I was most impressed by the fact that not only has the Government met the previous predicament but also it has caught up with another problem that was developing. If a State government decides not to allow the lease to continue after renegotiation and says, for whatever reason, that the lease will not be renewed and offers a piece of land in lieu, that again can come within the roll-over relief. We have acted properly to meet the wishes, desires and requests of the rural sector, and I am sure that it will be pleased. I am sure that this move will be welcomed and applauded. Whilst it could be said that these things should not happen and that when one is bringing down legislation one should cover every possibility, one knows that that is not possible. It is simply not possible when one has a myriad of legislation. In the Budget session last year some 111 Bills and last session 125 Bills went through this Parliament. Mr Rocher —It's crazy. Mr WRIGHT —That is a lot of legislation but, as my colleague on the Opposition benches knows, it is simply not possible for every piece of legislation to be very carefully scrutinised. That is why we have a committee system and a Senate, which offer mechanisms to rectify the position if provisions do not work out as originally intended. It is also important that community groups which find that there is a negative impact because of the application of legislation are able to come back and speak to governments that are willing to listen. That certainly is the case here. I am sure that members of the National Party will welcome this measure because they, too, have had many representations made to them by the rural sector. There are some other changes that I welcome. I refer specifically to the changes to the substantiation rules as they relate to overseas travel. Employees who receive travel allowances-we are talking mainly of reasonable travel allowances-will not now have to substantiate claims for expenses in respect of food and drink and that type of incidental expense. I regard that also as reasonable. Other changes relate to car hire expenses. In future car hire expenses will not be treated as normal car expenses for the purposes of the substantiation rules. It will mean that in one area they can be treated as employment-related expenses, or could even come within the category of travel expenses if the car is used for extended travel in Australia or overseas. The substantiation rules were changed in 1987. Members of the Government argued in favour of allowing fuel and oil expenses for cars to be verified not by precise pieces of paper from service stations but, if one so chooses, by a record of the total kilometres travelled. That covered cars, but not motor cycles and the larger vehicles such as trucks. Now that rule is also to be changed. So we are overcoming some problems. I am sure that the tax agents who have to handle hundreds of thousands of tax returns will be pleased that we have made changes in this regard. They will be pleased also that the Bill will make it extremely clear that reimbursements of fringe benefits tax are exempt from income tax. There is some fine tuning, we are cleaning up some of the minor problems, we have been listening to people who have had problems, and we shall see that they are resolved. I welcome also the exemption that will now apply to the fringe benefits tax where an employer compassionately allows an employee to undertake travel-for instance, to visit a seriously ill child, relative or spouse, or even to attend a funeral. It seems unfair that if an employer, in his or her generosity, allows an employee to undertake such travel the payment should attract tax. Again, the problem is being solved. These changes are in line with the attitude of this Government-a government which has been determined to address the many problems that have existed in the tax system across this nation and to redress the anomalies. The honourable member for Ryan (Mr Moore) spoke earlier of what the Government had not done. I took up a point made by the Treasurer (Mr Keating) earlier. It is the Opposition that should hang its head in shame when one compares its activities in regard to the tax system. After all, it was the government that imposed a 60 per cent maximum marginal tax rate. It was the Government that imposed a 46 per cent rate at a little under $20,000 earned. It was the government-a Liberal-National Party government-that had a double tax system for companies, where tax was paid on company profits and also on dividends earned. That has all been changed. It was the same Liberal-National Party government that had a threshold of $1,000 for provisional tax for pensioners. This Government has redressed the situation. We now have a provisional tax rate for pensioners whereby $10,332 can be earned in total taxable income before provisional tax applies. A married pensioner on, say, $5,100 can earn another $5,200 from interest or dividends without getting caught up in the provisional tax system. The single pensioner does not have it as good, but could still earn another $4,500 from interest before facing provisional tax. It is this Government that has acted in this proper way. It is the Treasurer, the Prime Minister (Mr Hawke) and the other Ministers who have been concerned about and sensitive to the issues that affect ordinary people. It was this Government that acted in the May statement on the rorts that were being perpetrated under the prescribed payment tax system. We have now increased that tax from 15 per cent to 20 per cent to ensure that the pseudo sub-contractors pay their way as everyone else has to do. I note the comments made by the building unions and by the building industry. The employees and the developers welcome this change. It has been this Government, too, that has seen the need to change the pensioner tax rebate system. In the 1987-88 financial year that rebate was $240, but, as the Treasurer said in the May economic statement, it will be increased to $430. The Government will raise the tax-free threshold for pensioners in the coming financial year from the present $6,142 to $6,892. This change is certainly necessary because there have been some problems. Thousands of pensioners have been caught up in a situation where, sometimes for the first time in their whole lives-certainly, the first time for many years and in some cases decades-they have had to fill in a tax return. I know that the tax form has been simplified, but there is nothing more traumatic for an elderly person, and even for some others, to have to fill in forms. It is traumatic for an elderly person of 70 or 75-I had one case the other day involving a women of 83-to have to fill in a tax return for the first time. The Government is acting on this matter and, as the Treasurer said in the earlier economic statement, we are now to have a threshold of $6,892. Following the increase in the rebate to $430, the single pensioner will be able to earn about $1,000 before getting caught up in tax. It will help significantly but I fear that, unless we monitor the rebate, unless it is in some way indexed, it could be gradually eroded, just as the $240 tax rebate has been eroded over recent years. I ask the Treasurer to keep that in mind and in some way to bring about an indexation system so that the tax rebate for pensioners increases with the pensions paid. We also need to review the 12.5 per cent or one-eighth loss-the 12 1/2c in the dollar loss that occurs when a pensioner earns in excess of the threshold limit. At the moment the figure is $6,142; in future it will be $6,892. At present, the moment a pensioner earns a dollar more than that threshold, he or she loses 12 1/2c in the dollar of the rebate. I will not go into the mathematics, but effectively the effect on the pocket of the pensioner is that the pensioner starts paying at an average tax rate of over 36c in the dollar-over 36 per cent. We have to be mindful that up to the $12,500 mark the ordinary worker is paying 24c in the dollar, or 24 per cent. So it seems to me that we need to rethink the situation and, just as we have acted in so many areas-in the capital gains tax area, which I referred to in my earlier comments, in regard to the fringe benefits tax system, and as we acted in our economic statement to overcome the threshold problems-we need now to monitor constantly, and I would hope change, the application of tax on pensioners over and above that threshold. No one wants to see the capacity to purchase or quality of life of pensioners eroded in any way, but unfortunately that is the regrettable situation. In times past pensioners were earning a lot if they earned an extra $1,000 from interest, but when they are getting 10 or 11 per cent from a building society or a bank they do not need much money, just $10,000 or $12,000, to earn that $1,000 interest. So there is a need to review constantly not only the threshold but also the impact of the 12 1/2c in the dollar that winds back and eats up the rebate. I would like also to make mention of another anomaly that needs to be rectified. We have in place a very generous system whereby when a pensioner's spouse passes away the Department of Social Security gives to that surviving pensioner 12 weeks of the spouse's pension-in other words, the extra pension is paid for six fortnights. That can mean a gift of up to $1,000. But it can also mean that at the end of the day, at the end of the financial year, that surviving pensioner has to pay tax on that gift. Pensioners do not normally know about this; they are not aware of it. There is no statement made to them by the Department of Social Security that it is a special gift that may be taxable at the end of the day, and so they use it for normal everyday purposes. They may use it to meet the funeral costs and those costs that one must pay when there is a death in the family. We all appreciate, too, that there are higher costs for single pensioners. That is why we give single pensioners a higher pension. That is why we give this 12 weeks' additional pension. I believe we ought to put into the provisions of the existing Income Tax Assessment Act a special exemption for this type of benefit, this type of additional payment. It certainly would not cost the Government a lot and I think it would be received extremely well by those who would otherwise suffer. It would not matter if we had a higher threshold, but while we have a tax free threshold over and above the pension of barely $1,000, it is clear that that can impact on a lot of people. They earn a few dollars in their bank accounts and then receive this gift, and they face this tax problem. In all, I welcome the measures brought forward by the Minister Assisting the Treasurer. I believe he has been responsive, as has the Treasurer, to the requests of trade unionists, rural producers and other groups in the community. That is the reason these amendments have been brought before the chamber today. Mr ROCHER(Curtin)(4.23) —In order to gain some idea of any possible relief from the ever expanding tax regime Australians have suffered under for more than five years, it is useful to look at the expected financial impact of the measures proposed in the Taxation Laws Amendment Bill (No. 3) of 1988. Not surprisingly, there is little of significance that will ease the burden and, as usual, there is nothing to lessen the tax induced plight of families. Given the greed of the Government, which has raised the total tax revenue plundered from all Australian taxpayers to the extent that it has reached the record high level of 25.4 per cent of gross domestic product, some will be thankful that the Bill does not seem likely to increase tax significantly. While the effects on revenue may be slight, the complexity of our tax laws will become even greater. I shall return to that later. The amendments proposed in the Bill include changes to capital gains and capital losses roll-over provisions, substantiation rules, and fringe benefits taxes involving reimbursements, holiday travel allowances and compassionate travel. We are told in regard to capital gains and losses roll-overs that a reliable estimate of the revenue effect cannot be made. It must come as a surprise to many, as it does to me, that when principal or inaugural tax legislation of this kind is introduced all sorts of heroic predictions are made of the effects on revenue and on the tax minimisation planning activities of those in the private sector, but when subsequent amendments are proposed, as is now the case, a reliable estimate cannot be given. When we consider the expected all-up total collected from the fringe benefits tax and the mammoth amount by which it will exceed estimates made at the time it was adopted by this Government there is no reason for confidence in the Government's guesstimates in its financial impact statements. This leads me to the general point that if the estimates of the financial impact of tax or any other legislation continue to be seriously wide of the mark, there is little point in going through this charade of publishing these estimates in explanatory memoranda. The truth is that no-one takes consistently inaccurate estimates seriously. Going through the motions makes a mockery of financial impact statements, is arguably misleading and is probably meaningless. It would be the final incongruity if some enterprising citizen was able to defeat legislation at law, under the provisions of the Acts Interpretation Act, because the financial impact statement was integral to the justification for a new law and at the same time outrageously inaccurate. That would be very rough justice indeed. For the time being we are told that capital gains and losses amendments in this Bill will have a financial impact that cannot reliably be estimated. Against that, precision about the financial impact of proposed changes to substantiation rules is apparently possible. In that area the official word is that it is estimated there will be a negligible effect on the Commonwealth's total tax take. The same is said for the proposed amendments to the fringe benefits tax law, because it is again said in the explanatory memorandum that the changes will have a negligible effect on fringe benefits tax revenue. But in the case of the fringe benefits tax amendments, further confusion about what is meant in the impact statement is created. We are told that the amendments `will lead to negligible but unquantifiable loss of revenue'. The words `negligible' and `unquantifiable' are clearly contradictory. Surely if the financial impact of the proposed changes to fringe benefits tax is negligible, as is said, it must be quantifiable. If it is unquantifiable, no-one has any way of knowing whether the financial consequences are negligible. The financial impact cannot in any circumstances be said to be both negligible and unquantifiable. It is that sort of nonsensical use of the language that brings governments and legislation into absolute disrepute. Given the experience with financial impact statements and plainly conflicting and contradictory statements-or at least one-there is no reason to believe on this occasion that the statement is worth the paper it is written on. Although operating in a vacuum as a consequence of such inconsistencies, as we are bound to do, in regard to the total cost or benefit to the revenue there are other matters which indicate either arrogance or indifference on the part of the Government. Its legislative incompetence seems unlimited. I will not be as generous as the honourable member for Capricornia (Mr Wright), who spoke before me. Take as an example proposed sections 160zzpc and 160zzpd in the Bill. These, with other clauses, deal with the future treatment of capital gains and losses roll-overs. Each of those two proposed sections is some 16 lines in length. On their own that would take some absorbing if they were simply dealing with new imperatives. Of course, those proposed new sections do not do that. They propose to impinge upon and interact with existing sections 160zzpa and 160zzpb. If anyone present is getting a headache trying to digest all the letters used as suffixes to the related clauses, he or she is not alone. Professional accountants and lawyers have to cope without the option of taking a Bex and having a nice lie down. No businessman can be expected to understand or decipher the code for the complementary clauses, let alone interpret the meaning or intent of the law as it is to be amended. The not so simple truth is that proposed sections 160zzpc and 160zzpd cross-refer to, or piggyback on, existing sections 160zzpa and 160zzpb. The latter existing sections total some 10 pages in the Act as it is presently written. To interpose by way of qualification 32 lines which must be read, digested and acted upon, into an equation which already takes 10 pages in the existing Act to describe, is a challenge, I put it to you, Mr Deputy Speaker, not likely to be able to be met by other than a few specialist professional practitioners. The outcome is that others are obliged to do the work of the draftsman in both the interpretation of the amendments and the explanation of them to third parties. If it were an isolated case it might be possible to ignore the outcome of the proposed amendment as an aberration not likely to be repeated. Sadly, that would be unduly generous and irresponsible in the light of experience with an abnormal amount of diabolically complex tax legislation over the past several years. I refer briefly by way of further example to legislation foreshadowed in the Treasurer's May economic statement, when he outlined what he proposed to do about regulation of superannuation funds. It will come to pass that in the transition stage there will be some sections in the tax Act dealing with deadlines and prudential aspects which, even though they will have been repealed, must be referred to in administering superannuation funds. By way of further criticism we should remind ourselves of the solemn but patently insincere promise of the Prime Minister (Mr Hawke) to simplify our tax laws so that everyone might understand them. As with so much that has been promised during the past three elections, we should not have believed him. Sooner or later, the thinking seems to go, he must increase his score. So many have wanted to trust him in his ability to increase his count of promises kept. In this case they have been betrayed. Big business, big unions and big bureaucracy are the only groups he has not failed during his tenure as Prime Minister. Proposed sections 160zzpc and 160zzpd may be described as roll-up provisions and contrasted with existing section 160zzo, which can be described as a roll-down provision. In a roll-up provision where a company float is involved, roll-over relief under proposed section 160zzpc will result in pre-float proprietors or shareholders having direct investment in the new public company. With the alternative of a float under existing section 160zzo, commercial advantage to existing or pre-float shareholders will dictate that their new shares will have to be held by an intermediary holding company. In such instances cashing up by selling will present some difficulties if one of those original shareholders wants to quit the investment without, or before, telling his fellow original shareholders. What all this is intended to illustrate is that the more complex tax laws become, the more costly are the non-tax and commercial consequences. These and earlier laws governing roll-over relief provide good examples of extra impositions. For instance, there may also be substantial stamp duty savings with section 160zzpc roll-overs, with duty being determined on the value of the shares rather than on the value of individual assets, as under section 160zzo. Of course, this will depend on the State in which the roll-over is taking place. This leads me to the point which illustrates that little or no thought seems to be given by the Commonwealth's legislators to the cost of doing business under State rules. The standard response by the Commonwealth to that type of complaint has in the past more often than not been to ask to be given more of the responsibilities being exercised by the States rather than to apply itself to the more difficult but worthwhile task of making its new Federal laws compatible with those of the States and, where possible, alleviating the costs under State laws of complying with that legislation. If it is not compatible the Commonwealth's law should at least be predicated on minimising costs in complying with State laws. It is also curious to note that under the section 160zzo roll-over provision it is possible for the original shareholders to extract some cash at the same time as doing the roll-over whereas the new 160zzpc roll-over will not allow that because the consideration has to be in non-redeemable shares only. Is that deliberate? Or is it merely one of those infamous unintended consequences? There is every reason to believe that these new roll-over relief promises come in the latter category-that is, another batch of unintended consequences, in turn the result of ham-fisted and poorly thought out principal laws. The Australian Taxation Office (ATO), professionals and businessmen alike, still have to cope with inadequate legislation. The ATO is thereby still bound to rely on ad hoc decision making and rulings to an excessive degree. That prevents most people affected by imprecise tax law from knowing their obligations in advance. This is in no small measure due to the headlong rush we have witnessed over recent years to squeeze more and more tax revenue out of the productive private sector. Almost all those changes, including these now before the House, are about revenue collection and not about tax relief or genuine tax reform. Apart from the overriding failure of the Government to reduce its overall spending, the main driving force is to take advantage of cash accounting-that peculiar practice which only governments can get away with. Because of strict cash flow accounting it is immensely attractive to bring forward the receipt of existing taxes as well as to create new taxes. The adoption of roll-over relief laws, as well as the previous introduction of prescribed payment taxes, company tax instalments, quarterly collection of provisional tax, and the proposed taxes on superannuation funds are more to do with artificially reducing Budget deficits or increasing surpluses than with genuine reform of the tax system. Along with the device of collecting long-standing taxes earlier, over recent years we have seen measures deliberately designed to tax transactions that were not previously taxed, to outlaw some tax minimisation practices and specifically to take advantage of inflation by indexing excises and by refusing to index brackets which determine the marginal rates of personal income tax. It is also worth mentioning in passing that the cost to both individuals and business is not just in the increased taxation they have to endure. As with all tax legislation these Bills, when law, will eat into the otherwise protective time of government instrumentalities, lawyers, accountants, business owners and the staff of businesses. The administrative and management costs are enormous and growing. There are still a few days left in the working calendar when businesses are not required, under threat of significant penalties, to lodge returns for group tax, prescribed payments tax, withholding tax, sales tax, provisional tax, company tax and fringe benefits tax or to lodge tax stamp sheets, group certificates, reconciliations and returns. Up to one-quarter of the working year is already taken up with lodging returns to the Australian Taxation Office, usually accompanied by cheques for tax collected on its behalf. At this juncture I seek leave to have incorporated in Hansard a table for such lodgments. Leave granted. The table read as follows- This financial year the following timetable must be observed. Each Month Day 7-Group employers must pay group tax deducted from employees wages for the previous month. Day 14-Amounts deducted under the Prescribed Payments System (PPS) for the previous month must be sent together with reconciliation forms and originals of deduction forms. Amounts deducted the previous month from payments of natural resource income or royalties to non-residents must be sent, together with written notification of the day on which each amount was deducted. Day 21-Tax withheld from non-residents' dividends and interest in the preceding month have to be sent. A monthly sales tax return and sales tax payable for the previous month, must be forwarded. Each Quarter 28 July, 28 October, 28 January, 28 April-Fringe benefits tax (FBT) instalments. 15 August, 15 November, 15 February-Earliest due date for company tax instalments. 1 September, 1 December, 1 March, 1 June-Earliest due date for provisional tax instalments. Annual 1 July-Employer to issue tax sheets to employees. 14 July-Last day for employers to issue group certificates and tax stamp sheets to employees. Last day for employers to remit tax stamp book and cancelled tax check sheets. 31 July-Due date for paying franking deficit tax for most companies. 14 August-Group employers must send copies of group certificates and reconciliation statement. 31 October-Unless period extended, last day for lodgement of income tax returns, S, B, D, AB, P, F; and C, and T withholding tax returns. Last day of the tax return amnesty. 1 November-Registration period begins for tax file numbers for new taxpayers.* 1 February-Earliest due date for payment of balance due on 1987-88 assessments of provisional taxpayers, paying current year instalments. 31 March-Earliest due payment for provisional tax not paid by instalments. 1 April-(April Fools Day). All employees to quote tax file number on new instalment declaration forms.* * Denotes: These dates stipulated by A.T.O., even though relevant legislation has not been introduced into or passed by the Parliament. Mr ROCHER —I thank the House. The table is headed `This financial year the following timetable must be observed'. As if to rub it in, the Australian Taxation Office has issued a calendar which it thoughtfully marked to remind business people of their duties. The calendar is distinguished by a colourful reproduction of a dishonest painting which, presumably, is intended to give credence to the slogan of the Commissioner of Taxation which is also blazoned on the calendar: `Taxes-building a better Australia'. I refer back to the timetable and point out that a couple of the dates refer to registration and adoption of a tax file number. Legislation providing for that, I remind the House, has not even been introduced and obviously such legislation has not been passed by the Parliament. The same timetable does not include the enforced provision of vast amounts of statistical information to Federal Government departments and authorities or State and local government taxes, charges, licences and registration fees and duties. After annual leave, public holidays, rostered days off or commensurately reduced working hours and sick leave the time available to proprietors of small businesses to earn taxable income rather than collate information to enable the lodgment of returns diminishes everyday. Each year sees greater inroads into the productive efforts of businesses both large and small. In those circumstances, for the Commissioner of Taxation, whose role is to administer the tax laws and who has no say in how those taxes are spent, to adopt the slogan `Taxes-building a better Australia' and display it on the ATO's official letterhead and a calendar to which I referred leaves a senior and once politically neutral public servant open to accusations of political partisanship. One of the fundamental economic and political issues today is whether our taxes are indeed building a better Australia. The Opposition argues with some force and great conviction that taxes are both extortionately high and are not being effectively used for building a better Australia. For some time the Commissioner of Taxation has deviated from the traditional role of his predecessors to argue political propositions rather than administer the tax laws of the day efficiently and fairly. If he persists in making value judgments about government policy, he should be asked to resign. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member's time has expired. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(4.43) —I thank honourable members for their contribution in what has been a very wide-ranging debate on the tax issue. It seems that when we are discussing detailed tax Bills the debates become very general debates on the tax issue. I want to pay tribute in particular to one speech which I was listening to as I came into the House; that is, the speech of the honourable member for Capricornia (Mr Wright). I must record the thanks of the Government for his continual interest in this issue, particularly in relation to threshold limits for pensioners. I recall that over my years here the honourable member for Capricornia has raised the issue time and again. I was very pleased that the Government was able to act on some of the initiatives that he suggested. In the early part of the debate a couple of points were made by the honourable member for Ryan (Mr Moore). He asked that amendments in respect of Crown leases apply to tourist leases in the same way that they do to pastoral leases. The Taxation Laws Amendment Bill (No. 3) does not distinguish between tourist leases and pastoral leases; it refers to Crown leases. So if a tourist lease is a Crown lease, it will be covered by the roll-over amendments applying to the renewal or extension of leases or the conversion to freehold. The second issue he raised concerning Crown leases was whether roll-over relief should be provided under the capital gains tax provisions when a Crown lease is surrendered and compensation is provided in the form of adjacent land et cetera. I understand that the office of the Treasurer (Mr Keating) has considered this matter and has replied directly to the representations. Other than that, I think it is suffice for me to make some general comments on the issues raised in relation to tax. Last night the Treasurer referred to the future tax cuts. The points that he made I think cover many of the points raised in this debate. Last night in this House the Treasurer said that this Budget was based on unprecedented rigor which has been applied to Government spending which will allow the tax cuts to come into effect in 10 months' time. That is the point of announcing tax cuts to follow in 10 months' time: they will not undermine or jeopardise the integrity of the Commonwealth's budgetary position. This means that our sums will add up, unlike those of the Opposition. On the one hand the Opposition is calling for further cuts in government funding yet on the other hand it is announcing many new avenues, particularly in my portfolio area of defence, where more money should be spent. It is also saying there should be more tax cuts. One of the problems about the Opposition's policies as they are reflected in this debate on this legislation is that the sums just do not add up. The tax cuts in the next 10 months that have been foreshadowed will not leave a black hole in our next Budget. The Budget will fund substantial tax cuts and still provide a further surplus. Budget outlays this year represent 25 1/2 per cent of the economy compared with more than 30 per cent four years ago, and that is a vast change. I commend this legislation to the house and I thank honourable members for their contributions. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mrs Kelly) read a third time. Debate resumed from 13 April, on motion by Mr Kerin: That the Bill be now read a second time. Mr LLOYD(Murray)(4.49) —The Primary Industries and Energy Legislation Amendment Bill has been around for, I think, five or six months. It is one of those omnibus pieces of legislation that pick up a range of unrelated issues in a Minister's portfolio. It covers the repeal of canned fruits legislation, amendments to the Australian Meat and Live-stock Corporation Act, the Export Control Act, the Fishing Industry Research and Development Act, the Meat Inspection Act, the Minerals (Submerged Lands) Act, the Plant Variety Rights Act, the Wool Marketing Act, the Dairy Produce Act, the Rural Industries Research Act and even the Pig Industry Act. So I think one can talk on just about anything to do with primary industry and I am sure it will be somewhere here in the legislation. I do not object to incorporating different forms of legislation into the one general Bill for carriage when they are minor items. But I do object when such a piece of legislation is a device of government to hide, or belittle for that matter, the significance of certain pieces of legislation. In this category, I wish to refer to the repeal of the canned fruits legislation. The canned fruits industry is a significant primary industry, the cornerstone of which has been the various pieces of relevant legislation-the Canned Fruits Marketing Act, the Canned Fruits Levy Act and the Canned Fruits Levy Collection Act. I believe that it would have been more appropriate for the Government to have introduced separate legislation on this industry so that a more appropriate debate could take place on policies, proposals and the future of this most important horticultural industry. The purpose of the part of the legislation before us which deals with canned fruits is to terminate the stabilising marketing arrangements which have been in existence for many years. In particular, I refer to their very much improved form in the legislation of 1979 which added some price stability after a period of very dramatic restructuring following the entry of Britain into the Common Market, and to the dramatic impact that that had on the overall market sales of canned deciduous fruit and, to a lesser extent, of fresh fruit on the export markets in Europe. We know what that meant in my electorate and several other electorates in terms of the trauma of fruit growers who had to pull out whole orchards, lost their livelihood and so on and the cash flow pressure that forced canneries into some very dramatic price competition which unfairly restricted or reduced the price to growers. That legislation brought some much needed stability to the industry. The Government has given notice that all of that stability will end from the end of this year. The industry is going through further adjustment in relation to consolidation of canneries. The canned fruits section of the industry has been based largely on cooperatives. There were three cooperatives in Victoria, one in particular in New South Wales and one in South Australia. The industry is now down to two cooperatives in Victoria; one in New South Wales, which exists only because of generous State government support; and one in South Australia which, even with extremely generous support from the State government of South Australia, has basically ceased to exist or has been dramatically reduced. After the end of this year fruit growers will be facing the prospect of a return to some of that most destabilising and destructive price competition which only people in rural industries ever have to face. The industry, in the very short time frame in which to rationalise or restructure, is endeavouring to obtain the consent of fruit growers in the Goulburn Valley of Victoria and the Riverina of New South Wales, in particular the Murrumbidgee Irrigation Area, for a combined cooperative. That undertaking has run into difficulties. Possible legal challenges will defer any final decision until well beyond the end of this year. As recently as yesterday and possibly again today-a range of earlier requests were made once this legislation was known to be coming through-the industry asked the Minister for Primary Industries and Energy (Mr Kerin) to extend the legislation for a limited period at least to continue the stability to the industry while the basic part of the restructuring and the sorting out of the new cooperative arrangements were being undertaken, particularly the ownership arrangements for the Letona cannery. There is a need for this process to be at least well under way so that the industry has some prospect of some better stability once the legislation is terminated. I believe that it is to the Government's shame that, to my knowledge, it has not agreed to my request for this extension. I indicated to the Minister that I would be very pleased either to support his amendment and congratulate him on recognising the need for an extension of time for the industry or to support him in every way in respect of a six-month or, at the most, 12-month extension for this industry. His view is that if the industry wants to have some stability it should join his vaunted Australian Horticultural Corporation. But the canning fruit industry has already discussed this with the Minister. It has not received any worthwhile assurances of the benefits of joining the Horticultural Corporation, particularly in terms of the critical area of price stability. So the industry is facing a most uncertain future in respect of cash flow, viability, et cetera, at a time when it need not if the Government were to listen to the reasonable requests of a most significant horticultural industry in Australia. I am proud of this industry, which is based principally in my electorate. I am particularly proud of the restructuring that has taken place at far greater pain than any secondary industry has ever been subjected to in this country following Britain's entry into the Common Market. The pear is still the major canned fruit of any type exported from this country. The fresh pear, the packham pear in particular, is also the major source of fresh fruit exports from this country, and there has been considerable diversification in respect of Asian or Nashi pears to cater for the increasing requirements of the Asian market. To a certain extent, this successful export industry suffers the unnecessary price instability that only export industries can suffer, simply because they are efficient enough to export. Without some sort of stabilizing mechanism, corrupt world prices are able to impact on the domestic price. This Government is putting this industry at risk in a second way, and that is the potential importation into this country of the bacterial disease fire blight. Australia does not have fire blight, as it does not have many other diseases, and that is a great relief to the plant and livestock industries of this country. New Zealand has fire blight. Yet, New Zealand apple producers are pushing very hard to export apples to this country. In the consideration of whether those apples should be allowed into Australia, the quarantine authorities of this country have to look beyond the question of apple imports and the impact of fair trading, quarantine procedures and guarantees, and protection for the apple industry of Australia. They have to look more particularly at the impact on the pear industry of Australia, which is a far more significant and important export industry for this country, and will remain so. If fire blight did come into Australia through New Zealand imports, the impact on the pear industry, as distinct from any impact on the apple industry, could be quite devastating in the Goulburn Valley, the Murrumbidgee Irrigation Area and the Riverland area of South Australia. Australia has an ideal climatic situation for the disease. Expensive chemical treatment would be required to maintain any sort of productivity, and that brings with it the potential problems of chemical residues. The introduction of the disease would immediately mean the termination of the export of fresh pears from this country to a number of other countries which, sensibly, want to protect themselves against the unnecessary importation of diseases. At this stage the New Zealanders cannot claim that their quarantine procedures are adequate. The New Zealanders are not playing fair with Australia when it comes to quarantine arrangements. Even within the last couple of weeks, following the second outbreak of the tissue worm disease in deer imported from New Zealand, the Australian Government had to act to change the laboratory and checking procedures in New Zealand. We have had to send a senior quarantine officer to New Zealand to discuss-I think that is the euphemistic term-with the New Zealanders the need for better procedures. We have had an equally absurd situation with the lax New Zealand quarantine procedures relating to deer in quarantine for 12 months in New Zealand. Despite the regular testing that takes place, there was no discovery of tissue worm on two occasions. Yet on the importation of these deer to Australia, with its far shorter quarantine period, our testing procedures have on two occasions within the last two years discovered that worm. That is completely unsatisfactory and it is time the New Zealanders realised the damage that they are doing to their own reputation. There is no reason why this Government should allow the major horticultural industry of this country-I put both apples and pears together here, even though I am speaking now only about the pear section of the debate-to be put at risk by allowing the importation from New Zealand of fruit which is not guaranteed free from fire blight. The second piece of legislation concerns fishing industry research. It is quite interesting that in the Treasurer's Budget last night, the fishing industry was once again used as a form of taxation for this Government. The Commonwealth fishing boat levy was increased by a staggering 33 per cent-from $295 to $395 per vessel-and that was only one year after the levy was introduced at the equally staggering level of $295. According to a release by the fishing industry today-and I completely agree with it-it is an absolute rip-off. Mr Peter Fisher —The industry was unlucky to get a mention; nothing else did. Mr LLOYD —The only unlucky people in the Budget last night-apart from every taxpayer in Australia and every fuel user in Australia because there was no reduction in fuel tax-were all the primary producers in Australia because they were all hit with more charges and levies to the total cost of $124m in the coming year. The fishing industry certainly has not been neglected in that regard. This levy is supposed to be for cost recovery, for the administration of the Australian Fisheries Service and various managed fishing programs within the control of the Commonwealth. However, those fisheries levies are paid into Consolidated Revenue, not to the Department. There is no accountability whatsoever as to the relationship between the actual cost involved in managing those fisheries or managing the Department or for that matter in the payments made to a State. The fishing industry in particular is wild because at present there is in place a review of the appropriate way to regulate, manage or administer the Commonwealth fisheries. With that review about to conclude, this seems a most inappropriate time for this dramatically increased levy to be introduced. It is interesting that at a time when the Prime Minister (Mr Hawke) has said-and this was stated in the Budget before the one last night-that there would be a reduction in the staffing of departments, there has been an increase in the staffing of the Australian Fisheries Service. The cost of administration of the Department of Primary Industries and Energy is skyrocketing by about 10 per cent a year. While the Government preaches to everyone in agriculture that he must be cost efficient and accountable, none of that is required of the Department itself. I hope that when that report comes through there will be a commonsense approach to allow self-management and self-regulation within the industry and the payment direct of any Commonwealth levies to the fisheries concerned so that there can be accountability and efficient management. The next section of the legislation to which I wish to refer is wool. We have an amazing situation with wool, the greatest and most efficient industry in Australia. By itself, this industry increased our exports last year by $2 billion, far more than any other industry. Because of the provisional tax arrangements, the woolgrowers of this country will contribute a dramatic percentage of that $5.5 billion tax induced Budget surplus; yet when it comes to doing anything to assist the wool industry, it is another matter altogether. I give just one example of something which was done in the name of harmonisation of tariffs. The Treasurer (Mr Keating) repeated last night how the Federal Government is reducing tariffs and costs to industry by the removal of the 2 per cent primage duty. Yet at the same time the tariff on lightweight woollen cloth that is made from Australian superfine wool, instead of being reduced from 2 per cent to zero, has gone from 2 per cent to 40 per cent. That was done all in the name of harmonisation; all in the name of equal playing fields for different industries; all in the name of making Australian industry more cost efficient and competitive internationally. This is completely absurd because the woolgrowers of Australia are spending close to $200m a year of their own money on research and promotion to make wool a modern, interesting and competitive fibre and to break the price relationship, which they have done most successfully, between wool and synthetics so that wool will have that status value as a fibre, adding value to the product. We are all told we must do this with exports and the wool industry has done it better than any other. One of the developments of this research and promotion is this special lightweight woollen cloth made from Australian wool and paid for by Australian woolgrowers so that it can command a better market in the warmer climates and during the warmer periods of the year. Yet all that, produced and paid for by Australians, is being denied to Australians and denied to the clothing industry of this country because of this 40 per cent tariff which has been placed there simply because one producer in Australia claims that it can produce this cloth and wants to produce it. This means that it is pricing what is the top of the market under natural circumstances beyond that price barrier where it can compete successfully with synthetics. It is not as if we are encouraging an Australian industry because synthetics will be the winner. Once again the double standards of this Government to the different industries-rural industries versus the other industries of Australia-is being displayed. Mr Peter Fisher —It is a pity they would not display the same standards to French wine. Mr LLOYD —That is an interesting point. When it comes to certain trendy items which are imported into this country, it is a different matter altogether. When it comes to secondary industry it is also a different matter. Honourable members should look at the textile industry in general terms and then look at what is being done to wool. The last point I wish to discuss in relation to this legislation refers to the dairy section of the Bill and closer economic relations with New Zealand. The closer economic relations agreement has just been concluded by the Government; it was signed by the Prime Ministers of both countries. Closer economic relations certainly has bipartisan support because the basic agreement was signed by my predecessor in a sense, the former leader of the National Party and the then Deputy Prime Minister of Australia, Doug Anthony. This Government has continued that agreement. In the closer economic relations agreement for the dairy industry that was signed by the coalition Government there was no actual termination date for the arrangements, for the memorandum of understanding. When this Government first came to power, 1995 was suggested as the termination date for that procedure. Twelve months ago that was brought back to 1992 and two months ago it was brought back to 1990. What an adjustment period that is when one compares it with the adjustment periods for, say, the motor vehicle industry or the textile industry in this country. In return for the agreement, or as part of the deal-what the dairy industry thought was the deal when the Government suddenly presented it with July 1990 instead of 1992 or 1995-the New Zealand Dairy Board's export monopoly power for the sale of New Zealand dairy products was not to be allowed to continue in what was to become an enlarged domestic market for both Australia and New Zealand. I do not quibble with that in the sense that the purpose of CER is to create one larger domestic market-that makes good economic sense. But it does not make any sense when a statutory authority in New Zealand that has an export monopoly is still allowed to maintain that export monopoly in what becomes one large domestic market and when the safeguards that the Australian industry had against the cross-subsidy pricing mechanism of the New Zealand Dairy Board-that is, anti-dumping duties-is terminated. How can there be anti-dumping duties when there is just a domestic market? The Australian dairy industry was certainly not happy with the New Zealanders negotiating against what I believe was a less than forceful negotiating position for the Australian dairy industry, with the New Zealand Dairy Board being allowed to continue to cross-subsidise with the returns it received in particular from its sale of 74,000 tonnes of butter each year to the European common market at two to three times the world price, and then to marginally price into Australia. The industry was forced to accept that but in return it was promised that there would be an exchange of letters between the Ministers stating that the Government of New Zealand would ensure that no cross-subsidisation or predatory pricing in Australia would be allowed by the New Zealand Dairy Board. That was an exchange of letters, I think dated 11 July, which had previously been agreed to by the New Zealand Minister as part of the CER arrangement for dairying. However, the New Zealanders then rejected that after all of the other rejections they had had on previous positions for marketing of dairy products between the two countries. They demanded-unfortunately our negotiators gave in once again-that the terms `cross-subsidisation' and `predatory pricing' be omitted. They also said that they did not even really want to have this in the treaty, it would only be in an exchange of letters. I understand that the final document is based on the second exchange of letters and that it will be included in the treaty, I hope beyond a certain limited period as the New Zealanders were also suggesting. I believe that the Minister should table that document in Parliament so that it is subject to the scrutiny of this Parliament, the industry and everyone in Australia so that they can see how good our negotiators are. I believe they have made a mess of this aspect of the agreement. It is as if the New Zealanders were the powerful body and we had to appease them rather than the other way around. It is a bit like the unequal treaties that the Chinese talk about which they have had to have in relation to their borders at various times of their existence. I believe it is a very critical commentary of either the lack of will of our negotiators or some other agenda in which the agricultural industry is once again traded off for secondary industry in this country. Those are the feelings that are about in the industry and certainly in my electorate. It would be helpful for the Government, in presenting its own side of the story, to table all documents relating to CER, and, in particular, to the dairy agreement, as soon as possible. To return to the original point, I am disappointed that in general omnibus legislation there is one piece of legislation in particular that should not be included. The Opposition will certainly not be opposing the legislation. Mr CAMPBELL(Kalgoorlie)(5.15) —Having listened to the speech made by the honourable member for Murray (Mr Lloyd), one would wonder whether `certainly not be opposing' actually means `supporting'. It was really a discourse of gloom and doom about the rural sector. Fortunately it is just not true. While there are a lot of problems in the rural sector and some of the recovery might be a little tenuous, things at the moment are looking up. I do not think the industry is served by the doom and gloom expressed by the honourable member. I will address some of those points later. I will return to the Primary Industries and Energy Legislation Amendment Bill, as the honourable member for Murray occasionally did. This is an omnibus Bill and not a lot can be said about it. If one reads the second reading speech of the Minister for Primary Industries and Energy (Mr Kerin) one will see that it has virtually said it all. Nonetheless, it is a very important Bill. One might say that it is the nuts and bolts of Parliament. In a very real sense it is oil for the squeaky wheels. As the Minister said in his second reading speech, it is a Bill to facilitate the passage of necessary amendments to existing legislation administered within the primary industry portfolio. The Bill provides for the repeal of the Canned Fruits Marketing Act 1979 and the Canned Fruits Levy Act 1979. The Minister covered all the implications of this in his second reading speech. I do not intend to dwell on them, as the honourable member for Murray did, although I recognise that the industry is a large constituent in his electorate. Of course there are problems out there, but I do not think things are as bad as he suggests. I believe we will see an increase in entrepreneurial expertise and an inevitable structural adjustment taking place. I feel there are untouched markets in the Gulf states of Iran and Iraq and in Japan and eastern Europe. I particularly mention eastern Europe because I believe that we are currently mesmerised by the Pacific Rim. Eastern Europe is potentially a much larger market and is much neglected, particularly in the current situation. I believe we should recognise that the Pacific Rim is surrounded by California and Japan. It is going to be mighty competitive. On the other hand eastern Europe is a market that we should explore with great relish. In respect of the Australian Meat and Live-stock Corporation Act 1977, the Bill makes a commonsense change so that shipping companies engaged in the carriage of meat or livestock do not need to have export licences. It puts beyond doubt the power of the authorised officer to take photographs or videos to be used as evidence in respect of breaches of the Act. It also enables the imposition of penalties for non-payment of fees, all of which was in some cloud under the previous Act. This is a very reasonable step forward. I am sure that it will be entirely endorsed by the Opposition. The relevant amendment in the Fishing Industry Research and Development Act puts beyond doubt the power of the Fishing Industry Research and Development Council to enter into arrangements with the Department of Primary Industries and Energy for the provision and payment of clerical and administrative services. Again, it is a very sensible piece of legislation. It is a very sensible amendment and one that will lead to efficiencies and cost savings. The honourable member for Murray talked about the fisheries industry as though it was a disaster zone. Representing one of the largest fishing electorates in Australia, I can say that this simply is not so. While the honourable member for Murray is clamouring for self-regulation, the industry is moving into limited entry fisheries. One simply does not self-regulate limited entry fisheries. Limited entry fisheries require a government fiat as to the number of people in those fisheries. In the State that has gone the furthest in the development of limited entry fisheries, namely Western Australia, the fishing industry is probably at its best and is certainly the best managed in Australia-so much so that I believe it is the envy of other States. Limited entry bestows on a fishing boat a value that it simply did not have previously. How fishermen can quibble about what are considered to be fairly modest fees for such a privilege is beyond me. I might add that it is not a quibble that I get from them. There is an enormous amount of research to be done in relation to cost recovery for the industry. I believe that the industry must be prepared to meet the cost of this research because it will be among the prime beneficiaries. The amendments to the Meat Inspection Act 1983 have the same effect as those in the Australian Meat and Live-stock Corporation Act. Both have the support of the Australian Meat and Livestock Corporation The change in the Minerals (Submerged Lands) Act 1981 is interesting and sensible. This will allow the States and Territories to authorise the Ministers to carry out the day to day administration of off-shore mineral activities by administrative action rather than lengthy, costly and unnecessary parliamentary legislation. The amendment to the Plant Variety Rights Act 1987 will simply change `public knowledge' to `common knowledge'. Public knowledge apparently-this is something that I was unaware of-is when one person knows about something; when one person in the community makes a subject public knowledge. Common knowledge is that which is generally known among those who are expected to know in that particular area. It is clearly a differentiation that has to be made and it brings us in line with the definitions that are used universally. I am sure that the Opposition could not quibble with that. The Act will also be amended to remunerate all part time members instead of the two who are presently remunerated. Clearly this was an anomaly. As the additional cost is only $3,000 and as it will be absorbed in the current appropriations, it simply had to be done. I do not think the Opposition will quibble with that. We now turn to the Wool Marketing Act 1987. The Australian Labor Party has a proud history in respect of wool marketing. It was the Australian Labor Party, under the Whitlam Government, that came to the aid of wool growers in 1974 and instituted the Australian Wool Corporation and the floor price plan. As a wool grower at the time I saw my wool sold in a Fremantle sale at some 16 to 18 cents a kilo when the voluntary pool collapsed. It was a disastrous situation and one which could easily have been prevented had the Opposition, then the Government, had any real concern for wool growers or for primary industry. In this country the rhetoric of the Opposition is designed to titillate and caress the primary producers but the reality is something different. Mr Lloyd —Stick to the facts. Mr CAMPBELL —For the information of the honourable member, it was a Labor government that instituted the wool marketing Act for the compulsory acquisition of the wool clip. This is the foundation on which the authority has been built. The Bill enables the Commissioner of Taxation to provide specific information to the Australian Wool Corporation to facilitate the payment of refunds of wool tax to wool growers. I understand that this used to occur, was stopped, and is now being reinstated. This seems to me to be very sensible and I do not think there will be any quibbles from the Opposition on this. It also and, and very importantly, extends the power of the Wool Corporation to control the sale of all wool. It currently has power to control the sale of wool sold at auction. But it is important for the protection of this industry that we have the power to stop the sale of wool that is contaminated in any way. I am aware of the problems we have had in the meat industry, where traces of dieldrin have been found in meat. I also believe very strongly that this never at any time posed risks to health. It was a marketing ploy by the United States and I do not think it did that government any credit. I also know that, had the United States tested its own meat at the same level that it tested ours, exactly the same or higher levels would have been found. Nevertheless, it is quite clear that this is an issue in the community and we can not risk a commodity by allowing high levels of these contaminants to appear in the wool. I say that even though they may be at levels which may be of no real significance. There is an emotional factor from which the wool industry must protect itself. This is a very good measure indeed and one which would enjoy the support of this entire Parliament and I am sure be endorsed by the industry. I will deal with the issues raised by the honourable member for Murray. I must say that that I have not looked at the issue of fire blight. It does concern me. I hope that this matter is addressed by the Minister. This would certainly make a case for irradiation treatment facilities in Australia as they would certainly provide protection against fire blight. I look forward to the day when we go down the road of irradiation treatment for our horticultural products because I believe it will open up new markets for us, open up new horizons for our growers and enhance the future for all Australians. Mr Lloyd —Hear, hear! Tell some of your colleagues that. Mr CAMPBELL —I do as a matter of fact. The tragedy of the Common Market is that at the time Britain entered the common market she was not enthusiastic about it but, it is true to say, there was no support from Australia. In a very large sense I believe that we let the British know that we really did not care, so intent were we on looking at other horizons. It is my view that since that time Australia has allowed itself to become an economic colony of America and Japan, something which never existed in our relationship with the United Kingdom. I am glad that now, with the advent of the Labor Government, we are gradually and very slowly-too slowly in my view-working our way out of this dilemma. However, there is a future in the common market. With exploration of that market we can find the niches that we can participate in. I also believe, and I have said before, that the weak link in the chain in the common agricultural policy, which is the aspect of the market which affects us, is of course the United Kingdom which has efficient agriculture. Had the National Farmers Federation been prepared to apply some of its very large `war chest' as it calls it-the money it has for its own propaganda-to an extensive campaign in the United Kingdom, it could have done a lot to weaken that common agricultural policy and could have done something to benefit primary producers in Australia. There would have been a far more effective and worthwhile cause than using that money to try to bring down the Australian Labor Party, an action in which it was of course singularly unsuccessful. Mr HAWKER(Wannon)(5.28) —I start by congratulating the honourable member for Kalgoorlie (Mr Campbell) for his strong stand in support of irradiation. I hope that he will remind some of his colleagues who seem to be a bit nervous about it that there are many benefits for Australia and, in particular, Australian horticulture in applying irradiation in a responsible and careful way. It certainly would help to extend the shelf life of many products. I am sure it would have no detrimental effect on consumers. However, I must take exception to a couple of points made by the honourable member for Kalgoorlie. First of all he wanted to talk about improvements in agriculture, particularly in the prices of some commodities. I would certainly agree with him but I also hasten to point out that last night the Treasurer (Mr Keating) boasted about what a great job he was doing in managing the economy. Of course it was a very shortsighted boast because one thing he based his forecasts on was high commodity prices. Anyone who has been involved in commodities would know that they are notorious for the way they go up and down. Once prices reach a reasonably high level, it is inevitable that before long those commodity prices will again fall. Of course, with that in mind, if the Treasurer were serious about his concern for not only Australia but also those who produce commodities, he would be looking for ways and means for them to insulate themselves against the inevitable fall. In particular I am referring to the income equalisation deposit scheme-an excellent scheme introduced by the former Liberal-National Party Government-which this Government has been so reluctant to reinstate since it scrapped it. It seems to me to be incredible that the Treasurer cannot see how short-sighted this is. In fact, if the income equalisation deposit scheme were allowed to start this year, rather than having its introduction delayed for another 12 months, many farmers who may well, in years to come, find themselves in difficult financial circumstances would in fact be able to insulate themselves against what otherwise would be a situation of considerable hardship. I hasten to add for the benefit of all honourable members that the income equalisation deposit scheme does not represent some special favour to farmers. In fact, it is a scheme that allows farmers and, indeed, anyone else with fluctuating incomes to whom it could be extended, to be in a position where in fact they pay the same amount of tax as those who are on relatively constant incomes. Certainly, it does not mean that they pay less tax. Under the current system with the sliding scale of income tax, people who have highly varying incomes in fact find themselves paying more tax, over a period of years, than do people with relatively stable incomes. A point that should not be lost on honourable members is that when we are talking about the income equalisation deposit scheme we are not talking about some special favour; we are talking about fairness and equity-words that the Government loves to ram down everyone's throats in relation to other matters but words which it seems very reluctant to apply in relation to the rural community. As I said before, it should not just be farmers who should be allowed to take advantage of this scheme; it should also be extended to those people who have highly fluctuating incomes, such as sportsmen and sportswomen and others who have periods of high income followed by periods of low income. The honourable member for Kalgoorlie mentioned the fishing industry. However, he very quickly skated over the fact that the Treasurer has found a new source of tax: he has slugged the fishing industry with a 33 per cent increase in the Commonwealth licensing fee. This is an increase that I really find hard to justify, particularly when there is very little concern being expressed about the level of staffing within the fishing section of the Department of Primary Industries and Energy. It is a classic example of empire building. The honourable member for Kalgoorlie also mentioned wool, which is part of this Primary Industries and Energy Legislation Amendment Bill. I think that we ought to remind him about some of the history of the Australian Labor Party and the wool industry. First of all, we ought to correct the little error his memory made as a result of time passing. In fact, when wool prices hit rock bottom around 1969-70 they reached a level of 30 cents a pound before the Government stepped in with a form of floor pricing which was later extended. By my calculations, 30 cents a pound is something like 66 cents a kilo, which is somewhat more than the price the honourable member for Kalgoorlie seemed able to remember. Also I think it is interesting to remind honourable members of the history of the Labor Party when it comes to matters relating to wool and the undertakings that the current Minister for Primary Industries and Energy (Mr Kerin) gave the wool industry not so very long ago. In fact, back in June 1987 he gave a public undertaking that when it came to wool promotion the Australian Labor Party was committed to continuing the current arrangements, which it put in place, whereby the Government contribution to wool promotion had been `placed on a predictable, long term basis'-I ask honourable members to note those words-by a contribution of 1.2 per cent of the gross value of wool production. Let us look at that. In June 1987, just before the election, there was a great election promise. What happened? We had the Budget last year when that little promise was seen to be broken, albeit in a small way. We suddenly found that, because wool prices had risen and the commitment looked as though it was going to cost the Budget more than planned, the funding was frozen at about $35m. However, that was not enough. The Government, having broken that promise once, turned around and did it again in the mini-Budget. Now the Government reminds us on page 219 of the 1988-89 Budget Paper No. 1 that its support for wool promotion has been reduced to $25m. I just remind honourable members that the promise made in June 1987 looks very tattered. Therefore, when the honourable member for Kalgoorlie talks about the proud history of the Labor Party in relation to wool he ought to include all the history. I support the honourable member for Kalgoorlie in his views on beef residues, particularly in regard to his comments related to the United States. It is quite clear that that issue was a very handy weapon to try to reduce the level of imports of Australian beef into the United States. I think that we really ought also to set the record straight on the matter of the National Farmers Federation and its efforts to bring about some more common sense in the common agricultural policy. The National Farmers Federation has in fact been at the forefront of trying to lead the debate in Europe. In fact, it has been supporting Dr Stoekel, the former director of the Bureau of Agricultural Economics, in producing some excellent papers that argue very coherently, very logically and in a way that nobody has been able to refute, that in fact the common agricultural policy is not only costing consumers in Europe a considerable amount of money but, in fact, also costing a large number of jobs. Those arguments have never been satisfactorily rebutted by the European Economic Community. I think that the credit ought to go to the National Farmers Federation, along with others including, I think, the Commonwealth Government in financing that research work. It is excellent work and I commend it to all honourable members. I think that it is the sort of thing that deserves to get the maximum amount of publicity because in time that will be the way we can prove to the consumers and to the decision-makers in Europe that their common agricultural policy is not only detrimental to farmers and consumers but also costing a considerable number of jobs, not to mention the cost involved to taxpayers. I would like also to endorse the words of the honourable member for Murray (Mr Lloyd) when he talked about the problems facing the dairy industry in relation to the closer economic relations between Australia and New Zealand. As he pointed out, the timescale originally facing the Australian dairy industry has been dramatically reduced, not once but twice, by this Government. Since the Minister for Primary Industries and Energy is now at the table, I will reiterate what the honourable member for Murray said. He feels that the only way the Minister can, in fact, confirm to the satisfaction of the Australian dairy industry that he has a reasonable undertaking from his New Zealand counterpart that the New Zealand Dairy Board is not going to use unfair trading practices is to table those letters he has exchanged. I think that in that way the Minister will be able to establish in the eyes of all dairy farmers that in fact this is a reasonable arrangement and not one which will disadvantage the Australian dairy farmers in free trade. In relation to the Bills to be amended by this legislation, I certainly support the words of the honourable member for Murray when he talked about the canned fruits section of the legislation. I also support his views relating to changes to the meat industry legislation. I think that the proposed changes to the Wool Marketing Act 1987 make eminent sense. Clearly, there could be a problem with wool that is sold outside the auction system not being subject to meeting the same industry standards. Clearly, quality control is very important for wool, as indeed it is with all our exports. At present the Australian Wool Corporation cannot prevent the export of wool which is contaminated which can still be sold through methods other than the auction system. This contamination of wool can, of course, occur in several ways. Firstly, it can happen as a result of coloured wool being included in pure wool or through the inclusion of stained wool, as well, of course, as the inclusion of any residues. I think it is worth reminding honourable members also that in this, our bicentenary year, wool is again our number one export earner. It seems ironical that despite all the intentions of successive governments over many decades to try to replace wool as our major export earner, it is evident that we in fact are still the best in the world at producing wool; not only can the wool industry itself respond to a challenge, it can respond very successfully and maintain its position as the premier exporter. I have no doubt that given the opportunity, in time the wool industry will develop considerably more export revenue as we move towards more value adding within this country. I share the concern of the honourable member for Murray about problems involving lightweight wools when the tariff suddenly moves from 2 per cent to 40 per cent. This seems to be a fairly difficult move, bearing in mind the Government's professed desire to reduce protection in that industry. This legislation also affects a number of other agricultural industries-in particular, fishing and wool. It deals with plant variety rights, which will affect people in the horticultural industries as well as the pastoral industries. It also affects other minor industries, including the dairy industry, industries covered by the Rural Industries Research Act and a couple of others. All these industries will be seriously affected by an ongoing decision of the Government to continue to reduce funding to the Commonwealth Scientific and Industrial Research Organisation (CSIRO). I find that very disturbing. If ever there was an organisation with a track record of excellent returns on money invested on behalf on Australian industry, to the benefit not just of those directly involved in the industry but of the whole community, it is the CSIRO. It is extremely disturbing to see yet another cutback in its funding. On page 266 of Budget Paper No. 1 one sees that there has been a further cut in dollar terms of 3.9 per cent in the funding of general and scientific research outlays. I do not quite know how the Minister for Science, Customs and Small Business (Mr Jones) can live with himself. Having come into this chamber on many occasions over the last few years to profess concern that there should be an increase in research effort in this area, he has yet again told us that he is to cut funding to the CSIRO. I do not know how he can hold his head up. The estimate of research funding to CSIRO in 1988-89 is $334m, which represents a reduction of $13.6m from last year. But the position is even worse than that. The dollar outlays for 1986-87 amounted to $367.8m. In other words, there is to be a reduction of a further $34m in dollar terms, not taking inflation into account. This Minister, who professes his concern and says that we should wake up to the importance of major technological changes, is the one who has come into this chamber to announce a cut in funding to the CSIRO. I find that very sad. I honestly do not see how he can continue to hold that portfolio and feel that he is doing justice not only to the people he represents but also to the research effort within Australia. If ever there was a short sighted policy, that would have to be it. The cuts are falling very heavily in areas where the CSIRO has achieved tremendous breakthroughs-areas that directly affect agriculture. There has been a dramatic cut in the animal production and processing area of CSIRO and an even greater cut in plant production and processing. I could go on. I am sure that the Minister for Primary Industry and Energy, who is at the table, must be conscious of this. I wonder what he intends to do about the situation. If we continue to run down the CSIRO, it will not be long before our whole research effort in this country is seriously jeopardised. Anyone who has spoken to people who work in CSIRO or has visited its establishments will notice one thing very quickly when they walk into its laboratories, and that is that in many places the equipment is not only old but positively ancient. An organisation that is supposed to be taking scientific research into the twenty-first century is using equipment which in many cases was probably built in the 1960s. Is it any wonder that the scientists themselves are getting very worried about the situation? Indeed all Australians should be getting worried about it. I say that the Minister for Science, Customs and Small Business should be having a long, hard think about whether he is doing justice to his portfolio. I seriously question his ability to carry on in that Ministry. As the honourable member for Murray has pointed out, the Opposition does not oppose this omnibus Bill of amendments to a number of primary industry Acts. None the less, as I have pointed out, we have concerns in a number of areas. I refer particularly to the cuts in CSIRO funding to which I have referred and which have been repeated year after year. This should be of very serious concern not just to the Minister for Primary Industries and Energy, but to the Government and to all Australians. I believe that this will be one of the most short-sighted cutbacks by a government in a long time. Mr SNOWDON(Northern Territory)(5.47) —Before I address the substance of the Primary Industries and Energy Legislation Amendment Bill, I wish to thank the honourable member for Murray (Mr Lloyd) and the honourable member for Wannon (Mr Hawker) for their contributions to the debate and, indeed, for supporting the legislation. In regard to the remarks by the honourable member for Murray, especially on the canned fruits legislation, I repeat what the Minister for Primary Industries and Energy (Mr Kerin), who is at the table, said in his second reading speech: The Government considers that the canned fruits statutory marketing arrangements have served their purpose of bringing about a degree of stability to the industry. However, the industry now needs to adjust further to changing market circumstances, and the repeal of the legislation will allow for necessary structural adjustments and encourage more innovation. I am not enticed by the arguments put forward by the honourable member for Wannon. It is clear that he, like his colleagues, is embarrassed by the fiscal genius of this Government and the structural changes it has masterminded, especially relating to the issue of commodity prices, which the honourable member raised in his speech. I refer to an article on page 3 of today's Australian Financial Review in which Steve Burrell refers to statement 2 in the Budget Papers. He says: Statement 2 points out that this is consistent with a world-wide trend and reflects the changing composition of trade . . . He continues: But it is the world economy which is expected to provide the buffer for Australia in 1988-89. `Slower overall growth in industrial production can be expected to limit further increases in commodity prices. `However, with commodity stocks generally low and few signs yet of any substantial pick-up in commodity production, commodity prices are likely to remain firm,' the Statement said. It also points out that although the terms of trade have recovered all of the substantial ground lost in 1985 and 1986, commodity prices are now around their long-term trend level and are thus not unusually high. And the 9 per cent growth, on average, in the terms of trade is largely based on improvements through 1987-88 and is consistent, on average, with recent strong levels. I do not share the gloom of the honourable member for Wannon. I am sure that tomorrow night when we hear the Leader of the Opposition (Mr Howard) respond to the speech by the Treasurer (Mr Keating), he will applaud the Treasurer for the innovation for which this Government has been responsible, for the way in which it has been able to handle our economy, and for the way in which it has been able to manage structural change. I suggest that the honourable member for Wannon could take a lesson from the Treasurer, and indeed from the Minister for Primary Industries and Energy, on the way in which they handle their portfolios. I also suggest to the honourable member that, far from being critical of the Minister for Science, Customs and Small Business (Mr Barry Jones), he should have regard to the positive things that have been involved in his portfolio and the way in which he has addressed those issues. I suggest that his statements about the Minister are entirely inappropriate and out of order and that they would not be accepted by any member of the House who has any reasonable judgment or is able to assess the true situation in his portfolio area. Unfortunately, the honourable member for Wannon is acting out of ignorance. The contribution by the honourable member for Kalgoorlie (Mr Campbell) was, as usual, enlivening and interesting, but unfortunately I am unable to share his support for food irradiation. This is a matter of contention, and I do not think this side of the House will be able to support it generally. This omnibus Bill for legislation administered in the Primary Industries and Energy portfolio contains minor amendments to a number of different pieces of legislation. I refer to the Administrative Decisions (Judicial Review) Act 1977, the Dairy Produce Act 1986, the Pig Industry Act 1986 and the Rural Industries Research Act 1985. It also repeals a redundant Act, the Dairy Industry Act 1967. These amendments and the repeal of legislation are of a non-policy, administrative nature. The Bill makes slightly more substantial amendments to the Australian Meat and Live-stock Corporation Act 1977, the Export Control Act 1982, the Meat Inspection Act 1983, the Fishing Industry Research and Development Act 1987, the Minerals (Submerged Lands) Act 1981, the Plant Variety Rights Act 1987 and the Wool Marketing Act 1987. The implications of each of these amendments were outlined by the Minister for Primary Industries and Energy during his second reading speech, and I will not repeat the substance of those explanations. Their importance lies in this clarification and/or streamlining of existing arrangements. This will enable the more efficient operation of the different sections of the industry which they affect. For instance, the amendment to the Australian Meat and Live-stock Corporation Act clarifies that shipping lines which carry meat and livestock do not need to hold a meat or livestock export licence. It is interesting to note the number of different primary industries that these amendments touch upon. This reflects the growing diversity and interests of the primary sector, a diversity which is also increasing in my own electorate of the Northern Territory. Some parts of this amending Bill will, of course, be more relevant to the operation of primary industry in the Northern Territory than others. Clearly we do not have many primary producers who will be directly affected by, for example, amendments to the Wool Marketing Act. The primary industries in the Northern Territory perceived to be of most importance, apart from the resource extractive industries, are pastoral production, through cattle and buffalo, agriculture, horticulture and commercial fishing. The legislation before the House places beyond doubt the power of the Fishing Industry Research and Development Council to enter into arrangements with the Department of Primary Industries and Energy for the provision of and payment for clerical and administrative services. The fishing industry in the Northern Territory is a rapidly growing industry. The waters off the north coast contain sizable and valuable fishing resources. The value of production of fishing off the northern coastline has risen from $30m in 1986-87 to $42m in 1987-88. In 1987, 86 per cent of the total value of fishing production was accounted for by prawns, almost all of which were exported to Japan. Regulation of the industry is necessary to prevent the overfishing that has happened in the past and, significantly, this has been recognised by those participating in the industry, through the Fishing Industry Research and Development Council. Both the prawn industry and the barramundi industry have had restrictions introduced concerning the timing and duration of seasonal activities. Research and development is essential so that we may have a clear understanding of the capacity and potential of the industry. Recent negotiations between the Commonwealth and the Northern Territory Government have also led to the reopening of the pearling industry in the Northern Territory. Four licences were recently allocated, and it is my understanding that after further discussions another licence will be allocated. I understand that these discussions involve the possibility of a joint venture arrangement between an Aboriginal interest and another person. However, there has been some dispute over the awarding of this licence, partly because of, I believe, the fairly irresponsible approach taken by certain people involved in the negotiations. Agriculture and horticulture are also emerging as important industries in the Northern Territory. Though initially small, the value of production in 1987 was $12.8m-a growth of 58 per cent on the previous year. The horticultural industry capitalises on being able to supply southern and overseas markets with fresh tropical fruits. In this regard the Territory enjoys a comparative advantage in being able to supply early season and out of season products to some markets. The main commodities produced are rockmelons, mangoes, table grapes, bananas, tomatoes, and watermelons. I am happy to say that some colleagues and I were able to visit the Arid Zone Research Institute in Alice Springs recently to hear about the research it has been undertaking into the production of table grapes, and the extension work it had undertaken in the Ti Tree area where table grape production is now a rapidly growing industry. The people there demonstrated to us an interest in date palms, and a number of associated experiments are being carried out. It is important to recognise that agriculture and horticulture are primarily export industries in the Northern Territory. By value, 79 per cent of production goes either interstate or overseas. Plant variety rights, therefore, are important in the research activities being undertaken, and I understand that research is taking place in the Northern Territory into plant variety rights. There is the possibility for expanding markets for plants bred in places such as the Northern Territory, especially when we consider the potential for exotic fruit and vegetables. The expansion of the Asian population in the region has already led to the introduction to Darwin of a number of varieties of fresh fruits and vegetables, which can be bought in the open markets held regularly throughout the year at Mindil Beach, near the Darwin casino. The pastoral industry has also traditionally been perceived as very important to the Northern Territory economy. The amendment to the Australian Meat and Live-stock Corporation Act is to make it clear that shipping lines involved in the carriage of meat or livestock on behalf of licensed exporters do not themselves need to hold a meat or livestock export licence. The amendment to the Meat Inspection Act 1983 will permit the regulations to impose penalties for the non-payment of fees and put beyond doubt the power of an authorised officer to act in specific ways. The pastoral industry in the Northern Territory underlines the image that people have of the north-romantic isolation; working in a harsh, forbidding environment. Indeed, studies into the ownership patterns in the Northern Territory pastoral industry mention aspirations to the `Cattle King' image as the motivation for entrance into the industry. It is not an industry, however, without its problems. These are leading to increasingly intensive investigations into the basis of the industry's operations, its methods of management, and the motivation of the pastoralists concerned. During 1987 the value of production of this industry in the Northern Territory totalled $107m, which in fact was a decline of 5.4 per cent over previous years. Of course, there are many explanations given for that decline. The Northern Territory Government, for example, has argued that the decline is a consequence of drought. However, it is my view and the view of people involved in the industry that where drought is blamed there is a need also to look at stocking and land management practices. There is also a need to understand the basic effects of the Commonwealth funded brucellosis and tuberculosis eradication campaign to clear Northern Territory beef for the United States market. I want to examine seriously over the coming months the whole pastoral industry, and indeed I will be endeavouring to do so. A number of areas need close examination. I am reminded of the discussions which took place recently between me and some colleagues from Caucus and members of the business community at Tennant Creek. We were commenting on the possible contribution of the pastoral industry in the Barkly, probably the most highly productive pastoral area in the Northern Territory. It is worth pointing out that the pastoral properties there are quite large, some carrying 40,000 to 50,000 head of cattle. Tennant Creek, residents consider that Tennant Creek is the closest service town to the Barkly region. Unfortunately, because of the nature of the ownership of those stations in the Barkly, and because of the proximity of Mount Isa to Tennant Creek, we find that owners and managers of the stations in the Barkly region market their cattle through Queensland when they turn their cattle off. They employ their labour through Queensland and they acquire their services through Queensland, which means that all in all the benefit to the local and regional economy of Tennant Creek, and indeed the Northern Territory economy generally, is fairly insignificant. In fact, it is of questionable value. It is worth noting that the total rental value of pastoral leases in the Northern Territory to the Territory's economy is in the vicinity of $375,000 a year, and that is in an industry which turns off production valued at hundreds of millions of dollars. Mr Courtice —It is a gift. Mr SNOWDON —As the honourable member says, it is a gift. It is something which needs to be examined because clearly, in my view, it is not acceptable that an industry based largely on big business is able to get away with exploiting the resources of the Northern Territory without due compensation to the Northern Territory Treasury-and indeed to the Australian taxpayer because, as members of the House will know, the Commonwealth Government provides an input into the Northern Territory economy by providing around 78 per cent of the Territory's income. One of the most important problems that has emerged in central Australia is soil erosion. I was extremely pleased to see that the Department of Primary Industries and Energy has increased funding for the national soil conservation program, whose budget is now $10.643m-an increase of over 77 per cent on last year. In that regard it was also with great pleasure that my colleagues and I visited a station, Atartinga, some distance to the north-east of Alice Springs, to see the work being undertaken by the owner-manager of that property, Mr Bob Purvis. He had significant difficulty trying to persuade the Northern Territory Government that the minimal stocking levels they imposed upon him were inadequate and unsatisfactory in terms of the administration of the land management of the area in which that property was located. In fact, he is now in a situation where his stocking levels have been halved. He now sells in the vicinity of 1,500 head per year every year because of quite innovative land management practices built on over 25 years. He has used extensive ponding arrangements and introduced buffel grass so that he is now able to use as a catchment the areas ponded to gain a benefit the equivalent of about 22 inches of rainfall in an area that receives only 10 inches. This allows him to turn off good cattle all year round in good seasons and bad. That is the sort of innovation of which people in the cattle industry should take note. Other issues will be raised in the near future in relation to the pastoral industry of the Northern Territory, but I will leave my comments on that for another day. Everything that gives additional assistance to the diversification of the Northern Territory primary sector, a sector which is the mainstay of the Northern Territory economy, is of benefit to the north. It is the mainstay at least in term of the inputs to the economy which are not derived from the Commonwealth. Rural industries contribute to regional development and the wide diversification of the local economy and provide a source of employment, particularly in the remote areas of the Northern Territory. It is estimated that these industries employ about 4,000 people. It is important that we are able to proceed with the fine tuning of these pieces of legislation. The increased streamlining and administration of these industries can only be of benefit to their development. The amendment relating to the Minerals (Submerged Lands) Act 1981 is a particular example. While this legislation was enacted in 1981, it has not been proclaimed because it requires that the States and Territories pass complementary legislation for the exploration of submerged minerals. The States and Territories, for whatever reasons, have not enacted such legislation. Consequently no administrative arrangements are in place for the exploration of submerged minerals, which has meant that companies are not interested in undertaking exploration. They will want to know the rules of the game before they begin to participate. This amendment will remove the requirement of the States and Territories to pass complementary legislation. Instead, administrative action is all that will be required on the part of these governments. The Act will then be able to be proclaimed and an administrative arrangement put in place. Presumably we will then see the development by companies of an interest in the exploration of submerged minerals. I conclude on that note and commend the legislation to the House. Mr TIM FISCHER(Farrer)(6.03) —It is a pleasure to address legislation-for the first time, in my case-in this new parliamentary building. I might just digress to mention one of the hazards of this building. There are many, and I guess we will gradually get on top of them. I think I should advise the House of a particularly exciting incident for one of my colleagues, who came storming down the corridors at one minute to ten this morning trying to make it to the House on time. He spun through the lobby, threw open an interesting brown door, thinking he would step immediately into the chamber, and ended up in yet another broom cupboard. Had the door slammed shut behind him he might still be there. I guess we will gradually learn to operate this building efficiently and effectively, if we can survive the walking involved, in the interests of our electors and the people of Australia. Tonight the House is addressing omnibus legislation which amends several existing Acts. The legislation is entitled the Primary Industries and Energy Legislation Amendment Bill 1988. I quite often take the opportunity to read a Bill from cover to cover before speaking on it on the floor of the House. I always find it an illuminating experience to try to decipher the drafting in Bills presented to this Parliament, which have a trend towards being increasingly complex with increasingly complex drafting. At the outset I wish to draw to the attention of the House, and perhaps the nation, the fact that in this year, 1988, we have reached a situation where we are legislating about the state of mind of people in the exact wording in the schedule to this Bill as it relates to the Wool Marketing Act. For the benefit of honourable members I shall quote some clauses of the legislation. The schedule as it relates to proposed new section 126a (1) of that Act states: Where it is necessary to establish, for the purposes of this Act or the regulations, the state of mind of a body corporate in relation to particular conduct, it is sufficient to show . . . The Bill gets down to a slightly different connotation in relation to proposed new subsection (3) of that same section, which states: Where it is necessary to establish, for the purposes of this Act or the regulations, the state of mind of a person other than a body corporate in relation to particular conduct, it is sufficient to show . . . Proposed new subsection (5) states: A reference in subsection (1) or (3) to the state of mind of a person includes a reference to . . . So this year, under the seemingly reasonable objectives of this legislation, this Parliament is now legislating for the interpretation of a state of mind in the conduct of people. I sound a note of warning: we want to be very careful how far we go down that path. I think the intrusion of legislation more and more on activities of individuals and organisations is a matter of concern. In dealing with this legislation, I record that concern. I know full well that these are legislative drafting phrases which relate in part to the Trade Practices Act 1974 and are consistent with phrases in the Australian Horticultural Corporation Act 1987. However, a line has to be drawn with regard to the extent to which legislation should deal with declared states of mind of people in terms of their conduct as interpreted by this Bill. The legislation relates to a number of primary industries, including the canned fruits industry, the meat industry, the fishing industry, the wool industry, and to other industries indirectly. I take this opportunity to say to the House that in the 1987-88 financial year we have seen very solid export performances by some of those industries. For example, in the meat and meat preparations industries the export figure for the last financial year reached some $2,552m; in other words, $2.5 billion. The fishing industry export income figure, including crustaceans, amounted to some $729m. The wool industry, enjoying the strong commodity prices which the Treasurer (Mr Keating) is banking on so much in his high risk, high taxing Budget, achieved an export income of some $5 billion. To be exact, it was $5,111m. That comprises some 12.5 per cent or more of Australian export income and puts wool right back on top in the export performance of this country. The wheat industry export figure was $1,718m, but I should hasten to add that that excludes flour. Other grains totalled some $394m. The grand total of exports, including canned fruits on a calendar year basis of around $57m, rounded out at some $10.5 billion. These are massive and major export industries. They make a tremendous contribution to the standard of living of people who live in your good electorate, Mr Deputy Speaker, in suburban Sydney, and to people who live right across Australia, whether they are directly or indirectly connected with primary industries. That should not be forgotten in the deliberations of this Government in both the Budget and the general legislative context and in the overall policies and priorities adopted by the Government. Too often it is forgotten along the way, resulting in the downgrading, for example, of some of the essential infrastructure required by these industries to maintain their export performance. Whilst I realise that it would be out of order to dwell on it, I highlight the $32m reduction in Federal road funding which will make it very difficult for some of the primary industries. To take one specific example, the movement of bales of wool in Balranald shire throughout this winter from some properties ceased altogether because the roads were totally impassable for weeks on end. Shearing of the sheep was severely disrupted because the shearers could not get into the properties along the same roads. Likewise, once the wool was shorn it was not able to be moved to markets and to export. That is a very direct and specific example of an area which has hundreds of kilometres of unsealed roads. Due to funding cutbacks over a lengthy period we are now paying the price. The overall economic situation in so many of the industries covered by this legislation has, I concede-I am delighted-greatly improved, particularly with the upturn in commodity prices. However, there has also been a fairly solid increase in the costs which impact on so many primary producers. By that I mean the very broad definition of primary producers. I include, of course, people who are members of the fishing industry and organisations associated with the fishing industry. They especially have suffered a huge cost increase with fuel and the taxation pertaining to much of their operation. That means that, notwithstanding the commodity price increases, so many in the rural industries and the primary producing industries are facing a squeeze play which the Government ought to be more conscious of in its determination of its policies and priorities. I would add that to some extent a cyclical effect pertains to the economics of rural industries. The seasonal prospects are good and commodity prices have improved but this does not automatically mean that this situation will continue for some indefinite period into the future. Again, it is a reason why the Government should be very conscious and sensitive in its determination of policies and priorities to ensure that there is a proper foundation for onward expansion of our primary industries dealt with in part by this legislation so that they can continue to make their massive export contribution. A new phenomenon has emerged during this particularly wet winter in many parts of south-eastern Australia. I advise the Minister for Primary Industries and Energy (Mr Kerin)-I am sure he has already seen it and had reports of it-of the green drought. There has been an enormous amount of rain but some primary producers have been unable to sow their winter crops for three or even four months due to the rain arriving in such large quantities and so quickly in the first fortnight of May that it made their winter crop paddocks impassable. In turn, this means that there will be a reduction in production, notwithstanding the extremely good overall seasonal conditions. On top of that, some primary producers, particularly in south-eastern Australia, who did sow their crops face having their seeds burst because of the excess of moisture. Alternatively, the crops only struggle through and they are virtually wiped out by weed growth and other factors arising from the extremely wet winter. While farmers like to complain-primary producers around the world fall into that category in one sense-the House ought to be aware that notwithstanding the extremely wet weather the green drought will affect production and the production projections of farmers for this year, for winter crops in particular. This flows over from not only grain production but also the wool industry with some producers being affected by a deterioration in the quality of feed available, again because of the phenomenon of an extremely wet winter. We now await the spring to see just what the conditions will finally produce. But I sound a note of warning that some of the earlier estimates of crop production for Australia for this calendar year may have to be adjusted in the light of the green drought phenomenon. The legislation before the House carries out a number of minor adjustments to existing Acts which my colleague the Deputy Leader of the National Party, the honourable member for Murray (Mr Lloyd), has dealt with most accurately and substantially. Therefore, I do not propose to detain the House to track through all the changes again, other than to highlight once more the exact drafting of the changes relating to the Wool Marketing Act 1987. It is dealing with the state of mind of certain people covered by the legislation. I hope that the trend down that path will be monitored very closely by this House, by the Senate and by the Government lest it go beyond that which might be deemed to be reasonable. Mr LAVARCH(Fisher)(6.18) —Tonight we are debating the Primary Industries and Energy Legislation Amendment Bill, which is an omnibus Bill. Unlike previous ones, it is confined to the Primary Industries and Energy portfolio: it does not touch on any other portfolios. Though a number of the amendments in the Bill are minor, they are nonetheless important. I will address some of the most important ones during my contribution. I shall also refer to some of the comments made by the honourable member for Farrer (Mr Tim Fischer). First, in relation to road funding, this subject is always being trotted out by the Opposition but a few facts need to be stated and put on the public record. Firstly, the spending on roads throughout Australia in real terms in the last five Budgets of the Fraser Government and in the last five Budgets of the Hawke Government has increased by 25 per cent. That fact is often conveniently ignored by the Opposition. It always points to the fact that over the last few years there has been a reduction but it does not point to the significant increases in road funding in the first few years of the Hawke Government. Overall, there has been a 25 per cent increase in real terms. The honourable member for Farrer also commented on farm costs and the difficulties in keeping them in some sort of proportion. There are very real difficulties but credit should be given where credit is due. I believe no government has done more than the current Government to put a lid on farm costs. The important cost of all primary production is the cost of labour. Through the accord and through the Government and union stances at the Conciliation and Arbitration Commission we have had the sort of wage restraint and general real reductions in labour costs which have been extremely beneficial to the Australian economy and in particular to our primary industries. That sort of result simply could not be achieved under the deregulatory approach which is sometimes proffered by the Opposition, and in other circumstances where there have to be wage-tax tradeoffs, et cetera it is implicitly rejected because that can happen only under some sort of regulated system. As the honourable member for Farrer pointed out, Australian industries as a whole and those industries which are touched by the legislation before the House in particular are playing a very major role in Australia's economic fight back. Through their efficiency and hard work, farmers, farm labourers and those employed in ancillary fields have gained much of Australia's export earnings. Those points have to be recalled. It is important that the House bear them in mind. Just as important as those export earnings, various rural towns and communities are substantially supported by the income earned by the predominant primary industry in their area. Although the Government is trying hard to remove the vulnerability of rural communities and towns being dependent on a particular industry in their area by encouraging a diversity of income and support, there is still no doubt that the future of many rural communities is pinned on the outcome of the predominant industry in their area. That certainly is the case in a number of towns in my electorate whose success and well being are related very much to the international prices that we are getting for beef and, to a lesser extent, for our horticultural products. Although this Government has correctly set as a very high priority the diversification of our nation's economic base, much has been done to improve the position of our traditional industries. In macro terms, the Government's initiatives in deregulating the finance and banking sectors, reforming the taxation system and generally moving towards a more free trade position have helped rural Australia. In micro terms, many problems inhibiting the growth and profitability of efficient primary industries lie in the continuation of outmoded marketing and regulatory frameworks. In this respect, the Bill is tackling the canned fruit industry and the Australian Canned Fruits Corporation. The Bill in fact brings that Corporation to its end. There will be a period in which the Corporation will continue in order to carry out functions which are currently on its books, but that, obviously, will be for only a limited time. After that time, the Corporation as such will no longer exist. The Australian Canned Fruits Corporation has played a role of a central buyer and marketer of canned fruit-apples and pears-in those States of Australia in which there has been complementary legislation. The Corporation has also operated a pooling scheme to equalise returns to the canners. The decision to wind down the role of the Corporation followed an Industries Assistance Commission (IAC) report on the industry. As with all orderly marketing arrangements, the canned fruit industry has enjoyed stability under this statutory scheme. However, such arrangements do not always lend themselves to innovation and often fixed regulation makes it difficult, if not impossible, for the industry to undergo necessary adjustments. This is particularly so as a lot of the orderly marketing schemes which we have in this country were put into place many years ago. The sort of environment in which the industry now has to operate and the markets to which its products are directed are becoming more and more export oriented and outward looking. The sorts of frameworks which were suitable 15 or 20 years ago, or even earlier, are not necessarily suitable today. The Government, throughout a whole range of industries, has attempted to start winding back that form of regulation to make Australian primary industries far more competitive. That is not to say that, at least in some cases, orderly marketing as a device has no useful role to play. It does. One example is the dairy industry. Certainly, the deregulation in that industry, which has been substantially modified, continues to play a very worthwhile role. Another industry which I would just like to touch on is the tobacco growing industry. Issues are now being discussed in relation to that industry. Mr Smith —Let us go to dinner and have a cigarette. Mr LAVARCH —I would like to, but I do not smoke. However, I do have a number of tobacco growers in my electorate. I was able to pacify them by saying that my wife smoked even though I did not. They were able to accept that. I think I am probably the only Government member who currently has some tobacco growers in his electorate. Even though only a small percentage of Australia's total tobacco crop is grown in the Fisher electorate, the quality of that crop is extremely high, and the growers are able to earn a very reasonable living out of their trade. Following another IAC report on the industry, the Government has moved to reduce the tariff protection to the industry as well as to phase out the orderly marketing arrangements over a period of years. At the moment the industry is asking the Government for a period of seven years for these arrangements to continue. I understand the Minister for Primary Industries and Energy (Mr Kerin) is still talking to the industry and to his Cabinet colleagues about the future of the industry. I would just like to put on the public record my support for the tobacco growers' position in relation to the continuation of the orderly marketing scheme for a further seven years. I believe it is an industry which has moved down the path of deregulation and has taken the steps necessary for it to compete effectively not only in Australia but also overseas where, hopefully, there is a potential export market. The major effect of this Bill is to bring about the end of the Australian Canned Fruits Corporation. As was indicated in the Minister's second reading speech, certain functions of that Corporation can be performed by the Australian Horticultural Corporation. I would like to speak for a few moments about the Australian Horticultural Corporation and horticulture as a whole. Horticulture is very important to my electorate, in which significant areas are under cultivation for such crops as avocados, custard apples, passionfruit, macadamia nuts, strawberries and, in particular, large quantities of bananas and pineapples. I understand that the largest pineapple plantation in the Southern Hemisphere is located in my electorate. So horticulture is extremely important to the people whom I represent. The Federal Government is keen to play its part in the development of expanded and improved horticultural production. That the industry is in fact growing is clearly demonstrated by the 100 per cent increase in export earnings from the financial year 1984-85 to 1986-87. The key to a successful future for horticulture is in the area of proper marketing and adequate research and development. In both these areas the Government is acting and the canned fruit industry hopefully will be one of the industries which will benefit. Grants are being made to horticulture under the innovative agricultural marketing program to aid innovation in marketing. A grant already has been made to the custard apple industry. This is particularly pleasing to me as an expanding custard apple industry is developing in the Sunshine Coast hinterland area of my electorate. In May of this year the Minister announced funding for courses in international marketing skills for smaller or developing industries which may not as yet have well established expertise available to them. Again, this is a program which will be very welcome to all horticulturalists throughout Australia, particularly those in my electorate. The Australian Horticultural Corporation commenced operation on 1 August this year with one aim being to assist horticultural industries to achieve their potential on overseas markets. Another aim is to contribute to the development of horticultural production and marketing within Australia. It is to be hoped that the canned fruit industry, like other horticultural industries, will see the benefit of cooperating with the Corporation and that it will become fully involved with its operations. The Corporation will be able to assist in the development of a comprehensive export strategy and provide services at costs far less than those of individual industries which are continually reinventing the wheel. There is a need for expertise to be on tap to the industry as a whole rather than each individual industry having to discover the same things. I see that the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), is taking a particular interest in primary industries. It is pleasing to see that his interests extend beyond Australia's urban areas. I have no doubt that members of his electorate and Australians generally will be pleased with his interest in this respect. The Australian Horticultural Corporation will provide the benefits of a cooperative approach without the rigidities which often flow from statutory marketing. An efficient industry in a fair market situation will inevitably be successful and more profitable. Sitting suspended from 6.30 to 8 p.m. Mr LAVARCH —Before the suspension of the sitting I was speaking about the Australian Horticultural Corporation and contrasting the very constructive policies, of which this is an example and which have been a feature of the Minister for Primary Industries and Energy and the Hawke Government, with those pursued by the Opposition parties when they were in government. The point I was making was that through the development of the Australian Horticultural Corporation and through the efforts which have gone into research and development of new export markets, as well as improvements in the production side itself, all Australia's horticultural industries are moving ahead very strongly. Our net production figures have increased rapidly over the last number of years and market penetration overseas has also increased. Before I conclude my remarks I wish to make some comments on the recent trips made by the Prime Minister's country task force, which have been extremely successful. I was fortunate enough to host the task force-- Mr Courtice —It has been a very successful task force. Mr LAVARCH —As the honourable member for Hinkler says, it has been very successful. I might add that he is an experienced member and he knows that the task force has proved successful. The task force visited Queensland, including my own electorate and that of the honourable member for Hinkler, and subsequently it had a full journey through the Northern Territory. Some of the issues that came out of those trips have been acted upon by the Government. An important one has been the re- introduction of income equalisation deposits. This particular form of assistance to primary producers has been long called for by many farmer organisations and, together with the excellent tax averaging schemes which have been put into place by the Hawke Government, this new form of equalisation deposits clearly demonstrates the Government's commitment in the area of self-help. This is very important as primary producers sometimes unfortunately get the reputation of being whingers and of always coming with open hands for government assistance. That is not a true picture of the producers in my electorate. These particular measures-tax averaging and income equalisation deposits-are an excellent example of how farmers are encouraged to and can provide for themselves so that when they run into adverse climatic conditions, downturns in markets or crises generally they are able to have a buffer against these downturns without calling for government assistance. That particular issue was well canvassed on the trips made by the country task force. I particularly wish to raise the matter of soil conservation. Last night in the Budget the Treasurer (Mr Keating) outlined a large increase in the Commonwealth expenditure in this field. Certainly, this point became very clear in the task force's trip to Northern Territory. During that trip-and the honourable member for Hinkler will no doubt agree with me-we were able to see a number of projects being adopted by pastoralists in the Northern Territory which were excellent examples of innovative land management techniques which are available and which are being developed. Certainly both Commonwealth and, to a lesser extent, Northern Territory agencies, together with farming organisations, are doing a lot of work in this field. In the past a lack of funds has been a distinct disadvantage in achieving an overall strategy to combat this problem. In my opinion it is the most serious environmental problem which Australia is facing. I know that a lot of other environmental issues gather the imagination far more readily, but in terms of its impact on the Australian economy and our future economic well-being, there is no more important environmental issue than the question of soil conservation. To see these funds increased by a massive 77 per cent in one Budget is a sure indication of this Government's immense commitment to overcoming this problem. I am extremely pleased to lend my support to those measures and also generally to the measures outlined in the Primary Industries and Energy Legislation Amendment Bill. They will in many ways improve the running of a number of the industries involved and generally will help Australia's primary industries to continue to contribute to the improvement of our economic condition. Mr SHARP(Gilmore)(8.06) —As I rise to speak in this new Parliament House for the first time-a House that will determine the course of Australia's future, its government and the quality of life and standard of living of those people who live in this country-there is probably no more appropriate legislation to be speaking on than that concerned with primary industry. In the course of the history of Australia, primary industry has helped to build this nation. It has ensured that Australia has had a backbone to its economy. It has been the engine room of Australia's economic machine. As we speak in this new House tonight-a House that will determine the future of this country-the legislation on which we speak will also help to determine the future of Australia. There is probably no more appropriate time to speak about primary industry than after last night's Budget Speech by the Treasurer (Mr Keating). Last night there was scant mention of primary industries in the Budget Speech. One had to go to the fine detail to find out how primary industries had fared during last night's Budget deliberations. When one looks at those fine details one understands why primary producers throughout Australia feel that they have been dealt another cruel blow. Last night a number of taxes, charges and levies were increased at a rate far in excess of justifiable consumer price index levels. They were increased for the the purpose of raising revenue. For the past 5 1/2 years the Labor Government has been treating primary industries as a milching machine for the Government to carry out its activities in other areas. When I say that primary industries have been dealt a bad blow by last night's Budget, I mean that one only has to look at the sorts of charges that have been increased. In total the primary industries of Australia, the subject of this Primary Industries and Energy Legislation Amendment Bill tonight, will have to pay an extra $124m in charges, levies and fees. This money is in the form of wool taxes which will increase $48m, livestock slaughter fees which will increase by $36m, and export inspection charges which are up $19m, raising something like $77m in total. It is those sorts of fees which affect the industry that we are discussing in the debate tonight. Those fees will help to ensure that in the future primary industry will not be as competitive as it could be. In recent times we have seen the primary industries enjoy somewhat better economic circumstances. Because of this I am sure the Labor Government will continue to go out and justify increases in charges and fees to primary producers. Certainly at present primary producers can perhaps afford increased charges. But the point I wish to make tonight to this Parliament is that historically primary producers have not always enjoyed good economic circumstances. Historically they have had ups and downs, depressions and booms. As sure as God made little green apples we will have another economic depression for primary producers in Australia. We will have another drought; we will have another commodity price decrease; we will see farmers falling on hard times. The charges which will be imposed on these industries will have a huge impact at that time, an impact that will ensure that many people in primary industry will not be able to continue to remain within that industry. It is not just the increases in fees and charges that have hurt people in our primary industries. Last night we saw one of the great allies of primary producers throughout this country, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), suffer yet another setback. For the fifth year in a row the CSIRO received a funding cutback-something of the order of $13.6m. For five years in a row the CSIRO has had to try to do a job better with less and less money. It has been told, `You have got to do this in order to be more market orientated and because you are more market orientated you are going to be able to get more private enterprise involvement with your research work'. That might sound fine in theory, but one thing that has helped to develop the primary industries of Australia through the history of this country has been the work that the CSIRO has done. The CSIRO has been instrumental in so many technological breakthroughs within the industry. One good example of the latest technological breakthrough for primary industries is a thing called gene shears which can quickly, easily and economically remove wool from sheep and will save the primary industries a tremendous amount of money in the future. Those gene shears have taken something like 10 years to produce, to bring to a stage where they can be practically utilised. They have cost many millions of dollars for research. Because of the time and the economic cost it is not likely that private enterprise will be able to afford to invest in that type of research. So primary industries need a strong CSIRO with good government support so that they can look forward to technological breakthroughs in the future. I just do not know how the Minister for Science, Customs and Small Business (Mr Barry Jones) can stand with his head tall amongst the science community of Australia today after five continuous years of cut backs to the science community. Mr Chynoweth —What about primary industry putting some money into CSIRO? Mr SHARP —I hear the interjection from the honourable member on the other side. Primary industries put tens of millions of dollars every year into research with both the CSIRO and other organisations in this country. They put this money in gladly and willingly. They are prepared to do it because they can see the economic support that they will get in the future from it. But at the same time from the taxpayers' point of view there are great arguments to warrant continuing and growing government investment through organisations such as CSIRO. Last night we also saw some of the fishermen of Australia take a set back. I note that this legislation in part deals with the fishing industry. We saw fees for Commonwealth fishing licences increase by about 33 per cent from $295 a year to $395 a year. That will raise about $1m extra. It is interesting to note a facsimile which was sent to me just this afternoon. I only just picked it up as I walked out. It comes from the Northern Fishing Companies Association Ltd. It discusses the increase in Commonwealth licence fees. It states: The Northern Fishing Companies Association considers the Government's Budget decision to increase the Commonwealth fishing boat special levy is a `rip' off and unjustified. The reason given for introducing the levy is to provide funds for new and extended fisheries management programs. . . . . Currently industry has little say in how the management costs are arrived at, how many Government staff are employed or what they do. Money collected by means of the special Commonwealth levy goes into consolidated revenue and there is no way of finding out how much is allocated to specific items. It is unlikely that any will go towards new initiatives in the northern prawn fishery because there are none planned. But the same applies in other Commonwealth managed fisheries that pay management levies. We have seen the fishing industry being dealt a blow by last night's decision. We have seen the fishing industry in my own electorate of Gilmore, which is quite substantial, suffer some tremendous upsets over recent months when the Minister for Primary Industries and Energy (Mr Kerin) tried to impose quotas in gemfish that would ensure that even if gemfish were dead in the net when they were brought up to the surface they could not be used for any commercial purposes, they had to be thrown back into the sea. Madam SPEAKER —Order! I do not wish to be pernickety, but I cannot quite find what the honourable member is talking about in the Bill. Perhaps the honourable member is going to get round to the Bill. Mr SHARP —Madam Speaker, I shall get to the Bill. As I understand it, this is an omnibus Bill. It deals with a number of specific industries within primary industry: for example, the wool industry and, I understand, the fishing industry. It also deals with wheat and the meat industry. It is for these reasons that I speak on these subjects tonight. Mr Hunt —You are doing a good job too. Mr SHARP —I thank the honourable member. Last night we also saw another disappointment in the Budget for primary producers. Primary production is very much dependent upon the cost of fuel. Fuel today is to a great extent made up of government excise. In recent days we have been led to believe in the press, from leaks by this Government, that the excise on fuel would be reduced by anything up to 5c per litre. Last night we waited with bated breath expecting that there would be a big announcement: `As a result of this $5.5 billion surplus, we are going to cut fuel excise by 5c a litre. We can afford to do it and we know at the end of the day it will give tremendous economic benefits not just to the broader Australian community, but to the primary industries of this country because primary industry depends so much on fuel as one of its major cost inputs'. But, no, last night we saw no cutback in the excise on fuel. In fact, if honourable members read the fine detail, they will find that fuel excise will increase by 4.5c a litre. Last night the primary industry people were not being given any additional advantage by having the income equalisation deposits brought forward. We still have to wait another year. All these matters are crucial to the future development and growth of primary industries in Australia. Income equalisation deposits, fuel excise, CSIRO development, wool taxes-all these things are crucial to the future of primary industry. We saw in last night's Budget the assistance to the dairy industry market support scheme cut by 21 per cent. That leaves our dairy industries in a not very happy state. In recent days the closer economic relations discussion between New Zealand and Australia dealt another blow to the dairy industries. It was originally agreed that protection for the dairy industry from unfair competition from New Zealand would end in 1995. The other day the Government decided it would end in 1990. That was a big shock to dairy farmers in Australia. This Government continues to go on protecting the motor vehicle industries and the textile industries yet, at the same time, it is not prepared to protect and take into consideration the needs of the dairy industry. There is no doubt that without some protection from New Zealand dairy imports, Australian dairy farmers will be disadvantaged. The dairy authority in New Zealand is a monopoly; it enjoys cross-subsidies. Attempts to ensure in letter between this Government and the New Zealand Government that these cross-subsidies would not be a part of dairy trade between Australia and New Zealand were not successful. Dairy farmers throughout Australia were upset by last night's Budget and by negotiations between the Minister and the New Zealand Government in recent weeks. Mr Hunt —The Minister had better table that letter, I think. Mr SHARP —That is quite right. The honourable member makes a very good point. Why will the Minister not table the letter between this Government and the New Zealand Government so that members of this Parliament and the people of Australia can scrutinise it and see exactly what was the subject of negotiations between our negotiating team and the New Zealand negotiating team? I believe that if that were the case and the Minister was prepared to do it we would find out that our negotiators were not as strong as the New Zealanders and that our dairy industry has not been as well represented as it should have been and rightly deserves to have been. Last night the primary industries of Australia and the people who depend so much on them, the country people, were given an additional blow. Perhaps it is not a major portion of the legislation before the House tonight, but I wish to express my dissatisfaction with the fact that there was a 17 per cent cut in the isolated children's assistance program. I think that is something that will concern every country Australian and everybody involved in primary industry. These changes and increases in taxes and charges and the cut backs in the isolated children's assistance program are to be compensated by a statement from the Minister last night that is designed to cheer us all up. He tells us that we should be happy because the Government has a big commitment to Australians living in rural areas. That big commitment does not really help those people who are trying to make a living form primary industry and who are trying to live in a country area. The Government says in this Budget that it will concern itself more with social issues than reducing farm costs. No consideration was given in the Budget to reducing one of the major cost burdens to the primary industries of Australia; that is, interest rates. Australian primary producers suffer interest rates that are two to three times that of their competitors around the world, yet as a result of last night's Budget we are unlikely to see interest rates fall at all. Also as a result of last night's Budget, primary producers will suffer not only because of the lack of bringing forward of income equalisation deposits but also because of the increase in sales tax. I think there has been an increase of about 14.4 per cent in revenue from sales tax and an increase in income tax revenue from farmers. In fact, if one goes out into the bush today, one would be interested to hear farmers talking about the fact that provisional tax is crippling many farmers, forcing them to borrow money at inflated interest rates. Madam SPEAKER —Order! The Chair has given the honourable member a great deal of latitude. It might be an idea if he now speaks to the Bill. Mr SHARP —Madam Speaker, I intend to do so. I shall, using the very broad omnibus nature of this Bill, remain within it. Madam SPEAKER —It is not that broad. Mr SHARP —This legislation deals with primary industry. Over the last few years primary industry has suffered greatly because this Government has done nothing to try to reduce farm costs-the cost of inputs. Farm producers have had to try to compete with their neighbours around the world who are also primary producers. The Government does take into account the high cost of interest rates. The Minister for Primary Industries and Energy (Mr Kerin) has been making big statements about getting interest rates down. I bring myself back to the legislation, but these points are very important because this Bill is about primary industry which has a great impact as a result of high interest rates. This Government has continued to tell us that it is great in reducing government expenditure. It is interesting to note that in the last few days we have found out that the cost of running the Department of Primary Industries and Energy increases by about 10 per cent per annum. I believe the Minister has not attempted to check or reduce that cost. Of course the Minister is now trying to make changes outside his Department rather than within it. At the present time, he is making changes to the wheat industry which are being violently opposed by wheat growers throughout Australia. The Grains Council of Australia says that the Minister for Primary Industries and Energy, with the proposals he has put forward for changes to industry marketing will lead its industry to the brink of disaster. I am pleased to say that members of the National Party of Australia are as one with the industry in Australia today. We are as one because we have always been the people who are prepared to get up and represent farmers throughout Australia. I take the point from honourable members on the other side. Who are trying to interject. We will be proven to be right. We have the support of people in the rural industries of Australia. If one wanted to see visible evidence of that support, one needed only go to some of the wheat grower meetings in New South Wales, Victoria and Queensland in recent weeks. This legislation that deals with primary industry is a very appropriate one. Primary industry will determine the future of Australia's economy, the future of our standard of living, and the quality of life that we all enjoy. If one had listened to last night's Budget Speech, one would have thought that primary industry was not a consideration whatsoever. Mr Hunt —It never rated a mention. Mr SHARP —As we are reminded, it never even rated a mention in last night's Budget Speech. Yet one has only to see the reason why Australia is going through an economic upswing at the present time. It is not because coal prices are up or because we have more public servants or whatever; it is because the farmers of Australia have been able to generate more income for this country. Twice in the time of this Hawke Labor Government we have seen the farmers of Australia give Australia economic input that it needs to get itself out of trouble. The Treasurer hardly gives any credit to primary industry. Yet in 1983 the breaking of the drought and the subsequent improvement in the lot of primary producers ensured that the first year of the Hawke Labor Government saw a dramatically improved economy. In recent times primary producers, because of the better prices that we have been getting for our primary products, have helped lift this Government out of its economic mismanagement. I conclude on the note that it will be a sad day for primary industry to see another successful election of a Labor government. Mr COURTICE(Hinkler)(8.25) —The Minister for Primary Industries and Energy (Mr Kerin) in his second reading speech indicated that this, the Primary Industries and Energy Legislation Amendment Bill 1988, was an omnibus Bill dealing with a wide variety of rural products. It covers canned fruits, the Australian Meat and Livestock Corporation, the Export Control Act, the fishing industry, the Meat Inspection Act, Minerals (Submerged Lands) Act, the Plant Variety Rights Act which is of great interest to me in my area and, of course, the Wool Marketing Act. In the June edition of the Australian Bureau of Agricultural and Resource Economics (ABARE), it forecast that world prices for many rural commodities would rise as world stocks declined. The gross value of rural production in 1988-89 is forecast to increase by 7 per cent to $21,200m after rising 16 per cent in 1987-88. The value of exports is forecast to rise by 7 per cent in 1988-89 to a new record of $15,400m. Wool production will be significant in this upsurge, contributing about $6,000m. In my view we lead the world in fashion in our wool industry. With value adding and the outstanding designers that we have in this nation it gives us a great opportunity to take on the world, to take on the French, and show them that our woollen products can lead the world. It is a massive opportunity to link in with the tourist industry. It is good to see an industry that was once thought of as only selling a raw commodity expand to the full extent. I can say, without contradiction from either side of the House, that everybody now recognises that the survival of agriculture comes back to value adding. I do not think we can ever overstress that fact. Certainly commodity prices and the rural sector are playing a vital role in restoring Australia's balance of payments. In every forum emphasis must be given to developing value added industries to assist our great primary industries. The ABARE has a number of vital statistics which show the great reliance placed on primary industry. In spite of the fact that there will be a record year in the value of rural exports, the number of rural establishments has declined from 198,400 in 1966-67 to 169,700 in 1985-86, while rural employment as a ratio of total employment has declined from 10.7 per cent in 1966-67 to 5.9 per cent in 1985-86. That demonstrates not only a loss of farmers but also a tragic loss of employment to many areas throughout Australia. Indeed, we are going through a dramatic change in agriculture and that is indicated worldwide. In the United States of America (USA) alone, despite heavy subsidies, tens of thousands of farmers have left the industry. I stress the fact that subsidies are not and never have been the answer. Reduction in input costs to farmers is the only way to go. In the last five years that has happened. This year in the May statement we saw the greatest advance in a reduction of input costs by the Federal Labor Government in reducing tariffs. After 40 years of having that tariff monkey on the backs of farmers, it has been taken off. Tariffs across the board will be phased down by 20 per cent. That is the real way in which agriculture is helped. It is not helped by artificial subsidies as the European Economic Community and the US are doing. All they are really doing is putting off the inevitable. One day they will have to face the facts of life. One would hope that after the presidential elections in November the United States will address the trade policies that they have which are, in simple terms, economic and trade madness. These figures I have just mentioned also serve to highlight that Australia is relying on fewer people in rural areas to make more wealth for the nation. It underpins the importance of the Government's attempt to expand our export orientated manufacturing sector. We should not have two industries divided; we should have them working together. Would it not be good if in a more diverse economy we did not have to rely on one particular area or industry. Would it not be good if manufacturing could help agriculture instead of what has been the case in the last 50 years. That is why we need to expand our manufacturing base. It is not a case of ignoring agriculture; it is a case of having a more diverse economy so that we are more able to take advantage of upturns in world markets and neutralise the effects when commodity prices drop. As the omnibus Bill deals with meat and livestock I would like to mention the importance of the recent signing of the $1 billion beef agreement with Japan. This move will benefit the beef producers, particularly in my electorate where we produce some of the finest beef in Australia. Recognition should go to the Minister for Primary Industries and Energy and to the Minister for Foreign Affairs and Trade (Mr Hayden) in persuasively arguing Australia's case for a fairer go on world markets. I welcome also the stance of the Japanese Government in freeing up this market for Australia. I think that we have already demonstrated at the General Agreement on Tariffs and Trade meetings, and will continue to demonstrate, that we lead the world in free trade. With a nation of only 16 1/2 million people we can beat the rest of the world, even with its protected subsidies. The last record year for cattle slaughtered in Australia was 1979-80 when $2,386m worth of beef was sold. In 1987-88 and 1988-89 we are set easily to surpass that record with the 1988-89 value expected to be $3,215m. While I may well sympathise with the Opposition for playing down and looking pessimistically at commodity prices, I think we should all be happy with the result that commodity prices, particularly beef, are up and will continue to go up because that helps all Australians, although it does not help the Opposition. As a result of last night's Budget the Government will be assisting this export in two very valuable ways. The decision to provide national legislation for the clearance of agricultural and veterinary chemicals and to establish the Agricultural and Veterinary Chemicals Council is welcome. It is expected that improved uniformity of uses and labelling of products will result. The possibility of chemical residues in food destined for both domestic and export markets should be minimised. This is important in my electorate where primary producers have had their living standards ruined by the quarantining of their farms, particularly with the chemical dieldrin. Many parts of my electorate have been cruelly affected by this residue problem, with farmers unable to use their land for a number of years. I note that the Victorian Farmers and Graziers' Association took action against the Victorian Government over bad advice on the chemical residue problem. Again I would appeal to the National Farmers Federation to look at the problems in Queensland to see whether similar action can be undertaken on behalf of the primary producers in my electorate. The second measure to assist cattle producers will be the expansion in the range of assistance measures available under the brucellosis and tuberculosis eradication campaign. Fifty per cent of the eradication costs will be met by the industry through the levy on slaughterings and livestock exports. Of course, as beef numbers expand and prices go up, that will increase. Thirty per cent of that cost will be met by the States and 20 per cent by the Federal Government. This expanded assistance will assist in meeting the 1992 target date for eradication of brucellosis and tuberculosis from Australian cattle herds. The 1992 target date is needed to minimise the costs of eradication and associated internal trade restrictions and to convince our major trading partners of our ability to contain these two diseases. Minor changes are proposed to the Plant Variety Rights Act, which is included in the package of Acts dealt with in this Bill. Given the innovation of the concept of plant variety rights, I believe that the Plant Variety Rights Advisory Committee is working very well. In my electorate, and indeed in the electorate of Rankin, two primary producers are working very well on the plant variety rights in regard to gerberas. I have mentioned in this House before the outstanding contribution made by Mr and Mrs Bauer of Bundaberg in the propagation of gerberas. Mr Kerin —Excellent work. Mr COURTICE —As the Minister said, it is excellent work. They are pioneers in Australia. Recently, the country task force of the Prime Minister (Mr Hawke) visited Bundaberg and called in on the Bauer's nursery. I know that the honourable member for Calare (Mr Simmons) and the honourable member for Rankin (Mr Beddall) will be only too happy to endorse these remarks. Any assistance the Minister can provide in having gerberas listed on the register will be appreciated. There is massive export potential for the product. It would be one more product in an impressive range of horticultural products capable of being exported from the Bundaberg region. I think that we particularly need to look at expanding markets such as the Chinese market where, as the standard of living increases, consumption expands at an even greater rate. I think that that offers a massive opportunity for Australian horticultural products. I think that, if we can lead the world with plant variety rights, we have another value added industry and an alternative technology that will certainly mean maintaining jobs in Australia and, of course-I say this very proudly-maintaining jobs in Bundaberg. I wish now to look specifically at the lifting of the sugar embargo for primary industry as part of the change in protection. Despite the fact that the National Farmers Federation had been negotiating with the Government for reduced levels of protection across the board, we found that when protection was lifted the Queensland Cane Growers' Council was unable to cope. The import embargo will be replaced by a tariff of 25 per cent on refined sugar and 35 per cent on raw sugar from 1 July 1989. Each tariff will then be reduced in stages to 15 per cent by July 1992. I might point out to the House that when the embargo was first put in place, 80 per cent of sugar produced was for the domestic market. Today, 80 per cent is exported. Of the domestic production of sugar, about 80 per cent is consumed by the food processing industry. This is why the Confectionery Manufacturers of Australia Ltd forwarded me a media release applauding the decision of the Government to deregulate. I would be very pleased to see a confectionery manufacturer open up in Bundaberg to take advantage of the new cost-effective position the manufacturers find themselves in. It is a way of value adding in the industry and creating more jobs locally. As I mentioned in a previous speech today in the House, we have a local Bundaberg firm that is exporting soft drinks to New Zealand. What that firm is doing is exporting sugar in aluminium cans. It does not matter which way we sell the sugar; as long as it is value added it means jobs. It saddens me that the Cane Growers Executive in Queensland has adopted such a myopic view of its own industry when it is so exposed to international competitiveness. The State Government in Queensland has been dragged kicking and screaming to implement the recommendations of the Savage Sugar Industry Working Party report on ways to create a more efficient industry. The sugar industry in Queensland has been described as the jewel in the crown of socialism. The fact that it can still compete effectively with one hand tied behind its back is testimony to its resilience. It will take a government with more resolve than the Ahern Government to bring about the type of efficiencies needed. I wish to turn to the advantages of the sugar decision in my own area. In my view the Bundaberg Sugar Company Ltd is well placed to grab a large slice of the domestic refining of sugar. It has set about the task of restructuring very well. It recently acquired sugar mills at Mourilyan and Nambour. In the year to April 1988, sugar generated $133m, or 73 per cent of group income. Group profit rose by 17 per cent in 1987-88. It has a fully integrated sugar business. It is the largest cane farmer in Australia and grows 400,000 tonnes a year on its own plantations. That is equivalent to almost 14 per cent of the crush at the group's three mills. It produces and markets Australia's top selling rum and has acquired the Inner Circle label of CSR Ltd. At the start of the year Bundaberg Sugar acquired the Hardings food packaging and food businesses which market sugar under various titles although all the sugar is acquired from Bundaberg. Again, as I have said, what that demonstrates is total value adding. It is through this acquisition that I hope Bundaberg will refine an increasing share of Queensland's sugar. Hopefully, this will be carried out in Bundaberg. I would like to see the company plough more of its profits back into the Bundaberg area. Bundaberg has been good to the Bundaberg Sugar Company. The refining of sugar and the creation of further jobs in Bundaberg will be an arrangement which would certainly benefit the city's working families. Of necessity this will involve heavier transport, particularly from the Fairymead mill. It is therefore crucial that the State Government give urgent consideration to the construction of a new bridge across the Burnett River. I welcome the traffic survey being undertaken, but I would like a firmer commitment from the State. I would like also to develop one further aspect of primary industry policy. It is generally recognised that agricultural industries receive only small levels of effective assistance-amounting to 16 per cent in 1986-87, compared to 19 per cent for manufacturing industry. There are some examples of agricultural industries which have higher assistance-namely, dairying 179 per cent, citrus 34 per cent, and dried vine fruit 36 per cent. However, these are exceptions. The measures announced by the Minister in May will reduce the effective rate of assistance and agricultural protection to 11 per cent by 1992-93. However, the reductions in manufacturing protection will increase returns in the agricultural sector by $350m. The freeing up of markets in agriculture and industry has been actively pursued by the Minister in the General Agreement on Tariffs and Trade. I welcome the initiatives to break down the United States sugar import quota. This has cost us a cutback in tonnages and has cost us millions of dollars. Australia is now actively arguing for a squarer deal from the United States. I would like to point to the effect that the Japanese Government has on the sugar industry. A paper put out by the Australian Bureau of Agricultural and Resource Economics estimates the cost to Australia in terms of lost export revenue at between $US41m and $US50m. Bundaberg and Isis grow 12 per cent of the nation's sugar production, so this is affecting my area dramatically, as much as it is the rest of Queensland. The Japanese have been outstanding in freeing up the beef trade, and I confidently hope that by plugging away and working together we may well be able to reach an accommodation on sugar. I wish publicly to acknowledge the outstanding work carried out not only in my area but throughout Australia by the Minister for Primary Industries and Energy and by the Minister for Resources (Senator Cook). Both are far-sighted, particularly in regard to the national afforestation and soil conservation program. Land degredation, as I am sure everyone agrees, is shaping up as a huge crisis for primary producers. The Budget initiatives should be welcomed. As the honourable member for the Northern Territory (Mr Snowdon) pointed out in his speech, the Northern Territory learned quite a lot recently from the Prime Minister's country task force as to the way in which farmers can work with nature and still make a profit without creating degradation. In regard to the closer economic relations with New Zealand, although there is some concern among individual farmers, which I can understand, I believe that in the long term both nations will prosper through CER. We will certainly prosper because we will have a market of 20 million not only in respect of the two nations concerned, but in taking on the rest of the world. As we face up to droughts, fires and floods, I do not think that we should be frightened of our neighbours across the Tasman with 3 1/2 million people. In some areas we can certainly learn from New Zealand marketing and quality, and I think that is a plus. I do not believe that we should continue to talk about putting up walls to protect our own industries, but that we should streamline them. The honourable member for Gilmore (Mr Sharp) mentioned farm costs. Farm costs have been the lowest for 17 years, at a figure of 4.5 per cent compared to 12 per cent under the previous Government. Contrary to what the honourable member said, interest rates and inflation are coming down, and the spectre of foreign debt will never again be used in an election campaign because Australia is paying off its debt and has turned the situation around. When one considers the fact that the Government inherited $9.6 billion deficit, lost $10 billion in terms of the trade slump, and has overcome that to have a surplus of $5.5 billion, I understand why the shoulders of everyone opposite were slumped in the House last night. What the Budget has done for agriculture and manufacturing is a signal to all farmers to be extremely confident. As a consequence, I fully support the legislation before the House. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr West) read a third time. Mr CARLTON(Mackellar)(8.45) —I move: That so much of the Standing and Sessional Orders be suspended as would prevent the Treasurer from explaining why he has not responded to the request of the honourable member for Mackellar for an explanation by 6 p.m. tonight as to whether or not he arrived in Japan on his recent visit without valid entry documents. I received information from what I regarded as a reliable source that the Treasurer (Mr Keating), on his most recent visit to Japan, arrived in Japan without valid entry documents. I believed that this was a matter of public interest. I wrote to the Treasurer today at lunch time in the following terms: Dear Paul, Information has reached me to the effect that on your recent visit to Japan you arrived with a passport and/or visa that was not in order, and that special arrangements has to be made by the Department of Foreign Affairs and Trade to ensure compliance with Japanese law. As this is a politically sensitive matter I would not want to raise it without checking with you as to its accuracy. I would be grateful if you could show me documentary proof of its inaccuracy, otherwise I should feel obliged to raise the matter openly in the public interest. Would you please let me know your answer by 6 p.m. today. Your sincerely, Jim Carlton. I made contact with the Treasurer's office in the course of the afternoon and asked to speak to the Senior Private Secretary, who was not available. At a quarter to six this evening I rang and asked to speak to Dr Russell, the Senior Private Secretary, and was told that he was in a meeting with the Treasurer. I asked the switchboard operator whether I could have a message left with Dr Russell to the effect that I would like a reply to my letter of lunchtime by 6 o'clock. I was told that it was not possible to deliver a message to Dr Russell. I then asked whether I could speak with any other responsible person in the office. After a delay, I was put on to a Ms Helen Ogston, who I understand is the personal secretary to the Treasurer, who acknowledged that the Treasurer had received the letter but was not interested in replying. I asked whether I could speak to Dr Russell or the Treasurer, and she stated the Treasurer was not available to speak to me before six o'clock and was not interested in replying. I have had no contact since then from the Treasurer's office. I believe, in all fairness, on a matter such as this that I should check with a person about whether certain facts are corrected before it is raised. I believe that it would be an important matter if a senior Minister did arrive in a foreign country representing Australia without valid entry documents. I believe that it is a reasonable matter of public interest for me to make reasonable inquiries and to check the facts before I raise it publicly. I do not believe that I have been treated well in this matter. I believe that I have extended proper courtesies to the Treasurer, but I do not believe that I have been treated well by the Treasurer this afternoon. It is with very great regret, therefore, that I move the suspension of standing and sessional orders to enable the Treasurer to explain why he has not given me a reply by the deadline of 6 p.m. tonight. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Is the motion seconded? Mr FIFE(Hume)(8.48) —I second the motion. In so doing, I emphasise to the House that the honourable member for Mackellar (Mr Carlton) has acted most responsibly in this matter. He wrote personally to the Treasurer (Mr Keating) this afternoon indicating the allegations that had been made and gave him an opportunity before this matter was raised publicly to indicate whether the allegation was true or false. The matter is of the utmost importance to the Australian public. It is not just an ordinary citizen who is alleged to have left the country without proper travel documents: it is the Treasurer of the country. Unfortunately, the Treasurer has a record of not worrying too much about some of the so called minor details with which ordinary citizens have to concern themselves. For that reason, I believe that this House and, indeed, the nation should be told by the Treasurer exactly what the facts are. I personally regret that he did not see fit to respond to the honourable member for Mackellar. Had he done so, he would have had an opportunity first to say whether the allegations were true or false, and, secondly, if they were true, perhaps he could then have made an explanation to the honourable member for Mac- kellar that would have been seen as reasonable and satisfactory. But unfortunately he has seen fit to disregard that request, and because of that the Opposition had no other responsible course open to it but to move in this way and to provide an opportunity for the Treasurer to advise the Parliament and the nation. Mr BEAZLEY(Swan-Leader of the House)(8.51) —The Government does not accept his motion to suspend Standing Orders. It really is very surprised that the Opposition should choose to raise this matter by moving such a motion. It is the sort of grotty little thing that perhaps honourable members are allowed to go on with on the adjournment, but generally a suspension of standing orders is utilised for serious matters. I have had an opportunity to discuss this matter briefly with the Treasurer (Mr Keating). He has pointed out to me that he entered Japan on a perfectly valid basis. He had a visa that was current for Japan. As the honourable member for Mackellar (Mr Carlton) will be aware, the passports of Ministers have to be constantly extended. All those who have served as Ministers know this. Our passports tend to be validated on a six months, eight months or 12 months basis; that is the way in which we operate. Mr Sinclair —Exactly the same basis as everybody else. Mr BEAZLEY —No, not the same basis as everybody else. So the situation is that the Treasurer had perfectly valid travel documents for entry to Japan; there was no problem associated with that. It does not surprise me that Opposition members should be seeking, in the midst of their misery over the Budget, to raise this matter as their only means of getting at the Treasurer. They have managed over the last day or so in their responses to the Budget to reveal their total ignorance on economic matters, the serious matters that are discussed in this country. They are obviously jealous of the trip that the Treasurer made on this occasion to Japan, where he dramatically demonstrated that Australia was a country getting on its feet, a country that was beginning to pay off its debts and that was dealing with its responsibilities seriously, as he is dealing with his responsibilities seriously. On this occasion, as on all occasions, the Treasurer was defending the national interest, promoting the interests of this country. As usual, Opposition members are walking away from their responsibility to debate serious economic policy and have decided that they will attempt to get down into the gutter. However, they will not really have the opportunity to hop into the gutter on this matter. So on the basis of a silly, arrogant little letter sent by the honourable member for Mackellar, who moved the motion to suspend Standing Orders, this matter has been brought before the House. It was a silly, arrogant, prissy little letter in which the honourable member said to the Treasurer, with extreme unction, that of course he must as a matter of responsibility raise this matter with the Treasurer and that the Treasurer had a deadline to reply to the honourable member, the most important man in this Parliament, by 6 o'clock tonight! If honourable members want pretentious arrogance, I suggest they read the letter of the honourable member for Mackellar as it is the only piece of pretentious arrogance in this episode. In these sorts of circumstances it would be totally irresponsible of this Government to give one second's credence to this matter by suspending Standing Orders to deal with this little piece of nonsense. Opposition members can continue to roll around in the gutter. We will not be getting down there with them. Mr KEATING(Blaxland-Treasurer)(8.54) —Mr Deputy Speaker, I did have entirely valid entry documents to enter Japan. I received an outrageously pretentious and threatening letter this afternoon. I will read some of it: . . . I would not want to raise it without checking with you . . . I would be grateful if you could show me documentary proof- show him, as if he matters; he is only doing the bidding of a journalist anyway- of its inaccuracy, otherwise I should feel obliged to raise the matter openly in the public interest. Would you please let me know your answer by 6.00 p.m. today. I rank this with the snide, underhand inquiries the honourable member for Mackellar (Mr Carlton) made when my son broke his arm in 1983. I went to a Sydney hospital and found out about the honourable member inquiring about my son's medical circumstances and my insurance cover. This ranks with that. It ranks with his general performance, like the last time he was back in the Parliament. Is this the Opposition's best attempt to deal with a public issue in this country? It is not dealing with the Budget or bringing on for debate any matter in relation to the Budget; it cannot even compile a set of questions about the Budget. Instead, we have a complaint about how the honourable member was dealt with badly. The Leader of the House (Mr Beazley) called it pretentious arrogance. I can only endorse his sentiments. It is entirely pretentious; unbelievably pretentious. Mr SPENDER(North Sydney)(8.56) —I wish to make only two points. First of all, when it comes to pretentious arrogance the Treasurer (Mr Keating) has written the book on the subject. The second point is that, sitting here and listening to what he had to say and listening to what the Leader of the House (Mr Beazley) had to say, the question occurred to me: what is meant when the Treasurer says he has perfectly valid entry documents? Did he in fact have a valid passport when he left Australia? If he did not have a valid passport when he left, would somebody tell me how he could have a valid entry document? How can one have a valid entry document for any country when one's passport, which is the document on which everything else depends, is not valid? Dr Theophanous —Very simply. It happens very often with people. Mr SPENDER —Does it? We have there a statement from the ranks of the Australian Labor Party. I take up one other point, too. The Treasurer refers to the letter as being arrogant, and we all know-there is not a person in this House who would dispute it-that he has written the book on arrogance and vanity in this House. The Treasurer tells us that this is an arrogant document. The Leader of the House swayed around, perfectly properly, in simulated anger and spoke of this letter as a threatening document. It will be recalled that on a previous occasion the honourable member for Mackellar (Mr Carlton) wrote to the Treasurer and raised with him a certain matter. We all know about the history of that. I seem to recall the Treasurer coming into the House on that occasion and saying that the honourable member for Mackellar had raised that matter in a perfectly proper fashion. Those may not be the precise words, but that is the burden of what the Treasurer said. We are all subject to the same laws, to the same practices and to the same privileges, or lack of privileges, and the Treasurer could explain to us precisely what he means by his expression `perfectly valid entry documents'. Indeed, he might tell us when it was that he got these perfectly valid entry documents. Motion (by Mr Beazley) put: That the question be now put. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 70 Noes . . . . . . . . . . . 50 —— Majority . . . . . . . . . 20 —— Baldwin, P. J. Jenkins, H. A.Beazley, K. C. Johns, G. T.Beddall, D. P. Jones, BarryBilney, G. N. Kelly, R. J.Blanchard, C. A. Kent, L.Blewett, N. Kerin, J. C.Bowen, Lionel Kerr, D. J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lamb, A. H. (Teller)Campbell, G. Langmore, J. V.Charles, D. E. Lavarch, M. H.Chynoweth, R. L. Lee, M. J.Cleeland, P. R. Lindsay, E. J.Cohen, B. McHugh, J.Courtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Morris, AllanDarling, E. E. Mountford, J. G.Dawkins, J. S. O'Keefe, N. P.Duffy, M. J. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Sawford, R. W.Free, R. V. Scholes, G. G. D.Gayler, J. Sciacca, C.Gear, G. Scott, J. L.Gorman, R. N. J. Simmons, D. W.Grace, E. L. Snowdon, W. E.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Harvey, E. R. Tickner, R. E.Holding, A. C. Uren, T.Howe, B. L West, S. J.Jakobsen, C. A. Wright, K. W. Adermann, A. E. Hewson, J. R.Aldred, K. J. Hunt, R. J. D.Andrew, J. N. (Teller) Lloyd, B.Beale, J. H. McArthur, F. S.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Burr, M. A. Nehl, G. B. (Teller)Cadman, A. G. Peacock, A. S.Cameron, Donald Porter, J. R.Cameron, Ewen Pratt, M. P.Cameron, Ian Prosser, G. D.Carlton, J. J. Rocher, A. C.Connolly, D. M. Ruddock, P. M.Cowan, D. B. Sharp, J. R.Dobie, J. D. M. Shipton, R. F.Downer, A. J. G. Sinclair, I. McC.Edwards, Harry Smith, W. L.Fife, W. C. Spender, J. M.Fischer, Tim Taylor, W. L.Fisher, Peter Tuckey, C. W.Goodluck, B. J. Webster, A. P.Hall, Steele White, P. N. D.Halverson, R. G. Wilson, I. B. C.Hawker, D. P. M. Wooldridge, M. R. L Hawke, R. J. L. Howard, J. W. Question so resolved in the affirmative. Original question put: That the motion (Mr Carlton's) be agreed to. The House divided. Mr Deputy Speaker-Mr Leo McLeay Ayes . . . . . . . . . . . 50 Noes . . . . . . . . . . . 71 —— Majority . . . . . . . . . 21 —— Adermann, A. E. Hewson, J. R.Aldred, K. J. Hunt, R. J. D.Andrew, J. N. (Teller) LLoyd, B.Beale, J. H. McArthur, F. S.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Burr, M. A. Nehl, G. B. (Teller)Cadman, A. G. Peacock, A. S.Cameron, Donald Porter, J. R.Cameron, Ewen Pratt, M. P.Cameron, Ian Prosser, G. D.Carlton, J. J. Rocher, A. C.Connolly, D. M. Ruddock, P. M.Cowan, D. B. Sharp, J. R.Dobie, J. D. M. Shipton, R. F.Downer, A. J. G. Sinclair I. McC.Edwards, Harry Smith, W. L.Fife, W. C. Spender, J. M.Fischer, Tim Taylor, W. L.Fisher, Peter Tuckey, C. W.Goodluck, B. J. Webster, A. P.Hall, Steele White, P. N. D.Halverson, R. G. Wilson, I. B. C.Hawker, D. P. M. Wooldridge, M. R. L. Baldwin, P. J. Jenkins, H. A.Beazley, K. C. Johns, G. T.Beddall, D. P. Jones, BarryBilney, G. N. Kelly, R. J.Blanchard, C. A. Kent, L.Blewett, N. Kerin, J. C.Bowen, Lionel Kerr, D. J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lamb, A. H. (Teller)Campbell, G. Langmore, J. V.Charles, D. E. Lavarch, M. H.Chynoweth, R. L. Lee, M. J.Cleeland, P. R. Lindsay, E. J.Cohen, B. McHugh, J.Courtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Morris, AllanDarling, E. E. Mountford, J. G.Dawkins, J. S. O'Keefe, N. P.Duffy, M. J. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Sawford, R. W.Free, R. V. Scholes, G. G. D.Gayler, J. Sciacca, C.Gear, G. Scott, J. L.Gorman, R. N. J. Simmons, D. W.Grace, E. L. Snowdon, W. E.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Harvey, E. R. Tickner, R. E.Holding, A. C. Uren, T.Howe, B. L West, S. J.Humphreys, B. C. Wright, K. W.Jakobsen, C. A. Howard, J. W. Hawke, R. J. L. Question so resolved in the negative. Debate resumed from 21 April, on motion by Mr Lionel Bowen: That the Bill be now read a second time. Mr SPENDER(North Sydney)(9.14) —In making on behalf of the Opposition the reply to the Statutory Instruments (Tabling and Disallowance) Legislation Amendment Bill, which is a Bill to amend the law relating to the making of statutory instruments, to illustrate my position, I must tell a very brief story about a counsel who was asked to appear in one of the old equity divisions. He was a common law counsel: he did not know anything about equity divisions; he knew something about juries. He was told that all he had to do was appear on behalf of one of the trustees. When the judge asked, `What are you doing?', he would simply say, `I agree'. He appeared one morning in the equity division on this very interesting case concerning a will and trusts. When it came to his turn he said, `I agree'. The judge then said, `I want to ask you some questions, Mr So and So'. His reply was, `Your Honour, I am obtaining money under false pretences'. I am here, your honour, as a former shadow Attorney-General, presenting a speech which the shadow Attorney-General, the honourable member for Flinders (Mr Reith), prepared himself. The brilliance of the speech is entirely that of the present shadow Attorney-General and any errors in the speech are entirely his, and I shall try to read it with as much style and panache as I can bring to the occasion, opposed as I am to my old colleague the Attorney-General (Mr Lionel Bowen). Although the Statutory Instruments Bill may not raise enormous interest in these hallowed corridors of power, nor will it be of major media interest in comparison with the recent Budget or the vital and urgent issues dealing with the referendum proposals, it has a major significance for many businesses and members of our community. This is because the Bill will affect the regulation making power of the Government through amendments to the Acts Interpretation Act and other legislation which enables the Government to make regulations. Essentially, this Bill will deal with the ability of the Government to use its power of delegated legislation to make regulations governing the plethora of legislation covering all aspects of government and business activities. One of the significant features of post-war government administration has been the greater use of delegated legislation. Governments have relied more and more on regulatory powers to administer government business. In the eighty-third report of the Senate Standing Committee on Regulations and Ordinances, the Committee identified 115 instruments covering regulations, ordinances, rules, orders, by-laws, declarations, determinations, notices, plans, guidelines, principles and proclamations affecting 160 sections dealing with a total of 116 Acts of Parliament ranging from the Commonwealth Electoral Act 1918 to the Wildlife Protection Act 1982. Many of the regulations made under these instruments have more relevance to the average Australian than the technical wording of the Acts themselves. In a sense, the growth in government control over almost all areas of commerce and recreation has been inevitable, given the community demands for adequate legal protection and safety standards. So today the effect of regulations is pervasive, dealing with all aspects of people's lives ranging from what chemicals are in a person's toothpaste to how many forms we must fill in when we start up a business. While we in the coalition realise that regulation is absolutely necessary for the protection of consumers and the smooth running of business, it is clear that in many respects the volume of regulation that has been produced in the last decade has actually harmed the effective operation of many businesses, reduced flexibility and strangled the initiative of those who wish to start up new businesses. Only through an examination of bare statistics do we appreciate just how many regulations affect our wealth creators. In 1960-69, 1,637 regulations came into force. This jumped to 2,581 in the period 1970-79 and, from 1980-85, 2,431 pieces of subordinate legislation came into force. So far in the Hawke Government's term there have been 2,006 regulations made. These miles of red tape are the real statistics businessmen confront every day in trying to make a living, not the lofty pronouncements of the Treasurer. Hence, while we are dealing with the review of regulations in this Bill, it is worth considering the need for reducing and streamlining the volume of regulations that exist in our community so that businesses are not put through bureaucratic acrobatics. When seen in this light it is clear that there must be comprehensive and effective legislation governing the means by which regulations are made. It is the Acts Interpretation Act which is the governing Act when looking at the implementation and operation of regulations. Section 48 of that Act provides that, unless a contrary intention appears in an enabling Act, all regulations shall be notified in the Commonwealth of Australia Gazette and shall take effect from the date of notification or, where another date is so specified, from that date. Section 48 also ensures that there is parliamentary supervision of delegated legislation. Through this section, unless the contrary intention appears in the enabling Act, all regulations must be laid before each House of Parliament within 15 sitting days of that House after they are made, and those regulations which do not follow this procedure will be `void and of no effect'. Section 48 (4) provides for a negative resolution procedure if either House, in pursuance of a motion of which notice has been given within 15 sitting days after regulations have been laid before that House, passes a resolution disallowing any of those regulations. Any regulation so disallowed shall thereupon cease to have effect. The remaining subsections of section 48 were thought to cover comprehensively any possible evasions of parliamentary scrutiny. These subsections enable the Government and the Opposition to have the opportunity of fulfilling their responsibilities of giving all regulations proper supervision and enable amendments to be made as is necessary. It may not happen often. However, when it does happen it is of crucial significance. It is worth noting that the infamous ID card was defeated because of the necessity for having regulations passed which would trigger the operation of that disgraceful piece of legislation which the Government wanted to foist on all Australians. We owe a debt of gratitude to Ewart Smith and his magpies for realising the Government's mistake before it was too late. This episode brings home in stark contrast the importance of the regulation-making power of an Act and the importance of the Acts Interpretation Act to ensure that that power is not abused. The amendments in the legislation, which the coalition supports, are aimed at closing potential flaws in the regulation covering ability of the Acts Interpretation Act. These flaws were detected by the Senate Standing Committee on Regulations and Ordinances, which plays an invaluable role in scrutinising subordinate legislation. It is an interesting aside to note that, if the referendum questions are accepted on Saturday week, the power of the Senate to deal with such flaws will be severely affected. One of the flaws detected dealt with the possibility that an unscrupulous government could avoid scrutiny by not tabling regulations within the required 15 days and then remaking on day 16 the exact same regulation, and thereby, in an action that would make Sir Humphrey Appleby proud, continue the operation of the regulations without parliamentarians having any recourse. The Senate Standing Committee on Regulations and Ordinances, in its eighty-third report, reported that: . . . it is . . . possible for the Executive to make delegated legislation which will be effective for 15 sitting days after being made and, on the 16th sitting make a fresh instrument, repeating the cycle thereafter indefinitely for each period of 15 sitting days the non-tabled instrument will have full effect. It is pleasing to see that the Government, in a rare change of form, is willing to act promptly on these potential flaws and prevent the possibility becoming a reality in the future, when the stakes may be much higher than merely regulations affecting the meal allowance of forest rangers. Clause 6 of this Bill will introduce a new section 48a, which will prevent the continuous remaking of untabled regulations, which is technically possible at the moment. It would also prevent an attempt by the Government to circumvent the review powers of both Houses by repealing, then remaking, tabled regulations so as to stop the opposition from looking at the nuts and bolts aspects of government activity. On reading the actual clauses, these provisions seem unexciting. But, for democracy to thrive, the Parliament must have a foolproof power to review and, if necessary, reject iniquitous regulations and legislation. The second flaw detected relates to the ability for regulations to be tabled, a notice of a disallowance motion to be given and then for the regulations to be repealed and remade. In this technical way the government of the day could ensure the continued existence of that particular regulation because the disallowance motion would, as a matter of course, fall and the new regulation would essentially continue the work of the recently repealed regulation which in all respects would have identical operation of the first mentioned regulation. A new section 48 (b) of the Acts Interpretation Act will effectively plug this gap in the parliamentary review procedure; a move which is welcomed by this side of the House. It would prevent regulations being made whilst subject to a disallowance. The remaining clauses in part III of the Bill deal with the necessary consequential amendments to a plethora of other Acts so that they fall into line with the Acts Interpretation Act. When debating this Bill it must be remembered that it is improbable for any government to resort to such contorted means of subverting Parliament's powers and it should also be recognised that the Governor-General, with his power on the Executive Council, could prevent such underhanded actions. However, the principle of the right to parliamentary review is vitally important. If the stakes were high enough this improbability may become an inevitability, if such flaws were allowed to exist. Hence such protections are a necessity, not a luxury. With the enactment of this Bill we can all rest assured that a budding Sir Humphrey does not guide any unwitting Ministers into foisting regulations which are against the public interest. It also prevents a reckless Minister from using such a clause for his political advantage. These checks and balances will benefit all. I commend this Bill. Mr KERR(Denison)(9.26) —The Statutory Instruments (Tabling and Disallowance) Legislation Amendment Bill is essentially a mechanism to tidy up certain procedures in the process of parliamentary review of delegated legislation. It is not unique to this Parliament; it is virtually a cornerstone of all parliamentary processes that the legislature exercises control over the actions of the Executive by scrutinising action taken under delegated legislation to ensure that it complies with the will of the Parliament. That is very important, because under our developed system of government, increasingly we leave the detail of legislative schemes to the Executive. The broad outline is provided for under legislation. The detail, the practical application of those measures, is left to the Government, the Executive, to fill in. That is a sensible arrangement, because Parliament concerns itself with broad social issues and the detail will sometimes need rapid amendment and change. So sensible administration properly leaves a degree of flexibility to Ministers of the Crown to execute. But Parliament does not entirely give away its responsibilities in these areas and it is always careful to ensure that the Executive acts in accordance with the broad framework that the Parliament has sought to have enacted. The mechanism for ensuring this is the process of parliamentary review. In our Parliament, both the House of Representatives and the Senate have power to disallow delegated legislation. But those powers would be largely illusory if governments could simply bypass those procedures by technical and procedural methods. So what we find in this Bill are procedures that perhaps on their face appear to be somewhat bureaucratic and overstated in that they cover every possible eventuality of avoidance of parliamentary scrutiny. But they do that to tie up all possible loose ends. There are real prospects that if those loose ends are not tied, an executive could seek to override the will of the Parliament. It has happened before. Dignam's was one of the leading cases where an Australian executive sought to override the power of the then Senate to disallow regulations which the Senate had set aside. For many years a number of members of the Parliament have felt that the present situation requires review. What we see before us now is a fairly watertight code which ensures that whatever the procedures sought to be followed to avoid parliamentary scrutiny, these cannot be followed. So we find now that the rules require any regulations or any delegated legislation of any kind whatsoever to be laid before the Houses of Parliament. If they are not so laid they automatically cease to be of effect and they cannot be remade whilst subject to disallowance. That is an important point because it means that the will of the Parliament cannot be thwarted. Previously, of course, it would have been possible to circumvent parliamentary scrutiny by not tabling regulations and by remaking the identical regulations on the day after the expiration of the period for which they were made, but not placed before the House. By repeating this process, regulations could have been kept in force indefinitely and Parliament could have been prevented from exercising its rights to examine and disallow such regulations. No parliament would wish to countenance that and, as I indicated at the beginning of this speech, every parliament in Australia and all common law parliaments exercise this power of controlling the Executive. There is a very interesting discussion about the way in which those powers were properly exercised in Pearce's landmark book, Delegated Legislation. It is a book to which many people have had recourse on many occasions and perhaps by way of an interesting diversion from the main theme of this debate, I will turn to the allegory of the restless magpies put forward by the honourable member for North Sydney (Mr Spender). The honourable member for North Sydney brought us back to Ewart Smith's so-called rescue operation of the Australia Card legislation. Of course in that instance there is a quite lively academic debate among legal practitioners as to whether Ewart Smith's restless magpies did in fact inspire him to the correct interpretation of the law or whether we were simply somewhat deceived by the interpretation that was put forward. Pearce and many others would argue that regulations or procedures bringing into effect delegated legislation can be self-executing. That would mean that when something is said to take operation from the making of a particular regulation once such a regulation is made, notwithstanding its subsequent repeal, whatever has been effected by the making of that regulation stands and cannot be unmade. If that interpretation is correct-and many academic commentators would say that it is-the restless magpies that kept Ewart Smith awake late at night may have persuaded many that we should not proceed with that legislation, but nonetheless the legal point which allegedly underpins that argument may be quite unsound. I put it forward only because it seems to me that we too readily accept the easy assertion that the Senate on that occasion was acting in some way properly and in accordance with its powers. It may well be on a strictly legal point of view that the Senate could not have exercised the power that the Opposition asserted it could have exercised. Nonetheless it was a controversial matter and putting it to a test in a court of law would have attracted a degree of controversy on a public issue of some very grave significance. Obviously that matter is now behind us, but the legal point is interesting and I simply raise it because it is still the subject of some considerable academic debate in Australia. I wish to pass on now to another substan- tive point which I think deserves the attention of this House. Although we have a very good system of review of delegated legislation, in my view we still miss a very fundamental point in our capacity to involve the public in the framing of delegated legislation. My attention was first drawn to this deficiency a number of years ago when I had the privilege of representing the State of Tasmania as its legal counsel in the United States in a case which concerned the intention of the United States Government to ban the importation of opium alkaloids grown in Tasmania. Under the Administrative Procedures Act of the United States, all proposed delegated legislation must first go through a public hearing process, unless the Executive certifies that it is urgent or that there is some publicly important reasons why exposure to the public processes should not be had on those matters. What that means is that, instead of the rather secret processes that go on before delegated legislation is made in Australia, when the United States Government proposes to make what it calls a rule, or to exercise rule making power, it must advertise its intention to make such delegated legislation, such a rule, in the United States equivalent of the Commonwealth of Australia Gazette. The public is then invited to make and has an opportunity to make submissions as to the appropriateness or otherwise of that proposed rule. In the case in which I was involved, the United States Government, acting largely at the behest of the International Narcotics Control Board and possibly because of the driving motive of India and Turkey, had proposed a rule that would have prohibited the import into the United States of opium alkaloids grown in Tasmania. Honourable members may not know this but, surprisingly, Tasmania is the third largest producer of opium alkaloids in the world. Mrs Darling —The third largest? Mr KERR —It is the third largest producer of licitly grown opium alkaloids. The poppy straw industry in Tasmania is a very important one. The United States proposal to ban all importation of such material from Australia would have proposed a very significant threat to the economic well-being of Tasmanian farmers and the drug manufacturing industry-Glaxo and Abbott Laboratories, then involved in the processing of codeine and opium alkaloid products. Representing the Tasmanian Government, I was able to go to the United States and challenge the intention of the Government to impose such a regulation, to make that rule. A hearing was held before an administrative law judge. It was a very interesting procedure. The process involved the American Government putting forward its proposed rule, regulation or delegated legislation, printing the proposal in the equivalent of the Gazette and inviting public submissions. There was a hearing before an administrative law judge which lasted for two days. In that hearing the judge took into account our submission that the proposed law was ultra vires, that is, beyond the power of the American Congress to pass because of constitutional restraints, and also took into account public policy considerations-arguments that such a rule would affect the interests of an allied nation, a friendly country, with which America had good, proper and sound relationships. At the end of the day, the administrative law judge, Judge Young, made a recommendation to the Drug Enforcement Agency that the rule not be made in the form proposed because it would damage the possibility of good, sound, solid supply from Australia. The judge accepted our arguments. He recommended that at least 10 per cent of the market be left open for Australian competition. That kept our industry in Tasmania alive and allowed us to continue to trade, to grow and to produce that crop. Mrs Darling —Did you put up those arguments? Mr KERR —Indeed I did. The point I am making in this debate is that that openness to the public process which exists in the United States is something we could well adopt in Australia. The process of parliamentary review is not sufficient, in my submission, to take into account all the elements of public interest. When the Executive makes regulations, I believe that, except in those cases where there is some genuine instance of urgency or public necessity for regulations to be made quickly, as sometimes there will be, there should be such an opportunity to have a hearing to let those who are interested in the process, whose rights or obligations may be affected by the proposal, be heard. Sometimes a superficially good, sound idea, when exposed to public comment, can be shown to be defective. At the moment what happens is that the Government has no such process. No Australian parliament has insisted that delegated legislation should be exposed to public scrutiny. So now the Executive makes the regulation and then anybody who is affected by that regulation complains afterwards. There is no opportunity of testing the process before such laws are made. My submission to the Parliament is that it is well to consider the possibility of adopting a modification of the procedures under the Administrative Procedures Act of the United States of America which would allow the exposure of proposed regulations, proposed delegated legislation, to review by the public before such regulations are made. That would often mean that there is no later need for the Parliament to intrude into these areas. A lot of the work of the Senate Standing Committee on Regulations and Ordinances would not be necessary because the public would have already had an opportunity to put reasoned arguments of opposition or amendment to proposals which the Government had sought to make into delegated legislation. Of course, any government is going to insist on the right to override those public processes in instances where confidentiality is important, where urgency is significant or where there is some public interest in having the matter not exposed to public comment until after the regulations are made. But such exceptions already exist in the case of American delegated legislation procedures and it is not difficult to frame laws that will accommodate appropriate exceptions. So I leave that point by simply saying that in this debate we can give too much importance to what is often a fairly empty power of the Parliament to review legislation and not give enough importance to the interests of the public to be heard before legislation is made. I think that there are real important public benefits to be had by following similar procedures in the making of delegated legislation as exists in the United States federal system. Finally, I commend those who have put this Bill before the House. I suppose in a sense it is technical legislation, but it is important. It underlies our commitment to a system of parliamentary democracy. It entrenches the very important principles we all hold dear that the elected members of the Parliament are the ultimate authority in this nation. It recognises that democracy is a bedrock on which this nation is built and it makes sure that there are no opportunities for people to abuse that system. I also indicate that the process that has been adopted in both this House and in the Senate in reviewing delegated legislation is a process which is, I think, universally regarded as important. That is not to say that we should try to exercise in this legislative House the powers of the Executive. The Executive is deliberately given the capacity to fill in the detail of broad legislative schemes and the process of parliamentary review should be an exceptional one rather than one used to embarrass or to score points in a political process. I suppose in that sense I find it very sad that the example used tonight seems to me to be one more designed in the nature of point scoring rather than in making a significant or sensible contribution to the debate. Mr Lavarch —There is nothing sensible over North Sydney. Mr KERR —My colleague perhaps makes too strong a point; nonetheless, it is true that it was a very unfortunate example because on this issue both sides of the Parliament are united. Both those in this House and those in the Senate who share the responsibility of parliamentary review of delegated legislation would not wish the debate to be seen as partisan or divided on the basis of politics. Whatever the shape of the Government, whether it be a Labor government or a Liberal government, it remains important for the Parliament to exercise its power to review the actions of the Executive and the actions of the Government in making delegated legislation. In conclusion, I commend this Bill to the Parliament. It tidies up a procedure that has much merit. It makes a significant contribution to ensuring that that parliamentary review cannot be avoided. I also commend to the Parliament the necessity to look at involving the public more in the making of delegated legislation, to open up the process, to take it out from the scrutiny merely of members of parliament and give members of the public a say before we make such regulations and such delegated legislation. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(9.46) —in reply-I thank honourable members for their contributions. The honourable member for North Sydney (Mr Spender) is standing in for the shadow Attorney-General, the honourable member for Flinders (Mr Reith), and has capably mentioned the matters which the Statutory Instruments (Tabling and Disallowance) Legislation Amendment Bill 1988 is about. My colleague the honourable member for Denison (Mr Kerr) made a very clear speech on what he thinks should be dealt with by way of a survey of delegated legislation. I suppose we could say also that we have always run a little behind the Senate. We never have enough committees, or perhaps not enough time for committees. It was the Senate Standing Committee on Regulations and Ordinances which suggested that regulations could be circumvented by making them and not tabling them, and, if they were sought to be disallowed, by making other regulations before they were in fact disallowed. The Government's wish is to prevent the circumvention of scrutiny, and clause 6 of the Bill does that. I know everybody is happy to see that that particular circumvention is now being prevented. With the cooperation of the honourable member for North Sydney, I am eager to move some machinery amendments which have been circulated. I will explain the position that has arisen which causes these amendments to be necessary. The Bill contains a schedule which talks about a number of pieces of legislation. The first amendment relates to that schedule and talks about the Broadcasting Act 1942. It appears that we have the wrong subsection there, so the amendment seeks to substitute the right subsection. The second amendment relates to the Companies and Securities (Interpretation and Miscellaneous Provisions) Act as it is dealt with in the schedule. That matter has yet to be dealt with by the Companies and Securities Ministerial Council and, accordingly, is premature and ought to be omitted. The third amendment relates to the Family Law Act. It appears that this Bill now needs to include a reference to section 26e, which was introduced into the Family Law Act on 5 April 1988, shortly before the introduction of the Bill into this House. The fourth amendment relates to the Australian National Airlines Act 1945. It now appears that that Act was repealed subsequent to this Bill being introduced. Accordingly, we need to update the legislation through these machinery amendments and I have indicated to my colleague opposite that I will move them at the committee stage. I thank honourable members for their cooperation. Question resolved in the affirmative. Bill read a second time. The Bill. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General)(9.49) —by leave-I move: (1) Schedule, page 4, item relating to the Broadcasting Act 1942, omit ``subsection 125e (3)'', substitute ``subsections 17 (3) and 125e (3)''. (2) Schedule, page 4, omit ``Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980-subsection 4 (2)''. (3) Schedule, page 4, item relating to the Family Law Act 1975, before ``subsections'' insert ``section 26e and'' (4) Schedule, page 10, item relating to the Australian National Airlines Act 1945, omit the item and the heading to the item. The four amendments relate to pages 4 and 10 of the schedule. They relate to the Broadcasting Act 1942, the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980, the Family Law Act 1975 and also the Australian National Airlines Act 1945. The amendments are necessary to correct the schedule mainly to take account of changes in legislation to be amended by the schedule. The schedule amends provisions of legislation which apply sections of the Act Interpretation Act to various kinds of statutory instruments. The amendments will make the new section 48a and 48b inserted by this Bill also apply to those statutory instruments. These amendments will omit a reference to the Australian National Airlines Act 1975 and add a further reference to the Family Law Act 1975 to take account of legislation which recently came into force. It will also omit a reference to legislation which forms part of the current cooperate company scheme. Finally they will correct the incorrect reference to the Broadcasting Act 1942. I have moved the amendments accordingly. Mr SPENDER(North Sydney)(9.51) —Mr Deputy Chairman, the amendments are agreed to. They have been explained to me by the Attorney-General (Mr Lionel Bowen) and his advisers and he has explained them to the committee. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Lionel Bowen)-by leave-read a third time. Bill received from the Senate, and read a first time. Mr WEST(Cunningham-Minister for Administrative Services)(9.52) —I move: That the Bill be now read a second time. The Referendum (Machinery Provisions) Bill 1988 provides that scrutineers may be appointed only by the Governor-General, by a State governor, by the Administrator of the Northern Territory or by persons authorised by them. No provision is made for appointment of scrutineers by political parties as applies at elections. The Bill provides that registered political parties will be able to appoint scrutineers for the referendums on 3 September. However, it is not necessarily regarded as a permanent solution. It is proposed that the question of scrutineers at referendums be referred to the Joint Standing Committee on Electoral Matters for consideration. I commend the Bill to the House and present the explanatory memorandum to the Bill. Debate (on motion by Mr Sharp) adjourned. Bill received from the Senate, and read a first time. Mr SHARP(Gilmore)(9.55) —I move: That the Bill be now read a second time. The Referendum (Machinery Provisions) (Informal Ballot-Papers) Amendment Bill 1988 relates to the forthcoming referendum on which Australians will be asked to vote, on Saturday, 3 September. It relates to a very important issue that is concerning the people of Australia at present. The issue is in what fashion votes will be determined as being informal or formal. At present the Australian Electoral Commissioner has advised that a series of combinations of ticks and crosses can be accepted as valid for formal votes whilst other combinations of ticks and cross are not valid or are informal votes. The Opposition in the Senate today moved this Bill, the purpose of which is to ensure that there is no confusion surrounding formal or informal votes for this referendum. The Bill before the House tonight lays down that a valid vote is one which has either a Yes or a No answer standing alone in the space provided on the ballot paper. We do that for the purposes of removing the confusion and concern that exists in the community throughout Australia. At present, with the way the Electoral Commissioner has ruled, the votes that would be considered formal, with either a tick or a cross in them, tend to be biased towards the ticks. The ticks, of course, are considered to be a Yes vote; the cross is considered in the eyes of many people to be a No vote. However, it appears that in most circumstances ticks placed in the space provided will be considered a Yes vote and formal, whereas, in most cases, crosses placed in the space provided will not be considered a formal vote, even though the voter at that time may have intended it to be considered a No vote. That is the position as it stands according to the Electoral Commissioner. The Electoral Commissioner has received advice from the Attorney-General (Mr Lionel Bowen), and the Opposition in the Senate today moved this Bill because we believe that the advice received by the Electoral Commissioner is not correct. Therefore, we want to change the legislation in order to remove what we see to be a bias that exists, for good or bad reasons, within the present legislation that leans towards a Yes vote for this referendum. We believe the Act should be amended and we want to make sure that in the process of amending it there is no doubt about what is a formal or an informal vote. We want to make sure that it is unequivocal-that a vote is either formal, if it has a Yes or No in the box provided, or, if it does not have a Yes or No in the box provided, is considered to be informal; so therefore, no combinations of ticks or crosses could be considered as a formal vote. It is interesting to note that section 24 of the Act states: The voting at a referendum shall be by ballot and each elector shall indicate his vote- (a) if he approves the proposed law-by writing the word ``Yes'' in the space provided on the ballot-paper; or (b) if he does not approve the proposed law-by writing the word ``No'' in the space so provided. That sounds clear and unequivocal, but there is another section of the Act, section 93, which amongst other things states: Effect shall be given to a ballot-paper of a voter according to the voter's intention, so far as his intention is clear. This additional part of the Act enables the Electoral Commissioner and the Attorney-General's office to give advice to electoral commissioners that a tick or a cross or a combination of such may be considered as a formal vote. There is no doubt at all in the minds of most people in this community that the present situation is confusing, it has a bias towards the Yes vote, and that many people throughout Australia are very upset and concerned. In the last few weeks I have been speaking, as no doubt many other members of this House have been doing, at public meetings called to debate issues surrounding this referendum. One of the questions that always arise at these meetings is: `Does it not seem unfair that ticks in the box are considered a Yes vote, but crosses in the box are not considered to be even a formal vote?' Mr Tim Fischer —Many still have not got their Yes vote information anyway. Mr SHARP —Of course, the honourable member for Farrer makes the point that people were voting by post before they had even received their copies of the Yes and No case arguments in the mail. This particularly concerns people in New South Wales, which was the last State to receive official copies of the Electoral Commission's Yes and No arguments. This confuses the situation. It causes much concern throughout the community. Senator Short, my colleague in the Senate who represents the Opposition on these matters and whom I represent in this House, introduced this Bill to try to alleviate that concern and to ensure that there is no confusion, that there is no perceived bias in this referendum, and that Australians have faith in the referendum process. Honourable members can rest assured that if this matter is not cleared up there will be questions surrounding the decision, whatever it is, passed by the people of Australia on 3 September, because there seems to be a perceived bias in favour of the Yes vote in the way the legislation currently reads. Therefore, we have brought on this Bill both in the Senate and House of Representatives today in the hope that it will be accepted by the Parliament and in the hope that it will alleviate many of the concerns. We believe that, in so bringing on the Bill and by the Parliament's accepting it, there will be no confusion but an unequivocal understanding of what is a formal or informal vote, and that the people of Australia will know for sure after 3 September exactly the true intention of the people of Australia in regard to the four questions before them. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Is there a seconder? Mr SINCLAIR(New England-Leader of the National Party of Australia)(10.02) —I second the introduction of the Referendum (Machinery Provisions) (Informal Ballot-Papers) Amendment Bill 1988, the purpose of which is to amend the Referendum (Machinery Provisions) Act in relation to informal ballot papers. We on this side of the House are concerned about a number of very serious aspects of the referendum. There is no doubt that the ruling by the Australian Electoral Commissioner which suggests that the marking of a ballot paper with a tick is formal and with a cross is informal seems to us to create a climate which is going to confuse many who, quite innocently perhaps, have decided that they will not use the formal Yes or No in order to register their vote. In this particular instance it could well be that there are some people who have already voted and who are not aware of the change that the Bill introduced by my colleague Senator Short in the other place suggests. I think we need to remember the climate surrounding the referendum proposals. We think that the Government is being inordinately devious in the manner of the putting of the propositions. The questions themselves are beguiling. They sound innocuous, yet they are quite sinister in their implications. Any proposal which, through four questions, will implement 33 changes to the Australian Constitution cannot be said to be benign. If there is a circumstance in which one form of registration of a vote other than the writing in of the Yes/No form of words is formal, that will create a climate in which, if another form of words is to be invalid declaring the whole vote informal, there will be another one of those beguiling consequences, which we think is a very serious for the Australian electorate. There is a problem: we see the questions themselves as having a profound effect on the powers of the Senate. For example, there is the extent to which the legislative and parliamentary responsibilities of the States are varied through the second question. In the third question, there is the degree to which funds are taken from local government, while we are told that local government will be registered. Of course, the fourth question related to the extent to which a climate will be set up in which state aid once again will be a major public issue, to name but one of those three components of the fourth proposition. This Bill is designed to ensure that in one area we are going to get rid of all of the deviousness of the Government by ensuring that one has to vote according to one's intention, that one has to say yes or no. It would seem to be that that is not an unfair proposition. Of course, there are always problems when elections are held, whether in terms of an ordinary election or a referendum. People do not always seem to express their wish according to what most reasonable people would see as the right modus operandi. If people are going to express their wish other than by putting something-if it is in the instance of voting for a preferentially determined series of candidates-other than one, two, three, four, it has always seemed to me that their vote should be invalid. In this instance the suggestion is that we should be requiring a change to the referendum machinery to ensure that a person actually has to write in his intention. I know that, as a result of the pressures within the community, there have been all sorts of forms of expression on ballot papers, some of which can almost be obscene. Indeed, I suspect that they well are. But that is not really the point. If people are going to vote-and they are obligatorily required to vote in our community-surely to goodness one can say to them that they have to be able to express their intention, whatever else they might put on the ballot paper. The various interpretative provisions suggest that if one does not put other than a simple form of words, or if one puts some other qualifying statement, those votes might well be excluded. I know that legislation of this sort has been before the Parliament in the past. It has always been a matter of trying to determine what is reasonable and what is unreasonable in considering what should be a valid vote. But we think this Bill, which Senator Short has introduced and which the Senate has accepted, is a very good basis on which to ensure total equality in the referendum proposals. We on this side of the House are totally opposed to the four questions. We do not think it is very difficult for anybody to say no, no, no and no. Equally, if the Government wishes to get its view put forward, we do not think it is improper for it to look for something more than a tick. That is what this Bill is about. It is about asking people to do something more than put a tick. If they are going to do something more than put a tick, they ought to be able to put yes, if that is the way that they foolishly believe they can better their interests, their lot. We do not see it that way. We are quite sure that most Australians do not see it that way, and we want to make sure that those Australians who feel that there is a reason to cast their views should be able to express them. I think that most of us have been delighted that the young people of Australia today seem far more articulate than the young people in the days when most of us around this Parliament went to school. If they are more articulate, surely to goodness they can be more literate, too. What we are asking them to do is write one or other of two forms of words. I think this proposal is very sensible. It is very clear and definite. Whatever the history, the point is that we now have a referendum proposal which is to go before the people on 3 September. This is not going to invalidate the wishes of people who are out there and who might have voted already other than if they have not done as the proposal itself would suggest. The form of voting is supposed to be yes or no. I notice that my colleague the shadow Minister for Veterans Affairs, the honourable member for Farrer (Mr Tim Fischer), has the official booklet with him. What does it do? It talks about about yes or no. It does not say `tick' or `cross', it says `yes' or `no'. Surely to goodness if we are going to tell people that they have to say yes or no that is in accordance with the very instructions the Government sent out to people. We think they should not have the option of doing anything other than as that booklet says. We hope the people will, and believe that they should, say no. But they want to have an option. If there is going to be an option, it should be to do exactly as the booklet suggests. It is on that basis and on that basis alone that we think the Government ought to accept this proposal. It is not good enough for the Government to say, `But people have already cast their votes and they are going to be disadvantaged'. I do not think that is so. They have not been told to put a tick or a cross. Nobody in any way, in any sense, has said, other than through a ruling which is given in an administrative sense by an officer of the crown, that he is going to treat it in a particular fashion. It is because of that ruling, which we think is regrettable, that this Bill is in here tonight. The proposal that the people are going to consider on 3 September requires them to do as the booklet has suggested, and that is to vote according to two particular words. Accordingly, I put it to the Government that this is not an unreasonable proposal. The Government should show some consideration for the very proposition which it expressed in the official directions to the Australian electorate. In that sense there is no doubt that it should exclude that alternative device of putting a tick or a cross and to accept that there is only one way to go. That one way should be clear and definitive. There should be no question of scrutineers deciding whether it is a tick or a cross or whether it is some other sort of sign. It should be two very simple words-`yes' or `no'. Is it so difficult that people cannot state those as their intentions? Is it not fairly simple that you have the directions from the Commonwealth Electoral Officer? Is it not proper that those directions should be complied with? I do not think there is any answer to any of those questions other than to say that of course this is the sensible answer. If it is sensible, then so is the passage of this Bill. I believe this chamber tonight should do exactly as the other place did a little while ago. It should affirm the proposition. I hope that the Minister for Administrative Services (Mr West) and the Attorney-General (Mr Lionel Bowen) accept this as a fair and reasonable proposition. If so, we on this side of the House will believe that justice is being done and is being seen to be done. Debate (on motion by Mr West) adjourned. Motion (by Mr West) proposed: That the House do now adjourn. Mr MILLAR(Wide Bay)(10.12) —It is strange how one's fortunes in this place dangle on a slender thread. I had no forethought about speaking in the adjournment debate tonight; I came into the House to listen to the earlier debate. However, as the adjournment motion has been moved, I shall take the advantage of that opportunity to say a few words on the referendum to which the adjourned Bill related. One matter concerns me. A referendum is possibly one of the most serious matters that are put before the broad electorate, especially when addressing changes to the Constitution. One would hope that if a change comes about, it will be as a result of a full understanding of the issues involved by the electorate. Therefore, it is incumbent on the participants in this debate, for and against, to be objective, fair and honest with the electorate. It has come to my notice in recent days that a public figure in whom the electorate might fairly have confidence in advancing on television the argument for the Yes case, orchestrated a scenario which was very appealing but extremely mischievous. The proposition was couched in words which I can reasonably accurately paraphrase at short notice. It went something like this: `There have been a number of referendums to change the Constitution over the years, and the people have been somewhat tardy in accepting propositions for change. Few of them have been carried. This time we decided to change the technique and we are doing it differently. We appointed a Constitutional Commission'-cost not mentioned- `so that you, the people, would be able to put your view to the Constitutional Commission which, in turn, would recommend the nature of the questions that should be put to the electorate'. By heavy inference: `These are not government questions, these are not proposals emanating from government. These are your proposals-the people's proposals which have come through the Constitutional Commission now onto your ballot papers-those things that you wanted and on which you will vote.' That is how a referendum should be. But the reality in respect of the first question as to four-year terms for the House of Representatives-a proposition to which in simple terms we are not unattracted-is not as presented a proposal of the Constitutional Commission reflecting the opinions of the people. The Constitutional Commission clearly said that there should be a four-year term for the House of Representatives, and that three years of that four-year term should be essentially mandatory; in other words, that an election could not be called unless the government of the day lost the confidence of the House and an alternative government could not be formed. The proposal was to have a mandatory three years out of four, with the Senate having a term twice the duration of the House of Representatives' terms, specifically eight years. That was the Constitutional Commission's view. I would accept arguments as to the merits of those proposals. As to the merits of those proposals, I would accept the Government not being of a mind to present those referendum questions. But the thing with which I take issue is the endeavour to persuade an unsuspecting and uninformed electorate that the first question reflects the recommendations of the Constitutional Commission-which it clearly does not. One should not bother with the word of the honourable member for Wide Bay; one should go to the recommendations of the Constitutional Commission and see what they are. I challenge any member of this House and my good friend the Attorney-General (Mr Lionel Bowen), to dispute the accuracy of what I have said.The Constitutional Commission said one thing and the Government has nominated and proposed a question that by no stretch of the imagination can be presented as being a proposal emanating from the Constitutional Commission as a product of the people's inputs, which would make the referendum question a request of the people along those lines. I hope that as the confrontation continues it will be predicated on fact, honesty and veracity so that if our Constitution is to be changed to the ultimate, it will be the consequence of informed public opinion predicated simply on the facts. Mrs DARLING(Lilley)(10.16) —I am happy to take this opportunity to comment on one program which the Government introduced in yesterday's Budget; that is, the jobs, education and training program, the JET help program for sole parents. It is high time a government took a stance such as this, putting forward a constructive answer to the concerns and problems facing sole parents, instead of their being blamed, as victims, for society's ills. I have been particularly concerned at a recent trend which tends to fall back on ostracising sole parents at a time when they are bringing up families alone and going through the trauma of quite recently having lost a spouse, or the trauma of marital breakup. One of my real concerns is the number of young people who are becoming sole parents. In fact, this program will provide 9,500 sole parent pensioners under the age of 20 with counselling, child care assistance and better access to education, training and employment opportunities. A parent striving to bring up a family alone deserves respect and constructive support. It helps not one iota for a society to turn its back on a young person in need and to blame the person, who is a victim of circumstance. Many extra places will be created in labour market programs designed for people who need to retrain or improve their work skills. The period following marital break up or death of a spouse is very traumatic. I have been concerned at recent trends that blame ills on these people. After the initial period of trauma and loss, when income support tides the sole parent over, a whole range of assistance is needed-and the Government is now facing this need. From March, JET will provide special counselling and individual guidance to sole parents choosing their future direction. It is practical advice and assistance which is being provided. JET advisers and Department of Social Security officers will provide individual assessment of job barriers and prospects. They will guide sole parents about their options and opportunities and will provide information about services such as child care. As well as extra places being provided in labour market programs for people needing to retrain or improve their work skills, the Austudy education supplement for full time student pensioners will double to $30 a week, payable on top of the full pension, to help with the extra costs of education. Extra child care places will be set aside for JET clients to take part in training or education programs, and for a short time after commencing work. Not only young people but also older people need support at a time of family break-up. Often people lose confidence because of trauma they have recently undergone, or because they have been out of the work force for many years with young children. Particularly when those children reach school age, it is necessary for a caring society to offer support to these people who are willing to give up their time to raise their children without the help of a spouse. While it is very important to give adequate income support, and this Government has taken that responsibility, it is even more important that we provide the counselling services, the training, the retraining and the necessary information regarding opportunities which will enable sole parents to become productive members of society again and to get off income support. Many of these people require just that. With programs such as JET and the extra child-care places which will be provided, as a caring society we will be moving towards giving greater opportunities and greater support to people who have fallen on hard times. Mr DONALD CAMERON(Moreton)(10.21) —Madam Speaker, yesterday your deputy suggested that it was more appropriate that I conclude during an adjournment debate some remarks I was making about having been misrepresented in a recent edition of a Sunday paper. I shall now continue the explanation I commenced in this place yesterday. I had reached the point of saying that I had written to the Director of Public Prosecutions, Mr Temby, asking for clarification as to why I had not been informed whether the story which reported that I had been under investigation since May was correct. I wrote to him on 1 August, and on 2 August his Mr Delaney-I think it was-faxed me a response, which said in part: We have not received a brief of evidence in relation to any investigation concerning yourself. We have recently provided advice on the interpretation of certain provisions of the Nature Conservation Ordinance 1980 but neither the enquiry itself or the advice we gave was expressed to be in relation to any particular investigation. On the Thursday morning following that I rang the acting editor of the Sunday Telegraph. I put it to that editor in a fairly restrained way that I expected, and I thought it was only fair, that somewhere on the front page of the paper on the following Sunday there should be some space allocated to make reference to the fact that this man who the previous week had been portrayed as facing charges had not been facing any charges and was not even under investigation. I did say that as the original story had moved on to page 7 I was happy to have just a commencement on page 1 and a continuation on page 7. He said to leave it with him and that I should ring back at 2 o'clock. We parted in a fairly amicable way. At 2 o'clock he advised me that in fact a reference about me had been made to Mr Temby. I raise this question: What is going on in this country when people in certain positions can be subjected to this type of publicity and then somehow, somewhere along the way, someone in a position of some power can pull a string and cause a reference to be made and so give legitimacy to such stories. I have, in fact, put in a freedom of information request to the Department of Primary Industries and Energy and also to the Department of the Arts, Sport, the Environment, Tourism and Territories to try to get to the bottom of this. I am beginning to develop sympathy for the views that were expressed by Neville Wran a couple of years ago-- Mr Tim Fischer —Steady on! Mr DONALD CAMERON —No, wait-when he made reference to the way in which the system of justice can go astray in this country. Everyone will have his turn to sit on the Government benches one day; mark my words about that. It behoves us all to ensure that we do not resort to a manipulation of the system simply to achieve some short term political gain. I have been exposed to the headlines. My kids have said, `Daddy's going to gaol'. They were quite worried because they were not sure how long I would be gone. When I walk down the street, people look at me, grab their kids and pull them to their sides as if to say, `There's the man who eats kangaroo meat; come away, kid'. Forty of us attended that dinner, yet I have been made the fall guy. I conclude by saying that I hope that those responsible for this give me some coverage when I say that I am not guilty, and that those responsible for the original leaks to the journalist adopt a more responsible attitude. Mr CAMPBELL(Kalgoorlie)(10.26) —I was lured into the chamber tonight by the slow drawl of the honourable member for Moreton (Mr Donald Cameron) in respect of this matter. I must say that the honourable member is a sort of friend of mine. Mr Lamb —Sort of? Mr CAMPBELL —Well, he is. He has had an illustrious career. He was at one time the Australian karate champion, during which time he obviously sustained many heavy kicks to the head, but that is not his fault. I want to take issue with this matter of kangaroo meat. The truth is that the honourable member for Moreton is guilty, as I am guilty, of eating meat that was taken into the Australian Capital Territory. It is quite possible that that does transgress the law. It is a darned silly law, but he should not whinge about not being guilty. I wrote to the honourable member after he circulated his letter. I said that while the letter was incoherent, which is the normal style of his speeches, I sympathised with him and would insist that if action were taken against him by Mr Temby-I might say that I have grave doubts about Mr Temby-it also be taken against me. Quite frankly, we are talking about a ridiculous situation. I saw the report in the paper. I thought that the report was quite factual. It was quite possible that the honourable member was facing charges. A complaint was laid, as was later confirmed, and charges could have arisen. I reckon that it was darned good publicity. I would have been absolutely incensed if the honourable member had been charged and I had not been charged on that occasion. I would have thought that it was outrageous. It is absolute political discrimination for him to get all the publicity on this matter. I believe that we were doing a public service. If the children of Brisbane are terrified of the honourable member, I suspect that it is not because he eats kangaroo meat. I believe that we must expand this market. In Western Australia we have recently followed the lead of South Australia. We have actually legalised the consumption of kangaroo meat. Mr Downer —Visionary legislation. Mr CAMPBELL —Visionary legislation, as the honourable member says. We have the makings of a socialist over there. I am appalled that my friend the one time Australian karate champion should whinge as he did. When I listened to the broadcast of this speech in my office I felt quite ashamed because I, too, am a kangaroo meat eater. Mr PRATT(Adelaide)(10.30) —I take this opportunity to speak on the referendum, which has been dubbed around Australia as the great X lotto referendum, the mark a bingo card on 3 September referendum. I want to speak on the issue that has been mentioned before about scrutineers not knowing what they would face on the evening of Saturday, 3 September, and the yes, no, ticks and crosses problem. A valid formal vote could be no, no, a tick, a cross; four noes; four yeses; a mixture of noes and yeses; or a mixture of ticks and crosses. Yet if it came to the scrutineer interpreting four crosses on a ballot paper, under the law it would have been interpreted as an invalid paper. In the pamphlet that has been letterboxed around Australia, the `ballot paper: sample only' card quite specifically says to write `yes' or `no' in the space provided. There is no mention of ticks or crosses. Whilst speaking to the Adelaide media I had the opportunity to discuss this matter. People said, `But a cross surely can be interpreted when you mark a ballot paper or when you mark an X lotto card as indicating your preference for that square'. It certainly had a great deal of ambiguity about it and deserved some attention. Under the Bills brought forward in the Senate and introduced into this House the referendum must be decided on the words yes and no and not on the deceiving and deceitful ticks and crosses which would have been allowed. It has certainly been a very expensive exercise. People have said, `But what is the referendum about? We have not demanded this referendum'. It has cost $35m. It is a $6m exercise set up by the Constitutional Commission which has included a $3m advertising campaign implemented by the Labor Government and carried out by its pet advertising agency. The Opposition has worked hard to bring to the attention of the Australian people just where this referendum was going. We had to challenge it in the High Court of Australia on the grounds of media advertising. Then the Yes and No pamphlet produced a case which was biased towards the Government. People said that those questions did not seem too bad-the proposals for fairer elections, one vote one value, et cetera. I will come back to the those proposals in a minute. Let us consider the hypocrisy of the Australian Labor Party's views on the one vote one value question. At the Australian Labor Party conference in Adelaide recently the personal gerrymander was evident in the voting to elect a president and the attempt to roll George Apap. Some 23,004 votes were cast for the president and 18,000 against. That ballot was held at Trades Hall. If it had been held at Football Park, which accommodates about 45,000 people-- Mr Campbell —You don't understand how that system works. Mr PRATT —I will certainly pursue the one vote one value case further. The fact is that the Government has run a most dishonest and biased and disgraceful referendum campaign when the people of Australia expected more and certainly were entitled to more. Opposition to one referendum question has come from the churches and from the independent schools. Mr Tim Fischer —The Catholic bishops. Mr PRATT —And the Catholic bishops; we will not be biased between the Protestants and the Catholics. I endorse what the Opposition is attempting to do. The campaign should not be reduced to a biased attitude to the referendum if we are going to go down the path of Yes and No to determine how that referendum is handled. Mr CHYNOWETH(Dunkley)(10.34) —When I was first elected to the Australian Parliament one of my ambitions was to get to this House and to see you, Madam Speaker, in that beautiful chair. I must congratulate you on sitting in a truly Australian chair. I note that the other chair had the royal coat of arms over the top of it. However, yours has a beautiful wattle emblem over the top and it symbolises springtime and joy in Australia. I must say that it is very pleasing for me to come into this House and see you sitting in that beautiful Australian chair crafted by Australian craftsmen. However, the main thing I want to talk about this evening is another beautiful object-the new extension to the Frankston Hospital. It was opened today by the Premier of Victoria, John Cain, who will be the Premier of Victoria for many years to come. He is doing a great job there and I am certain that the people of Victoria really appreciate the work that he and his government are doing. He opened the Frankston Hospital today-another 100 beds for the community of the Mornington Peninsula. This particular hospital was promised by the Liberal Government back in Bolte's days and all they did was dug a hole in the ground. I think that is all that happened for about seven or eight years until the Australian Labor Party was elected to fill it up. The John Cain Labor Government came along and got something done. In addition to this beautiful new extension to the hospital, another psychiatric ward will be added. I think they are doing the plans now to build the extension. It will also become a training hospital that will work in conjunction with the Monash Centre and also with the Chisholm Institute which has started a course on nurse training. At the opening of the hospital this morning there were, I would say, several hundred guests and the Premier and the Minister for Health, David White, received an exceptionally good welcome from all who were present. There were also the candidates in the next State election. Tony Moore, who is standing for Frankston South, is a great candidate and I am quite certain that he will be the next member in the Frankston area. And there were two other candidates actually, Madam Speaker-- Mr Pratt —What were their names? Mr CHYNOWETH —Barry Smith is the candidate for the Mornington electorate, and I think there is a chap called Robin Cooper down there. I think he has been called the mouth from the south. He is similar to Mr Hodgman who used to be a member of this place. Barry Smith will no doubt win Mornington and the other person, of course, is Rob Riley who is now the President of the Flinders Shire Council. About five years ago I won Flinders and I won the Peninsula-the first time in 29 years-for the Labor Party. I stood again for the new seat of Dunkley; we won that and we are gradually moving down the Mornington Peninsula. The State Government will win all of those seats and once again the Labor Party will be the true representative of the majority of the people in the beautiful Mornington Peninsula. Mrs Kelly —Cerberus is next. Mr CHYNOWETH —Cerberus of course, is the naval training base. I think without a doubt it is the best base in Australia. It received a grant in the Budget yesterday of $5m for the building of a new communications school. I have been there several times recently and I can assure honourable members that all of the sailors and the officers are very appreciative of the work that the Minister for Defence (Mr Beazley) and the Minister for Defence Science and Personnel (Mrs Kelly) are doing in relation to building up our defence forces and making the conditions better for all the service personnel. I would like to say, Madam Speaker, that I am very pleased to be here and I am very pleased to see you in a very beautiful Australian Speaker's chair. Mr NEHL(Cowper)(10.39) —Next Saturday week, 3 September, is a vitally important day for Australians, not only for the individual Australians as citizens but also for the future of federation in this country. If one takes it to its logical conclusion, it is a vitally important day for the future of democracy in this country as we know it. Of course, 3 September is the day that the Labor Government is spending $35 million on four referenda questions. Mr Tim Fischer —It is $41m. Mr NEHL —I defer to my colleague but I was coming to the point that the Constitutional Commission cost $6 million. When one adds $35m to $6m it does come to $41m. Next time, if the honourable member waits for it, he will get the right figure when it comes up. After that slight diversion into elementary mathematics I have to come back-- Mr Chynoweth —You should give John Howard a lesson. Mr NEHL —Paul Keating could do with several lessons. Madam Speaker, I need to come back to the important point and that is that the people of Australia are faced with four apparently simple questions. But those four apparently simple questions are misleading, devious and designed to con the people of Australia. They are designed to try to get people to vote Yes on all the questions. However, the people of Australia must give consideration to what is behind those questions and vote No to all four. As I said, there are just four questions, yet in those four most simple questions are proposals to change 33 clauses in one way or another. Nine clauses would be repealed and 20 new clauses would be inserted in the Constitution-just from four simple questions. Another four clauses would be changed. The total number of words changed within the national Constitution of Australia, from four simple questions, would be 2,341. This is just from four simple questions. We have to see the hidden agenda behind the proposals. The Australian Labor Party, the Government, does not care about the recognition of local government in question No. 3. It does not give a fig for question No. 2. It certainly does not really care about question No. 4. All four questions are designed to try to destroy the power of the Senate, to emasculate the Senate. It is on the agenda of the Labor Party, on the agenda of the people on the benches opposite. Australia knows they want to destroy the power of the Senate. Senator Gareth Evans has said, `If you cannot get rid of it, white-ant it from within'. The people of Australia know this. The proposals are an attack on States rights. They are an attempt to centralise power in Canberra. They are an attempt to give the Prime Minister of the day a power to have a double dissolution whenever he wants it. That is what they are about. Labor has tried to do things in the last three years and the Senate has stopped it. In 1985 Labor set out to destroy the veterans' affairs legislation. The Senate forced it to come back in six months with a sunset clause. It had to reinstate the provisions. In 1986 the Government tried to introduce its insidious Bill of Rights and the Senate stopped it again. That is why the Government wants to get rid of the Senate. Last year the Government tried to introduce the identity card and the Senate stopped it again. I accept that when we are in government after the next election-there is no doubt about that-we will be upset from time to time if the Senate is in a position to inhibit what we want to do. But that is a price we are prepared to pay in the interests of democracy because we believe the Senate has a vitally important role in preserving democracy in this country, in preserving the rights of the States. Labor's hidden agenda must make the people of Australia ask, `What are the real reasons behind these questions?' We all know that Labor has a republic on the agenda. It is all part of the destruction of the Senate. We believe that the Senate is a powerful force for good and democracy. Madam SPEAKER —Order! The honourable member's time has expired. Mr LAMB(Streeton)(10.44) —Madam Speaker, I had thought, looking at your magnificent chair-the honourable member for Dunkley (Mr Chynoweth) referred to it-that we were in the Australian Parliament but after listening to the honourable member for Cowper (Mr Nehl) I thought that we were here as part of a meeting of the League of Rights. I had originally intended to talk about one of the good decisions in the Budget announced last night but I could not let the opportunity pass without making some references to this rather disparaging attack upon four most honourable and positive referenda to change and improve our Constitution and bring it into the 1980s. Who could argue, as a true democrat, against the simple proposition of one vote one value? But the honourable member for Cowper has laid that to one side at one stroke. Who could argue that governments would be more positive in their thinking about the onerous decisions of government with four-year terms than they would be with three-year terms, with one eye and one ear constantly to the polls? Who could argue against the right of compensation at State level when it is in the Australian Constitution that, if a government should acquire a person's property, it shall give just and fair compensation? The honourable member for Cowper dismissed that out of hand. We then heard the honourable member for Adelaide (Mr Pratt) say that somehow there was something wrong with having the right of religious freedom, asking whether honourable members did not know that this was something that was in common law. Yet in the honourable member's State of South Australia the Supreme Court determined that common law was no protection whatsoever for the right of religious freedom. As I have said, I did not rise actually to support four Yes votes on 3 September. All honourable members might remember that 3 September was the date when England declared war on Germany in 1939, just as this Government has declared war on the anti-democratic vestiges of the Australian Constitution as we inherited it in 1900, and will be the date on which we will strike a blow, as the people did in 1939, for greater freedom for the world and this country. I rose to speak about the laudable decision in the Budget that the 20 per cent sales tax on soya milk should be removed. How far removed could that be from a debate on the referendum? But it is important to those who suffer from allergies and those who cannot digest or tolerate other forms of milk, usually cow's milk. In one of this morning's Melbourne papers we saw the rather satirical comment that those who are thinking of buying flavoured milk or thick shakes should try to choose drinks made with soya milk, because, as I have said, it would mean that they would be 20 per cent cheaper. I have received many letters from people complaining that this Government had imposed a 20 per cent sales tax on soya milk. When I, as a pharmacist, wrote to the Treasurer (Mr Keating) complaining that people who take soya milk do it not because of free choice but because they are reduced to doing so as they cannot tolerate cow's milk, I was told that it was not an imposition by this Government but a decision by the previous Government; that it had been inherited; and that the manufacturers of soya milk had not been passing on the sales tax but, realising that they had been paying it, had added it to the price. It was not new; it was inherited. I said, `It is not good enough just to perpetuate this inherited crime against soya milk drinkers, so how about removing it?' As I said, it was not a choice. I do not know whether the honourable member for Farrer (Mr Tim Fischer), who is at the table, has drunk soya milk but it is certainly not something that one would do if one could tolerate more palatable milks. The Treasurer has taken the advice of the honourable member for Farrer and others who made representations and rightly removed the 20 per cent sales tax from soya milk. I congratulate the Treasurer and the Government on behalf of all those in my constituency and, I guess, all other members who made representations on behalf of all those who suffer from allergies and all those who cannot tolerate cow's milk. This is a wise decision-a decision which is in the interests of Australians. Mr DOWNER(Mayo)(10.49) —I start by commenting on the speech made by the honourable member for Streeton (Mr Lamb). I wrote to the Treasurer (Mr Keating) only three weeks ago pointing out this inequity in relation to soya milk. I am very glad that on this occasion in this Budget the Treasurer has replied to my representations. I am particularly pleased that I was able to achieve the resolution of that problem for my constituents. The matter I am going to talk about tonight is the referendum and the way in which this Government, throughout this campaign, has behaved with something little short of deceit. That is a real concern of mine, because one would expect the Government of the Commonwealth of Australia to behave with propriety, with decency and with integrity, as the Fraser Government did. This Government has not done that, particularly in relation to these referendum questions. Government members interjecting-- Mr DOWNER —For those honourable members opposite who are interjecting-goodness knows what they are saying-let me draw attention to the words of the so-called Yes case which have been distributed in that rather unbalanced document sent to every household in Australia. What it says-- Mr Kerr —But you wrote it. Mr DOWNER —We did not write the Yes case, blockhead. Mr Snowdon —What do the people of Queensland say about one vote one value? MADAM SPEAKER —Order! The honourable member for the Northern Territory has not been recognised by the Chair. The honourable member for Mayo has the call. Mr DOWNER —Madam Speaker, it is sad that honourable members opposite do not realise that it was their Party which wrote the Yes case, but there we are. The Yes case contains the words: The business community has strongly supported four-year terms because it believes they are very important for Australia's future welfare. But what the Yes case does not tell us-and this is part of the deceit-is that the business community does not support the four-year Senate term proposal that the Government is putting forward in referendum question No. 1. The Government is always trying to tell us what a great institution the Business Council of Australia is. It is a good institution-I am not denying that. But the Business Council of Australia issued a press release on 17 August which was unreported by the Press Gallery. Let me remind the House of what that press release says. It starts off by saying that in general terms, as is the case with the Opposition, the Business Council supports the proposition of extending a House of Representatives term to four years. It goes on to say: The Business Council continues to support an increase from three to four years in the maximum term for the House and maintains the view that such a change would be beneficial to business and general economic planning. We all agree with that. However, the Business Council goes on to say: . . . the Senate proposal differs significantly from the Council's preferred position. In the absence of bipartisan agreement the Council is, therefore, not able to support the proposals as put by the Government. It considers that the question must now be approached as a matter of on-balance judgment on which individuals on the Council and in the community generally must make up their own mind. Here we have it: the simple fact is that on 17 August the Business Council did not support the Government's proposal in spite of the totally false claims made in the Yes case section of the document distributed to every household. By the way, some honourable members opposite do not known that this document was written by the Government, but it was. The fact is that the Yes campaign has again and again been shown up to be a fraud. We are aware of the great story of the impartial television advertisements. Do honourable members opposite know who found that they were cheats? Who discovered that they were cheating? The High Court of Australia, the highest court in the land, found that the lot over there have been cheating, and cheating furiously. The Liberal Party of Australia and the National Party of Australia say that the High Court is the highest and most distinguished court in the land. That Court said in no uncertain terms that honourable members opposite were cheats. They are cheating on the advertisements, cheating on their ticks and crosses. What a woeful way of trying to cheat. We have already mentioned the official pamphlet which contains giant yeses and little noes and all that sort of thing, but I think the bottom line is that everywhere we look in this proposal-by the way, the honourable member for Denison does not even know that the Government wrote the Yes case-the whole of the Government's campaign has been exposed as a fraud. Here is the Business Council pointing out that the Yes case which the lot opposite wrote and which all of them approved is false in relation to the business community. Madam SPEAKER —Order! The honourable member's time has expired. Mr MILTON(La Trobe)(10.54) —It is always interesting to following the honourable member for Mayo (Mr Downer), who is a very conservative person. Here we have the old story. When we put up proposals to the Australian people to give them more power at the ballot box, to give them more democracy, what do those on the other side do? They keep on refuting our proposals. They keep on going back to this old, outdated nineteenth century Constitution. Madam Speaker, it was not my intention to deal with this issue tonight, although I believe that it is very important. It is for me a great pleasure to follow, as the next speaker from our side of the House, the honourable member for Streeton (Mr Lamb), who was the previous member for La Trobe. For me it is a very proud occasion to follow the honourable member for Streeton in making my first speech in this House. There was a brief interlude when the Liberal Party of Australia held the seat of La Trobe, but between us we held the seat for 11 years. We will continue to hold it for a long time to come. I want to speak about industrial democracy, a matter of great importance to me. In this my first speech in this wonderful new chamber of this great Parliament House of which all members are proud I feel I should speak on this subject. I have raised this subject on a number of occasions previously in adjournment debates and I have spoken in debates on Bills in relation to the Commonwealth Bank and the Australian Broadcasting Corporation. I was interested to hear the Minister for Industrial Relations (Mr Willis) in a speech in the old provisional Parliament House mention a joint statement on industrial relations and worker participation. The Australian Council of Trade Unions (ACTU) and the Confederation of Australian Industry made a joint statement supporting industrial democracy. I shall quote first from the statement by the ACTU: The ACTU has for a number of years given support to action which would enable employees to become more involved in the functioning and the efficiency of their enterprises. The ACTU hopes that through this Joint Statement employers, employees and their representatives can develop fresh approaches in areas such as the provision of information, the introduction of new technology and workplace consultation. Through these initiatives the potential exists for the development of workplaces which are able to offer more fulfilling, more secure and, over time, better paid jobs. The Confederation of Australian Industry said: The CAI, from its establishment in 1977, has actively supported and promoted the greater participation of employees in influencing the decisions which affect them directly at work. Consultation and participation provide the key to realising the commitment of employees to improvements in efficiency, quality and productivity which are in the mutual interests of employers, employees and their enterprises. CAI believes that the development of closer and more co-operative and participative relationships between managers and their employees is critical to the future effectiveness of our enterprises. There, Madam Speaker, you have it. There is support from employers and employees and their representatives for the introduction of industrial democracy. It has already been introduced to great effect in many countries, particularly in Europe. I hope this Government will have the opportunity in this new Parliament House to introduce industrial democracy legislation. In February 1983 I wrote a paper on a proposal for workers' decision making in the public sector, from which I shall quote: An impelling factor supporting the proposals is that decision making at the immediate job level is attractive to most workers as it generates in them a confidence in their own ability to make decisions. If one accepts that they have the ability and are given the power to make decisions at work, then it necessarily follows that they will insist that decision making is extended to all aspects of their lives outside the work place. Mr Kerr —Hear, hear! Mr MILTON —I know that I have support from the honourable member for Denison. He has strongly supported workers' decision-making and the introduction of industrial democracy. I hope the Government will take the opportunity to introduce legislation on industrial democracy. Madam SPEAKER —Order! The honourable member's time has expired. Mr ANDREW(Wakefield)(10.59) —I was not planning to participate in this adjournment debate until the honourable member for La Trobe (Mr Milton) made a comment or two on the subject of the referendum with which I simply have to take issue. He accused the Opposition of denying to the people the power that ought to be theirs. The reality is that the four questions that are to be put to the people of Australia on 3 September will do nothing more than centralise more power in Canberra. Nowhere is this better illustrated than in question No. 1, the key question in the referendum proposals. That question will lock the Senate into the House of Representatives. There has been no objection from this side of the House to the proposal for a four-year term for the House of Representatives. In fact, we indicated to the Attorney-General (Mr Lionel Bowen) our preparedness to vote in favour of a four-year term. The objection on this side of the House has been entirely to the locking of the Senate into the House of Representatives. Madam SPEAKER —Order! It being 11 p.m., the debate is interrupted. The House stands adjourned until 10 a.m. tomorrow. House adjourned at 11 p.m. The following notices were given: Mr Punch to present a Bill for an Act to establish the Australian Sports Commission, and for related purposes. Mr Simmons to move- That this House: (1) notes that there are 3 tiers of Government in Australia; (2) recognises the contribution of dedicated men and women who are prepared to serve their local communities in public office; and (3) calls upon the Australian people to endorse strongly the Government's proposal for Constitutional recognition of local government. Mr Lavarch to move- That this House acknowledges that the Constitutional Commission has, through a process of widespread public consultation, identified a number of concerns about deficiencies in the protection of rights and freedoms currently guaranteed in the Constitution. Mr Webster to move- That this House: (1) declares that this nation enjoys basic human rights and freedoms unequalled anywhere in the world, and that these rights and freedoms are not under threat; (2) acknowledges the inherent dangers in inserting `rights' clauses in a written Constitution; and (3) expresses its concerns that the changes to the Constitution proposed by referendum question number 4 would allow Commonwealth Governments to meddle with and deprive Australians of their basic rights and freedoms. Mr Lamb to move- That this House- (1) expresses its concern at the way in which the incorporation of East Timor into Indonesia occurred; (2) regrets that there are no proposals for an internationally supervised act of self-determination; (3) calls on the Government to maintain active support for all international initiatives to settle the East Timor problem, especially the efforts of the U.N. Secretary General; and (4) recognises that the territory of East Timor should be opened up to international relief and humanitarian organisations, to parliamentarians, trade unionists and other community groups to relieve concerns about human rights and safety. Mr Hawke to move- That this House- (1) acknowledges the historic action of the Holt Government, with bipartisan support from the Australian Labor Party, in initiating the dismantling of the White Australia policy; (2) recognises that since 1973, successive Labor and Liberal/National Party Governments have, with bipartisan support, pursued a racially non-discriminatory immigration policy to the overwhelming national, and international, benefit of Australia; and (3) gives its unambiguous and unqualified commitment to the principle that, whatever criteria are applied by Australian Governments in exercising their sovereign right to determine the composition of the immigration intake, race or ethnic origin shall never, explicitly or implicitly, be among them. The following papers were deemed to have been presented on 24 August 1988: Australian Bureau of Statistics Act-Australian Bureau of Statistics-Proposal for collection of information-1988-No. 4-Survey of manufacturing technology. Australian Meat and Live-stock Corporation Act-Regulations-Statutory Rules 1988, No. 197. Currency Act-Regulations-Statutory Rules 1988, No. 200. Customs Act-Regulations-Statutory Rules 1988, No. 199. Judiciary Act-Rule of Court, dated 11 August 1988. Migration Act-Regulations-Statutory Rules 1988, Nos. 201, 202. Torres Strait Fisheries Act-Regulations-Statutory Rules 1988, No. 198. The following answers to questions were circulated: (Question No. 978) Mr Macphee asked the Attorney-General, upon notice, on 17 May 1988: (1) Further to his answer to question No. 880 (Hansard, 27 April 1988, page 2227) relating to Sir Peter Abeles allegedly instructing or advising another person to transfer sums of money from Australian dollars to American dollars, on what date and in what year did the transaction referred to in his answer to part (3) take place, according to entries made in a private detective's notebook? (2) What sum of Australian dollars was involved? (3) Was there any reference to the amount of American dollars involved? (4) How many days after that conservation passed before there was a decline of several cents in the Australian dollar compared to the American dollar? (5) Does the Government accept as normal and proper practice for Reserve Bank Board members actively to trade in foreign exchange markets whilst simultaneously carrying out their wider public responsibilities? (6) Does such a practice constitute a potential conflict of interest; if not, why not? Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) The private detective's notebook shows the date ``MON 3.12.84'' as the date of the entry referred to in part 3 of the answer to question No. 880. That entry does not record that sums of Australian dollars were to be transferred to American dollars. The cassette recording of the conversation does not record that Australian dollars were to be transferred to American dollars. (2) As indicated by the answer to part 3 of the answer to question No. 880, no sum of Australian dollars is referred to in the notebook. In the cassette recording of the conversation reference is made to two? hundred Australian dollars. (3) No. I referred parts (4), (5) and (6) of the question to the Treasurer, who has provided the following reply: (4) The Australian dollar has been floating since December 1983 and fluctuates in line with market circumstances. The market was not subject to particular volatility in December 1984. (5) and (6) Australians in business serving on the Board of the Reserve Bank will inevitably be participants in foreign exchange transactions-as they no doubt are in domestic financial transactions. Appointment to the Board of persons without experience and expertise in business matters would lower the competence of the Board in a unacceptable way. It would be absurd to prevent people with a business background from serving on the Reserve Bank Board on the grounds that as part of their day to day commercial responsibilities they or the companies they serve might be involved in dealings in the foreign exchange market. The potential for conflicts of interest has always been recognised. The Reserve Bank Act contains provisions relating to disclosure by Board members of interest in contracts affecting the Bank and the `Bowen Rules' also operate. Moreover, Board members are required under the Act to make a Statutory Declaration of Secrecy about the Bank's affairs before entering upon their duties. No member of the Reserve Bank Board is required to abstain from the commercial activities of their companies including their foreign exchange activities. The Chairman of the Reserve Bank has informed me that the Board's role is seen as assessing the appropriate direction and stance of monetary policy from time to time but the Board is not drawn into the specific action to implement that policy. The latter, which involves operations in the various financial markets with implications for movement in interest rates and the exchange rate, is in the hands of the Chairman himself. (Question No. 1049) Mr Prosser asked the Minister representing the Minister for the Arts, Sport, the Environment, Tourism and Territories, upon notice, on 26 May 1988: Why is expenditure on the Tourism Overseas Promotion Scheme expected to fall short of the level appropriated for in 1987-88 by $2.334m, as revealed by the Statement of Savings Expected in Annual Appropriations released by the Department of Finance. Mr Punch —The Minister for the Arts, Sport, the Environment, Tourism and Territories has provided the following answer to the honourable member's question: An amount of $6 million was appropriated for the Tourism Overseas Promotion Scheme in 1987/88. That represented the potential claim value of applications that were approved at that time. Actual claims received fell short of this potential value. Consequently expenditure was less than the amount appropriated.