Wednesday, 30 November 1988 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Mr BEAZLEY(Swan-Leader of the House)(10.01) —I move: That: (1) the resolutions adopted by the House on 9 October 1984, a.m., as amended on 21 March 1985, 13 February 1986 and 22 October 1986, relating to the registration and declaration of interests by Members, be further amended by omitting resolution (4) which provides for the making of oral declarations of interests in debate and proceedings; such amendment to be effective from the first sitting day of the House of Representatives in 1989; and (2) in all other respects the resolutions adopted by the House on 9 October 1984, a.m., as amended on 21 March 1985, 13 February 1986, 22 October 1986 and by this resolution, relating to the registration of interests by Members, continue in force. The motion proposes the removal of a provision from the resolution governing the declaration of members' interests obliging members to make an oral declaration about their interests prior to participation in debate and votes in this chamber. The Government's motion is based on a recommendation in a committee report presented in the House by the honourable member for Prospect (Dr Klugman) the other day. As I understand it, the majority view of that committee was that this course of action should be pursued as opposed to another course which suggested that perhaps pecuniary interest declarations might be left in the resolution thus requiring a declaration on that. The view of the Government was that in fact all of this is usefully picked up by the Registration and Declaration of Members' Interests, which of course is a public document available to all members-and the public for that matter-to check and, if they wish, to call to book one of their colleagues on a potential area of conflict of interest in the course of participation in debate. When looked at in detail, the Government felt that that resolution was so broad and all encompassing that as it stood at the moment it was probably being regularly honoured in the breach in the House. Given that protection of the written declaration, it was felt that there was no real need to leave this matter in that resolution. For those reasons, I move the Government's motion. Mr FIFE(Hume-Manager of Opposition Business)(10.03) —The Opposition does not oppose this motion, which, as the Leader of the House (Mr Beazley) has pointed out, has been moved as a result of a recommendation of the Committee of Members' Interests. However, in indicating that we do not oppose the motion, I think it is important to point out that the move this morning highlights the reservation expressed by members of the Opposition in 1984 when the Government proposed to the House the motion which was subsequently approved dealing with the declaration of a wide range of interests of members, members' spouses and dependent children. It will be recalled that a number of members were of the opinion that what was being proposed then was unnecessary and would serve very little useful purpose. Also there was concern felt that there would be some practical problems associated with what was being required of members. The decision to remove resolution (4), which we are dealing with now, shows that that concern was certainly well based. The Committee of Members' Interests has now reported to the House some of the problems associated with the need for members to make oral statements to the House or to a committee of the House of relevant interests, as well as providing within 28 days of making an oath or affirmation, a written statement of registrable interests, and also within 28 days providing a written statement of any alterations to the original declaration. I think it ought to be placed on record that the Committee did seek oral legal advice, as I understand it. The Committee was told that the practical effect of the advice that was received was that it would be necessary under the present arrangements for all members to declare orally any of a whole range of interests that may be applicable to them should they participate in debate in the House or committee or if they proposed to vote in a division in the House or committee. The interests covered by such a requirement include such diverse matters as shareholdings in a company, ownership of real estate, disclosure of assets or liabilities and being a member or patron of an organisation. The report which is before us points out that one member of the Committee felt obliged to declare orally during debate in the House the fact that he was a patron of a particular bowling club. This was because he was questioning a decision by the Australian Broadcasting Corporation not to proceed with the production of a television series of the program Jack High from that bowling club. I do not intend to refer at length to the report of the Committee other than to say that it is a comprehensive one. I think the House is indebted to members on both sides who participated in producing that report. But the example I have just given highlights the nonsense of resolution 4 which was originally proposed by the Government and approved of by the House. Mr RUDDOCK(Dundas)(10.07) —As a member of the Committee of Members' Interests that looked at this matter, I did have some views and, in a sense, they come out in the report which was tabled in the House last week and from which this motion derives. The report notes that an oral opinion, to which the member for Hume (Mr Fife) referred, was obtained. I think written advice was made available subsequently affirming that view of the Attorney-General's Department. I must say that I found the advice certainly interesting, but it was not advice with which I necessarily agreed. I would like to explain to the House the extent to which I disagreed with that advice. It seemed to me that section 4 of the resolution requiring the declaration of interests-the section which required an oral statement of an interest in a debate or other proceedings-would make no sense at all if the interpretation of the Attorney-General's Department were accepted. The view of the Attorney-General's Department was that the declaration ought to be of an interest of the sort that was registered and on the register. Dr Klugman —A registrable interest. Mr RUDDOCK —A registrable interest, yes. Dr Klugman —It was interpreted in that way. Mr RUDDOCK —That is the way in which the Attorney-General's office interpreted it. The relevant words are, `any relevant interest in clause 4'. The words at the beginning of clause 4 put this matter in perspective. My view is that a relevant interest, where referred to in that section, means a relevant interest in the matter that is under discussion in a debate. I certainly do not believe that any relevant interest that ought to be disclosed orally in the context of a debate ought to be restricted merely to the range of matters that are registrable. I think that limits what was meant by a `relevant interest' in clause 4 as it was drafted. In my view a wider range of interests that are non-registrable may well be required to be declared orally in the context of a debate and the appropriate time to declare an interest is when the matter is under discussion. The mere fact that a declaration appears on a register which people might be able to go or stumble across to find out whether or not a member has an interest in a matter which is under debate or being voted upon, is not the way to ensure fair dealing and disclosure in the context of a debate that is proceeding. People might want to take into account and weigh up whether a member's interest affected his judgment in terms of what was said. When one looks at clause 4 it is clear that my view was certainly the proper view of the intention of clause 4. Clause 4 states: That, notwithstanding the lodgment by a Member of a statement of the Member's registrable interests and the registrable interests of which the Member is aware (1) of the Member's spouse and (2) of any children who are wholly or mainly dependent on the Member for support, and the incorporation of that statement in a Register of Members' Interests, a Member shall declare any relevant interest. I find it extraordinary that one can argue that a relevant interest in that context is a registrable interest, when the resolution referred to registrable interests in the text where it intended to refer to registrable interests. I find it extraordinary that the view is offered that a relevant interest in the context of that section is a registrable interest when the words `registrable interest' are used successively. It seems to me that relevant interest in that context means relevant to the matter under discussion and not anything else. The second alternative view offered by the Committee was that that position should have been made clear. That advice was offered to the Government and the Opposition. It was a view that resolution 4 be amended to require: oral declarations to be made only when a Member, his or her spouse or dependent children, hold a pecuniary interest which could conceivably bring the Member into a potential conflict of interest situation. That relates to proceedings in the House of Representatives or committee. My view is that some interests might well be relevant to a debate, for example such as an honourable member having a family company which holds shares and who may have substantial shares in a company such as Broken Hill Proprietary Co. Ltd. We might be dealing with oil interests. It might well be relevant to the matter under discussion to know that an honourable member has substantial shareholdings held either in a trust or in a family company which does not have to be disclosed on the register but which could be relevant to the issue being debated before the House. A disclosure of that interest ought to be made. That is the traditional way in which these questions have been dealt with. My view is-and I put it on the record publicly-that the register ought to be scrapped. It is useless; it is a waste of time. Because of the complexity and detail to which people have to go, it is probably faulty in relation to most people's affairs, no matter how honestly they try to put them together. When it comes to the question of whether or not a person has an interest that ought to be disclosed in the context of a debate or a vote, the register is largely useless because nobody looks at it, nobody is aware of it, and nobody has that issue brought to his attention. In my view, the preferable way to deal with this question would be to scrap the register entirely and provide for proper declarations to be made to the House at the time when the relevant matters are under consideration. I cannot say much more than that except that the Committee did offer a compromise but the Government has not picked that up. The Opposition has been prepared to accept the Government's view in relation to this matter. I simply highlight that question again because it may be that in the debate in the Government Party rooms my view did not come through clearly. Perhaps it did not come through clearly enough in the report. Certainly, the report tried to give some guidance as to the two alternative views that were available to address this question. As the Leader of the House (Mr Beazley) ponders these questions, I impress upon him to perhaps consider the matter again. Mr SCHOLES(Corio)(10.14) —I have two concerns. One is a broad concern; that is the implication of the whole issue that an honourable member in this Parliament should not vote on a matter in which he has a pecuniary interest. I do not disagree with that principle. It certainly applies to local government. Following an earlier election there was a majority of two in this Parliament. Had the result been different, one of the members of the then government would have been the president of one of Australia's important unions. If matters had been before this Parliament which directly affected that union, as occurred on another occasion with the Federated Ship Painters and Dockers Union of Australia, whilst he would not have been barred from voting on a government matter he could well have constituted a majority in the carriage of a measure where he was on the record as either being a beneficiary or having a commitment because of the office he held. The member would have been required by his party to vote but he would have borne the stigma of voting throughout the rest of his political career. That is a serious problem. I have a more specific matter to raise, and it is one I have objected to at all levels in discussions on this particular matter. Clause (i) in the section relating to discloseable matters refers to the nature of other assets excluding household and personal effects, each having a value of over $5,000. That does not appear to me to exclude, for example, a family painting which was a gift from an artist friend and which, because of the passage of time, has acquired a value well in excess of its value when it was acquired. Some members who may have had an active life in another area, or in the political area for other members of their family, may have personal documents in their possession at a time when Australiana is of very high value which could not be described as household or personal effects. Those documents are identified as being in that person's possession and are almost certainly, by the register, described as being located in his home, unless he keeps everything in a vault. He is, therefore, describing an item of value to any person who is going to target the home for a break-in or a robbery. Whilst the member is here in Parliament, his family is placed at risk by the fact that we have a register of assets in the member's home which are stealable and mobile. I have always had a strong objection to that particular clause. It would be unusual for members to have a number of these items, but I do not think that publishing a list of items which are eminently stealable and tradeable should fall within the category of a conflict of interest. Mr TUCKEY(O'Connor)(10.18) —The question of pecuniary interests has arisen in the House before. It is interesting that since the requirement was introduced by the Government the only person to be severely criticised is the Minister for Employment, Education and Training (Mr Dawkins) in regard to his declaration and some of the implications therein. The Government found it necessary to bring in very strict rules regarding the declaration of donations for electoral matters. The Government itself is the only one to be embarrassed by that so far, and it appears to me that it frequently judges others by its own standards. I am concerned that the Government has overlooked the fact that, by requiring a declaration prior to a speech or prior to a matter being raised in the Parliament, and particularly in the heat of debate, it is putting an unnecessary and intolerable burden on members of the House. The written declaration has never concerned me. I have said that time and time again in this place. I am only too happy to declare these things, although I have never declared my wife's personal interests because she has a rule in our family that I am not entitled to know. I can assure the House that they would be inconsequential but, while I do not know, I doubt that I will take a vote in this place that will influence her fortunes. The point I make is that, whilst we put it in writing, we do it in calmer times. The other day my staff drew my attention to a matter which I had neglected, and I put it in writing. It was to do with a trip in the Union of Soviet Socialistic Republics. I do not want that to be hidden and it certainly is a matter of public knowledge. The point I make is that in calmer times it is easy. I think that the problems confronting members in this regard are very difficult the more complex the matter gets. I have seen the technicalities of pecuniary interest and declaration of interest used in local government, often quite improperly. It is a big issue in local government. I would like to give an example of just how people could, if the interpretation were so taken, be affected in this regard. I also believe-I have said this before in one of the debates on pecuniary interests in this place-that we seem to be going down the wrong road. We demand that people declare their savings bank accounts. With due respect, I am not sure how any member of this place would be likely to vote on a banking Bill differently to the way he would otherwise vote on the simple grounds that he happens to have a savings account with a particular bank. But, on the other hand, I pointed out that we have never asked people to declare their rich and powerful friends. One might think that that was a very serious declaration. We have had examples over the last couple of days that might accentuate that point of view. I will go no further into this matter; I will not use this debate as an opportunity to recycle some of the debates of the last couple of days. Madam SPEAKER —Very wise. Mr TUCKEY —I am quite serious. If I were writing this legislation I would throw out many of the inconsequential matters. I tend to agree with the previous speaker, the honourable member for Corio (Mr Scholes). If a person declares that he owns some paintings or antique clocks, putting them at risk of theft, I am not sure whether that is of great importance to the judgments we make in this place. It goes a little further than that because when we look at the Constitution in regard to the responsibilities of members, we find the grounds on which they are entitled to sit in this place. I will give honourable members an example: section 44 of the Constitution lays out a series of disqualifications to a member of parliament. Section 44 (iv) states: Holds any office of profit under the Crown, or any pension payable during the pleasure of the Crown out of any of the revenues of the Commonwealth: Many honourable members have experienced this because they probably came from local government, as I did, and were on certain government committees. Others who were employed by the Government or the Australian Broadcasting Corporation (ABC) and organisations such as that have found that it is necessary to resign those positions prior to seeking election. That is okay. Section 44 (v.) states: Has any direct- this section is very important; the word `any' should be underlined- or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons: I think that is another matter that should be taken into account in terms of pecuniary interests. When a person has involvements and investments in very large companies he has an interest in common. I refer to page 2551 of the House of Representatives Hansard where the Minister for the Arts and Territories (Mr Holding) at Question Time responded to some allegations made about him on the ABC by Mr Gary Foley. During his answer, he stated: I do not mind saying that because following a statement made on ABC radio yesterday I contacted the ABC and said clearly that the matters were defamatory and I would be taking them up. Within an hour and a half I received the following message from the ABC . . . The message was, basically, an apology. He then went on to say: The costs which the ABC has paid will be donated to local Canberra charities. That is a simple statement in this place made by the Minister in good faith. I draw honourable members' attention to the fact that if someone were nasty enough to make the link between the Constitution and that fact, it is arguable, at least, that the Minister has had a direct or indirect pecuniary interest in an agreement with the Public Service. In other words, he got $500-that is a fact-and that $500 is clearly a pecuniary agreement. No doubt there are other legal factors. The Minister for Defence (Mr Beazley) is attempting to interject. As I have said, the Minister is not someone I would appoint as a lawyer in my defence. His knowledge of the law and of the Standing Orders is frequently demonstrated to be highly deficient in this place. I constantly think `Wouldn't it be nice for the Labor Party to have Mick back here?'. Let me take the matter a little further. When we get into this nitpicking, we open further doors to suggest, as I am willing to suggest, that there is a prima facie case that Mr Holding, the Minister for the Arts and Territories - and certainly he could be subject to legal action-should lose his seat because he has had a direct pecuniary interest in the Public Service in receiving $500 in costs directed to him. The fact that he may pass the money on to charity is immaterial. He could have been suspended from this Parliament. That is not to say that that could happen. It is giving Parliament an example of the fact that when the Government goes down the road with matters of this nature and tries too hard, it causes difficulties for members of parliament which should not be necessary in relation to their responsibilities in this place. Although Opposition members do not propose to stand in the Government's way in this matter, I feel that the Government and its backbenchers should consider whether it is necessary to make verbal declarations which, according to this proposal, will make us guilty of a contempt of Parliament. In view of what happened yesterday, I wonder whether we should be too concerned any more about committing a contempt of this place. Pettifer points out that misleading the House is a contempt, and if this were the British Parliament we would be dealt with most severely, as Mr Profumo was. Yesterday it was considered very likely that the Prime Minister (Mr Hawke) on one day would tell us one thing, and even go to the people and tell them one thing, and the next day get up and say, `What I told you yesterday were not the actual circumstances, but in fact they were as follows . . .' That is not a contempt under the rules of this Government. Therefore, one wonders whether we should worry about the penalties that might apply to this baring of chests and applying the hairshirt treatment which the Government seems to think is necessary. Presumably, it lives with the idea that Opposition members will be caught out day after day because they have all these secret financial deals which will be exposed by these arrangements. I remind the House that since the original legislation came in, Opposition members have complied with its provisions. Only one case has come before this Parliament with considerable evidence to suggest that a Minister could be embarrassed. Also to be considered is the requirement of declaration of interest by those involved in Cabinet committees. We are well aware that during the Bell-BHP takeover and its being considered by a secret committee of Cabinet, two members who participated-this is all on the record; it has all been said in this Parliament-had very close links with shareholdings in the two companies-namely, Bell Group and Broken Hill Co. Ltd. They were Senator Button and Mr Dawkins. They did not declare an interest. They were on a secret committee which never explained itself to the Caucus. It made recommendations, it never gave Caucus reasons, and yet two of those sitting on the committee had these direct links and certainly could have been involved in a pecuniary interest. However, the Government shrugged it off-it was `one of them'. It is amazing how the Government keeps catching itself with its own traps; yet this side of the House is clear. If Government members want to keep damaging themselves-it seems to be their problem-they should carry on in that way; but I believe that this is an unnecessary imposition on members. Yesterday the Treasurer (Mr Keating) suddenly had worries about people slandering members of this House-he used the broad term `members'. Mr Tim Fischer —Smearing. Mr TUCKEY —And, of course, smearing people. That is all part of the fact that the Treasurer has made an art form of amnesia. He is the fellow who forgot to file his tax return. Mr Scholes —This has nothing to do with-- Mr TUCKEY —Yes, it has because yesterday the Treasurer slandered people in this place-- Madam SPEAKER —Order! The honourable member for O'Connor will get back to the motion. Mr TUCKEY —Yes, Madam Speaker. I do not know why Government members are so sensitive about the Treasurer's amnesia. He even forgets his engagements, but we cannot worry too much about that. I put to the Government that this is an unnecessary activity. It is done, apparently, for proper reasons, but I think it is done for the wrong reasons. The Government is still living in the hope that it will catch some Opposition members, and in this case it just might because it is putting an obligation on people to get up and say, in the heat of debate, `Wait a minute; hold everything. Do I get time out because I have to make a personal declaration?' For instance, when I am talking about excise, do I have to mention that there was a time when I was involved in the hotel industry? That is fine, provided that the House is able to treat those mistakes in the proper way. Unfortunately, there always comes a time-for instance, in the Sankey and other cases-when people choose to use the technicalities of the law. It might be, as the honourable member for Corio has just said, that there is a majority of one. That is what happened to former Senator Webster. The courts said eventually that he did nothing wrong, but the reality was that nobody wanted his hide because of what he had done; they wanted his hide because he was going to change the balance of power in the Senate. When such temptations come before us-whatever side of politics we are on-we intend to look very closely at the law. I assure the House that if there were a majority of one in this place there would be legal action before the courts now regarding the eligibility of the Minister for the Arts and Territories to hold his seat in this place on the grounds that he is in breach of the Constitution. I suggest that what the Government is doing today is not smart or fair. Mr Beazley —You obviously don't understand it; we are taking it off, you idiot! Mr TUCKEY —That is even better. It was a great speech anyway. Dr KLUGMAN(Prospect)(10.33) —We have just heard a typical speech from the honourable member for O'Connor (Mr Tuckey). He cannot blame amnesia in his case; he just does not understand things. We are deleting a resolution and he thinks that we are bringing it in. Obviously the honourable member belongs in the hotel which he ran, apparently, so successfully many years ago. It has been mentioned in this debate that honourable members can be prevented from voting in a division. Standing order 196 states: No member shall be entitled to vote in any division upon a question (not being a matter of public policy) in which he has a direct pecuniary interest not held in common with the rest of the subjects of the Crown. The important point to remember there is the qualification `not being a matter of public policy'. Pettifer, at page 173 of House of Representatives Practice, held-and I think that another book was cited to us at the committee meetings-that all legislation which comes before the House deals with matters of public policy and there is no provision in the Standing Orders for anything except public policy. As far as I can make out, it is a meaningless standing order. If all we deal with is public policy it is pointless to say that an honourable member cannot vote on issues in which he has a pecuniary interest, provided that it is not a matter of public policy. One is not prevented from doing anything. We addressed the problem that this requirement applies not only to things that happen in the House but also to all committees of this House. I do not think that would include the committees about which the honourable member for O'Connor spoke; that is, the Cabinet committees. It would certainly include all joint committees and other committees of this House. It is a step in the right direction. There are shortcomings in the resolutions which were adopted by this House to deal with pecuniary interests and other interests of honourable members. We do not resile from the fact that there are shortcomings there, that people who want to cheat can cheat. If they do not want to disclose certain interests, what we have before the House does not force them to disclose them; it is just a question of hiding them under a pseudonym or second removed or third removed name and one cannot get at them. Mr Tuckey —What about rich and powerful friends? Dr KLUGMAN —How does one define friends? How does one define rich and powerful friends? As soon as the appropriate legislation or motion is introduced into the House, we will deal with it and find out. Perhaps the honourable member for North Sydney will define it for us. Mr BEAZLEY(Swan-Leader of the House)(10.36) —in reply-I thank honourable members who have participated in the debate, even though some of them clearly did not know what the debate was about. I thank particularly honourable members on my side of the House and also the honourable member for Dundas (Mr Ruddock), who raised some very useful points. I do not think anyone would be so foolish as to suggest that we have the whole issue of the way in which members declare pecuniary interests absolutely right. There is a permanent committee, the Standing Committee on Members' Interests, and the Government is prepared to listen to advice from that Committee, as this motion demonstrates. That a need for this exists is obviously demonstrated by events in Queensland at present. Whether or not the particular propositions in terms of our pecuniary interests would be sufficient to pick up that sort of situation is a matter for debate and consideration by that committee. Clearly there are situations which are ridiculous at one level, and the intention of this motion is to obviate some of those absurd situations where people have to stand up in this place and declare orally their membership of bowling clubs, Amnesty International or whatever if they are talking about Jack High competitions on the Australian Broadcasting Corporation or about torture legislation, as the honourable member for Dundas did at one stage when legislation was before the Parliament, by declaring that he was a member of Amnesty International. It is not sensible or possible for members of Parliament necessarily to comprehend at any point in time the direct relationship between a matter before the House and their membership of that sort of organisation. That is ridiculous at one extreme and to hope to cure it here today is ridiculous at the other extreme. We have nothing like that. The situation could arise that is being revealed daily in the Fitzgerald Inquiry into Possible Illegal Activities and Associated Police Misconduct, where various Liberal and National Party Ministers are revealed as having received gifts, loans or whatever, worth well over millions of dollars- Mr Moore —Which Liberal Minister? Mr BEAZLEY —Don Lane. Mr Moore —A National Minister. Mr BEAZLEY —He was a Liberal Minister; he became a National Minister. The point about that situation is that something is needed to hold members of Parliament to account so that obviously they do not benefit so massively from the positions they hold. The honourable member for O'Connor (Mr Tuckey) came in here less in his Horatio Hornblower mode and more in his Uriah Heep mode-`I am ever so humble and I just have this humble advice to offer the Government'-with his usual lack of comprehension of matters before this House. He suggested that he would not take legal advice from me and then suggested that he might not take standing orders advice from me. It might have been helpful if he had actually taken advice from me, because he would then have discovered that the motion put forward by the Government is supposedly what he was supporting by his remarks. The honourable member for O'Connor takes advice from very few people and is permanently putting his foot in it as a result. In his Uriah Heep mode today the honourable member for O'Connor made a snide comment about the Minister for the Arts and Territories (Mr Holding) and said he would like to consider the possibility that perhaps, because he successfully secured a settlement, prior to suing, from the Australian Broadcasting Corporation for a remark reported, he was somehow or other placed in breach of the Constitution. This suggested therefore that if the media happens to be government owned, members of this place are not entitled to protection from it in the normal course of events; that they can not take out an insurance policy with the State Government Insurance Office; that presumably, on that basis, they cannot take interest from a bank account with the Commonwealth Bank. Those actions are all in that same category. The matter raised by the honourable member for O'Connor is obviously an absurdity. One does not have to be a genius of a lawyer to work out that that constitutional provision relates to being directly in receipt of a benefit by means of employment, dividend or some other form of income. Quite clearly, that was the snide little Uriah Heep mode he adopted. He then suggested that members on this side of the House have been trapped here. None of the matters that were raised by him or anyone else with regard to the Minister for Employment, Education and Training (Mr Dawkins) saw him in breach of these pecuniary interest provisions. The honourable member for O'Connor suggested that he does not know what his wife owns. One can have sympathy with that. How is it expected that a member of this place would necessarily know such details? The pecuniary interest provisions permit that to occur. Neither is it expected that honourable members know the interests of other members of their family, less directly related than a wife. The mode of presentation by the honourable member for O'Connor demonstrates the sort of person he is. He ignores the issue. He takes the opportunity to make a little smear. He failed miserably in the debate yesterday and he has been smarting ever since. He sought exculpation for his miserable parliamentary performance yesterday so he came in here to try to get that exculpation. As usual, he made a monkey of himself in this place, reminding us again-as I have had occasion to refer to in the House-that when we see him gibber and twitter in this place we get a full understanding of what is meant by monkey business in the Liberal Party in Western Australia. His insubstantial contribution can be dismissed. I thank the Opposition for supporting me in this motion even if the Manager of Opposition Business has some difficulty in communicating the motion to his deputy before he discusses matters in this place. Question resolved in the affirmative. Motion (by Mr Beazley) proposed: That this House authorises the broadcasting and rebroadcasting on Australian radio and television stations of a sound record of excerpts of its proceedings, subject to the conditions determined for this purpose by the Joint Committee on the Broadcasting of Parliamentary Proceedings. Mr FIFE(Hume-Manager of Opposition Business)(10.54) —The Opposition supports the motion. Mr TIM FISCHER(Farrer)(10.54) —Today we face an increasing battle to maintain a proper focus on the proceedings in the House of Representatives in this chamber and, for that matter, a proper focus on the proceedings of the Senate in its chamber. I guess that is due in part to the dynamics, firstly, of the new Parliament House building; secondly, of the Government; thirdly, of the media today; and fourthly, of the community at large. This motion-which the Opposition supports-seeks to address this problem by permanently authorising, rather than on a periodical basis, the broadcasting and rebroadcasting on Australian radio and television stations of a sound record of extracts from the proceedings. It would have been worse if the original design envisaged for the new Parliament House had been proceeded with, which I understand placed the Executive in some supreme position physically vis a vis the two chambers. We have reached the situation now where, for example, the Cabinet room is buried in the tomb-like core of the central core of this building, although, certainly, it is at least on the same level as the House of Representatives chamber and the Senate chamber. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member for Farrer might get to the motion, which is about the broadcasting and rebroadcasting of proceedings. It is not to do with the architecture of the building. Mr TIM FISCHER —Mr Deputy Speaker, I take and comply with your ruling. I take that ruling on board. My remarks relate very much to the focus on these proceedings and the ability of Australia at large to examine its national political mode and to be able to hear the proceedings of the House of Representatives and the Senate. This motion goes to the very heart of that subject by authorising the continued practice of directly broadcasting extracts from these proceedings on radio and television. I want to make two other short points in passing. One is that in maintaining a proper focus on proceedings of the Parliament, a focus which has drifted over recent years under governments of both sides-I do not blame governments entirely because a number of other factors, which I referred to at the outset, are involved-we have reached the stage where in fact, as we learnt this morning, people are being interrogated for possible war crimes even though the war crimes legislation has not passed through the Parliament. Mr DEPUTY SPEAKER —The honourable member for Farrer is drifting quite considerably away from a rather restricted motion which is about the mechanics of broadcasting and rebroadcasting of the proceedings of Parliament. It is not about the specific proceedings past or future. Mr TIM FISCHER —Thank you, Mr Deputy Speaker. I make the other point, which relates very much to your comments. I ask: How are the people of Australia to have any idea what is happening in regard to the proceedings of this Parliament and what stage legislation such as the Defence Service Homes Amendment Bill has reached if the broadcasting regulation is not approved? Again in that context I am making passing reference to the fact that letters from the Westpac Banking Corporation have been sent out all over Australia when the defence service homes legislation has not yet passed the Senate. Finally, I point out to the House that the actual motion, once again in authorising the continuing practice applying to radio and television stations, does not pick up as a separate but related question the televising of Question Time, the broadcasting of the adjournment debate-- Mr DEPUTY SPEAKER —Order! I am fairly tolerant, but I ask the honourable member to get to the subject of the motion. Mr TIM FISCHER —I believe that at some future date the question of the televising of Question Time and broadcasting of the adjournment debate should be addressed properly by resolution of this House. I support the motion to continue the authorisation of those radio and television broadcasts. Mr SCHOLES(Corio)(10.48) —I want to express concern to the House that in the use of extracts of parliamentary broadcasts it is not unusual for an introduction or a commentary to be made before or after a very short extract which places the extract of the proceedings totally in conflict with what actually took place. This concerns me because it is not informing the public of what took place in the Parliament. In fact, it is misrepresenting the Parliament and is a practice which the media uses fairly widely. Question resolved in the affirmative. Motion (by Mr Beazley)-by leave-agreed to: That the following orders of the day, government business, be discharged: 7 Privacy Bill 1986: Further consideration in committee. 8 Privacy (Consequential Amendments) Bill 1986: Second reading-Resumption of debate. 19 National Board of Employment, Education and Training-Paper-Motion to take note of paper: Resumption of debate. 24 Science and technology statement 1987-88-Paper-Motion to take note of paper: Resumption of debate. 25 Human Rights and Equal Opportunity Commission-Toomelah report-Motion to take note of paper: Resumption of debate. 29 Inter-State Commission-Report-Efficiency of Interstate Transport Arrangements-Motion to take note of paper: Resumption of debate. 30 Committee to Advise on Australia's Immigration Policies-Report-Motion to take note of paper: Resumption of debate. 31 Central Land Council-Report-Motion to take note of paper: Resumption of debate. 32 Human Rights and Equal Opportunity Commission-Report-Motion to take note of paper: Resumption of debate. 33 Federal Police Disciplinary Tribunal-Report-Motion to take note of paper: Resumption of debate. 34 Australian Security Intelligence Organization-Attorney-General's guidelines in relation to politically motivated violence-Papers-Motion to take note of papers: Resumption of debate. 35 Auditor-General's Efficiency Audit-Australian Taxation Office-Taxpayers in unincorporated businesses-Errata-Motion to take note of paper: Resumption of debate. 36 Foreign Affairs, Defence and Trade-Joint Committee-Report-Management of Australia's defence-Government response-Motion to take note of paper: Resumption of debate. 37 Economic statement, May 1988-Ministerial statement and papers-Motion to take note of papers: Resumption of debate. 38 A changing workforce-Report-Motion to take note of paper: Resumption of debate. 39 Primary industries and resources-Policies for growth-Paper and Ministerial statement-Motion to take note of papers: Resumption of debate. 40 Industry reforms-Ministerial statement-Motion to take note of paper: Resumption of debate. 41 Australian telecommunications services: A new framework-Paper and ministerial statement-Motion to take note of papers: Resumption of debate. 42 Reshaping the transport and communications government business enterprises-Paper and ministerial statement-Motion to take note of papers: Resumption of debate. 43 Constitutional Commission-1st report-Summary-Motion to take note of papers: Resumption of debate. 44 Strengthening Australia's schools-Papers-Motion to take note of paper: Resumption of debate. 45 Lemonthyme and Southern Forests-Commission of Inquiry-Report-Motion to take note of paper: Resumption of debate. 46 Energy policy-Papers-Motion to take note of papers: Resumption of debate. 47 Social justice under Labor-Report-Motion to take note of paper: Resumption of debate. 48 Child support consultative group-Report-Motion to take note of paper: Resumption of debate. 49 Australian Security Intelligence Organization-Report-Motion to take note of paper: Resumption of debate. 50 Australian Safeguards Office-Report-Motion to take note of paper: Resumption of debate. 51 Telecommunications (Interception) Act-Paper-Motion to take note of paper: Resumption of debate. 52 Law Reform Commission-Annual report-Motion to take note of paper: Resumption of debate. 53 Australian Institute of Family Studies-Report-Motion to take note of paper: Resumption of debate. 54 Law Reform Commission-Report on the Commonwealth Prisoners Act-Motion to take note of paper: Resumption of debate. 55 Joint Coal Board-Report-Motion to take note of paper: Resumption of debate. 56 Australian Agricultural Council-Paper-Motion to take note of paper: Resumption of debate. 57 Stevedoring Industry Finance Committee-Report-Motion to take note of paper: Resumption of debate. 58 National Agenda for Women-Paper-Motion to take note of paper: Resumption of debate. 59 Bankruptcy Act-Report-Motion to take note of paper: Resumption of debate. 60 Australian Heritage Commission-Report-Motion to take note of paper: Resumption of debate. 61 Industries Assistance Commission-Transport containers-Report-Motion to take note of paper: Resumption of debate. 62 Grain Storage, Handling and Transport-Report on Royal Commission of Inquiry-Motion to take note of paper: Resumption of debate. 63 Parliament House Construction Authority-Report-Motion to take note of paper: Resumption of debate. 64 Aboriginal Hostels Limited-Report-Motion to take note of paper: Resumption of debate. 65 New Parliament House-Progress report and budget-Ministerial statement-Motion to take note of paper: Resumption of debate. 66 Federal Airports Corporation-By-laws-Motion to take note of paper: Resumption of debate. 67 Australian Bicentennial Road Development Program-Report-Motion to take note of paper: Resumption of debate. 68 Australian Broadcasting Tribunal-Report-Motion to take note of paper: Resumption of debate. 69 Australian Meat and Live-stock Industry Policy Council-Report-Motion to take note of paper: Resumption of debate. 70 Commonwealth Ombudsman and Defence Force Ombudsman-Report-Motion to take note of paper: Resumption of debate. 71 Defence Service Homes Corporation-Report-Motion to take note of paper: Resumption of debate. 72 Department of Aviation-Report-Motion to take note of paper: Resumption of debate. 73 National Crime Authority-Report and paper-Motion to take note of paper: Resumption of debate. 74 Special Broadcasting Service-Report-Motion to take note of paper: Resumption of debate. 75 Duty free shopping facilities-Sydney Airport-Paper-Motion to take note of paper: Resumption of debate. 76 Australian Science and Technology Council-Report-Education and national needs-Motion to take note of paper: Resumption of debate. 77 National Crime Authority-Report-Operation silo-Motion to take note of paper: Resumption of debate. 78 Simultaneous dissolution of the Senate and the House of Representatives, 5 June 1987-Paper-Motion to take note of paper: Resumption of debate. 80 Inspector-General of Intelligence and Security-Report-Motion to take note of paper: Resumption of debate. 81 Commonwealth statutory authorities and government business enterprises-Policy guidelines-Paper-Motion to take note of paper: Resumption of debate. 83 Fraud on the Commonwealth-Review of systems for dealing with fraud-Report-Motion to take note of paper: Resumption of debate. 85 Constitutional Commission-Advisory committee reports-Motion to take note of papers: Resumption of debate. Debate resumed from 29 November, on the following paper presented by Mr Hawke: Joint Defence Facilities-Ministerial Statement, 22 November 1988 and on motion by Mr Peter Morris: That the House take note of the paper. Mr SPENDER(North Sydney)(10.49) —The Leader of the Opposition (Mr Howard), in replying to the statement by the Prime Minister (Mr Hawke), has made plain the Opposition's support for the agreements on the joint facilities which have been entered into by this Government with the American Government. Let me say at the outset, before going any further, that I would join not only in supporting what the Government has said and what the Leader of the Opposition has said but also I would like specifically to thank the Minister for Defence (Mr Beazley) for the courtesy he extended to me and my colleagues in briefing us before this matter came before the House. The agreements on the joint facilities provide for greater direct operational involvement of Australians-a very good thing-and more senior management involvement of Australians. It provides for a further 10-year lease period for each of the joint facilities and three years' notice of termination of the agreements. As was pointed out by the Prime Minister in his speech, the facilities at Nurrungar provide ballistic missile early warning facilities and other information related to missile launches, surveillance and the detonation of nuclear weapons. The Prime Minister pointed out that Nurrungar has a fundamental role in preventing nuclear war and that it: . . . reduces the chances that United States forces could be destroyed in a surprise attack, and that makes it extremely unlikely that anyone would ever try such an attack. I point out that, of course, that remark was directed at the Soviet Union since that is the only nation that could ever mount a surprise attack against the United States. It is quite inconceivable that any other nation could-indeed, no other nation has the capacity to mount such an attack. In relation to Pine Gap the Prime Minister said that its: . . . function is to collect intelligence data which supports the national security of both Australia and the United States. He went on to point out that it makes an important contribution to verification and arms control and disarmament agreements. The Prime Minister, in the course of his statement, used the expression `global peace'. In fact that is the underlying rationale for these facilities. The Opposition agrees with the Prime Minister on that and on the importance of these facilities. Of course, that is a view we have always maintained. It is not a view that the Australian Labor Party has always maintained; many senior people in that Party have questioned or opposed these facilities. I am glad to see they have been converted and that the facilities have the strong support of people such as the Prime Minister, the Minister for Defence and others in the Government. What the agreements signify, however, is the enduring nature of global security and national security concerns. It is a fact that the potential adversary remains the same, and that is in the minds of both the United States Government and the Australian Government, each of which has taken the long view about the need for the continuance of these facilities-thus renewing the leases for 10 years and providing for a three-year termination period. That long view is taken, rightly taken, despite perestroika, despite glasnost, and despite the very real advances which have been made in domestic policy in the Soviet Union-advances which we should welcome and recognise. However, we should understand the goals of and reasons behind perestroika-restructuring-and glasnost-openness. These doctrines are the result of a realisation by the leadership of the Soviet Union, notably of Mr Gorbachev, of the serious relative economic decline of the Soviet Union against the Western economies, particularly in high technology areas. This decline, should it continue, will have far reaching consequences for Soviet power; perhaps for the position of the Communist Party in the Soviet Union; and for Soviet society. Reforms were judged to be needed, especially in economic policy, so as to repair some of the great damage that has been done over decades of centralised planning and in order to make life more predictable and lawful for Soviet citizens and to reduce their alienation from the Soviet Government. These internal reforms have been accompanied by a reassessment by the Soviet leadership of the costs and benefits of some foreign excursions, notably Afghanistan. The invasion by the Soviet Union of that country created huge problems for the Soviet Union in its dealings with the Third World and with China. It created problems at home and created problems for the Soviet Union in the conduct of diplomacy. How could the Soviet Union at one and the same time say that it favoured peace and international law, as it constantly does and did, and continue with the invasion of Afghanistan? The Soviet Union is now on retreat from that country. We need to remember that it is leaving behind in the wake of the war around one million dead people and four or five million refugees out of a population of fewer than 20 million. Although action has been taken to reform Soviet domestic policy, there is no evidence of fundamental change in Soviet foreign policy. Mr Gorbachev has made it plain that competition will continue with the West. If one looks at the hard facts, one sees that military spending continues. It is estimated that military spending by the Soviet Union represents up to 20 per cent of its gross national output. There are no signs of decreases in such items as the production of main battle tanks which, I remind the House, are offensive weapons, and the production of submarines, nor are there any signs of any slowdown in the modernisation of Soviet forces, both conventional and nuclear. It is sometimes said that the divisions that exist between the democracies and the Soviet Union are caused by what is called the arms race, that if nuclear forces and conventional forces could somehow be abandoned, if overnight they could vanish, we would have peace and light. But in fact arms competition and the existence on both sides of large nuclear and conventional forces are not a product of some kind of arms race which exists for its own purpose. They are a product of fundamentally different views of society and of the actions taken by the Soviet Union over decades. I remind the House that the Soviet Union is now withdrawing from Afghanistan but that that withdrawal is a result of reassessment of costs and benefits of Soviet policy. I remind the House again that the Soviet Union has left in its wake one million dead people. Over the past four decades or more, the Soviet Union has been expansionist, confrontationist and totalitarian. The societies of Australia, the United States and our allies in the Western alliance are open, democratic, individualistic and diffuse. One might say that in many ways we are the societies of the status quo. We wish to see human rights observed throughout the world. We wish to see the extension of political rights. We are not and never have been expansionist. We have sought to protect the rights and interests of freedom. We have not sought aggression against the Soviet Union. Perestroika and glasnost are of great importance-there is not doubt about that. There is also no doubt that the changes that are taking place in the Soviet Union are important. However, the main question, the fundamental question, is whether these doctrines will be truly historical or something far less? Are we witnessing a change in strategy or are we witnessing a tactical re-evaluation within the Marxist society, something perhaps akin to Lenin's new economic policy back in the 1920s? There are a number of warnings that we must bear in mind in our dealings with the Soviet Union. Firstly, restructuring of the Soviet Union is truly a long term and mammoth task. We are talking about decades, not years. The Soviet leadership faces the paradox of introducing the practices and the efficiencies of a market economy and, at the same time, retaining control. We must understand that the patience of Mr Gorbachev's colleagues and the people of the Soviet Union may not last; that expectations have been raised in the Soviet Union and yet results are not forthcoming for the average Soviet citizen. The caution of Mr Gorbachev's Soviet colleagues may reassert itself. Indeed, there are signs that Mr Gorbachev himself is becoming more cautious as one of the burning issues in imperialist Russia and in the Soviet Union surfaces again. The nationalities issue has become evident in the Baltic states which were annexed by the Soviet Union and in the Armenian question. These events have created a spark which, if fanned into a fire, could cause radical changes within the thinking of Soviet leadership. The second warning I would give is that there is no evidence of any intention by Mr Gorbachev or his colleagues to transform Soviet society into one which resembles even remotely democratic pluralism. He remains implacably opposed to what he would describe as `bourgeois democracy'. The Baltic states are a case in point. Mr Gorbachev has made clear beyond doubt that the ancient liberties of those states will not be tolerated by the Soviet Government. The third warning is that the West should not be persuaded to foot the bill of restructuring. There is in fact no way of knowing that a more powerful productive Soviet economy would make the Soviet Union a better neighbour, although we would all hope for changes that would make life in the Soviet Union more tolerable. If the Soviet Union wishes to spend more resources on the civilian side of its economy, cut-backs in its huge spending on the military side would be a way to achieve that result. The fourth warning I would give is that we should guard against becoming captives of the cult of personality. Mr Gorbachev is an individual, not an institution. He is not the Soviet Union. He is the first among the Soviet leadership and he is a most adroit, determined and sophisticated man. He is also committed to the Soviet system and that is something we should never forget. The historical outcome of the processes now under way will not be known for years. In the meantime, we must judge with an open mind events in the Soviet Union; we must judge on the basis of deeds, not words. We must maintain our alliances and we must be committed to the long haul. That is why the bases agreement and the recognition by this Government that we must be committed to the long haul are important. Mr HALVERSON(Casey)(11.04) —In the context of this debate on Australian-United States (US) joint defence facilities, it is appropriate to recall the words of D. H. Lawrence when he said `Loud peace propaganda makes war seem imminent'. I would like to remind and reassure Australians that despite the loud peace propaganda emanating from various often totally misinformed and sometimes demonstrably sinister sources, war is not imminent. As with many potentially devastating, life threatening situations, if the correct preventative measures are taken, the danger is diminished accordingly. The claims of those who are determined to spread unjustified and unnecessary alarm by continually promoting the idea that we are living under the constant threat of nuclear war, deny the fact that we are living in the reality of a nuclear peace; a nuclear peace which has lasted for more than forty years and which is stronger now than it has ever been; a nuclear peace which has been achieved and which is maintained through national and international vigilance and security, including the verification of arms control and disarmament agreements, and the preservation of the vital nuclear balance of power. It is a peace based on a system of deterrence which has operated successfully since the nuclear arms race began. It may not be a perfect system, but in the absence of any other workable alternative it is the best option available. There is no doubt that we must continue to promote the concept of a safer, more secure and peaceful world. I commend the present administrations of both the United States of America and the Union of the Soviet Socialist Republics (USSR) for pursuing such initiatives as the intermediate-range nuclear forces (INF) treaty and the current strategic arms reduction talks (START) which we all hope will be successful and will do much towards achieving a broader and more secure base on which to keep building international peace and goodwill. It is important to realise that these initiatives-INF and START-and others like them are not possible unless the superpowers have access to reliable verifi- cation data. We have not yet attained-and realistically may never reach-a stage where both sides trust each other sufficiently to operate without this monitoring capability. Through the Australian-United States joint facilities at Pine Gap and Nurrungar, we have the opportunity to make a vital contribution to the arms control verification process. The recent statement of the Prime Minister (Mr Hawke) to this House, that Australia and the United States of America have agreed to extend for a further 10 years the arrangements under which the Pine Gap and Nurrungar joint facilities operate is therefore very welcome, as are the improvements to the existing agreements in so far as the three years' notice of termination provisions, and the increased Australian involvement in the management and operation of these joint facilities are concerned. The increased participation of Australian personnel at senior management levels at both facilities serves to reinforce the fact that these facilities are a genuine joint venture. They do not represent a US takeover or demonstrate an abrogation of Australia's independence or sovereignty. They always were-and are increasingly-a combined effort, a shared defence resource. Nurrungar is located within the Woomera restricted area, about 480 kilometres north-west of Adelaide, in the far north of South Australia. It plays an important role in the US defence support program by monitoring satellites equipped with an early warning capability. This early warning system helps to ensure that there can be no surprise nuclear attack mounted against the United States, and also reduces the risk of war through accident or miscalculation. The satellites accessed through the Nurrungar facility are also capable of monitoring compliance with the test ban treaty and the nuclear non-proliferation treaty. In his recent joint defence facilities statement, the Prime Minister said: As an essential link in the DSP, Nurrungar plays a quite fundamental role in preventing nuclear war. Pine Gap, which is located in the Northern Territory, 19 kilometres south-west of Alice Springs, has been operational for almost 20 years. This facility monitors signals from intelligence gathering satellites, thereby making a significant contribution to the West's strategic intelligence gathering capabilities. Information from these satellites plays an essential role in maintaining the balance between the superpowers by verifying adherence to the anti-ballistic missile treaty, and the constraints on strategic offensive forces stipulated in the strategic arms limitation talks (SALT) agreement. In acknowledging the role of Pine Gap in reducing the likelihood of nuclear war, it is also important to remember that, for a number of technical reasons, a facility with these particular capabilities has to be located in Australia. Again, I refer to the words of the Prime Minister: Intelligence collected at Pine Gap contributes importantly to verification of arms control and disarmament agreements. The value of that data has become more and more evident over the last year or two, as disarmament has moved from being an aspiration to becoming an emerging reality. Bob Howard, Senior Lecturer in Government at the University of Sydney and Editor of Current Affairs Bulletin (CAB), in an article `Debating the Bases' which appeared in the CAB in July this year, expressed it another way: Opponents of Pine Gap, North West Cape and Nurrungar obviously regard the closure of these facilities as a significant act of disarmament in itself and therefore a good thing. But closure of Pine Gap would make us less secure, rather than more. Unlike the INF Treaty or the proposal to cut Soviet and US strategic nuclear forces by up to 50 per cent, the removal of Pine Gap would in no way diminish the nuclear arsenals which threaten us all. Instead, closure of Pine Gap would deprive the world of a facility which helps ensure that existing nuclear weapons are less likely to be used now and which increases the chances that they will be reduced or eliminated in the future. It is quite understandable that some Australians are concerned about these joint facilities. People are often afraid of the unknown. Unnecessary official secrecy only leads to unnecessary public concern. Australians need and deserve to be better informed about the general purposes and functions of installations such as Nurrungar and Pine Gap. This would, of course, have to be done carefully, with due care, consideration and regard being paid to the obvious need to maintain significant elements of security where a genuine need exists. But it seems rather ridiculous that Australians are still being denied information which is part of the public record in the United States. This veil of secrecy-which is imposed not by the United States, but by the Australian Government-extends not only to the general public, but also to their elected parliamentary representatives. The Opposition foreign affairs and defence committee visited Pine Gap and Nurrungar earlier this year. This visit-the first by a parliamentary party delegation-was made, as it had to be, with the consent and permission of the Minister for Defence (Mr Beazley). Having made the effort to visit the bases to inspect them and to talk to the Australian and American personnel who work there, the delegation was advised on its arrival that although the US officials were quite prepared to provide them with a briefing, they were not permitted to tell them any more than was already on the public record. This caveat had not been put in place by the Americans, but by the Australian Government. It is an absurd situation when members of the Australian Parliament are not allowed to know what is going on, when similar restraints are not applied to their US counterparts who are fully briefed on the role and operations of these establishments. In the conclusion to his authoritative study on Pine Gap Professor Desmond Ball, of the Strategic and Defence Studies Centre at the Australian National University in Canberra who, incidentally, supports the continued presence of this facility, notes a certain irony about the decision to keep the public so totally in the dark about the Pine Gap operations. Professor Ball contends: If the unwarranted secrecy which surrounds Pine Gap were removed the Australian public would overwhelmingly endorse the continued maintenance of the station. This view is no doubt based on a well-founded and researched belief that if Australians were more aware of the significance of our alliances with the United States and the role of facilities such as Pine Gap, public support would replace public suspicion. Furthermore, the real motives of certain significant elements of the so-called peace movement-and I refer to those who are so determined to promote an anti-United States propaganda line whilst at the same time neglecting to mention their socialist friends and sponsors-would be more easily and readily recognised. In an earlier commentary, Professor Ball described our relationship with the United States as `one of the most fundamental underpinnings of Australian national security policy'. He said: Although there has been an increasing emphasis on greater self-reliance over the past decade Australia remains greatly dependent upon the United States. For the very extreme contingencies, of course, such as an attack (conventional or nuclear) by the Soviet Union, Australia has little choice in the matter. Only the US can provide the necessary deterrence to such action. Although we must keep pursuing the objective of improving our own regional defence capability, in the context of our security against nuclear weapons and nuclear powers we cannot defend ourselves. We would need to call on our friends for support. That is the fact of the matter. That is why our alliances-such as ANZUS and the Western alliance-and our defence and security agreements with countries such as the United States are so necessary and important. The alternative is to become nuclear capable ourselves and I do not think many would see that as a desirable option. The solution to the nuclear challenge is peace through security. Those who advocate such measures as unilateral disarmament are arguing that peace may be achieved by making some weak and vulnerable whilst others increase their power. A child on a see-saw knows the necessity of maintaining a balance of strength and power at both ends-or the see-saw just does not work properly. International peace will not work either-unless the balance of power is maintained. This fact has now been recognised by Australian governments, past and present, of both political persuasions. It has taken the Labor Party a little longer to hear the bugle, but at last it appears to have answered the call. The joint facilities of Pine Gap and Nurrungar are not only of benefit to the United States; they are also of direct benefit to Australia and to the whole world. The vast majority of Australians-of people of all nations-long for a certain and lasting peace. The best and most certain means of achieving this objective is through the security which is provided by joint facilities such as Pine Gap and Nurrungar. Despite the protestations of the Australian Anti-Bases Campaign Coalition spokesperson, Dr Hannah Middleton, who claims that facilities like Nurrungar `put every single person in this country at risk as a nuclear target', the fact is that the opposite is true. Without these installations and the information they provide, we are at risk. Whilst they are operating, we are secure. That is the reality. That is why the Prime Minister's recent statement is welcomed by members on this side of the House and by all who truly desire a free, safe and peaceful world. Mr BEAZLEY(Swan-Minister for Defence)(11.17) —That was a fine speech by the honourable member for Casey (Mr Halverson) but it involved a considerable rewriting of history, and it will be necessary to correct a couple of points before I sit down. He made one point, however, with which I completely agree, but the point would be more sensibly made on this side of the House rather than on the other. It related to the management of information associated with the joint facilities. Over a period-and for the substantial proportion of that period we were not in office-a failure to lay out in considerable detail the general purposes and functions of those installations severely militated against the capacity of governments to secure a wide public consensus in Australia for their support. The bulk of that failure does not rest with this Government, which has persistently placed more on the public record after negotiation on these matters with the United States than any other government that has had responsibility for the joint facilities. We feel that on the conservative side of politics there has been a failure to manage alliance relationships generally in a way that ensures broad public consensus through generations. There are generational changes in attitudes to allegiances. Generations who came out of World War II and experienced the full weight of American support for our national survival have one view. Generations who were brought up during the Vietnam war may well have another view. Generations now being brought up in an education system which seems to be placing increasing emphasis in its curriculum on issues of nuclear war may have another view as time goes by. The problem for government is to establish a rationale for the relationship that Australia has with the United States that crosses all those generational attitudes and assures all citizens that there is real value in a continuation of the relationship we have. A problem we confronted when we came into office was that the veil of secrecy that had been unnecessarily drawn over these joint facilities did not assist that process of obtaining the support of succeeding generations of Australians in broad enough numbers to be prepared to accept the joint facilities with the potential areas of attendant risk-that the joint facilities were worthwhile irrespective of any attendant risk. The fact that there was not that public scrutiny meant that opportunities to ensure a fuller Australian participation in and utilisation of those joint facilities was neglected by successive governments; or, if not neglected, the full opportunities vital for our own national security interests were not appropriately exploited. It has been a focus of the management of this Government to ensure that that is not the case. With that public exposure, that recognition, there is the possibility of obtaining a degree of consensus and support for the continuation of those facilities. The suggestion was made by the honourable member for Casey and other members that Australia effectively controlled the amount of information that was available both to members of parliament and to the community in general. The situation is not like that. There is a requirement that there should be a joint position adopted by the United States and Australia on anything that is publicly said. Anything which is officially not on the record as far as discussions of these matters are concerned in the United States or here is officially not on the record because of the initiative of the Australian government; it is not on the record because of a joint agreement between the United States and Australia. These installations involve overwhelmingly United States technology. Therefore, to a considerable degree, determination of what is properly available must rest in the first instance with the United States and not necessarily in our court. There is too much facility in the glib assertion that arises from time to time that a great deal more is on the public record about these facilities than the Government has been prepared to see placed. What often pass for matters on the public record are materials that emerge from trade magazines like Aviation Week and Space Technology in the United States which purport to contain detail of what goes on or the technologies associated with Pine Gap and Nurrungar. Those are not official documents. A great deal of that detail is accurate; a great deal of that detail is not accurate. There have been repeated assertions in relation to the joint facilities, seemingly based on substantial reporting in those technical and trade journals, which do not conform to reality. There is a certain value in that process. Australian academics and the Australian public are not the only people who read Aviation Week and Space Technology and other trade and technical journals. They are read by people with a deeper interest in the joint facilities than those professionally required to do so by being lecturers in international relations or whatever. The fact that there is, inadvertently, a considerable degree of disinformation does no harm in protecting the knowledge of the technical capabilities and the facilities. I return to the point that materials made available by those sources are not official records, either in Australia or the United States. There needs to be more discipline in the public understanding of that, otherwise people are going to feel aggrieved. There is a broad equivalence between members of the Congress in the United States and members of Parliament here in understanding the actual detailed technical capabilities and operations of those joint facilities. We do not have the same executive arrangement in this country as in the United States, where there is a separation of the Executive and legislature. Within that framework in the United States there is a situation where certain people within the Executive have a comprehension of what goes on at the joint facilities. They are by no means a broad group inside the United States national security bureaucracy. There is a congressional committee-perhaps one more-that is capable of being substantially briefed on those joint facilities. An average member of Congress drifting through will have no more of a briefing on that than will a back bench member of the Australian Parliament, or of a committee of the Opposition, or the Government for that matter. A distinction is drawn between a particular section of Congress and Congressmen generally. That happens here too. For example, in Australia a substantial number of members of parliament are generally briefed in detail on the capabilities of the joint facilities-in the case of the Government, all members of the security committee; in the case of the Opposition, all relevant spokesmen. As I said, there is an equivalence, given the different nature of the two systems of government, in the type of briefing that is received by people in this place and that received by people in the United States. One virtue of the road that this Government has chosen, uniquely among all governments, of placing on the public record after discussion with the United States details of the functions of the joint facilities, is that we now know the very beneficial role those joint facilities perform in preserving global stability. We have now established firmly on the public record the role in verification. It is sometimes argued, conceding that verification is utterly essential for arms control arrangements, that a system of international verification would be useful. Perhaps Pine Gap should be abolished and a United Nations-based system put in place. I would say two things to that: the first point is that what the United States is capable of achieving technically and what everybody else is capable of achieving technically in the area of verification is chalk and cheese. The second point about these bilateral arrangements-and they are bilateral arrangements between the Soviet Union and the United States-is that it is not for Australians to be reassured that the Soviet Union and the United States are conforming to arms control arrangements when the US and the Soviet Union are achieving the balance between themselves, but for each of them to be assured that the other is conforming to those arrangements. Neither the Soviet Union nor the United States would accept in any shape or form an international organisation as the only means of verification as to whether each is conforming. There would be value in an international organisation; I do not dispute that at all. We are openly and actively advocating that in regard to nuclear test ban verification through which we make a contribution via another facility near Alice Springs. But we set that to one side. There is value in that, but there is no value in it as an exclusive means of verification when we look at the issues involved. Since we have decided to agree with the United States to place on the public record other functions, we have been able to make much more clear the Australian role in early warning of an attack upon the United States. This is a very substantial Australian contribution to global stability which is performed from Nurrungar. Basically, the warning time extension that the Australian facility provides means that the possibility of nuclear war by accident is virtually removed. The possibility of nuclear war by accident is remote but finite. On occasions there have been false alarms inside the American early warning system. By checking through the system there has been an opportunity for correction. Fortunately, those problems have tended to occur at times when the notion that a threat would emerge is purely ludicrous. They have not been periods of high tension. Were one of those to occur during a period of high tension, a problem could well arise. Being able to check back through the system-we happen to be one of the most important components of the system-enables the United States to take a relatively relaxed attitude to those sorts of situations should they occur and have confidence in its management of crisis issues and know that it cannot be surprised. Nobody should underestimate the critical nature of that capacity to preserve global peace. Our geographical situation enables us to make a contribution which is virtually unique. To remove those joint facilities would create the circumstances where the remote possibility of a nuclear conflict would become slightly less remote. At the same time I believe that it is necessary for us to comprehend the value that these joint facilities have to the United States and to us. We get useful information and experience by virtue of our participation in these joint facilities and that will improve. It is an indication that the relationship between ourselves and the United States is in balance. We do not approach that relationship from a position of inferiority. An alliance relationship is, in the first instance, a coalition of spirits; in the second instance-in part at least-there is an element of bargaining and trade-offs in that relationship within the defence area. Of all the legs of the Western alliance system, the American alliance system, in which we participate, is a system in which the trade-offs are probably a little more equal than anywhere else. That perhaps represents the nature of the security issues in our region which are very different from the security issues in Europe. Australians should have an attitude to the American alliance of total control of our capacity to manage it from our end and ensure that that alliance relationship serves both Western security interests and Australian national interests in a most important and effective way. Question resolved in the affirmative. Consideration resumed from 24 November. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(11.33) —I move: That the Bill be now read a second time. This Bill proposes a variety of amendments to Acts dealing with defence matters. The more important amendments provide the Government with a proper legal control over claims for salvage by crews of naval ships; decriminalise the wearing of items of Defence Force uniforms by members of the public while retaining a prohibition on the wearing of Defence Force emblems and other insignia; enable the defence administration to require an officer of the Defence Force who is promoted to the rank of colonel or equivalent or higher rank to render at least one year's service in the rank before resigning; remove the upper limit on the amount of reparations that a court martial or Defence Force magistrate may order a convicted offender to pay; and enable certain officers of defence small arms factories to be exempted from State and Territory firearms licensing laws when carrying small arms for official purposes. Other amendments: Make various changes to Defence Force retirement and death benefits legislation to take account of recent improvements to superannuation legislation, remove certain possible ambiguities and put the existing appointment of the Vice-Chief of the Defence Force upon a statutory base. I will explain the more important amendments. The other changes are explained in the explanatory memorandum. Salvage Claims The Bill proposes to amend the Defence Act 1903 to clarify the power of the Government to control the exercise by the crew of ships of their right to claim salvage for the salvage of property at sea, and to put on a proper legal basis the administrative arrangements that are followed when the crew of a warship exercises that right. I should point out that the Bill is not concerned with military salvage-that is, the capture of property at sea from the enemy in time of war-which is governed by what is known as `prize law'. In the case of the successful salvage of property on the high seas, the right of the salvor to reward has been recognised by maritime law from ancient times. The requirement that the owners of the ship and cargo pay salvage to the salvors is a recognition of the effort by the salvor and of the direct benefit conferred on the owners. It is also based on a just regard for the general interests of ships and maritime commerce. The right to claim salvage vests in the owners of a salving vessel and in the crew of that vessel. The greater share of the reward goes to the owners, whose vessel was put at risk. In the case of a Crown vessel, manned by employees of the Crown, entitlement of a member of the crew to claim salvage generally arises if the services rendered are outside the scope of his ordinary duties. Warships have real, if undefined, duties stemming from their function of policing the high seas. The law has accordingly implied a high scope for public duty in the case of warships, but has nevertheless accepted that it is proper for the crew to claim salvage where the service has been one of an important character. While a very high duty would be expected where the saving of lives is concerned, the crews of warships could not be expected, as part of their duties, to run the same risks where the salvage of property is concerned. In practice, claims for salvage by crews of HMA ships are infrequent, for two reasons. First, commanding officers are instructed not to undertake salvage if any suitable merchant ship is available. Secondly, the making of claims is discouraged where the service is not regarded as being of an important character. The most recent cases in which claims by Australian naval crews proceeded were the salvage in 1955 of the Swedish ship Pacific Clipper by HMA ships Murchison and Shoalhaven and the salvage in 1972 of the Hong Kong ship Kai Wing by HMAS Sydney. The Bill proposes that, when one of HMA ships renders salvage services to a vessel in circumstances that give the crew of the naval ship an entitlement to claim salvage from the owners of the salved vessel, the following rules will apply: First, the right of the crew of a naval ship to pursue a claim for salvage to be subject to the consent of the Chief of Naval Staff; secondly, the commanding officer to be empowered to act on behalf of the crew in the pursuit and settlement of salvage claims; thirdly, the distribution of the crew's share to be apportioned according to a prescribed scale, with provision for recognition of specially meritorious service. The reasons for the rules are as follows, respectively. Because warships have the kinds of duties I have described, it is desirable that there be a legally based power to restrict claims to those where the service has been of an important character. Secondly, it would be an excessive administrative burden if the Australian Government Solicitor prosecuting the claim had to be authorised individually by all the sailors involved in a claim and were required to deal with each sailor separately. Thirdly, the setting by law of fixed shares for each class of member relieves the arbitrator of the difficult task of apportioning the reward between the sailors involved. Rules of this kind are not necessary in the case of salvage services provided by merchant ships, because the crews are much smaller and, in any case, may belong to unions which can press claims on behalf of their members. The Government did consider whether the right of the commanding officer and crew of HMA ships to claim salvage reward might be abolished, on the ground that members of the Navy have a duty to perform for which they are adequately recompensed. Against this, it is a fact that salvage at sea remains a difficult, hazardous and uncertain operation and encouragement to persons to assist in successfully salvaging an endangered vessel should be continued. As to the question of duty it has been indicated already that this is of limited extent where property only is concerned. Members of the Navy are not trained salvors and the design of naval ships makes them ill-suited to salvage work. Furthermore, it would be inequitable to deny the right of salvage to members of the Navy while retaining that right for merchant seamen employed by the Commonwealth. Wearing of Defence Force Uniforms and Emblems Section 83 of the Defence Act creates offences relating to the use and wearing by unauthorised persons of Defence Force uniforms, emblems, flags, et cetera, and their supply and manufacture. The section attempts to cover both peace and war. It extends to the forces of Commonwealth countries and, in time of war or defence emergency, to forces of allied countries and to other uniforms, emblems or flags specified by the Minister. So far as Defence Force uniforms are concerned, the offence of wearing such uniforms without authority is, in peacetime, widely disregarded. This is not surprising since the Commonwealth itself facilitates this breach of the law by selling surplus Defence Force uniforms to disposals retailers for sale to the public. This situation has been the subject of comment in the press and of representations to Ministers. The Bill accordingly proposes to decriminalise the wearing of Defence Force uniforms while retaining the offences of wearing Defence Force emblems, badges, et cetera. Since the controls necessary in peace and war are so different, the dual role of section 83 is unsatisfactory. The Bill therefore deletes the wartime offences and all references to foreign forces. Restriction on Resignations of Senior Officers When an officer of the Defence Force who has not less than 20 years' effective service resigns, he is entitled to a pension calculated in relation to the annual rate of pay applicable to him immediately before his resignation. If such an officer resigns shortly after his promotion, he is entitled to pension calculated by reference to the salary applicable to the higher rate, notwithstanding that he had provided the Commonwealth with very little service in the higher rank. Such resignations also cause significant disturbance to staffing arrangements, particularly when the promotion has been made in conjunction with posting the other officer concerned. The Bill proposes to amend the provisions of the Defence Act 1903 and the Naval Defence Act 1910 relating to officers' resignations so that the relevant Chief of Staff may reject such a resignation if tendered to take effect before 12 months has elapsed since the date of promotion to the rank of colonel or equivalent or higher rank. A similar amendment will be made for the Air Force by statutory rules amending the Air Force Regulations. Reparation Orders The Defence Force Discipline Act 1982 empowers service tribunals to order a convicted person to pay reparations to a person who has sustained loss or damage through the offence that was committed, up to a limit of five times the maximum amount of fine that could have been imposed. No such limit applies to ordinary criminal courts. The limit on service tribunals was imposed because of doubt whether service tribunals should be concerned with reparations involving substantial sums. One consequence of the present limit is that where substantial reparations should be ordered, it is necessary for there to be the cost and delay of a separate civil court action. It also means that the service tribunal cannot, in sentencing the person, take into consideration the amount of reparations that the offender will be required to make. Finally, it seems inconsistent that a general court martial may impose life imprisonment but is subject to limits as to the amount of a reparation order. The Bill proposes to remove the limit on the amount of reparations that may be ordered by a court martial or Defence Force magistrate but retain the present limits on summary authorities. Financial Impact The amendments made by sections 10 and 42 regarding officers' resignations will ensure that a minimum of 12 months' service will be rendered by senior officers after promotion. This will result in deferring for a period the commencement of payment of pension to the officers concerned, but no figure could reasonably be estimated of the saving to the Commonwealth. The amendment made by section 22 is expected to eliminate the institution of civil court proceedings to recover the balance of the loss or damage suffered by the Commonwealth in cases where the loss or damage exceeded the amount that the offender could have been ordered, by a court martial or Defence Force magistrate, to pay in a case where recovery of the amount so ordered is appropriate. No figure could reasonably be estimated of the saving to the Commonwealth. The amendment made by section 25 to ensure that the provisions relating to the transition from the Defence Force retirement benefits scheme of 1948 to the Defence Force retirement and death benefits scheme of 1973 do not operate with regard to re-entered recipient members will prevent the payment of additional unintended benefits to pensioners, but no figure could reasonably be estimated of the saving to the Commonwealth. I commend the Bill to the House and present the explanatory memorandum to the Bill. Mr WHITE(McPherson)(11.41) —The Defence Legislation Amendment Bill (No. 2) outlined by the Minister for Defence Science and Personnel (Mrs Kelly) consists of a variety of amendments to the various defence Acts. It occurred to me while I was listening to the Minister deal with the amendments to the salvage Act, that this is an excellent opportunity for servicemen who are now poorly paid, as we all know, to supplement their incomes. I presume that is part of the objective of the amendment. Mrs Kelly —Not totally. Mr WHITE —Not totally. There are two amendments which are of particular interest to me and to my Opposition colleagues. One relates to the new regulation to prevent officers of the rank of colonel or equivalent and above from resigning within one year of promotion. It provides for their resignations to be subject to disallowance by the relevant chief of the service to which they belong. The other amendment relates to the Defence Force retirement and death benefits scheme (DFRDB). Both amendments are pertinent in the conditions of service debate which is now going on at a fairly increased level since the Cross report-the report of the Joint Committee on Foreign Affairs, Defence and Trade on Personnel Wastage in the Australian Defence Force-was brought down a couple of weeks ago. The amendments to the DFRDB scheme are pretty cosmetic; the scheme itself needs a thorough review. It has fallen far behind in attracting service men and women compared to the level of attraction that existed some years ago. The level of benefits would now appear to be inadequate. Interest is still not paid on the contributions of personnel who leave before their 20 years are up. I see that the Minister for Defence Science and Personnel nods. I know that she recognises the problem. I guess the Government has a problem in that if it opens the scheme up, some of its mad left wingers will want to abolish it altogether. Mrs Kelly —They are not the problem. Mr WHITE —Whatever the problem is, I think it is in the Government's hands to overcome it and fix it. The Minister and I know that the DFRDB scheme is not encouraging people to stay in the Services sufficiently long enough and its attraction is diminished. If the Government is looking at a review, it wants to consider giving access to lump sum entitlements without the service man or woman having to leave the service. In other words, at a certain period-perhaps 20 years-service men and women should have an entitlement to that lump sum without having to leave the service, as so many do, in order to buy a house or put their kids through school. One of the other bad aspects of the DFRDB scheme is the penalty that officers but not other ranks suffer because they leave the service before the nominal age of retirement for their rank. So those two amendments deal with conditions of service. The Defence Legislation Amendment Bill (No. 2) is very broad and concerns a whole range of matters in the Services generally. Conditions of service have a direct impact because they lead to the enormous wastage rate that the Services are experiencing at the moment and that has a direct impact on capabilities. I wish to say a few words about those capabilities. Last week in a debate in this House I referred to Australia's declining Defence Force capabilities. I spoke particularly about the dispatch of troops during the Fijian crisis last year to stand offshore. I said it was very lucky that they did not have to do anything when they got there, because they did not have the equipment to do anything with. That is no reflection on the troops that were sent. They did a magnificent job under very difficult circumstances. However, they were not given sufficient support. The Minister for Defence (Mr Beazley) simply does not understand, and we have said that time and time again. A little while ago the Minister gave an academic exposition of the joint facilities-he did it very well-which seemed to make sense. However, the relationship between equipment, training and personnel is highlighted in the deployment last year of 120 troops to Fiji. It is pertinent to note that last night the Special Broadcasting Service showed a very well-researched and presented program on that deployment. The program was based on a paper by a Mr Mathew Gubb, a New Zealander who is a Master's student at the Strategic and Defence Studies Centre of the Australian National University (ANU). The commentary on last night's program was provided by Mr Ross Babbage, a very experienced and respected defence analyst, who is also at the ANU. The program was based on interviews that Mathew Gubb had conducted with a lot of people who had planned and actually taken part in the Fiji operation. That program really was a complete indictment of the Government's policies concerning the operation of the Australian Defence Force (ADF). The Minister for Defence declined to appear on the program. Every time he is asked to go on a program and debate a defence issue he is suddenly too busy to do so. He said, apparently, that he was too busy with affairs of the House. For God's sake, he has to make up his mind whether he is the Minister for Defence, take an interest in defence matters and go on air and present the Government's point of view, or whether he is too concerned with what is going on in this House. It is no use sending the Minister for Defence Science and Personnel to debate these issues because she understands, in terms of what is happening in the Australian Defence Force, even less than he does. The Minister for Defence is always too busy to discuss defence matters In talking to this Bill and the capabilities of the Australian Defence Force, I want to go into a little detail on the deployment to Fiji. A company of troops from the operational deployment force in Townsville was nominated to go. The troops came from 1 Battalion, Royal Australian Regiment-a battalion I once had the great privilege to command. What I am saying is in no sense a criticism of the troops because I know that they did a magnificent job under the difficult circumstances. That was the first deployment of troops in an operational sense from Australia since 1965, so their performance is of some importance as a benchmark of where the ADF and its training stand. Because Gubb had access to the people concerned, his paper is of great interest. The first comment he made concerned the lack of intelligence. This is not reflection on the ADF which had no people in Fiji. The lack of intelligence from our people in Fiji has been well documented. Certainly, it was below the standard required. The second point I raise concerns the lack of warning to the operational deployment force troops. They were put on seven days notice. They were given seven days in which to go on a course, take part in an exercise or do whatever they normally do. Within 48 hours of the troops having been put on seven days notice, they were told suddenly to bring themselves to immediate readiness. They were told that they would have to reach full readiness in seven days. But within 48 hours of being told that, they were told that they had to be ready immediately. That was an impossible task. That is why there are warning times. Warning times should not be cancelled. Troops are given seven days notice to bring themselves to readiness. I do not know who was responsible for this cancellation, but that was the start of some very grave deficiencies in this whole operation. Suddenly they were told to bring themselves to full readiness. I know for a fact-I suspect the honourable member for Farrer (Mr Tim Fischer) also knows, because he has spoken to them since-that the equipment that the troops should have had was simply not available. There was a scavenger hunt through the whole of that brigade to find enough equipment to send one company off to Fiji. Load carrying equipment was in short supply; night surveillance equipment did not seem to exist; there were insufficient radios; clothing was in short supply; and so it goes on. If the Government wants people to do the job, it should give them the equipment and the training to do it. Those troops had done no training whatsoever with the Royal Australian Navy (RAN) and it had been quite a long time since they had done any training with helicopters because of a restriction of flying hours. When they got to Norfolk Island they had to transfer by barge to the RAN ships. I understand that this very hazardous operation, which had to be carried out by barge because there were insufficient helicopters, was almost a fiasco. Such a difficult operation is extremely dangerous if one has not done any training. While all that was going on, in Sydney the Jervis Bay, which is now a training ship, was hurriedly undergoing a 24-hour a day modification program. In other words, people were working 24 hours a day to create a helicopter deck so the ship could be deployed as well. That is an important point because we on this side of the House have been saying for some time that one of the great deficiencies in the equipment program of which the Government is so proud is that our offshore capabilities have run down to almost nothing. The Government has disbanded the amphibious squadron. It has made no attempt to acquire a ship that can carry troops, stores and helicopters-apart from the Tobruk, but it is not part of the squadron now because the squadron has been disbanded. We in the Parliament and in the community have all agreed for some time now that the most likely task for our Defence Force will not be because Australia is about to be invaded. The most likely task will be to provide some assistance in our region of interest to maintain stability, or to go to the assistance of countries whose governments might ask for it. What do we have to do the job, the most likely task that we face? Nothing. As far as I can see, some 18 months later, there has been no attempt to provide that offshore capability. I come back to the point about training. It is criminal to ask people to do in war or in operational deployment something for which they have never trained. It is expecting far too much. When the troops got to Fiji one would have expected there would have been some-- Mr DEPUTY SPEAKER(Mr Blanchard) —Order! I remind the honourable member that this is a wide-ranging debate, but it is important to keep within the parameters of the Bill. I know that the honourable member is trying to illustrate his case by dwelling on the Fiji campaign, but I ask him to draw it to a close and relate his comments to the Bill. Mr WHITE —I hear what you say, Mr Deputy Speaker, but the point is that several amendments in this Bill relate to improvement in the conditions of service. I ask you to consider the problems now facing members of the Australian Defence Force which are directly related to the deterioration in their conditions of service. What I am saying is that, if the amendments brought in really addressed some of the important issues and improved conditions so that conditions translated into capability, we would not have the sort of fiasco that we had in Fiji. Having got to Fiji, the troops would have expected that there would have been helicopters available-a most important piece of equipment. In fact there were eight-four Squirrels, which are observation helicopters, two Wessex and two Iroquois. I might add that they were not deployed for this particular task; I think the Iroquois and the Squirrels were going on to be used at the South Pacific Forum where the Prime Minister (Mr Hawke) was. That is where the Tobruk was heading. Anyway, there were eight helicopters. But, within a matter of days, four of them were unserviceable, and a couple had gone off. That left one Wessex, which can carry nine passengers, and one Squirrel, which I think can carry one passenger. That is some mobility-one Wessex really-for a 120-man force! That one Wessex appears to have been there partly by accident. But, even if they had been all operational, we would still not have had any real deployment capacity. The Tobruk was there for a while. It might be argued that the Tobruk, an amphibious heavy lift ship, could have done the job and got the troops ashore. That is not so. The Tobruk is a ship that has to be very careful where it beaches. There had been no survey of beaches in Fiji, and the Tobruk could not be expected to just run up against the nearest beach. Of course, from my memory, most of the beaches of Fiji are protected by coral anyway. Let us turn to the size of the force sent. There were 120 men, one company. Mr DEPUTY SPEAKER —Again, I remind the honourable member that he is spending a lot of time on the Fiji campaign, which is not directly related to the Bill. I ask the honourable member to come back to the Bill. Mr WHITE —I do not want to go through the arguments which I put to you before, Mr Deputy Speaker, and with which I think you generally agreed. I understand that you do not want me to dwell entirely on these matters, but you do understand that there is a relationship between the conditions of service and capability? Mr DEPUTY SPEAKER —Yes. Mr WHITE —Right. Then I will just finish on the Fiji operation. It is very important that people understand what the capabilities of the Australian Defence Force are when it is put to the test. What I am saying is that when it was put to the test, the first deployment since 1965, there were grave deficiencies in that deployment. The size of the company was 120 men. For some reason the Government insisted that it not be increased. One hundred and twenty men represent a company group, but that does not allow for signallers, medics, drivers and all the extra people required when a company has to go as an independent group. The greatest deficiency was that no surgical team was taken on that deployment. That is a fact. There was no surgical team afloat. Mrs Kelly —Mr Deputy Speaker, you have been pretty tolerant in this far-reaching debate. The honourable member is now talking about surgeons and a medical team in Fiji. I ask you to rule on the relevance of this. I understand your problems, Mr Deputy Speaker, as you have just taken the chair. Mr DEPUTY SPEAKER(Mr Ruddock) -My problem is that I have only just taken the chair and I am not on top of what the Bill is about. It is a Bill dealing with amendments to the Air Force Act, the Defence Act, salvage claims, the Defence Force Retirement and Death Benefits Fund and the Defence Force Discipline Act. Perhaps the honourable member would care to indicate, as he progresses with his comments, their relevance to the Bill. Mr WHITE —Several of these amendments relate to conditions of service, to DFRDB and senior officers' retirement benefits. The point I am making is that conditions of service have a direct impact on the level of capability. If the Government were serious and wanted to fix up the problems of the ADF, it would not be mucking around with some of these minor amendments. It would bring in serious amendments which would fix the problem of the enormous wastage rates that the Services are suffering. Wastage rates have a direct impact on capability. It is important to emphasise the decline in the capabilities of the ADF and I am arguing that these cosmetic amendments do not address the serious problems. In any case, when one talks about conditions of service and the DFRDB, for example, one is talking really about capability. I have been illustrating that point by referring to our deployment to Fiji last year. I intend, with your indulgence, to bring that to a close in a minute. Mr DEPUTY SPEAKER —I was not familiar with this Bill, but it does seem to me to deal with a wide range of issues relating to defence; in other words, it is an omnibus Bill in a sense. I would call the honourable member to order if it were legislation of a more limited character. In view of the wide-ranging nature of the issues addressed in the Bill, I regard the honourable member's comments as largely in order. Mr WHITE —Thank you, Mr Deputy Speaker. I was talking about the restrictions on personnel. Again, the Government does not seem to understand that it is not a matter of just sending a company. If one sends an independent company group, one has to allow it to take people so that it can operate in an independent way. To have not had a surgical team afloat was a grave dereliction of duty on someone's part. The reason it happened was that the Government had made an announcement that only 110, I think, were to go and it was not to go beyond that number. Two hours after the Prime Minister's announcement here in Canberra, the troops were briefed in Townsville. One can imagine their morale when they were finally briefed, two hours after the announcement had been made. Their families had been ringing up asking what was going on, and two hours later the troops were given a brief. For some reason that entirely escapes me or anybody else who has given this matter any thought, the Government decided that no machine-guns were to be taken. Mr N.A. Brown —Why? Mr WHITE —Nobody knows. Why would they not take machine-guns? It is part of a normal complement of an infantry battalion. I suspect they wanted to say, `We are sending troops who can't really do the job; don't be alarmed.' for God's sake, if we are sending troops to do a job, we send them so that they can do it in the worst possible circumstances if they have to, and if they do not have to use all the equipment they take, of course they will not. Mr Tim Fischer —You don't tie them up with one hand behind their backs. Mr WHITE —The honourable member for Farrer says they were sent off with one hand behind their backs. I now come to a direct correlation between the wastage rates. Because of personnel wastage and the changeovers in the Defence Force, the company that went, which consisted of 120 men, had a new second-in-command; all three platoon commanders were new; and two of the platoon sergeants were new. Because they had supposedly been on seven days' notice and people were allowed to go, the commanding officer was away on an exercise with the 1st Battalion; the company's sergeant-major was away on a course; and one of the platoon commanders and four section commanders were also away on courses. That is what you get when you do not understand how the Australian Defence Force (ADF) operates. You give them seven days' notice, and you do not cancel it like that and expect everyone to be there. As I say again and again, it is no reflection on the troops; it is the reverse. The fact that they did the operation under very difficult circumstances is to their great credit. I have already mentioned the lack of training for this type of operation, and I do not see the Government taking any steps to overcome that problem. Papua New Guinea, in the best circumstances, has domestic problems. If the Government of Papua New Guinea asks us to assist there, would we be able to do any better? The answer is no. There was no question when we sent troops to Fiji about an invasion of Fiji. That is ridiculous. However, there was to be an evacuation of Australian nationals, and another six countries had asked Australia to assist in the evacuation of their nationals as well. If conditions in Fiji had deteriorated, that operation would have been fraught with considerable difficulties. This is a reflection on the Government and particularly on the two Ministers involved. Those honourable gentlemen stand up here and talk about all the grand academic visions they have for the Defence Force but they do not understand what is happening on the ground. I hope they will take the trouble, if they have not already done so, to read this critique of Operation Morris Dance. I will be only too happy to provide a copy of the paper which documents all the things we have been saying and exactly what happened on that operation. I now turn briefly to one other matter-the prevention by the chiefs of staff of officers of colonel and above resigning if they have been less than 12 months in that rank, because it highlights the number of senior officers in the Australian Defence Force at present and the growth under this Government in those numbers. I shall briefly give some figures. In 1983 one star and above, brigadier and above, within the Australian Defence Force numbered 142 and within the Department of Defence civilian equivalents numbered 119. The ADF ratio for one star and above is 1:513 and the Department of Defence 1:326. By 1987 the number of one star and above had risen in the ADF to 158, an increase of 11 per cent, and the number of departmental officers, brigadier and above, had risen to 169, a 42 per cent increase in four years. At the same time the Australian Defence Force had declined in numbers by 3 per cent and the Public Service by 6 per cent. I ask: when will the Government take some action to stop this stupid and counterproductive increase in the number of senior officers in the Department and the Australian Defence Force? For a defence force of 70,000-odd it is a ridiculous, top heavy structure which is slowing down all the decision-making processes in Russell in particular. In conclusion I emphasise the lessons brought out so vividly last night and in this paper as to what happened in our first deployment offshore since 1965. I think I have made the point about that, and I hope people who are interested in these matters will come to me and get a copy of that paper, which illustrates it so graphically. I urge the Government to stop talking this academic waffle about the Defence Force and come to grips with the reality of what is happening on the ground, particularly with the decline in capabilities which is going on month by month. It stands on the high ground and presumably looks at the hills beyond while all the time its base is crumbling beneath it. Mr TIM FISCHER(Farrer)(12.12) —I support the honourable member for McPherson (Mr White). I will not traverse the areas he covered in some detail, other than to say that I share his concern with regard to the state of the Defence Force. At the end of this bicentennial year, as the House considers the Defence Legislation Amendment Bill, I would like to pause for a moment and pay tribute to the members of the Navy, Army and Air Force for their contribution to the bicentenary. At unit level, through hard work, particularly by commanders at all levels, there is a degree of strong unit spirit, despite all the difficulties imposed by Government budgetary allocations and lack of allocations and by Government policy restrictions. Notwithstanding all that, and it has to be said, I pay tribute to our armed forces for the contribution they have made throughout this bicentennial year, whether relating to the large number of guards they have been called on to supply to Canberra, about which I have asked a question on notice and the response is now in Hansard, or to a range of activities from naval salutes to the Army Tattoo, which is about to come to Canberra, or the magnificent air show at Richmond. In that context, to the members of the armed forces involved in the bicentenary I give my congratulations, as one member of this House who has had the privilege of seeing some of that activity, and my tribute to the various units, including those in the Albury-Wodonga military area, Kapooka and elsewhere who have supplied some personnel for that activity. They have a right to be proud of their efforts in that context. The House is considering omnibus legislation which tidies up a number of areas relating to the Defence Act and includes the requirement of an extra year of service for ranks higher than the rank of colonel or equivalent to render at least one year's service before they are allowed to resign. That is a reflection of the need to relate further to this massive problem of the record wastage rate about which we have said much before. In this context the Cross report Personnel Wastage in the Australian Defence Force, which is now before both Houses of Parliament and the Government, requires action. It has some excellent unanimous recommendations, including recommendation No. 33 on defence housing. In passing I mention that the Bill which is jammed in the Senate at present, the Defence Service Homes Amendment Bill, caught up in the legislative log jam at the end of the session, specifically cuts across that recommendation. As the House considers this Defence Legislation Amendment Bill, relating in part as it does to the wastage rate, I reiterate the need for the Government to react and respond positively and quickly to the recommendations of the Cross report. The second thing I would like to say is that the Bill also relates to a set of amendments dealing with the military legal system. It removes the upper limit of the amount of reparations that a court martial or a Defence Force magistrate may order a convicted offender to pay. I would like to take this opportunity to point out that the House is once again altering the military legal system which has been in place in our armed forces right throughout World War II, Korea, Malaya, Vietnam and other conflicts. It is a timely reminder that we have in place a military legal system, affirmed again by this Bill, under which court martials have occurred for war crimes in periods of conflict. Australian service personnel have been dealt with under that system. I mention merely in passing that again before the Senate, in the legislative log jam, there is the War Crimes Amendment Bill which includes in its ambit Australian Service personnel when they have already been covered by the military legal system. I would only add that the honourable member for Menzies (Mr N.A. Brown) has quite properly highlighted the fact that that interrogation has commenced even though that Bill has not passed through the Parliament. That is a shocking pre-emption of the right of parliament. It is not possible for me to dwell on that in detail. I support the amendments before the House relating to changes to the military legal system. I remind the House again that that military legal system has been in place for decades. It ill-becomes anyone to suggest otherwise. In other words, Australian service personnel have been dealt with under an existing military legal system for any war crimes or activities which have attracted its attention. The House and nation need to know that. Thirdly, the Defence Force retirement and death benefits scheme (DFRDB) amendments basically make improvements, but one improvement is not included in the Bill. I highlight to the Minister for Defence Science and Personnel (Mrs Kelly) that the 2 per cent DFRDB cutback brought in in the 1986 Budget is strongly contested by many veterans' organisations, including the Returned Services League of Australia and the Regular Defence Force Welfare Association, who claim that that cutback breaches the contract between government and ex-service personnel. It was brought in by the Labor Government in the 1986 Budget. The Government is now writing to organisations saying that it wants to fix it up but it is not sure when. Clearly, the sooner that breach of contract is addressed, the better in terms of Defence Force morale. Fourthly, I point out to the House that this Bill reaffirms, the office of the Vice Chief of the Defence Force, in effect, the deputy commander of the Defence Force and attaches to it a statutory backing clarification. By way of explanation to the House that means that the office currently held by Vice-Admiral Knox is boosted by these provisions, especially when the chief of the Defence Force, General Gration, might quite properly be out of the country effecting liaison and attending conferences essential to defence coordination. In boosting the role of the Vice Chief of the Defence Force, if only in a statutory sense, I invite the Minister to comment whether there is a close scrutiny of the numbers which are now attaching to the office of the Vice Chief, vis-a-vis, either the commander of the Defence Force or, more particularly, the heads of the three forces-the Navy, the Army and the Air Force. I raise this in a constructive sense. In adding the Vice Chief, to functions previously held by others at the top of the pyramid in the defence structure, quite properly we must look for staff savings, no matter how hard pressed those other areas may be, so that we do not merely add to the bureaucracy at the top of the Defence Force. The Minister might well know-and certainly members on the coalition side of the House know-that there is bitter resentment at the size of the bureaucracy and, more particularly, its civilian component. I have nothing but respect for General Gration, Vice- Admiral Knox, Vice-Admiral Hudson, Lieutenant General O'Donnell and Air Marshal Funnell as they go about their difficult tasks in the climate of the Government's policy and budgeting priorities. I invite a comment on that from the Minister. Finally, in the Bill before the House once again we have some legislative drafting tautology. I will not detain the House because I know that the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock) is soon to follow. I will merely highlight clause 35 on page 15 of the Bill. On line 32 of that page we see an awful construction on the requirements of the Authority to send out letters to people. It seems to me that the Government has gone about this the hardest way it possibly could. I guess there are legal requirements for that but I reiterate my plea for more simplified drafting, where possible, so it can more readily be understood. I salute again our armed forces personnel for the contribution they have made in this bicentennial year and the high unit spirit, as opposed to overall morale, of our Navy, Army and Air Force units. I welcome the constructive aspects contained in this legislation. Those who are into uniforms will be delighted to know that this Bill authorises their right to wear uniforms, although not insignia so that they cannot masquerade as a ranking officer. I understand that. But on a more substantive note these other changes are very important because our defence forces are very important and we should never forget that. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(12.22) —in reply-I take this opportunity to make a few comments in response to the Opposition's points on the Defence Legislation Amendment Bill (No. 2) 1988. It has been a fairly wide ranging debate but a few issues directly related to the legislation have been raised and I will refer to those first. The issue raised by the honourable member for McPherson (Mr White) related to the potential need for a review of the Defence Force retirement and death benefits scheme (DFRDB). I know that this was one of the matters raised in the Cross Committee-the Joint Committee on Foreign Affairs, Defence and Trade-recommendations. Personally, I can see the sense of that. I can see that there are many anomalies now. The DFRDB was basically devised by an all-party committee which brought in recommendations for the Defence Force in the late 1960s and early 1970s. It targeted benefits for those people who stay in the Defence Force for 20 years. I suppose we have to ask whether that is relevant today. Is 20 years the optimum time people should stay in the Defence Force? I have some reservations about that. I suppose this is so because I have met so many people in the Defence Force who have served their 20 years and still have a fantastic contribution to make to it. I have an inclination to bring about some review of the DFRDB. I say to this House that I also have a few reservations about it. The major reservation is that the Defence Force is a very conservative organisation, as we will all admit. It gets very concerned about any discussion of changes to the DFRDB, even with the necessary guarantees that there would be no detriment to those currently covered by it. I think there would be a frenzy through the Defence Force, a feeling of terrific uncertainty, if we tried to make major changes to the DFRDB, even though I recognise that there are anomalies with it at the moment. I suppose that is a balance that we have to take into consideration. I am thinking seriously about which way to go. As I visit the bases-I spend a considerable amount of time going around the defence establishments-I am asking people about the issue. I would not be prepared to go ahead with a review unless I felt that it was fully understood not just by the officers but mainly by the soldiers, the sailors and the airmen, and that they understood that there would be no detriment to them. However, my concern is that even if we gave them those sorts of ironclad guarantees, some would be particularly worried. I think the key category I would be worried about would be the senior non-commissioned officers getting near their 20 years' service. Despite understanding all the points raised in the debate, in fact I agree with a lot of them, I am still very wary of any review of the DFRDB. One of the other issues that emerged in this debate involved a major discussion of Operation Morris Dance, the exercise which involved Fiji. I am absolutely appalled by the comments made in this House by the honourable member for McPherson. I am saying that primarily because I think it reflects an attitude of the Opposition which I personally find appalling-and so do a lot of senior officers and men and women of the Defence Force. The honourable member for McPherson, who entered this debate today not so much with a discussion about conditions but capabilities, launched into a disgraceful criticism of Operation Morris Dance. What did he base his criticism on? He based it on an article by a New Zealand academic. I am not going to go into the details of that criticism and respond to it at this time, because in my view this is not appropriate. That will be done at some later time. All I want to say in relation to the criticism is that I believe the honourable member for McPherson should have given the senior officers of the Defence Force and the Minister for Defence (Mr Beazley) the right to respond. He should have done that before he got up and gave this almighty bagging to the Defence Force of this country and criticised the commanding officers and the planning of the exercise. He should have given us the opportunity to sit down with the Defence Chiefs and discuss the article he was referring to. Maybe he would still have stood up and given exactly the same speech. I do not know about that; it would have been a matter for his judgment. However, I believe that he should have given the Defence Chiefs and the Minister the opportunity to respond. I should not be surprised by that sort of attitude because it consistently reflects the attitude of the Opposition. Honourable members opposite put cheap political gain and cheap political point scoring above the morale of the Australian Defence Force. I am appalled by that attitude as, indeed, have been the senior defence officers. I want to make a few references to that matter because it is very unusual for commanding officers of our Services to make comments about politicians. However, over the last few weeks we have seen continual criticism of the Defence Force by honourable members opposite. Mr Tim Fischer —I was not criticising the personnel. I saluted the personnel. Mrs KELLY —The honourable member did. I will talk about that in a moment. I pay tribute to the honourable member for Farrer for doing that. I am referring particularly to the comments made by the honourable member for McPherson. The Chief of the Defence Force said in an article in the Australian of 7 October: Australia has a coherent defence policy, an efficient and effective Defence Force and skilled service professionals in whom Australians can feel pride and confidence. Yet it has become almost fashionable in some small but vocal segments of the community to talk about the rundown of the Australian Defence Force (ADF) and of our defences in general. Where have we seen that reflected? We have seen it reflected in the remarks of Opposition members in this Parliament. Again, we have Vice-Admiral Hudson making the same sorts of comments to the Congress of the Returned Services League. He criticised quite specifically comments made by the honourable member for McPherson that `Australia's defence capability is becoming a sick joke to our friends and allies'. He said that he knew that we had difficulties but that that comment by the honourable member for McPherson was not right. The Chief of the Air Staff said exactly the same sorts of things. All I am saying to the House is, let us have a constructive debate instead of consistent criticising. How do honourable members opposite think members of the Defence Force feel with this consistent criticism of their capabilities and ability to do the job of defending this country properly? The honourable member for McPherson referred also to training. He criticised the number of training exercises and their type. He forget to tell the Parliament that in 1989 this country will see, in the form of Kangaroo 89, the biggest military exercise conducted in this country since World War II. About 27,000 troops will be involved in a major exercise. As I said, it is the biggest since World War II. No mention was made of that. The other major issue referred to was the ratio of civilian to military and the ratio of the top levels of the Defence Force and the rest of the system. I agree with a lot of the points that were raised. There has been some distortion in the ratio of the civilian and military components, primarily because of the amalgamation of the Department of Defence Support with the Department of Defence. On the civilian side every attempt has been made in the last few months to prune the top levels. That has not been done in the way suggested by Senator Newman, chopping the numbers with an axe. Rather we are doing it with management initiated retirements and various other initiatives. There will be more of that because, frankly, I believe, like many members of the Opposition, that the Defence Force and its civilian side are in fact too top heavy. I think that this particularly is a reflection of the Russell syndrome. People hate being posted to Russell. One of the reasons for that is that they do not have enough responsibility because the system is too top heavy. I am of the view that action has to be taken actually to get a more appropriate ratio. However, that will be done in a humane and sensible way-aimed at getting more efficient administration, not chopping around with an axe. I know that the House wants to get on to debate the next Bill so, finally, I pay tribute to the honourable member for Farrer for the constructive comments he made and to the thanks he gave to the Defence Force for its contribution to the Bicentennial. There are not enough of those sorts of compliments made in this House. I too pay tribute to the Defence Force's fantastic contribution in the bicentennial year. Australia has benefited greatly from the contribution of the three Services to the bicentennial celebration. More importantly, I think that this country has benefited from the marvellous traditions that the Defence Force has given this country. When we talk about the nature of the Australian, the first thing that comes to mind is the role of the Australian in war; the role of Australians as soldiers. That is such a fine quality that no member of parliament should ever undermine it, in the way it has been undermined in this House today by the honourable member for McPherson. Finally, I tell the House that I take very seriously the recommendations of the Joint Committee on Foreign Affairs, Defence and Trade-the Cross report. Just today I am putting out a statement announcing that we are establishing a task force to prepare not only a response to this Parliament but, more importantly, a timetable for implementation. That will be headed by Admiral Beaumont. Those honourable members who know him will know that he is a very fine officer. I look forward to bringing in a report to this House very early in the next session. I would like to thank all honourable members for their contribution to this debate. I recommend the legislation to 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 Mrs Kelly) read a third time. Date resumed from 19 October, on motion by Mr Peter Morris: That the Bill be now read a second time. Mr PEACOCK(Kooyong)(12.34) —We are debating the International Bank for Reconstruction and Development (General Capital Increase) Bill 1988. The coalition parties do not oppose the Bill. The purpose of the Bill is to obtain parliamentary approval for Australia to take up part of its allocated subscription to the third general capital increase of the International Bank for Reconstruction and Development, that is, the World Bank. In April this year the World Bank's board of governors approved a resolution authorising a $US74.8 billion general capital increase. This is a substantial increase beyond the existing capital stock of some $US91 billion. It is the third such increase and follows a doubling of the Bank's capital in 1959, and a near doubling in 1980. Such increases allow the Bank to expand its borrowing on world capital markets and it is these borrowings which largely finance the Bank's activities. For example, last year the World Bank made $US14.8 billion in lending commitments. With the capital increase, it is estimated that more than $US20m can be lent annually by the early 1990s. As of June 30 this year 142 of the 151 member countries of the World Bank had voted to approve the capital increase. For its part, Australia is entitled to subscribe before September 1992 to 10,734 shares. The Government has decided to subscribe to 7,880 shares, somewhat less than the full quota, which will cost $US28.52m. As I said before, we will not be opposing the Bill. However, I move the following second reading 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 view that: (1) a thorough analysis of Australia's contribution to the International Bank for Reconstruction and Development is long overdue; and (2) in future, the Australian Government should take a more active role in the forums of the International Bank for Reconstruction and Development, to explain this nation's growing concerns with the Bank's management and direction, and to convey the message that a more efficient utilisation of the Bank's existing resources must eventuate before further contributions to its capital base will be provided.' This amendment highlights the concerns that the Opposition has about the effectiveness of the World Bank in pursuing its goals. Those goals are best summarised by the following quote from the 1988 World Bank annual report: In September 1987, Barber B. Conable, President of the World Bank, pledged a reinvigorated role for the Bank in assisting the heavily indebted, middle-income countries to grow out of debt and recession; in containing and managing the current economic crisis in sub-Saharan Africa and in instituting sustained adjustment programs to foster the entrepreneurial and productive potential of Africa's economies and peoples; and in supporting governmental strategies to eliminate by the year 2000 the worst aspects of absolute poverty in the populous, poor countries of Asia.'' That is an enormous task. The World Bank is currently active in 37 countries around the globe. However, there is a long, long way to go to meeting these goals, and in many quarters commentators have become increasingly critical of the operations of the Bank. That criticism extends from private bodies such as the Australian Council for Overseas Aid to the United States Congress, where a battle is currently raging over whether that country will ratify the general capital increase. Indeed, even the Minister for Industrial Relations and Minister Assisting the Treasurer (Mr Peter Morris) noted in his second reading speech that: Australia is a strong, but not uncritical supporter of the IBRD. He went on to say: In particular, Australia has expressed concerns about the very fast rate of growth of large scale fast disbursing structural adjustment loans, the growing incidence of arrears on bank loans, and the need to further enhance the Bank's work on environmental matters. I agree with these criticisms and will be addressing them shortly. But, first, it is instructive to note that the World Bank is itself aware of its various failings and has attempted in recent times to address them. I understand that in an internal review last year, a committee of investigation found that the Bank had failed to `chart a clear institutional strategy through difficult times'. Following that review, a series of reorganisations have begun in the Bank. A more streamlined administration has been sought. In fact, the Bank reduced its staff by 320 positions during the 1987-88 financial year. However, the problems go far beyond the question of staff numbers. Broadly speaking, there are two camps of dissatisfaction with the World Bank. There are those who oppose the Bank's evolution from a bank to what is, in effect, an aid agency. There are also those who are content with this trend but are critical of the aid programs, and the delivery of services, by the Bank. The first group of critics point out that the nature of the world has changed markedly since the World Bank was established in 1946. Private capital markets have become sophisticated, and are more capable of dealing with developments which in the immediate post-war years they may have not been capable of doing. There has also been concern about the increasing tendency to finance governments as opposed to private sector projects. To an extent there has been crowding out of private sector investment due to large government controlled projects. People object to this because, in the case of some countries, such aid tends to prop up corrupt and oppressive regimes. It has also resulted in some spectacular financial and environmental disasters. For example, in Guatemala the Chixoy hydro-electric dam has ended up as a $A1 billion white elephant with the impoverished population having to pay through increased power costs. In the Philippines the Aquino Government has inherited huge debts from its predecessor's abortive attempt to establish a nuclear power plant industry. In Brazil the building of a highway through the Amazon jungle has resulted in deforestation on a large scale. All these projects were partly funded by World Bank lending. They are spectacular reminders of bad decisions following upon bad decisions. There has also been concern about the changing nature of the Bank's structural adjustment loans. Over the last five years these types of loans have increased in importance, from 10 per cent to 23 per cent of total borrowings. It has been argued from some quarters that these loans have changed the emphasis of World Bank lending from funding specific projects such as mines and factories to lending money for housing, education and roads. It is argued by some that this lending has not been effective and has reinforced the trend to funding governments and not viable private sector projects. That is the argument from one quarter, but from another quarter come the arguments of those who are pleased with the World Bank's apparent move towards becoming in effect an aid agency. However, such critics are also unhappy with the delivery of services and the priority setting by the Bank. They are genuinely worried that the very poor are not benefiting sufficiently from World Bank programs. For example, a recent World Bank report claimed that only 29 per cent of the Bank's lending directly helped the poor. While not denying that the poor can be helped indirectly via other programs, these people would like to see that proportion increased. Critics are also worried about the lack of focus on the role of women in developing countries. It should be noted that women actually produce most of the food that is eaten in poor countries-as much as 80 per cent in Africa-and yet receive by far the smallest part of assistance. The `soft' terms of loans from the World Bank have also been criticised. It is argued by some that many private sector bankers support World Bank intervention in developing countries as that enables them to protect their own past imprudent investments. They are also concerned that the World Bank has been encroaching on International Monetary Fund territory by providing funds for current account deficits on easier conditional terms than the IMF would require. I make all these diverse points to highlight the extent of criticism of the effectiveness of World Bank programs. There are many who have become alarmed by the increase this year in the Bank's provision for loan losses to cover bad debts from $100m to $500m. At present eight borrowers are in arrears. They start with Peru which owes $US1.2 billion, and include Nicaragua, Guyana, Liberia, Syria, Sierra Leone, Zambia and Panama. This is a very worrying development. Of course, the debt of the Third World in its entirety is staggering. The World Bank projects that in 1987 debt for the Third World stood at an enormous $1,080 billion-a 66 per cent increase since 1980. I observe that in a shorter space of time-that is, since the election of the Hawke Government in 1983-Australia's net foreign debt has quadrupled. Compared with South American countries, we do not stand up too well. For example, if I go back to 1986 to get an accurate comparison with other countries, we find that Australia's gross foreign debt stood at around $101 billion, representing 42 per cent of gross domestic product. In a Morgan Guaranty Trust Company study, we find that while our debt at 42 per cent was not far distant from the 46 per cent for Colombia, it was larger than the 41 per cent figure for Brazil. What a chilling comparison! Since 1986, of course, Australia's foreign debt has risen to 120.4 billion and, as we all know, the current account deficit is still coming in at around $1 billion, and sometimes more, a month. Australia has a major restructuring task before it. Tuesday's national accounts figures revealed the misrepresentation behind the rhetoric of the Treasurer (Mr Keating) about this tired and discredited Government's micro-economic reform. As is true for Australia, what must not be overlooked when discussing the plight of Third World countries is that the principal task is for those countries to get on with restructuring themselves. All the aid in the world will not provide lasting development if the government concerned is not prepared to make the hard decisions and get on with economic reform. In the same frame of mind, many are afraid that by increasing the World Bank capital we are offering no more than the continuation of the same policies which, over many years, have solved few problems, but created more in their place. As I said at the beginning, the Opposition's second reading amendment is based on our conviction that a thoroughgoing review of our commitment to the World Bank must be made. Australia, as a respected voice in the forums of that institution, must actively push for greater effectiveness in the allocation of the Bank's resources. Mr DEPUTY SPEAKER(Mr Ruddock) —Is the amendment seconded? Mr Tim Fischer —I second the amendment and reserve my right to speak. Mr DEPUTY SPEAKER —It being past 12.45 p.m., the debate is interrupted in accordance with sessional order 101a. The debate may be resumed at a later hour. Sitting suspended from 12.46 to 2 p.m. Mr HAWKE(Wills-Prime Minister) —As a matter of courtesy, I inform the House that the Minister for Trade Negotiations, Mr Duffy, will be absent from Question Time today and tomorrow on Government business. Questions which would normally be addressed to Mr Duffy should be directed to the Deputy Prime Minister and Attorney-General, Mr Lionel Bowen. I also inform the House that the Minister for the Arts, Sport, the Environment, Tourism and Territories, Senator Richardson, is departing this afternoon on Government business overseas and will return on 11 January. He will be taking private leave during some of this period. In his absence, the Minister for the Arts and Territories, Mr Holding, will be the Acting Minister. Mr SPENDER —Does the Prime Minister agree that the Yugoslav Government should give a full, unconditional and public apology for the shooting of Josef Tokic, should offer compensation to the wounded boy, and should provide complete cooperation with police inquiries coupled with a waiver of diplomatic immunity should immunity apply to the person responsible for the shooting? Does he also agree that unless these steps are immediately taken by the Yugoslav Government, the Australian Government must close the Sydney Consulate and expel its staff? Mr HAWKE —I can assure the honourable member that the Government is taking an appropriately tough and relevant position in its discussions with the Yugoslav authorities. I think all honourable members share the repugnance that exists throughout the community about the events of last weekend. I can assure the honourable gentleman that in the discussions which the Minister for Foreign Affairs and Trade is having, including discussions he had this morning with the Ambassador, the strength of the Government's position, which I know is shared by all members of this House, has been put to the Ambassador. I believe a situation needs to be obtained where the person responsible for this outrage is subject to the appropriate processes of the Australian jurisdiction. In trying to achieve that objective all possible options need to be kept in reserve by the Government in negotiating that desirable outcome. As to the first part of the honourable gentleman's question, which goes to apology and compensation, these are relevant considerations and will be taken into account. Mr LAMB —Is the Minister for Employment, Education and Training aware of recent reports claiming that Australia is suffering from a net loss, or brain drain, of skilled scientists, researchers and scholars? Can the Minister inform the House whether these reports are accurate? If so, what is the Government's response? Mr DAWKINS —I have noticed what I would describe as some fairly alarmist suggestions that Australia is suffering from a brain drain. Indeed, some of these suggestions have come from honourable members opposite, but from their performances yesterday they would know much more about drains than they would about brains. We notice that every time the Leader of the Opposition appoints a new shadow Minister, the average IQ on the back bench actually increases. If we look at the facts and the data collected by the Department of Immigration, Local Government and Ethnic Affairs we see that over the last four years there has been a very substantial net inflow of scientists and engineers into Australia. In other words, far from there being a brain drain, Australia has experienced a very strong brain gain. There are 10 categories of engineers and 10 categories of scientists. If we look at lecturers and professors separately we find that over this four-year period we have gained 4,800 engineers, about 2,500 scientists and about 1,000 lecturers and professors. I would not like to give the impression that we are remotely complacent about the fact that some of our best scholars and some of our best researchers may leave Australia for overseas. That is not new; that happens often. They operate in very much an international environment. It is quite often important that they go overseas for additional experience. Mr Beale —It is important that they come back too. Mr DAWKINS —Of course it is important that they come back, as so many of them do. It is quite mischievous for the Opposition to pretend that, on the basis of these figures, Australia is actually losing people when in fact we are net gainers of engineers, scientists, lecturers and professors. In terms of the forthcoming environment confronting our higher education system, now is the least likely time that people involved in the higher education system would be leaving Australia. If one looks at the additional resources we are committing next year to higher education alone, one sees that we will spend $3,000m on the higher education system. If we compare that in terms of the same value dollars it is half a billion dollars more than was spent in the last year of the Fraser Government. As a result of that extra expenditure over the next triennium we are likely to see about 4,000 new academic staff positions created within the higher education system. One can see from that that the circumstances and opportunities for those in the higher education systems, particularly those involved in research activities, are improving and not, as the Opposition maintains, getting worse. If we isolate the research expenditure within our higher education institutions, primarily within our universities, we see that that amount will top $1 billion in 1991. That is an annual expenditure of $1 billion or nearly a 19 per cent increase since 1985 to support our research activities in our institutions. I will mention one other figure because the research effort depends very much on how we support our graduate and postgraduate students. We will provide 15,000 scholarships for these students, which is enough for every full time postgraduate student in the country, still leaving some 7,000 exemptions for honours students and other part time higher degree students. When one adds that up and when one adds that to the fact that we have increased the postgraduate awards by 10 per cent in real terms, one sees that not only have we been gaining scientists, engineers and others from the rest of the world but also we are likely to see even more interest on the part of Australians and others being involved in our higher education system and, indeed, in the research activities which they support. Madam SPEAKER —I draw the attention of the House to the fact that we have present in the Gallery today a former member of this House, Peter Drummond. I am sure that all members of the House would be glad to give him a very warm welcome. Honourable members-Hear, hear! Mr TUCKEY —I address my question to the Prime Minister. I refer the Prime Minister to his statement at his press conference on Sunday, 27 November 1988, when he said: I have instructed my solicitors to issue proceedings against Sir Jack Egerton and any media which repeats the claims. I also refer him to his contradictory remark yesterday that he is not suing Sir Jack and that the matter of defamation relates only to the association of a headline and a photograph of Royal Commissioner Fitzgerald in the Sunday Mail. I ask the Prime Minister: If this latter contradiction is true, why did he choose to publicly threaten Sir Jack in the first place and why does he still continue action against the Courier-Mail which did not print the headline or the photograph? Mr HAWKE —The statement I made on Sunday afternoon to the press was a statement of the position which followed from the discussions I had had with my solicitor on the Saturday evening. Following that statement in Melbourne, I returned to Canberra. I had further discussions with my solicitor on the telephone. As a result of the discussions between myself and the solicitor, the course of action which has been followed is that at this stage there has been no issuing of a writ against Sir John Egerton. Dr THEOPHANOUS —My question is to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. Is the Minister aware of the conference of the Federation of Ethnic Communities Councils of Australia (FECCA) taking place in Canberra? Is he also aware of concerns previously expressed by that Council on the abandonment of the bipartisan policy on immigration and the concerns expressed by that organisation in relation to statements made by the Leader of the National Party of Australia and others? Is the Minister able to assure the House that an immigration policy which discriminates on the grounds of race will continue to be rejected by the Government as having no place in its immigration policies? Mr HOLDING —I am aware of the conference being held by the Federation of Ethnic Communities Councils in Canberra. I am also aware, as I am certain all honourable members who have an overwhelming interest in these matters are, of its continued publicly expressed concern that race should continue to be considered as having no part of an assessment as to whether someone should or should not come into this country. I draw the honourable gentleman's attention to the fact that Government policy on this matter has been clearly and effectively spelt out by the Prime Minister. I use this opportunity to point out to the leaders of the FECCA conference the motion that was passed by this House which still embraces government policy. That is the motion which gave 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, racial ethnic origins shall never explicitly be among them. That clearly reiterates the assurances given by the Prime Minister, and that represents the Government's position. I suspect that the real concerns of FECCA are directed to the fact that, with some honourable exceptions, including a former distinguished Minister for Immigration, all members of the Opposition are on record as having voted against that very simple proposition. There have been some developments in that situation. The Leader of the Opposition has endeavoured to suggest that somehow or other, although they voted in that way, there are still no aspects of discrimination in their policy. I refer to the statements made on the public record by both the Leader of the National Party, who is a senior member of the coalition, and the Leader of the National Party in the Senate who, although he is still leader in the Senate, at the moment does not seem to be able to make it into the shadow Cabinet, but he is on a long term promise. Senator Stone's position was perfectly clear in the Melbourne Herald of 9 August: Asian immigration has to be slowed. It is no use dancing around the bushes. He subsequently said on 15 August: I've said-and I don't withdraw-that what the Opposition has been talking about, and what John Howard has been talking about, is to bring the composition of the immigration stream back into better balance. And that will require a reduction in what has become the excessively high proportion of immigrants from Asia in that stream. On this issue Senator Stone-although one might not agree with the sentiment-has told the truth. If he has been demoted, he has been demoted for advocating the policies of the Leader of the Opposition. That is the reality. That position was supported by the Leader of the National Party, who expressed similar views, and on that occasion the Leader of the Opposition indicated that he- Opposition members interjecting- Mr HOLDING —I realise those opposite do not like it, but this is the public record. This is the reason why, for the first time, as I am aware, in the history of FECCA there was no invitation extended to the Leader of the Opposition, which is a traditional courtesy, to address that conference. I understand that his staff intervened, and perhaps he intervened, and I am pleased to say that after representations from the office of the Leader of the Opposition FECCA has correctly decided that he should be given the opportunity to address that conference. That is a view, I would like him to know, that we on this side of the House strongly support. I hope on that occasion he will be able to clarify the ambiguities and the dishonesty that are so apparent-- Mr Nehl —Madam Speaker, on a point of order: I wonder whether the Minister is giving us the great Christmas pollywaffle. Madam SPEAKER —Order! The honourable member does not have a point of order. The Minister will conclude his answer. Mr HOLDING —I will conclude by saying that I hope the Leader of the Opposition will use this opportunity to indicate that he and Opposition members resile from the situation that they were forced into when they voted in this House against the proposition that was supported by the Government, and that he will also use the opportunity to assure the conference that those who disagreed with him are no longer going to be pursued in preselection, as is occurring in Victoria at the behest of the Leader of the Opposition, which is directed to a former Minister for Immigration-- Mr Tim Fischer —On a point of order, Madam Speaker, I draw your attention to standing order 145. This Minister has now clearly gone for beyond relevance to the original question asked by the honourable member and I ask you to rule him out of order. Madam SPEAKER —Order! The Chair has asked the Minister to conclude his answer. He will now do so. Mr HOLDING —Having indicated that he will not support those kinds of attacks, I hope he will use the opportunity at the FECCA conference to support the resolution carried in the House and have the guts to apologise to all those Australians of Asian origin for the disadvantages and the problems he has created for them. Madam SPEAKER —I understand that we are being visited in Canberra this week by a large number of former members of the House, I would not like to be discourteous, and I am sure the House would not. I welcome on your behalf Frank O'Keefe, the former member for Paterson; the Honourable Bob King, the former member for Wimmera; and Sir Harold Young, former President of the Senate. Honourable members-Hear, hear! Madam SPEAKER —I might also mention that we have present in the gallery today the Dutch Minister of State for Defence and his Party. On behalf of the House, I give you all a warm welcome. Honourable members-Hear, hear! Dr HEWSON —I refer the Treasurer to yesterday's national accounts release for the September quarter and, in particular, to the fact that the non-farm gross domestic product (GDP) deflator has consistently accelerated from an annual rate of 7.2 per cent in the year to the December quarter 1987 to 9.1 per cent in the year to the September quarter 1988. Given that inflation on this basis is running at 50 per cent above the Budget estimate, will the Treasurer please inform the House what his revised forecast for inflation is this year? Given that the Forward Estimates released last week were also based on this forecast, when will he provide revised estimates? Mr KEATING —The honourable gentleman would know that the non-farm GDP deflator is influenced by the terms of trade. In terms of the consumer price index I have said on a number of occasions that the disappointing figure we had a few weeks back will probably mean that we will now exceed the Budget forecast-I hope not by much-but still we will maintain the trend of inflation coming down. Having succeeded in bringing down the inflation rate of 11 per cent under the Liberal Party to 5 per cent in 1985 and having watched inflation rise to 10 per cent as a result of a big depreciation of the exchange rate, we are now succeeding in bringing it back to the 5 per cent area whence it came in 1985. In so doing we are rendering a level of competitiveness to the Australian economy it last enjoyed in the early 1970s. That is part of the reason the profitability of the traded goods sector has risen and with it the levels of investment which are now underpinning the major restructuring of the Australian economy. Inflation is declining. It is not declining as fast as the Government would like it to decline. Both the Prime Minister and I have referred to those causes, some of which are that we are not seeing cheaper prices being passed on to consumers from the appreciation of the exchange rate, and the building of margins by business. While the Government has pursued a very clear policy of lifting the profitability of Australian enterprise, we take the view that it ought to have at least some regard for the inflation rate and should not be fattening margins for some rainy day. It should be doing what the trade unions are doing; restraining their wage claims. If there were a parallel restraint on the part of business, the inflation rate today would be lower than it is. Having said that, it is still declining and it can decline with this Government's policies in place because of the fiscal policy, monetary policy and wage policy amalgam we preside over under the accord-something which is unavailable to the coalition parties. All that would have happened in these circumstances under a coalition government is that wages would have taken off towards another wages boom in the face of this prosperity, the coalition would have tried try to nip it in the bud with interest rates which would have recessed the economy; and we would have the same sinusoidal movement in prosperity in the economy which we always had under the Liberals. When the honourable member poses questions to me about the inflation rate, he ought to ponder the experience he had when he and the former Treasurer were comrades in economic management. Those opposite slunk out of office with an 11 per cent inflation rate, an 11 per cent unemployment rate and the first negative growth in 30 years. Mr LES SCOTT —Has the Minister for Defence seen comments by the honourable members for McPherson and Casey covering Royal Australian Air Force (RAAF) aircraft accident rates? Have the first six months of this year been the worst for RAAF aircraft accidents in the last 20 years? What is the actual RAAF aircraft accident rate? Should defence resources be re-allocated in light of those claims? Mr BEAZLEY —I thank the honourable member for his question. I note that he has a very substantial concern with Air Force matters as Amberley is within his constituency. Last week the spokesman he named for the Opposition quoted out of context a report about aircraft accidents. Part of the claim was that there was some decline in the operational capability of the Air Force. That report shows the difficulty of operating off six months worth of statistics for a year. It covered the January-June period 1988 and there were eight major accidents-a high rate. I have now been advised by the Chief of the Air Staff that the figures for July to date-we are almost at the conclusion of the year-constitute one accident. That has been one of the lowest accident rates for some years. The Chief of the Air Staff pointed out to me that a comparison of the two halves of 1988 serves to illustrate the dangers of taking a short term view of statistics. He also pointed out to me that just as a high accident rate is not necessarily a cause for alarm, a low accident rate is never a cause for complacency. The point about all that is that as far as the Air Force is concerned, air safety and operations always have the highest priority. The Air Force operates on the basis that it is responsible for the training and flying program. If adjustments are required to take account of changes in the status of personnel involved in the program, it makes those adjustments. The Air Force is experienced in handling these problems and it has the right sense of priority about how they ought to be handled. It ill becomes members in this place to attempt to take political advantage of that by utilising it to attack the Government. In fact, by doing so they more often attack the command arrangements and the effectiveness of the Air Force itself and call into question the professionalism of the people who are responsible for operating the Air Force. As I had occasion to point out in this House some time ago, the propensity for members of the Opposition to do that is creating enormous and justified resentment in the Australian armed forces generally and in the Air Force specifically. Of course, the question of priority is a long way from the minds of Opposition spokesmen, all of them junior, in their views about defence policy planning. We have yet to see their defence policy. We are now years into their period in opposition and we have seen nothing. What we have seen, however, is a total incapacity to get priorities together. Obviously the junior defence spokesman has become so bored with his efforts in that regard that he now spends his time on the telephone to ex-members of Gold Coast councils and finds some amusement in that in this place. No priorities have been established in defence spending by the Opposition. No policy has emerged from members of the Opposition. Nothing they say makes sense or has any meaning within the context of contemporary Australian defence debate. Mr MOORE —I refer the Attorney-General to reports in today's Australian which indicate that small depositors in the merchant bank Rothwells Ltd are considering legal action on the grounds of misrepresentation. Will the Attorney-General be requesting the Trade Practices Commission to institute a representative action against Rothwells under section 87 of the Trade Practices Act in order to protect the rights of the large number of small depositors around Australia? Mr LIONEL BOWEN —It is refreshing to have a different question asked about Rothwells on this occasion. I draw attention to the fact that I am quite happy to have the Trade Practices Commission examine the position. There has been a lot of discussion about whether there should be class actions and representative actions. I have no doubt that the people concerned might want to avail themselves of an investigation. If the honourable gentleman is aware of those people who want it to be done, I will arrange for it to be done. Dr KLUGMAN —I direct my question to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. Is it true that Mr Ta Duy Binh, a Vietnamese playwright, has been refused permission to stay in Australia as a refugee? Has this gentleman whilst here expressed abhorrence of the Hanoi regime, and does he claim that the brutal Hanoi regime would punish him severely if he returned? Has the Australian Government really accepted so-called Vietnamese assurances that he would not be persecuted if he returned? Will the Government review its decision but, if unchanged, will the Minister give an assurance that the Government will allow sufficient time before any deportation proceeds so that a more humanely sensitive country might be found to protect him from Vietnamese persecution? Mr HOLDING —I thank the honourable member for his question. He will be aware that any applicant for refugee status makes his claim to the Determination of Refugee Status (DORS) Committee, which then advises the Minister after an exhaustive and extensive investigation of the claims made. Where the DORS Committee recommends against refugee status, in almost all cases that advice is accepted by the Minister. It is open to the Minister if he believes that victimisation could take place-- Mr Spender —Address the Chair. Mr HOLDING —Have you quite finished? Madam SPEAKER —Order! The Minister will continue his answer. The honourable member for North Sydney will cease interjecting and will not argue with the Chair. Will the Minister address the microphone? They are fixed microphones and if he turns away we cannot pick him up. Opposition members interjecting- Mr HOLDING —It might be better than some of the things the honourable member has picked up in his time. Madam SPEAKER —Order! The Minister will withdraw that comment. Mr HOLDING —I think it is perfectly true. The honourable gentleman-- Madam SPEAKER —Order! The Minister will withdraw. Mr HOLDING —I withdraw. If those opposite make silly interjections, they will get hard answers. Mr Reith —He ought to be named. Madam SPEAKER —Order! The honourable member for Flinders will cease interjecting. The Minister withdrew his comment. Mr HOLDING —There is the discretion on the part of the Minister in a section of the Act which enables the Minister, on humanitarian grounds, to grant residency on the basis of a view that could be expressed or considered in respect of the possible victimisation of the applicant if he returns to his country of origin. I will have regard to the submissions made by the honourable member and refer them immediately to the Minister for Immigration on the basis of the honourable member's request. Dr HARRY EDWARDS —I address my question to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. I ask the Minister, not entirely without notice, whether he is aware of the High Court's decision which ruled last week that the Government's arrivals tax is unconstitutional? Will the Minister now tell the Parliament how much was raised by this unconstitutional tax, and what he will say to those who demand their money back? Mr HOLDING —I am aware of the decision. The decision is currently being examined by officers of the Department who are awaiting the receipt of legal advice as to the implications of the High Court decision. Mr CHARLES —Is the Minister for the Arts and Territories aware of the refusal by the Australian Film Commission (AFC) to grant the Wim Wenders film Until the End of the World eligibility as an official co-production? If so, can the Minister inform the House of the reasons behind the AFC's refusal? Mr HOLDING —Yes, I am aware of the refusal of the Australian Film Commission to grant the Wenders film Until the End of the World eligibility as an official co-production. It must be understood that the Commission is the responsible authority to consider the merits or demerits of any application for funding. The implementation of the co-production arrangements between the AFC and its French counterpart is a matter for those parties and the AFC's Act specifically precludes any direction from the Minister with respect to a particular project. Representations in respect of this matter have been received by the French Minister for the Arts and Communications and the German Minister for Economics, and both have been responded to. This matter has been the subject of some media speculation, and it is important that honourable members should understand the way in which the Commission operates under its statutory obligations. The co-production guidelines have been worked out in consultation with industry associations, and they are essentially in place to protect people working in the industry generally and Australian taxpayers, who want to see funds that are made available for film production serving the interests and development of the Australian film industry. The guidelines rate the various elements of a film project on a points system which takes into account the principal creative roles. In the case of Until the End of the World the elements did not add together to establish a project which had a sufficiently high Australian content to make it worthy of falling within those guidelines. If the guidelines were to be set aside in this case, the AFC would have done both the industry and the Government a considerable disservice. I have had representations supporting the Film Commission's position on this project from many individuals and organisations involved in the Australian film industry. That includes Actors Equity, the Australian Writers guild, the Theatrical and Employees Association and the Australian Screen Directors Association. On a personal level, I hope that those who want this project to proceed will recast their application so that it falls within those guidelines. If it does, obviously it will be reconsidered by the AFC. Mr HUNT —My question is directed to the Prime Minister-and I hope that he will answer the question. It is a question I had hoped to ask the Minister for Trade Negotiations, Mr Duffy, yesterday. Is the Prime Minister confident that the United States and the European Community are likely to reach any agreement on a policy to freeze agricultural and agricultural export subsidies as a first step to their ultimate abolition at the Montreal mid-term review of the Uruguay Round? If no agreement is reached or progress made, has the Government developed a fall-back strategy to enable Australian farmers to compete on subsidy-corrupted world markets should commodity prices continue to fall, as the Minister for Trade Negotiations has recently suggested is more than probable? Mr HAWKE —I thank the honourable member for his question, which goes to a very important subject. I have been following this issue both in discussions with my Ministers and in the cable traffic. We had hoped, as the honourable member will recall, that, following the statement made by the United States representative at the Islamabad meeting, some basis might emerge whereby there could be a bridging of the enormous chasm between the two sides. The United States has taken the position in regard to the Uruguay Round of the Multilateral Trade Negotiations that it is suspicious of any agreement on interim remedies being reached at the Montreal conference. The United States takes the view that, if there is agreement on such interim measures, the Europeans will say `That's it', put it in their pocket and that will be the end of the matter. The United States takes the view that there should be a commitment to an end point-there is a degree of flexibility as to whether it will be the year 2000-and that at that point all subsidies should be eliminated. The Europeans have not accepted that view. Therefore, on the basis of what was said in Islamabad by the United States representatives, there was some hope of reaching an agreed position. Unfortunately, on the basis of the cable traffic I have been reading and the result of the discussions I have had, the optimism that seemed to be possible out of the Islamabad meeting is to some extent dissipating. I give the honourable member the complete assurance that every possible effort is being made by my Ministers and our officials in the now diminishing period leading up to the Montreal meeting to try to use our good offices, not only in our own right but also as the country which chaired the Cairns Group, to try to form some bridge between the two positions. As the honourable gentleman implies and understands, if we cannot get agreement at Montreal for some substantial move in this area, we run a risk of an accentuation of the protectionist and subsidising measures which have cost Australian producers so dearly. I think the honourable member will also understand that an additional irritant has been introduced into the negotiations between the United States and Europe on the question of the treatment of hormone affected products. They are now threatening massive retaliation, one against the other. I have to say in all honesty to the honourable member that the environment on this issue is somewhat less favourable than what I thought it was a few weeks ago. I repeat that we will do everything in our power to operate as a bridging group. Our position is one of constructively trying to get that agreement. In the latter part of his question, the honourable gentleman asked whether we have a fall-back position if, in fact, there is no possibility of agreement at that point. I say briefly, in conclusion, that we have, as I am sure the honourable gentleman would want us to do, concentrated our efforts and energies on trying to discharge this bridging role function. But I can assure the honourable gentleman that if the worst case scenario does emerge-that there is no agreement and we seem then to be in an international environment which is going back on this issue-we will be prepared to do everything that we possibly can internally, by bilateral negotiations and by what remains of the multilateral negotiations to protect the interests of our Australian producers. They deserve that effort. The great tragedy for our producers, as the honourable gentleman and the Opposition know, is that they are among the most efficient producers in the world. They are essentially a non-subsidised sector, certainly by comparison with what happens in-- Mr Cadman —Make a statement. Mr HAWKE —Someone says, `Make a statement'. I assume that the honourable gentleman who has asked the question is satisfied with my response and the time I am taking on it. The position is that, compared with the rest of the world, our producers are essentially non-subsidised. They are among the most efficient in the world. The tragedy is that their interests and the interests of Australia are being affected by the operations of Europe, the United States and Japan which are pouring billions of dollars into a process which is not efficiently protecting their producers at any rate but which is imposing enormous costs on the citizens of Europe, the United States and Japan. We are cognisant of all those facts and will do everything we can to protect and advance the interests of that sector, which I know the honourable gentleman is assiduous in pursuing. Mr ALLAN MORRIS —Could the Minister for Defence advise the House of progress on the Anzac ship acquisition program? Is the project on schedule? Could he outline the processes and timings leading to the final prime contractor selection and the construction of these vessels? Mr BEAZLEY —I thank the honourable member for his question. I note his deep interest in this matter, as his home town is one of those that stand to benefit very greatly from the project. The Government is pleased with the performance of the two consortia competing to build new warships for the Australian and New Zealand navies. Australian Warships Systems and the Australian Marine Engineering Corporation Consolidated-AMECC-are now in their final stages of tender preparation. The design documents were submitted by both, on schedule, a week or two ago. The Government expects that tenders will be completed and submitted on time by 19 January next year. The joint project team will then begin an intensive evaluation of the two bids. It expects that to be completed by about May next year. The contract is expected to be awarded by mid-1989. I must say that, for such a very complex program, the levels of slippage in the timetabling have been very small. We anticipate that to continue to be the case. We will be in a position to make the right commercial decisions when the two tenders are submitted in January. We can begin the work on detailed, effectively best and final offers by the middle of that year. Mr NEHL —My question is addressed to the Minister for Telecommunications and Aviation Support. Is it a fact that the Government will allow Australia Post to close 350 country post offices and a further 250 offices in metropolitan and regional areas? Why is the Minister unconcerned about the potential loss of jobs and the reduction of postal services to the Australian people? Why is the Minister doing nothing to stop Australia Post from closing almost half of the nation's post offices? If the Minister claims that Australia Post's proposal is just `a discussion paper', how does he respond to the letter dated 28 October 1988 from Australia Post's Director of Retail Operations, Mr Graham Flynn, inviting the Union of Postal Clerks and Telegraphists to discuss `recent Commission decisions concerning the retail business'? Mr PUNCH —I thank the honourable member for Cowper for his question. The paper that has been circulated and has generated, quite understandably, a good amount of discussion on this issue is nothing more than a proposed set of guidelines. It has no more status before this Government than that. It is intended at this stage to form a basis of discussion with the unions and only that. Media reports that have suggested that it represents a program for the closure or withdrawal of some 590 postal outlets are very wide of the mark and are a gross misrepresentation. In fact, Australia Post has informed me that, should this be pursued-I say `should be'-it is not envisaged that there will be a significant change in the number of postal outlets, full stop. Further, Australia Post says that the proposal may mean a different mix of service outlets with additional products for sale. I thank the honourable member for the question because it is a very important one. Anything to do with postal facilities in this country is important. I want to make this point to him: like other government business enterprises, it is incumbent upon Australia Post to set in advance, in conjunction with the Minister, a financial target for next year. I make it clear that this Government will be taking very much into account the necessity and the obligation upon Australia Post to maintain a retail postal outlet system, even in a wide number of areas where the outlets may not be individually commercially viable. If that means that this Government accepts a lower financial return, so be it. Quite simply, we believe that every community in Australia has a right, not only in terms of the legislation but also morally, to postal facilities. We want to ensure that this right is preserved. This principle will be uppermost in our minds in discussions with Australia Post. Any firm decisions that are to be made, albeit by Australia Post in the first instance, before they even come to the Government, will be very cognisant of those matters. I remind the honourable member that that may not be a view held by one of the coalition senators-Senator Alston. I suggest that he also take the matter up with him. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek your indulgence and that of the House to draw the House's attention to a certain matter. Madam SPEAKER —Indulgence is granted. Mr HOWARD —Today marks the twenty-fifth anniversary of the election to the House of Representatives of the two longest serving members on the Opposition side of the Parliament. I refer to my colleague and friend the Leader of the National Party of Australia, the right honourable member for New England (Mr Sinclair), and the honourable member for Page (Mr Ian Robinson). Both of those members served in the New South Wales Parliament prior to their election to the House of Representatives on 30 November 1963. The right honourable member for New England has led the National Party and, as such, but for a brief and long forgotten interruption last year, has been in coalition with the Party that I lead during the time that he has been Leader of the National Party. I particularly say of the Leader of the National Party that any fair-minded, objective member of this Parliament would have to concede that he has been one of the best equipped and most accomplished parliamentarians to serve in this Parliament. Whatever people may think of his politics-I know those opposite had things to say about that on occasions-it can certainly be said that he has a certain indestructible quality about him. I do not think any member of the Parliament, certainly not in the 14 years that I have been here, has been subjected to as much personal abuse as has the right honourable member for New England-and much of that personal abuse has been totally unjustified. It has gone on unrestrained; and I think it is a reflection on the Parliament that it has been allowed. I simply say that on this occasion I, as Leader of the Liberal Party of Australia, have very great pleasure in drawing the attention of the Parliament to the fact that today is the twenty-fifth anniversary of the election of the two longest serving members on this side of the House. In doing that, I particularly record a personal tribute to the right honourable member for New England and I look forward to a very long association, soon to be translated to the other side of the House, with him. Mr BEAZLEY(Swan-Leader of the House) —With indulgence, Madam Speaker, I also extend the Government's congratulations to the right honourable member for New England (Mr Sinclair) and the honourable member for Page (Mr Ian Robinson). Their service in this place has been for a truly remarkable period. I do not know what it says about the National Party of Australia, as opposed to the Liberal Party of Australia, that it is two members from the National Party who have mounted the 25 years. Obviously, the strains of representing the more bucolic areas of this country are not as substantial as those of representing our metropolitan areas. But they have made a distinctive contribution to the life of this nation since they have been in politics. I must say that I have had a little bit more to do with the right honourable member for New England than I have with the other honourable gentleman in portfolio areas. The right honourable member for New England stands in this place as a parliamentarian of very considerable reputation both in his understanding of the forms of the House and his contributions to the development of the forms of the House. He had an extremely long and distinguished ministerial career. On behalf of the Government, I join in the remarks of the Leader of the Opposition (Mr Howard) and congratulate both gentlemen on their lengthy service in this place as reflected by this anniversary today. Mr LLOYD(Murray) —On behalf of my National Party of Australia colleagues, I support the words of the Leader of the Opposition (Mr Howard) and the Leader of the House (Mr Beazley) about the two Ians and add our congratulations on 25 great years of representing the rural and regional people of Australia and playing a significant part in this Parliament. The Leader of the Opposition referred to the indestructible nature of the Leader of the National Party, the right honourable member for New England (Mr Sinclair). Twenty five years of service indicates a certain indestructible nature in both of those members. They will be here, as the Leader of the Opposition said, continuing that indestructible nature and playing a very significant role as members-and the Leader as Deputy Prime Minister-of the government of this country after the next election. We, as their colleagues, will be celebrating in grand style tonight. Madam SPEAKER —I present the annual report by the Auditor-General of the Australian Audit Office for 1987-88 and the report of the Auditor-General, accompanied by the financial statements prepared by the Minister for Finance and certificates of exempt accounts and the report of the independent auditor for the year ended 30 June 1988. Motion (by Mr Beazley)-by leave-agreed to: (1) That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the annual report by the Auditor-General of the Australian Audit Office for 1987-88 and the report of the Auditor-General, accompanied by the financial statements prepared by the Minister for Finance, for the year ended 30 June 1988; and (2) That the papers be printed. 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- Australian Bicentennial Authority-Annual Report 1987-88-including the Auditor-General's Report-section 25 of the Australian Bicentennial Authority Act 1980. Public Service Commissioner-Annual Report 1987-88-section 15 of the Public Service Act 1922-including the Equal Employment Opportunity Report section 22b of the Public Service Act. Resolutions of the Australian Fisheries Council-Eighteenth Meeting-Cairns, 15 July 1988. Rural Adjustment Scheme-Annual Report 1987-88-clause 25 of the Schedule to the States and Northern Territory (Rural Adjustment) Act 1985. Sugar Cane Growers Adjustment Scheme-Annual Report 1987-88-clause 21 of the Agreement between the Commonwealth of Australia and the State of Queensland relating to Adjustment Assistance to Sugar Cane Growers. Innovative Agricultural Marketing Program-Report for the period 1986-87 and 1987-88. Automotive Industry Authority-Annual Report 1987-88-section 27 of the Automotive Industry Authority Act 1984. Commissioner of Taxation-Annual Report 1987-88-section 14 of the Income Tax Assessment Act 1936, section 3b of the Taxation Administration Act 1953, section 14 of the Child Support Act 1988 and corresponding provisions of the general taxing statutes of Australia. Taxation Statistics 1985-86-Report. Mr TUCKEY(O'Connor) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr TUCKEY —I do. Madam SPEAKER —Please proceed. Mr TUCKEY —During Question Time, the Treasurer (Mr Keating) interjected that I had been involved in the past in dishonest council deals in Carnarvon. This is a regular and unsubstantiated allegation made by Government Ministers, the most notable being Senator Walsh. Mr Beazley —Which allegation? Madam SPEAKER —Order! I must say that I heard no such allegation. Mr TUCKEY —Madam Speaker, I certainly did. Mr Downer —We heard it. Mr TUCKEY —Others here did. It is on the record now. Mr Beazley —Because you put it there. Mr TUCKEY —I certainly have, because I will not tolerate it. On the occasion that I referred to, when allegations were made in the other place by Senator Walsh, I invited Senator Walsh-- Madam SPEAKER —Order! The honourable member should not bring Senator Walsh into it. He is making a personal explanation about what happened here. Mr Cunningham —I take a point of order, Madam Speaker. I raise the Standing Orders on the rights of a point of order. The honourable member for O'Connor has read something into Hansard and then said, `Now that it is on the record, I want to say something about it'. There is nothing of that nature allowed under the Standing Orders, and this is totally out of order. Madam SPEAKER —I certainly did not hear such an interjection. I heard both the honourable member for O'Connor and the Treasurer interjecting. I asked them both to cease interjecting across the table. I certainly did not hear the comment made by the Treasurer. Mr TUCKEY —Madam Speaker, I made an interjection, suggesting that the Treasurer had made $750,000 on his residence yesterday. He responded by calling me-- Madam SPEAKER —Order! The honourable member for O'Connor will resume his seat. He is quite out of order. He is just abusing the forms of the House. Madam SPEAKER —I have received a letter from the Deputy Leader of the Opposition (Mr Peacock) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Hawke/Keating Government to bring about a restructuring of the economy and thereby strengthening the underlying balance of payments and improving living standards. 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)(2.59) —The Opposition proposes this matter of public importance the day after the national accounts were produced, which painted an even grimmer picture of the Australian economy than we had believed prior to that, and on the day on which the foreign debt figures have been received, which show that Australia's gross foreign debt is now $120.4 billion. Notwithstanding all the indices which show the difficulties confronting the economy of this country, the Treasurer (Mr Keating) continues to paint rosy pictures. I commence by reading some of the claims that the Treasurer has made about the Australian economy in recent months. He has repeatedly claimed that the worst is over and that the economy is on the mend and with it the living standards of Australians. Let us take a few of these claims. At the Premiers Conference on 12 May 1988 he said: The policy is working. . . . It will bring higher living standards . . . It will continue to- listen to this one, back in May- lower the current account deficit and, in doing so, restore Australia's sovereignty over its own affairs. Evidently that referred to a sovereignty that had been lost under this Government. Commenting on the national accounts and investment data released yesterday, the Treasurer continued his claims that the economy was `in the throes of restructuring'. He said: Australia has never really had a balance of growth this good. We are now putting into place the investment which would power the economy along for the next decade. Only a fortnight ago, after the release of a disastrous current account deficit number, the Treasurer stated: . . . we have an investment boom on, we have got a major structural change taking place in a very strong economy . . . This followed his statement on Budget night this year when he said: We are now systematically restructuring the economy. Business investment is rising rapidly. Some honourable members will recall that the Treasurer stated-I am not sure whether it was in the House-that his Budget was the Budget that would bring home the bacon. It has now been seen to be another part of the pig's anatomy, and accurately so. The Treasurer's message has been that if Australians just hang in there, and `hanging' is probably an appropriate expression to be used at the moment for some who are seeking to cope, everything will be rosy and we will soon be reaping the benefits of the sacrifices that have been made. That is plain, unadulterated rubbish. The national accounts and the investment data that were released yesterday destroy the Treasurer's increasingly shrill rhetoric and these data provide very little evidence that the economy is undergoing the massive restructuring claimed by the Government. Indeed, they portray an economy that is, bluntly put, going nowhere. Investment in plant and equipment actually declined in real terms in the September quarter, and expectations for investment in plant and equipment in 1988 and 1989 have been revised downwards significantly. Moreover, investment in the most crucial areas of mining and manufacturing, which are vitally important for restructuring, is expected to show little real growth in 1988-89. The Treasurer continues to insist that the massive increase in imports-he did it again yesterday, taking the whole collection of figures of imports-is part and parcel of the investment boom. The reality is that total imports of goods and services grew by more than 20 per cent in real terms in the year to the September quarter 1988, and it is clear that imports of consumption and other goods and services have contributed overwhelmingly to this growth. The Treasurer takes the total import figure and seeks to point out to us that this is the figure for plant and equipment, the engine for growth. It is not. The figure that is rising is the consumption to which I have just referred, with little growth in exports. Net exports, in fact, made a negative contribution to gross domestic product (GDP) growth yet again in the September quarter. In reflecting our poor trade performance, net foreign debt, as I have indicated from the figures out today, rose by more than $3 billion in the September quarter to exceed $93 billion net and $120.4 billion gross. At the same time, and the honourable member for Wentworth (Dr Hewson) referred to this in his question to the Treasurer today, inflation as measured by the non-farm GDP deflator remained stubbornly high; prices increased by 9.1 per cent in the 12 months to December. No matter how bad the figure, the Treasurer continues to mask the reality with rhetoric, and if one strips that away one sees, using one of the expressions that the Treasurer frequently uses, the carcass of an economy-that is the appropriate word to use-as these figures get worse and worse. Only on Monday the Treasurer repeated his claim that `we have not shirked the hard decisions'. The Government has not shirked them: that is the central point. The Government has consistently shirked the tough issues. Honourable members will recall that day after day, after this Government was elected last time, there were background briefings that the hallmark of the third term of the Hawke Government was to be micro-economic reform. The Government has not been able to move in this area at all or take tough decisions to strengthen our balance of payments and improve our living standards. The one thing the Treasurer has been able to do-he bridles about it but it is a harsh reality-is increase taxes. This Treasurer is the highest taxing Treasurer in post-war history and his claims that the $5.5 billion Budget surplus for this year has not been achieved on the revenue side are downright misleading. We have talked about bracket creep here, but the proceeds of bracket creep, money ripped off taxpayers due to the effects of inflation since the so-called tax reforms in 1985, are estimated in this financial year to be approximately $7 billion, and $10 billion next year. This year alone the Government is $7 billion better off due to bracket creep, which would be enough to finance all the forecast Budget surplus. On Monday at some function in Sydney the Treasurer referred to businessmen as being greedy. What is greed? It is $7 billion ripped off taxpayers which alone would finance the surplus? I know the Treasurer is calling the Prime Minister names that he has not even called the Opposition yet, but to have to resort to calling businessmen greedy is frankly an indication of a man who is reaching a state of desperation about the trends within this economy. The Government has failed time and again to tackle the very issues that would increase living standards and strengthen the balance of payments. I referred to the failure in terms of the micro-economic reform that the Government has backgrounded so frequently. But when one considers labour market reform, privatisation, the gambit of micro-economic reform, and particularly what has transpired recently in regard to coastal shipping and the waterfront, nothing at all has been achieved. Only on Monday the Treasurer said that the Government had reforms in the transport area `actively under review'. This is part of the problem. If we have a problem, put it under review. We have an inquiry, it is under review, and there is no action. We play off the factions. If there are difficulties and the Left cannot agree with the centre, we have another review and we bury it. Fundamental issues in so many areas remain under review and the inquiries are constantly being commissioned, but there is no action in the area that was to be the hallmark of this Government, namely, micro-economic reform. This is the major reason why there has been no fundamental improvement in the balance of payments. The Government-unable to cut expenditure any further, locked out of that; unable to drive on and free up the economy by adopting labour market reform, with its relationship with the trade union movement, locked out of that-has only the blunt instrument of monetary policy to drive up interest rates, to cut back demand and hence imports. This Government has wasted the opportunities of the last two Budgets and the May statement, and the Treasurer clearly was distracted. When we look back at the pattern of behaviour, we discovered after that Budget-it was only a matter of days before it unravelled-all the plotting and planning through the campaign manager of the time to get the Treasurer up to succeed the Prime Minister. It would have been better for him to concentrate on the prime numbers rather than on simply being Prime Minister because these figures are coming out day after day showing how vulnerable this economy is. It is vulnerable at an extraordinarily important time. There is no-one in this nation who would not recognise that with a change in administration in a country the size of the United States different policies will have an enormous effect. We have already seen how the United States dollar has been driven down by the market, which is concerned that the incoming President will not take action on its twin deficit problem and, in particular, the Budget itself. I am confident that the incoming Administration will respond to those pressures, and if it does tackle the deficit, as it must, at least over time, it will have some form of recessionary effect. One would not be saying that it would be a heavy landing, to use the jargon. But the effect on commodity prices will be there and will impact on a country such as Australia. How much more important has it been, therefore, to try to get our house in order before we have any possible downturn internationally next year? But no, this has not been done. The Treasurer set two key economic forecasts as benchmarks-that was the expression he used-upon which his economic management could be judged. They were the current account deficit and the inflation rate. He did this in this year's Budget. The current account deficit was to be $9.5 billion in 1988-89 and the inflation rate was to be 4.5 per cent over the course of the year to June 1989. In fact, the Budget forecast of $9.5 billion has no chance of being reached. Everybody knows that within a short period of the financial year commencing we are well over 50 per cent of the forecast already. It is now clear, as the Treasurer admitted himself, that the inflation rate will not be achieved. So on the two essential tests he set himself, in terms of benchmarks-they were his words, not ours-he has failed. Some benchmarks and some failure! At a State Council meeting the other day I said that the Treasurer-on occasions I do not get too rude with him-ought to go back and do his sums. I know he has some problems in doing sums these days because he counts with only eight fingers. He uses the other two to say `g'day' to the Prime Minister. So he has clearly failed to deliver on economic policy. He has clearly failed the two tests he laid down himself. The bottom line is that despite the sacrifices that have been made the burden-and the burden is real-is falling on low to middle income Australians. They are the ones who are copping the consequences of this man's administration of the economy. The improvements that he constantly talks about have just not been delivered. The twin evils of the Hawke-Keating Government-low productivity and high taxes-are unquestionably the root cause of our underlying current account deficit and our low living standards. Low productivity is known and it has eroded our competitiveness and undermined real wages. Does anyone deny that high taxes are a reality? High taxes have sapped the incentive to work and to invest. The large government sector uses up resources that could otherwise be directed to the private sector, including export and import competing industries. Taxpayers have a right to be angry. We have said time and again that for a person on average weekly earnings with a dependent spouse with two children to get back to the disposable income he had when we went out of power we would have to give him $56 a week. That is the test. The Treasurer will not be able to pass that test. I am not even saying that he ought to be able to but it is a measure of the task if he is to alleviate the burden that he has passed on to people. While contemplating that he ought to contemplate the reality that he has failed the two tests he put forward in this Parliament on which we could make a judgment. Mr KEATING(Blaxland-Treasurer)(3.14) —Let me deal with some of the issues raised by the shadow Treasurer and Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock). The matter of public importance reads: The failure of the Hawke-Keating Government to bring about a re-structuring of the economy and thereby strengthening the underlying balance of payments and improving living standards. Just a simple recital of a few simple facts will deal with the central proposition. The current account deficit peaked at 6 per cent of gross domestic product (GDP) three years ago. Last year it was 4 per cent of GDP; in the year in between it was 5 per cent. It has fallen from 6 to 5 per cent. This year we are targeting a figure of 3 per cent. We will probably produce a current account somewhat in excess of 3 per cent but well under 4 per cent. In other words, it has fallen by half its recorded peak. Its unrecorded peak was 8 per cent of GDP. The current account deficit stood at about 5 1/2 per cent of GDP when the terms of trade collapse started. The terms of trade collapse was worth 2 1/2 per cent of GDP. It never recorded 8 per cent because policy was pulling it back as it was rising. We reduced it from 8 per cent to a figure of over 3 per cent. The honourable member referred to our `failure to improve and strengthen the underlying balance of payments'. Whatever figure we produce this year will be the lowest current account deficit in nine years. The Government was elected only five and a half years ago. This indicates that the underlying level of the current account was out of control in the years of the last Government in which the honourable member served as a Minister. The languid and slow responses by the former Government to Australia's changed conditions on the terms of trade has had the effect of leaving Australia totally dependent on commodity prices; keeping Australia closed and regulated; shipping wheat and wool and minerals; doing nothing which was innovative or clever in manufacturing; letting our manufacturing sector fall to pieces; letting our import competing sectors fall to pieces; and letting our service sector not just fall to pieces but never begin-Tourism of any strength did not even exist in Australia before this Government turned up. That lopsidedness, that imbalance in Australian's industrial structure, led to the current account imbalance under the coalition Government. The fall in the terms of trade; the fall in commodity prices upon which the Opposition left us exposed and dependent, rammed the current account into these unacceptable figures. As usual, who was around to clean up the mess? Who was around to restructure the Australian economy; turn it into a proper market economy; float the exchange rate; set interest rates in the market; deregulate the financial sector; and take the budget imbalance, the massive Budget deficit it left us of nearly 5 per cent of GDP, to a surplus of 2 per cent? Who has had to cut outlays by 5 per cent of GDP? As usual, it has been the Australian Labor Party. It has had to clean-up after every episode in Australian Federal life, whether it be after the Menzies Government in the early war years, in the post-war reconstruction, in shifting our external and domestic policies in 1972 to 1975 or now. As usual, Labor has come along to do the proper job. We have done it again by fixing this fundamental imbalance. The Deputy Leader of the Opposition talks about our failure to restructure the economy. If a massive change in investment; a shift of profitability towards the traded goods sector; the renaissance of the manufacturing industry; the birth of tourism; or the birth of financial services is not a restructuring, I do not know what is. I remember the days when Sir Phillip Lynch was Minister for Industry and Commerce. He put out press releases about what his Government thought the next Australian Bureau of Statistics release would be about investments in the mineral industry. That was its only claim to fame. The Japanese wanted to buy coal and that produced a spurt of demand for Australian minerals. The natural growth of mineral investment was hailed by that Government as its achievement. It sat there asleep for 30-odd years and now this Government is changing it all. The Opposition says that, the change is not enough and, in fact, that we are not doing it. That is just piffle. The Deputy Leader of the Opposition opened up with the remarks that at the Premiers Conference I said that the policy is working. Of course it is. He said that I said it would continue to lower the current account-as if it were now not lowering it-and that it will decline substantially this year as a proportion of GDP. In relation to the national accounts he said that I said that the economy `was in the throes of restructuring'-it is-and that `Australia was powering along'-it is. He said that when the current account numbers came out a fortnight ago I said that there was an investment boom. There is an investment boom. We have seen growth in investment of about 11 per cent across the year from yesterday's national accounts figures. He asked me an absurd question yesterday about one quarter's figures which happened to be in the negative. I replied that they had been growing strongly, and they are. We have a figure of 11 per cent for equipment but if we include all capital expenditure it is 25 per cent, including dwellings and other things. That is the answer to the question about investment. Then the Deputy Leader of the Opposition said that I said that living standards are rising. He says that is wrong. It is not wrong. We have been reducing inflation. Last year wages growth and inflation were broadly in line. We have seen household disposable incomes rise in every year but one of the Government's term in office. Why? Answer: Because there are now 1.2 million more people in jobs. They happen to live in households, strangely. Therefore, it is not strange, is it, that household disposable income in Australia is rising? Even though there may have been restraint for individual wage and salary earners, household disposable income has been rising because of the massive growth in employment-1.2 million. When we came to office I think the number of people employed in this country was around six million. We have added 1.2 million to that number since 1983-84. It is any wonder that living standards per household have been rising? I invite honourable members opposite to go to people and ask, if they have one or two extra people in their homes in employment, whether they think they are better off. Of course, they are better off. In other words, the opening diatribe by the Deputy Leader of the Opposition was nonsense. It was absolute arrant nonsense. The worst thing about all this is that the Opposition has no policy framework whatsoever. The Opposition has now been defeated on three occasions. It is now heading for a fourth defeat. It is in the middle of the third term of office of this Government. The Opposition said it would have policies out by August. I quoted the Deputy Leader of the Opposition yesterday saying that the Opposition would have policies out by August. It has not. The result is that the Opposition has no policy framework. It has no fiscal policy. The Deputy Leader of the Opposition says that I claimed that the economy is overheating more than it is. The shadow Finance spokesman, the honourable member for Wentworth (Dr Hewson), says that it is overheating more than I say. They are not even agreed about their stance on domestic demand in the economy or what the response should be. They are not at all convinced about what the response should be. The Opposition has no fiscal policy. It has no wages policy. It rejects any consultation with the trade unions. The Opposition thinks that the trade unions are there to be battered. What happens is that generally the unions batter the Opposition, as they did in 1980-81 when wages went up by 16 per cent in one year and destroyed economic growth. The Opposition has no framework. It has no accord. It has no demand management. It will not say where it will go on fiscal policy. I indicated the other day when the Minister for Finance (Senator Walsh) and I released the Forward Estimates of Budget Outlays, prepared by the Department of Finance, that Commonwealth outlays by the end of next year will be back to 1972-73 levels. In other words, this Government will have succeeded in reducing the size of the Australian public sector at the Federal level to the size that existed in 1972-73. No other government in the Western world has reduced its public sector on that enormous scale-by five percentage points of gross domestic product now; next year by six. The shadow Minister for Finance, who has the responsibility within the coalition for outlays, said that that was an exaggeration, camouflaging the spending of this Government. That is an absolutely illiterate reply to a compilation of statistics presented by the Department of Finance. This was a response by somebody who prides himself on understanding technical information. The Department of Finance has a table in the outlays document which is headed `Action necessary to reduce Budget outlays by one per cent'. That is important because of this point. Both the shadow Treasurer, sitting opposite, and the shadow Finance spokesman say that there should be a maintenance of the surplus but tax cuts by a coalition government funded by cuts in spending. In fact, the honourable member for Wentworth said: . . . my own hardline preference would be to pay for tax cuts totally through spending cuts, and keep the surplus intact. A similar thing has been said by the Deputy Leader. What would tax cuts cost a coalition government? We are talking about at least a couple of billion dollars. The coalition parties are big hitters. Last election their proposal was $8 billion unfunded. But let us say that they are talking modest; let us say that they scale back their crazy tax cut prospects to $2 1/2 billion. That is three percentage points of government spending. Every one per cent of government spending represents $800m. They say that they will exclude public debt interest, aged pensions, all personal benefits and cuts to defence. The Department of Finance has very conveniently provided them with a table to show that if they wish to cut government outlays by one per cent but exclude public debt interest, defence and all personal benefit payments, they actually have to reduce the balance-that is what is left; that is what is not quarantined-by 2.1 per cent, or, if they also want to quarantine financial payments to the States, by 3.3 per cent. In other words, to gain one per cent, or $800m, they have to cut 2 per cent to 3 per cent out of the balance of the outlays. However, for a 3 per cent cut-a tax cut of $2 1/2 billion-they would have to cut 6 per cent to 9 per cent of the outlays which are left. That would just massively rip to pieces the rest of the outlays. Of course, those cuts are not available. We contend that they are simply not available, not now that we have reduced the public sector by 5 per cent of GDP. Not one fact has been tendered by the Opposition about where those cuts would be. We have the shadow Finance spokesman running away all the time with press statements. The one thing he is not running away on is telling us where we are going to gets the cuts. Here we are half way through this Parliament-in reality probably more than half way through-and the Opposition is saying that it has a preference for tax cuts funded totally through spending cuts. It has no detail. It has no policy. The Opposition's policy is come into the House smear Ministers and attack us. Honourable members opposite are waving press releases around today. They do this kind of thing to substitute for policy. What we say to the Deputy Leader of the Opposition is this: Here are the Forward Estimates; this is our policy. That document reflects our policy. That is real policy-a five percentage point cut in outlays, with a six coming up. No other government in the Western world has done this-not one. We say that we have rising living standards because we have 1.2 million more people in work. We say that we have rising living standards because we are bringing the inflation rate down. We say that the current account is being repaired, because it is. It has gone from 8 per cent to 6 per cent, to 5 per cent, to 4 per cent and is now heading towards 3 per cent of GDP. It is at its lowest level in nine years. Yet these are the claims made against us. At the same time we have taken the Budget deficit, bequeathed to us, of nearly 5 per cent of GDP and turned it into a surplus of 2 per cent. As well as that we have changed the tax system. We have cut the company rate of tax to 39 per cent. We have introduced a system of full dividend imputation. The Deputy Leader of the Opposition talks about micro-economic change. There is none on the agenda. I do not know what he calls that. There is a total change to the tax treatment of superannuation and reductions in tariffs by 33 per cent. These are all massive micro-economic changes. There is no government in the world shifting an economy structurally as fast as this Government. That is why we have had two Budgets every year for the last five years in order to do it. Instead of that we get cheap press releases, waffle, empty speeches, no policy, no framework, no structure, no discipline-just these few cheap personal jibes thrown at Ministers; a barb at the Prime Minister (Mr Hawke) suggesting that he is up to something shady, a suggestion which he easily dismisses out of hand. This is the stock in trade of the current Australian Opposition. This is where it stands. These are the Opposition parties, once the parties of government. They had some substance, some quality, some vision and some integrity. They have now fallen to pieces and have become an illiterate rump that does not understand basic economic policy. Worse than that, it is a lazy rump whose members have sat opposite for just on six years hoping they will come back as the parties born to rule the rest of us. I have said it before, and I will say it again: The only change, apart from all these massive economic changes we have implemented in the last six years, is that what we have all understood over here, basically, is that we are born to rule honourable members opposite. We are going to keep it up. Mr LLOYD(Murray)(3.29) —If the Treasurer (Mr Keating) keeps up that born to rule attitude, he will be buried very quickly. Six years after the election of this Government it still has to continue to resort to the very tired and inappropriate excuse that it was the previous Government that created the problems. In all those six years the Government has not been able to achieve any of the restructuring, or any of the improvement in our economy or our trade balance, which it has had every opportunity to do. It still has to resort to the admission of failure and blame the governments of six years ago. This Government indicates that itself because in the last Budget the Treasurer said that it would bring home the bacon. The shadow Treasurer, the Deputy Leader of the Opposition (Mr Peacock), referred to the greasy pig when it comes to failure of the Government to really make progress. I say, on behalf of the people of Australia, that the only people who got the bacon was the Government; the rest of Australia was left with the pig's whistle. The Treasurer talked about the failure of the previous Government to have any diversity in exports. He talked about our relying on primary industry and mineral exports. Today, six years after this Government has supposedly been pursuing diversification, manufacturing exports are at a lower percentage than they were when the coalition Government lost office. In fact, in 1984 the level of manufacturing exports was the lowest it had been since 1967. We hear about this country being saved by primary and mineral exports. The Government came to office at the end of the greatest drought that has ravaged this country and it is now fortuitously, and certainly not as a result of its policies, gaining the benefits of the commodity boom which is still taking place in primary and mineral commodity exports. The Treasurer also mentioned that our trade balance is improving, yet we have the greatest external debt that we ever have had-a gross figure of $120 billion. Last month's trade account figure of $1.7 billion is the worst monthly figure that we have ever had. What an inaccuracy-what a subterfuge to try to impose on the people of Australia. The Treasurer in his response also said that inflation was decreasing. Yet, as the shadow Treasurer, the honourable member for Kooyong has pointed out, the gross domestic product deflator is sticking at 9.1 per cent. The Treasurer, after all his obfuscation, at last admitted in Question Time today that his Budget proposal on inflation cannot be met. That is about the only honest statement that we have heard from him on the economy for months. Inflation is increasing at a time when, because of the short term commodity boom, it should be going the other way. This means that the Government has failed in its primary responsibility to reduce our inflation rate to something like that of our competitors. The Treasurer talked about living standards improving. What a laugh that is! As the shadow Treasurer said in his speech, the average family would need to be given an additional $56 a week to restore its living standards to the level it enjoyed when we lost office in 1983. What a tragedy this is for the ordinary people of Australia. What a farce it is for this Government to say that it has actually improved living standards in this country. Anyone who goes to any other Western nation and sees the difference between that country and this country since Labor came to office, knows what a farce it is. The Treasurer also talked about employment. But he did not say that the additional employment he referred to has been needed to maintain the total productivity of this country at the same level it was a few years ago. On an individual basis, productivity has actually fallen. So much for restructuring our economy and getting on with making this nation work again. The Treasurer also talked about this so-called restructuring being under way when the figures, which came out only yesterday, indicate that investment has actually fallen for the last quarter. As the shadow Treasurer said, if one separates and looks in detail at the investment figures over the last 12 months one can see that investment in that most essential area of plant and equipment has actually fallen. Further, actual investment on agricultural plant and equipment-and this country will continue to depend on agricultural exports for many years to come-is negative and has been negative for several years. For example, fewer tractors were sold in this country last year than in any year since the war. What is a real investment figure? Mr Brumby —Less what? Mr LLOYD —This does not include figures for private vehicles, which the Government lumps in under investment but which should be dealt with under consumption. Mr Brumby —Maybe they are getting bigger. Mr DEPUTY SPEAKER —Order! The honourable member for Bendigo will cease interjecting. Mr LLOYD —Could I suggest that the honourable member for Bendigo should not repeat that statement if he wants to keep his seat because he is showing that he is ignorant of the major rural industry in his area. Much has been said about our trade prospects. Just look at the situation facing this country now because of the artificially high Australian dollar. On a quick calculation, the loss in exports will be over $2 billion this year. There will be a $1 billion loss in wool export earnings in the year just ended. The price of wool is now down 30 per cent of what it was in April this year. On an average 20 per cent reduction, our major export industry will earn $1 billion less. A woolgrower with a 100-bale clip will lose $30,000 in income. Meat and coal will each lose $500m. This loss of $2 billion alone will further aggravate our massive trade imbalance in a 12-month period, and that is not taking into account other agricultural commodities such as wheat and grain, mineral commodities and manufactures. We note that the Ford Motor Co. of Australia Ltd is now saying it will not be able to export its sports car as it was hoping to do. This significant reduction in export returns for Australia means that the rural recovery will be very short term; it is being aborted. The commodity boom in real terms for the exports of this nation is now over. The position will be compounded if commodity prices fall even for two or three of the major commodities and the current economic policy for this Government remains. I want to re-state the subject of this debate because, in his usual way, the Treasurer has tried to confuse by rhetoric the real issue that is facing the people of this country-the issue that was so aptly put in the terms of this matter of public importance. That issue `The failure to restructure the economy, to strengthen the underlying balance of payments and improve living standards'. All of the key indicators are negative, and show that these objectives are not being achieved. No hard decisions have been made in respect of the labour market. The Australian Council of Trade Unions is continuing its dangerous fallacy of saying that somehow or other increases in wages and tax cuts will not affect the economy. Nothing whatsoever has happened in regard to the waterfront in the six years that this Government has been in power. An interesting document called the Rorke report indicated very aptly what is not being done on the waterfront. Nothing is being done in respect of transport or coastal shipping. The most expensive piece of water in the world next to our coast is the Tasman. We are now losing exports to New Zealand in spite of the closer economic relations because it is cheaper for products, particularly bulk commodities, to be shipped to New Zealand from more distant countries than from Australia. Nothing has happened in respect of privatisation of Australian Airlines and Qantas Airway Ltd, which operate in the important transport area. No hard decisions have been taken on Mascot or on the privatisation of airports. No pressure is being put on state railways to become more efficient. Investment has actually fallen; productivity is stagnant; research, which is necessary for future of productivity, is down by over 30 per cent. Interest rates are double that of our competitors and rising and inflation is also increasing. To top it all off, the Federal Government is taking more and more in taxes and not actually reducing its expenditure. This Government has been a dismal failure in setting the example, in providing the guidelines for the general macro-and micro-economic policy areas, so that this country can improve its living standards and hold its head up once again in the rest of the world. Mr BRUMBY(Bendigo)(3.38) —It is now 5 1/2 years since I have been coming into this place and I can honestly say that I have never once heard a speech in which the Opposition has actually had the courage to enunciate its policies on the Australian economy. What we heard today was no different. Both the Deputy Leader of the Liberal Party of Australia, the honourable member for Kooyong (Mr Peacock), and the Deputy Leader of the National Party of Australia, the honourable member for Murray (Mr Lloyd), gave a lacklustre performance. They are quick to tell us what they think is wrong in the Australian economy, but they have never in 5 1/2 years let this Parliament or the Australian public know exactly what their policies are to fix up the problems that they say are wrong. Both made speeches of no account. They come in here and tell us what they think is wrong with the Australian economy. But they never get down to the detail; they never put together a comprehensive policy program to tell us how they would deal with the Australian economy. They have not done it in 5 1/2 years. Let us look at the Opposition's record. What about the Leader of the Opposition (Mr Howard), who earlier this year said: I have said all along that the timetable for policy release by August is going to be adhered to. By my reckoning it is now late November and we have not had one skerrick, one iota, of policy release from the Opposition parties. What about the President of the Liberal Party, Mr Elliott. He said that policies would be finalised by August. What about the Deputy Leader of the Liberal Party, the honourable member for Kooyong, the man who would want to be Treasurer of Australia. He said that we would see the Opposition's tax policy released before the end of the year. He is rapidly running out of time. From what we heard in today's debate there is a total policy vacuum in the Opposition parties. Andrew Peacock also said: And we'll be announcing a tax policy later in the year . . . John Howard has said: . . . that by August/September of this year we will have clear policy positions on all the important issues. The Opposition has failed. It has been defeated in three consecutive elections. It has failed to put up proper economic policies in those elections. It is now November 1988 and honourable members opposite still come into this House with not one single economic policy for improving Australian living standards, structural adjustment or repairs to the balance of payments. The only thing the Opposition did today was associate itself with tax cuts of about $56 a week. The Deputy Leader of the Opposition associated himself with tax cuts which he implied would be introduced under a Liberal-National Party government. In the past he has also said that he takes a hard line position on spending cuts and tax cuts, and that he would like to see tax cuts of that proportion financed out of spending cuts. So too did the shadow Minister for finance, the honourable member for Wentworth (Dr Hewson), who was quoted by the Treasurer (Mr Keating). Dr Hewson was the adviser to the Leader of the Opposition when he was Treasurer of Australia before 1983. Dr Hewson's hardline preference for tax cuts would be to pay for them totally through spending cuts and to keep the surplus intact. The Treasurer, in his speech today, referred to the Forward Estimates of spending. He produced the table which stands up to the rigours of public scrutiny on the sorts of expenditure cuts that would need to be made to finance tax cuts to the Australian people. The Opposition has also stated that it would protect certain areas of spending-public debt interest, defence, age pensions and all personal pensions and benefit payments. The Forward Estimates show that if one per cent is cut off spending-about $800m-it has to be cut in those non-quarantined areas by more than 2 per cent. Let us look at what $56 a week in tax cuts would cost. If it went to every taxpayer in Australia it would cost the staggering sum of $22 billion. It is absurd to think about that but the Deputy Leader of the Opposition, who comes in here as a man of integrity and decency, a man who wants to be respected for his economic policies, does not say anything about Opposition policies but he dishonestly associates himself with tax cuts of $56 a week. He does not cost them but he says that, under a Liberal government, any tax cuts would be paid from spending cuts. If the Opposition wants to bribe the Australian public with $56 a week it will cost $22 billion. If the Opposition is not going to cut defence, public debt interest, and aged pensions it has to cut all the other areas of spending by 50 per cent. That is the arithmetic. School programs would have to be slashed by 50 per cent. Public hospital spending would have to be cut by 50 per cent-bed numbers would be cut in half. Policies for primary industry programs would have to be cut by 50 per cent. All the Deputy Leader of the National Party talked about for 10 minutes was tractors, for goodness sake. Mr Willis —Roads. Mr BRUMBY —The Minister for Transport and Communications reminds me about roads. The National Party is always complaining about roads. How would we look if we cut road funding from $1.2 billion to $600m. That is what the Opposition dishonestly implies and suggests when it comes into this place. It is November 1988. The Liberals and Nationals have been in Opposition for 5 1/2 years. We have yet to have released a comprehensive economic policy. Every time honourable members opposite come in here they run away from releasing one. They said that they would have it out by August-September this year. It is now November and they have missed the boat. Let me conclude by coming to the fundamental issue of this matter of public importance. It revolves around decisions that this Government has taken to repair the balance of payments and to improve living standards. Yesterday I was astounded to hear the Deputy Leader of the Opposition, the honourable member for Kooyong, say that, under this Government, there was no longer any incentive to work or invest. What poppycock. What baloney. Since we have been in government there have been 1.2 million new jobs. This is a rate of job growth unparalleled in the Western world yet the Deputy Leader of the Liberal Party says that no-one wants to work. It seems to me to be a strange contradiction. We have had a rise in the participation rate in the labour market. We have unemployment down to 7 per cent and there are more than one million new jobs-16 per cent job growth. He says that no-one wants to invest. The national account figures released yesterday show that investment during this year is running at 11 to 12 per cent. They are the best figures we have had for years in Australia. They are certainly better figures than were achieved through most of the years of the Fraser-Howard Government. It is nonsense to say that nobody wants to work or invest in Australia. In fact, people want to work and people want to invest. What else have we done to improve living standards in Australia? We have introduced Medicare. Every Australian is now guaranteed health cover. When we came to government two million Australians had no such guarantee. We have assisted needy families through the family allowance supplement, whereby low income working families can receive up to $100 per week tax free to boost their living standards. We have dramatically improved the Austudy student allowance, so much so that numbers receiving Austudy are up by 270 per cent. We have opened up new opportunities for young Australians in higher education. We have provided 70,000 new places for higher education over the last five years. More of our young people are staying at school. They are getting a better education and better training. Nearly two-thirds of Australia's young kids are now completing year 12. When we came to government the pension for the elderly was under 23 per cent of average weekly earnings. We, as a government, can now proudly say that that pension is now one-quarter of average weekly earnings. This Government has achieved structural adjustment. It has repaired the balance of payments deficit from 6 per cent of gross domestic product to around 3 per cent in this forthcoming year. We have dramatically improved living standards for the Australian people. The Opposition has enunciated no policies. It has no prospect of election at the next general election. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The debate is concluded. Mr BEAZLEY(Swan-Leader of the House) —I ask for leave of the House to permit the Clerk to announce a petition lodged by the honourable member for Parkes (Mr Cobb) from Snedden Hall and Gallop, barristers and solicitors. Leave granted. The Clerk-The following petition has been presented- To the Honourable the Speaker and Members of the House of Representatives of the Commonwealth of Australia in Parliament assembled: The humble petition of the undersigned Snedden Hall and Gallop of 4th Floor Law Society Building 11 London Circuit Canberra City in the Australian Capital Territory Respectfully showeth: 1. Your petitioner is a firm of solicitors acting as agents for Messrs Burke and Burke solicitors of 21 Forbes Street Trundle in the State of New South Wales on behalf of Glenn Fearnside in an action for damages for negligence commenced in the Supreme Court of New South Wales against The Goodyear Tyre and Rubber Co. (Aust.) Limited as first defendant and N. W. Aghan as second defendant. The said action has been set down for hearing in the Supreme Court of New South Wales Central West Registry No. CW212 of 1985 commencing the fifteenth day of December 1988. 2. The said Glenn Fearnside is claiming damages for negligence arising out of a motor vehicle accident which it is alleged was caused by the blowout of one of the tyres upon the motor vehicle driven by Glenn Fearnside at the time of the accident. 3. The House of Representatives Standing Committee on road safety, hereinafter referred to as ``the committee'' enquired into tyre safety as a result of which the committee produced the report of June 1980. 4. The Chairman of the committee was The Honourable R. C. Katter MP. 5. The report of the committee was published by the Australian Government Publishing Service and made available in bound form. On page 51 of that report in paragraph numbered 157 the committee concluded as follows: ``It is concluded that one Australian tyre manufacturer acted irresponsibly in not recalling tyres produced in the initial stages of its steel belted radial production which, the manufacturer knew, were failing at an unacceptably high rate and were thus placing many people at risk''. 6. During the hearings the committee received certain evidence from numerous parties both individual and otherwise. Among the evidence received were various letters, statistics reports, transcripts and associated documents as well as ``exhibits'' specified in appendix 9 appearing on pages 100-106 inclusive of the report of the committee. 7. Certain of the said exhibits appearing in the appendix 9 of the report of the committee were marked with an asterisk as ``confidential'' and in particular certain documents prepared by or on behalf of, and submitted by Goodyear Tyre and Rubber Co. (Aust.) Limited. 8. In order to properly and adequately conduct the hearing of the claim by Glenn Fearnside it shall be necessary to adduce evidence tending to show matters such as the identity of the ``one Australian tyre manufacturer'' which acted irresponsibly in failing to recall tyres. Evidence relating to such matters is to be found in the transcript of proceedings of the committee, including oral evidence taken by the committee and all documents tendered as ``exhibits'' and appearing in appendix 9 of the report of the committee. 9. The conduct of the said proceedings would be assisted and expedited if the plaintiff could call on the evidence which has been tendered to the committee. 10. Your petitioner therefore humbly prays that this Honourable House will publish or authorise the publication of the transcript of all proceedings of the committee inclusive of the transcript of all oral evidence taken by the committee and all documents tendered or presented by each and every party appearing and giving evidence before the committee or otherwise and in particular all ``exhibits'' as referred to in appendix 9 of the report of the committee. 11. Your petitioner further humbly prays that this Honourable House: (a) Will grant leave to your Petitioner to take possession of all documents of any nature referred to in paragraph 10 aforesaid including all reports of oral evidence to the committee and to permit the production and admission into evidence of any or all of such documents referred to in paragraph 10 aforesaid as well as any and all oral evidence taken by the committee of and incidental to the enquiry of the committee. and (b) Will grant leave to an appropriate Officer or Officers of the House to attend in Court as and when necessary to produce the official report of the House of Representatives Standing Committee on road safety June 1980 titled ``Tyre Safety'' and the full transcript of the proceedings of the committee resulting in the preparation of the report of the committee inclusive of all ``exhibits'' referred to in appendix 9 of the report of the committee and to give evidence in relation to the conduct of the inquiry which led to that report, providing that such Officer or Officers should not be required to attend at any time which would prevent the performance of his, her or their duties in the Parliament. Dated the 29th day of November 1988. Snedden Hall &Gallop Barristers &Solicitors And your Petitioner, as in duty bound, will ever pray. Mr BEAZLEY(Swan-Leader of the House)(3.50) —by leave-I move: (1) That this House grants leave to Snedden, Hall and Gallop to issue a subpoena for the production in court of the published records of all proceedings and the report of the House of Representatives Standing Committee on Road Safety in its inquiry into tyre safety; (2) that this House grants leave to an appropriate officer or officers of the House to attend in court and produce the said records and the official report of the committee, provided that such an officer or officers shall not be required to attend at any time which would prevent the performance of their duties in the Parliament; and (3) that the following matter be referred to the Standing Committee on Transport, Communications and Infrastructure for consideration and advice to the House: Whether confidential exhibits as referred to in Appendix 9 of the report on tyre safety by the Standing Committee on Road Safety should be presented to the House by the Standing Committee on Transport, Communications and Infrastructure for the purpose of the House granting leave to a petitioner or his or her legal representatives to issue and serve a subpoena for the production of those exhibits to a court. This motion seeks to give leave for the issue of a subpoena for the production in court of the published records of proceedings and the report of the House of Representatives Standing Committee on Road Safety in its inquiry into tyre safety and for the attendance of an appropriate officer or officers in court to produce the documents. Whilst it is held in some quarters that leave of the House is not required for the production of certain parliamentary documents in court, the House has not made a decision to discontinue the practice. Honourable members may recall that a resolution on this matter was presented in draft form as part of the package of resolutions to complete the implementation of the recommendations of the Joint Select Committee on Parliamentary Privilege. I emphasise that the use to which such parliamentary material may be put in any court or tribunal is strictly governed by section 16 of the Parliamentary Privileges Act 1987. The present motion does not affect the actual use which may be made of the documents but is limited merely to the question of permitting subpoenas to be served for their production in court. The final part of the motion proposes that the question of the possible release of confidential exhibits, which has also been sought, should be referred to the Standing Committee on Transport, Communications and Infrastructure. The documents in question, I understand, have never been presented to the House and, there now being no Road Safety Committee or Transport Safety Committee, it is appropriate that the Transport, Communications and Infrastructure Committee, being the Committee which now encompasses the area covered by the Road Safety Committee, should consider this question. I understand that the documents in question are desired for use in a case scheduled for mid-December. In these circumstances it was considered that as far as practicable this matter should not wait until the sittings resume on 28 February. I commend the motion to the House. Mr FIFE(Hume-Manager of Opposition Business)(3.53) —The Opposition supports the motion that has been moved by the Leader of the House (Mr Beazley). In so doing, and particularly in reference to the last comments made by the Leader of the House, could I perhaps, through you Mr Deputy Speaker, seek an indication from the Leader of the House whether it is intended that the Committee on Transport, Communications and Infrastructure might meet and report back to the House tomorrow? I think some attempt will be made for the Committee to meet, and I would like to commend the Leader of the House for moving the motion in the way he has. The House really needs to have advice from the Committee before it can consider the last part of the request that is contained in the petition. Question resolved in the affirmative. Bill presented by Mr Willis, and read a first time. Mr WILLIS(Gellibrand-Minister for Transport and Communications)(3.54) —I move: That the Bill be now read a second time. The purpose of this Bill is to clarify and refine the technical operation of `grandfathering' and related provisions in the Broadcasting Act 1942. The relevant provisions were introduced by the Broadcasting (Ownership and Control) Act 1988. The Broadcasting (Ownership and Control) Act introduced new radio and cross-media ownership and control limits in the Broadcasting Act. Relevant prescribed interests or directorships held before 29 October 1987 were protected, or `grandfathered', from the operation of the new media ownership limits. The then Minister for Transport and Communications, Senator Gareth Evans, had announced the Government's intention to introduce these new limits on 28 October 1987. In addition to these `retrospective' grandfathering rules for interests held before the date of announcement, the Broadcasting (Ownership and Control) Act introduced `prospective' grandfathering rules. These rules provide protection where relevant radio, television or cross-media limits are breached because of minor changes in the service areas of commercial radio or television stations or because of changes in census count population figures within relevant service areas. This Bill improves the technical operation of the grandfathering and related provisions introduced by the Broadcasting (Ownership and Control) Act. A detailed outline of the amendments is provided in the explanatory memorandum to the Bill. The amendments are of a minor, technical nature and involve no change in the Government's policy toward the grandfathering of relevant interests. In essence, that policy is to protect legitimate interests acquired before the date of Government announcement or where they were acquired after that date but only breach relevant ownership and control limits because of minor changes in service area populations. The Bill will also allow the Minister to delegate his or her powers to make determinations for the purposes of relevant Commonwealth of Australia Gazette notices that are necessary for the enforcement of the new ownership and control limits. These Gazette notices relate to the populations within defined radio and television service areas as measured by the most recent census count results published by the Australian Statistician. The determinations made for the purpose of these gazettals do not involve the exercise of any real discretionary power and are based purely on objective data. The delegation of these ministerial determinations to an authorised officer in the Department of Transport and Communications will facilitate a more streamlined process for the updating of existing Gazette notices. The Broadcasting (Ownership and Control) Act has completed a process of reform of media ownership policies in Australia. The present package of radio, television and cross-media rules in the Broadcasting Act has also complemented the Government's policies for the provision of additional commercial radio and television services, particularly in regional areas. The `fine tuning' amendments in this Bill are designed to ensure that the technical operation of the ownership and control Act is more certain and equitable for those persons who have a legitimate claim to protection under the grandfathering rules. Financial Impact There will be no additional costs to the Commonwealth in the administration of the provisions in the Bill. I present the explanatory memorandum and commend the Bill to the House. Debate (on motion by Mr Cadman) adjourned. Bill presented by Mr Peter Morris, and read a first time. Mr PETER MORRIS(Shortland-Minister for Industrial Relations and Minister Assisting the Treasurer)(3.58) —I move: That the Bill be now read a second time. This Bill introduces measures to give effect to the superannuation tax reform measures announced in the May economic statement. The announced changes, which apply from 1 July 1988, have two central elements-first, the bring-forward of tax from end benefits to the point at which employer superannuation contributions are made; and, second, the introduction of a tax at a concessional rate on the investment income of superannuation funds and approved deposit funds. The concessional rate of tax on investment income is to apply also to pooled superannuation trusts-that is, trusts that are wholly owned by complying superannuation funds and approved deposit funds. The tax on contributions and investment income of complying funds is being set at a rate of 15 per cent. Funds will, however, be able to significantly reduce the tax by offsetting excess imputation credits on franked dividends. It has not been possible to include in this Bill all of the legislation necessary to give effect to the May superannuation tax package. The balance of the legislation will be introduced in the new year. That will include the changes to the concessional application of capital gains tax to superannuation funds and the reductions in the rates of tax on retirement benefits paid from taxed superannuation funds. The Bill also includes legislation announced in the May Economic Statement to repeal the special tax treatment relating to the calculated liabilities of life insurance companies. The other changes to the taxation of life insurance companies will also be introduced after Parliament resumes next year. Another matter included in the Bill is the change announced by the Treasurer (Mr Keating) on 11 August 1988 in respect of arrangements where a holding company cancels shares in itself that are held by a subsidiary company. Finally, the Bill reflects changes in the arrangements for approval of research institutes for the purposes of the tax concession for expenditure on scientific research. I now move on to the detail of the measures that are implemented by this Bill. Superannuation Tax Reform The Bill removes the tax exemption for the income of complying superannuation funds. Complying funds are those which satisfy standards set down in the Occupational Superannuation Standards Act. Contributions to such funds by employers and tax deductable contributions made by self-employed persons and employees are to be included in assessable income by this Bill. The Bill also includes in assessable income the investment income of complying superannuation funds, complying approved deposit funds and pooled superannuation trusts. To ensure that there is no retrospectivity in taxing funds' income any income accrued before 1 July 1988 will not be taxable even if derived after 30 June 1988. Public sector funds are being brought generally within the scope of the taxing provisions, on the footing that the proposed tax would not amount to a tax on the property of a State. The Bill will also put in place the following concessional rules for taxing complying superannuation funds: the part of a complying superannuation fund's income that is referable to current pension liabilities is to remain exempt from tax; dividend imputation rebates are to be available to complying superannuation funds even where the dividend is exempt income; as announced on 1 July 1988 the costs of death and permanent disability insurance premiums paid by complying superannuation funds are to be excluded from contributions tax. The Bill allows deductions to funds for premiums paid to obtain death and disability insurance. The concession is also extended by this Bill to funds which, though providing death and disability cover to members, do not fully insure against the liability. Such funds will be allowed a deduction equivalent to the cost of insuring against death and permanent disability liabilities. The concession is further extended by the Bill to cover the cost of providing temporary disability benefits; expenses incurred by funds in bringing in contributions are to be fully deductible even though some of the contributions are not taxable-for example, where a fund receives non-deductible employee contributions. The Bill will also include in the assessable income of superannuation funds and approved deposit funds the post-June 1983 components of certain rolled over eligible termination payments. The relevant payments are retirement payments by employers-that is, `golden handshakes'-and, to deal with any argument by public sector superannuation funds that they are not liable to tax because of the operation of section 114 of the Constitution, payments from any such funds. The concessional taxing arrangements for complying funds will not apply to any superannuation funds and approved deposit funds which do not satisfy the Occupational Superannuation Standards Act. Those funds will be taxed on their income and taxable contributions at the rate of 49 per cent. Complying funds which invest in pooled superannuation trusts will not be taxed again on the income which is taxed in the hands of the trust. That approach parallels the treatment of investments in life insurance policies. Another measure being proposed by the Bill will allow funds that invest in a pooled superannuation trust to pass on to the trust their liability to contributions tax if the trust agrees. The proposed amendment will also allow complying funds to transfer their contributions tax liability to a life office or registered organisation from which they have purchased a life insurance policy. This provision is designed to ease the administrative burden on funds. As a complement to the taxing of employer superannuation contributions, it is proposed in the Bill to make all such contributions tax deductable from 1 July 1988, whether or not the contributions are made to complying funds. Also, consistent with the policy of bringing forward the tax on end benefits to the point of contribution, deductions will not be allowed in future for amounts not paid into a fund but merely set apart by an employer to provide superannuation benefits. After today deductions will only be available for amounts actually paid to a fund. The Bill will give effect to the Government's decision, announced in the May Economic Statement, to increase the maximum allowable deduction for contributions made to personal superannuation funds by self-employed persons and eligible employees. The maximum deduction is to be increased from $1,500 to $3,000 with effect for the income year ending 30 June 1989. I take this opportunity to announce an extension of the proposal, announced on 11 August 1988, to exempt from tax superannuation contributions made after 30 June 1988 to meet a liability that existed at that date. The concession as announced applies to contributions to a complying fund that was in existence at 30 June 1988 in respect of that fund's own liabilities. The Government has decided that the exemption should be extended to cover superannuation contributions to complying funds that take over pre-July 1988 liabilities of other funds, including where the transferee fund did not exist at 30 June 1988. The concession will apply in these cases, however, only if the liability is transferred in circumstances where the member's employment period is unbroken and where benefits are not paid to the member at the time of transfer. The relevant legislation will be included in a later Bill. The changes to the system of taxing superannuation funds that this Bill introduces continue the reform of the tax system that this Government has been carrying out since 1983. Together with the proposal-also announced in the May 1988 Economic Statement-to tax the superannuation and roll-over deferred annuity business income of life insurance companies and registered organisations they are expected to generate additional revenue of $980m in 1989-90 and $1,400m in 1990-91. The net revenue gain will be smaller though because of proposed reductions in the tax payable on retirement benefits. At a time of significant growth in the superannuation industry, this Bill will assist in improving the equity and efficiency of this area of the taxation system. Life Insurance Taxation The Bill will give effect to two changes to the taxation treatment of life insurance companies as announced in the 1988 May Economic Statement. In particular, the Bill will abolish the special deduction available to life insurance companies in respect of their calculated liabilities, and also remove the exemption from income tax where such liabilities exceed the value of the company's assets. These concessions will cease with effect from the 1988-89 income year. The broadening of the tax base of life companies through the changes in this Bill are estimated to produce revenue gains of $70m in 1988-89, but this will be more than offset by the reduction in the company tax rate. Share Cancellations This Bill gives effect to the proposal announced by the Treasurer on 11 August 1988 to prevent a reduction in tax liability arising where a holding company cancels, for less than market value, shares in itself that are held by a subsidiary company. Where the subsidiary company receives less than market value for the shares, its tax liability would be less than it would have been had the shares been cancelled or disposed of for an arm's length amount. The Bill addresses this situation by taking the subsidiary company to have received, as consideration for the cancellation, an amount equal to the market value of the shares. If the holding company were subsequently to dispose of its interest in the subsidiary company, the disposal proceeds would be reduced because the interest would have fallen in value as a result of the cancellation. Consequently, the holding company could in this way obtain an unwarranted benefit, by way of a reduction in its tax liability, from the cancellation of the shares. The Bill prevents a holding company from obtaining such a benefit. This is achieved by reducing the acquisition cost, or increasing the disposal proceeds, of the holding company's interests in the subsidiary company by an amount that ensures there is no reduction in the holding company's tax liability because of the cancellation. Where the interest of the holding company in the subsidiary is held indirectly through one or more interposed entities, similar adjustments will be made to ensure that the interposed entities obtain no undue benefit from the share cancellation arrangement. This amendment applies to a cancellation of shares for which court approval is obtained after 11 August 1988. The amendment is of a safeguarding nature without which very significant amounts of revenue would be at risk from the generation of deductions and capital losses that share cancellation arrangements could produce. Approved Research Institutes Finally, the list of approving authorities in the definition of an `approved research institute' in section 73a of the Income Tax Assessment Act is being amended to reflect machinery of government changes made in July 1987 and changes in responsibilities as between some departments. The amendment, which will permit the secretaries of the departments of Community Services and Health and Employment, Education and Training to approve research institutes for taxation purposes, will have no impact on revenue. I commend the Bill to the House and in so doing present an explanatory memorandum that contains a general outline and description of the main features of the measures it contains. Comprehensive notes on the clauses of the Bill will be made available to honourable members in about a fortnight. That has arisen because of pressure upon the preparation and printing of explanatory memorandums. Debate (on motion by Mr Downer) adjourned. Bill presented by Mr Peter Morris, and read a first time. Mr PETER MORRIS(Shortland-Minister for Industrial Relations and Minister Assisting the Treasurer)(4.12) —I move: That the Bill be now read a second time. This Bill will amend the Income Tax Rates Act 1986 to declare the rate of tax payable on taxable contributions and income derived by complying superannuation funds, approved deposit funds and pooled superannuation trusts. For complying funds, the declared rate is generally 15 per cent. A rate of 49 per cent will apply to the income and contributions of non-complying funds. The existing 49 per cent rate for excessive non-arm's length income derived by superannuation funds and approved deposit funds will be maintained for those funds and extended to such excessive income derived by pooled superannuation trusts. I commend the Bill to the House. Debate (on motion by Mr Downer) adjourned. Mr CONNOLLY(Bradfield)(4.13) —I move: That so much of Standing and Sessional Orders be suspended as would prevent the member for Bradfield moving forthwith: That this House condemns the Government for its unacceptable delay and lack of consultation prior to the introduction of the superannuation tax legislation, which will reduce employees' final end benefits, thus proving that the Treasurer misled the Australian people when he said that these changes would not `diminish any personal end benefit by one cent'. The issue before the House is one of profound importance to Australia. The Government has misled the Australian people and deliberately done so. Mr Peter Morris —I move- Mr CONNOLLY —Mr Deputy Speaker-- Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member for Bradfield will resume his seat. Mr Peter Morris —I move: That the honourable member be not further heard. Mr Connolly —This is a disgrace. Here we are at the end of a session, when this legislation goes to fundamental issues, and when- Mr DEPUTY SPEAKER —Order! The honourable member for Bradfield has been warned once. I ask him to resume his seat. Question put. The House divided. (Mr Deputy Speaker-Mr C. A. Blanchard) Ayes . . . . . . . . . . . 72 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 21 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Kerr, D. J. C.Blewett, N. Klugman, R. E.Brown, John Lamb, A. H. (Teller)Brown, Robert Langmore, J. V.Brumby, J. M. Lavarch, M. H.Campbell, G. Lee, M. J.Charles, D. E. Lindsay, E. J.Charlesworth, R. I. McHugh, J.Chynoweth, R. L. Martin, S. P.Cleeland, P. R. Mildren, J. B.Courtice, B. W. Milton, P.Crawford, M. C. Morris, AllanCross, M. D. Morris, PeterCunningham, B. T. (Teller) Mountford, J. G.Dawkins, E. E. O'Keefe, N. P.Dubois, S. C. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Sawford, R. W.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, JohnGrace, E. L. Scott, LesGriffiths, A. G. Simmons, D. W.Hand, G. L. Snow, J. H.Harvey, E. R. Snowdon, W. E.Holding, A. C. Staples, P. R.Hollis, C. Theophanous, A. C.Howe, B. L. Tickner, R. E.Humphreys, B. C. Uren, T.Jakobsen, C. A. West, S. J.Jenkins, H. A. Willis, R.Johns, G. T. Wright, K. W. Aldred, K. J. Miles, C. G.Andrew, J. N. (Teller) Millar, P. C.Beale, J. H. Moore, J. C.Blunt, C. W. Nehl, G. B.Braithwaite, R. A. Porter, J. R.Brown, N. A. Pratt, M. P.Burr, M. A. Prosser, G. D.Cadman, A. G. Reith, P. K.Cameron, Ewen Robinson, IanCameron, Ian Rocher, A. C.Carlton, J. J. Ruddock, P. M.Cobb, M. R. Shack, P. D.Connolly, D. M. Sharp, J. R.Cowan, D. B. Shipton, R. F.Downer, A. J. G. Sinclair, I. McC.Fife, W. C. Smith, W. L.Fischer, Tim Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Taylor, W. L.Hicks, N. J. (Teller) Tuckey, C. W.Hunt, R. J. D. Webster, A. P.Jull, D. F. White, P. N. D.Lloyd, B. Wilson, I. B. C.McArthur, F. S. Woods, R. L.McGauran, P. J. Wooldridge, M. R. L.Macphee, I. M. Question so resolved in the affirmative. Mr BLUNT(Richmond)(4.22) —I formally second the motion. Motion (by Mr Beazley) proposed: That the honourable member be not further heard. Mr DEPUTY SPEAKER(Mr Blanchard) —The question is that the honourable member be not further heard. Mr Connolly —On a point of order, Mr Deputy Speaker-- Mr DEPUTY SPEAKER —Order! Points of order cannot be raised while the motion is being put. The question before the House- Mr Connolly —Mr Deputy Speaker, this is the greatest perpetration-- Mr DEPUTY SPEAKER —The honourable member for Bradfield-- Mr Connolly —of the Australian people that has ever occurred in this Parliament. Mr DEPUTY SPEAKER —The honourable member for Bradfield-- Mr Connolly —The Government is not allowing a measure involving a large amount of taxpayers' funds to be debated. Mr DEPUTY SPEAKER —Order! I warn the honourable member for Bradfield. Mr Connolly —They will not thank any of you for this. Mr DEPUTY SPEAKER —Order! I name the honourable member for Bradfield. Motion (by Mr Beazley) put: That the honourable member for Bradfield be suspended from the service of the House. A division having been called and the bells being rung- Mr Sinclair —I raise a point of order, Mr Deputy Speaker. You cannot name a member in the middle of a question being put. You have to wait until the question has been dealt with. You cannot do it in the way you are doing now. Mr DEPUTY SPEAKER —Order! There is no point of order. Mr Sinclair —I raise a further point of order, Mr Deputy Speaker. You cannot proceed on the basis on which you are now proceeding. If you wish to name the honourable gentleman you must wait until the question is dealt with. You cannot do it in the middle of the question being put. Mr DEPUTY SPEAKER —Order! The Chair has ordered that the vote be taken. The question that the honourable member for Richmond be not further heard will have to be put after the vote is taken on the suspension of the honourable member. The House divided. (Mr Deputy Speaker-Mr C. A. Blanchard) Ayes . . . . . . . . . . . 73 Noes . . . . . . . . . . . 52 —— Majority . . . . . . . . . 21 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Kerr, D. J. C.Blewett, N. Klugman, R. E.Bowen, Lionel Lamb, A. H. (Teller)Brown, John Langmore, J. V.Brown, Robert Lavarch, M. H.Brumby, J. M. Lee, M. J.Campbell, G. Lindsay, E. J.Charles, D. E. McHugh, J.Charlesworth, R. I. Martin, S. P.Chynoweth, R. L. Mildren, J. B.Cleeland, P. R. Milton, P.Courtice, B. W. Morris, AllanCrawford, M. C. Morris, PeterCross, M. D. Mountford, J. G.Cunningham, B. T. (Teller) O'Keefe, N. P.Dawkins, J. S. O'Neil, L. R. T.Dubois, S. C. Price, L. R. S.Duncan, P. Punch, G. F.Edwards, Ronald Saunderson, J.Fatin, W. F. Sawford, R. W.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, JohnGear, G. Scott, LesGrace, E. L. Simmons, D. W.Griffiths, A. G. Snow, J. H.Hand, G. L. Snowdon, W. E.Harvey, E. R. Staples, P. R.Holding, A. C. Theophanous, A. C.Hollis, C. Tickner, R. E.Howe, B. L. Uren, T.Humphreys, B. C. West, S. J.Jakobsen, C. A. Willis, R.Jenkins, H. A. Wright, K. W.Johns, G. T. Aldred, K. J. Macphee, I. M.Andrew, J. N. (Teller) Miles, C. G.Beale, J. H. Millar, P. C.Blunt, C. W. Moore, J. C.Braithwaite, R. A. Nehl, G. B.Brown, N. A. Porter, J. R.Burr, M. A. Pratt, M. P.Cadman, A. G. Prosser, G. D.Cameron, Ewen Reith, P. K.Cameron, Ian Robinson, IanCarlton, J. J. Rocher, A. C.Cobb, M. R. Ruddock, P. M.Connolly, D. M. Shack, P. D.Cowan, D. B. Sharp, J. R.Downer, A J. G. Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Taylor, W. L.Hicks, N. J. (Teller) Tuckey, C. W.Hunt, R. J. D. Webster, A. P.Jull, D. F. White, P. N. D.Lloyd, B. Wilson, I. B. C.McArthur, F. S. Woods, R. L.McGauran, P. J. Wooldridge, M. R. L. Question so resolved in the affirmative. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member for Bradfield is suspended from the service of the House for 24 hours. The honourable member for Bradfield thereupon withdrew from the chamber. Mr DEPUTY SPEAKER —The question now before the Chair is that the honourable member for Richmond be not further heard. The House divided. (Mr Deputy Speaker-Mr C. A. Blanchard) Ayes . . . . . . . . . . . 75 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 24 —— Baldwin, P. J. Jones, BarryBeazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Kerr, D. J. C.Blewett, N. Klugman, R. E.Bowen, Lionel Lamb, A. H. (Teller)Brown, John Langmore, J. V.Brown, Robert Lavarch, M. H.Brumby, J. M. Lee, M. J.Campbell, G. Lindsay, E. J.Charles, D. E. McHugh, J.Charlesworth, R. I. McLeay, LeoChynoweth, R. L. Martin, S. P.Cleeland, P. R. Mildren, J. B.Courtice, B. W. Milton, P.Crawford, M. C. Morris, AllanCross, M. D. Morris, PeterCunningham, B. T. (Teller) Mountford, J. G.Dawkins, J. S. O'Keefe, N. P.Dubois, S. C. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Sawford, R. W.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, JohnGear, G. Scott, LesGrace, E. L. Simmons, D. W.Griffiths, A. G. Snow, J. H.Hand, G. L. Snowdon, W. E.Harvey, E. R. Staples, P. R.Holding, A. C. Theophanous, A. C.Hollis, C. Tickner, R. E.Howe, B. L. Uren, T.Humphreys, B. C. West, S. J.Jakobsen, C. A. Willis, R.Jenkins, H. A. Wright, K. W.Johns, G. T. Aldred, K. J. Miles, C. G.Andrew, J. N. (Teller) Millar, P. C.Beale, J. H. Moore, J. C.Blunt, C. W. Nehl, G. B.Braithwaite, R. A. Porter, J. R.Brown, N. A. Pratt, M. P.Burr, M. A. Prosser, G. D.Cadman, A. G. Reith, P. K.Cameron, Ewen Robinson, IanCameron, Ian Rocher, A. C.Carlton, J. J. Ruddock, P. M.Cobb, M. R. Shack, P. D.Cowan, D. B. Sharp, J. R.Downer, A. J. G. Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Taylor, W. L.Hicks, N. J. (Teller) Tuckey, C. W.Hunt, R. J. D. Webster, A. P.Jull, D. F. White, P. N. D.Lloyd, B. Wilson, I. B. C.McArthur, F. S. Woods, R. L.McGauran, P. J. Wooldridge, M. R. L.Macphee, I. M. Question so resolved in the affirmative Mr Tim Fischer —Mr Deputy Speaker, thousands of-- Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member for Farrer has not been called. The question is that the motion for the suspension of Standing Orders be agreed to. The time limit for the debate has expired and I now propose to put the question. Question put: That the motion (Mr Connolly's) be agreed to. The House divided. (Mr Deputy Speaker-Mr Blanchard) Ayes . . . . . . . . . . . 49 Noes . . . . . . . . . . . 75 —— Majority . . . . . . . . . 26 —— Aldred, A. E. Miles, C. G.Andrew, J. N. (Teller) Millar, P. C.Beale, J. H. Moore, J. C.Blunt, C. W. Nehl, G. B.Braithwaite, R. A. Porter, J. R.Brown, N. A. Pratt, M. P.Burr, M. A. Prosser, G. D.Cadman, A. G. Reith, P. K.Cameron, Ewen Robinson, IanCameron, Ian Rocher, A. C.Carlton, J. J. Ruddock, P. M.Cobb, M. R. Shack, P. D.Cowan, D. B. Sharp, J. R.Downer, A. J. G. Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. Taylor, W. L.Hawker, D. P. M. Tuckey, C. W.Hicks, N. J. (Teller) Webster, A. P.Hunt, R. J. D. White, P. N. D.Jull, D. F. Wilson, I. B. C.Lloyd, B. Woods, R. L.McArthur, F. S. Wooldridge, M. R. L.Macphee, I. M. Baldwin, P. J. Jones, BarryBeazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Kerr, D. J. C.Blewett, N. Klugman, R. E.Bowen Lionel Lamb, A. H. (Teller)Brown, John Langmore, J. V.Brown, Robert Lavarch, M. H.Brumby, J. M. Lee, M. J.Campbell, G. Lindsay, E. J.Charles, D. E. McHugh, J.Charlesworth, R. I. McLeay, LeoChynoweth, R. L. Martin, S. P.Cleeland, P. R. Mildren, J. B.Courtice, B. W. Milton, P.Crawford, M. C. Morris, AllanCross, M. D. Morris, PeterCunningham, B. T. (Teller) Mountford, J. G.Dawkins, J. S. O'Keefe, N. P.Dubois, S. C. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Sawford, R. W.Free, R. V. Scholes, G. G. D.Gayler, J. Scott, JohnGear, G. Scott, LesGrace, E. L. Simmons, D. W.Griffiths, A. G. Snow, J. H.Hand, G. L. Snowdon, W. E.Harvey, E. R. Staples, P. R.Holding, A. C. Theophanous, A. C.Hollis, C. Tickner, R. E.Howe, B. L. Uren, T.Humphreys, B. C. West, S. J.Jakobsen, C. A. Willis, R.Jenkins, H. A. Wright, K. W.Johns, G. T. Question so resolved in the negative. Bill presented by Mr Peter Morris, and read a first time. Mr PETER MORRIS(Shortland-Minister for Industrial Relations and Minister Assisting the Treasurer)(4.45) —I move: That the Bill be now read a second time. This Bill contains a precautionary measure related to the proposed amendment of the Income Tax Rates Act 1986. If for constitutional reasons that amendment were to apply so as to tax only the income of particular superannuation funds and approved deposit funds, and not their taxable contributions, this Bill would operate to impose tax on the taxable contributions of such funds at the rate of 15 per cent. I commend the Bill to the House. Debate (on motion by Mr Downer) adjourned. Bill presented by Mr Peter Morris, and read a first time. Mr PETER MORRIS(Shortland-Minister for Industrial Relations and Minister Assisting the Treasurer)(4.46) —I move: That the Bill be now read a second time. This Bill will amend the Income Tax Act 1986 to guard against any possibility that the proposal to tax both the contributions and the other income derived by superannuation funds and approved deposit funds could be found to deal with two subjects of taxation contrary to the Constitution. In such an event, the Act would impose tax only on that other income. I commend the Bill to the House. Debate (on motion by Mr Downer) adjourned. Bill presented by Mr Staples, and read a first time. Mr STAPLES(Jagajaga-Minister for Housing and Aged Care)(4.47) —I move: That the Bill be now read a second time. This Bill will amend the Aged or Disabled Persons Homes Act 1954 and will repeal the Aged or Disabled Persons Hostels Act 1972. The major purpose of this Bill is to introduce new arrangements to enable improved planning and financial management in the hostel sector. In addition, the Bill proposes measures that will ensure better targeting of subsidised hostel services to those aged people in need of such care and introduces provisions to assist people seeking to avail themselves of respite care services in a hostel. The Bill also seeks to overcome an inconsistency between nursing homes and hostels by enabling moneys borrowed or received from Commonwealth or State governments, or from other sources, to be taken into account when calculating the amount of capital grant in relation to a nursing home. This provision already exists for hostels. The Bill provides for the repeal of the Aged or Disabled Persons Hostels Act 1972 while preserving any outstanding entitlements under the Act through the grant of an approval in principle under the new provisions in the Aged or Disabled Persons Hostels Act 1954. In 1986 the Government endorsed the findings of the nursing homes and hostels review which recognised that there was a need to develop a total aged care policy with an expanded range of care options to meet individual needs. As part of the strategy to meet this need, the Government has introduced a series of measures directed at the expansion and better resourcing of the sector. The discussion document entitled `Equitable Funding Base for Hostels', released by the Department in October 1987, made a number of recommendations along these lines, concerning, in particular, the integration of funding and planning for the expanding hostel sector. Primarily, these recommendations proposed the introduction of an approval in principle and approval process for hostels to ensure that Commonwealth capital and recurrent funding would in future be provided only to those hostels meeting an identified need. To establish the framework for the approval in principle and approval mechanisms, amendments introduced by this Bill enable the Minister to determine the maximum number of hostel places to be funded on a recurrent basis for each State and Territory in a financial year, and to specify the distribution of these hostel places among planning regions. These maxima will be specified by a Commonwealth of Australia Gazette notice. Clause 9 of the Bill also introduces a provision that prevents the Minister from granting an approval in principle or approving additional hostel places for recurrent funding if the effect of doing so would cause the maximum number of committed hostel places in a State, Territory or region to be exceeded. The allocation of hostel resources will be determined on the basis of the Government's objective to provide 100 residential care places for 1,000 people aged 70 and over, with a mix, within this 100, of 60 hostel places to 40 nursing home places. In determining priorities in line with this objective, the Minister will take into account advice provided by the aged care advisory committees. On 15 July this year I announced that the Government plans to approve 4,244 new places in 1988-89, 4,723 in 1989-90, and 4,738 in 1990-91; 13,705 additional places overall, of which 12,296 will be for hostels and 1,409 for nursing homes. These new hostel places will be accommodated within the State or Territory and regional maxima to be gazetted for the corresponding relevant periods. Clause 9 of the Bill also introduces the proposed approval in principle and approval arrangements. A primary objective of these arrangements is to establish firmly for both the eligible organisation and the Commonwealth, the extent of the Commonwealth's financial commitment in terms of recurrent, and where relevant, capital funding, and the conditions that must be fulfilled by the holder of an approval in principle before a formal decision to grant capital moneys or to approve the payment of recurrent subsidy is made. The proposed amendment responds to concerns expressed by service providers that, in the past, the Commonwealth has not always been able to provide assurances in advance of the commencement of a hostel project that, upon completion, recurrent subsidy will be paid, even though Commonwealth capital funding had been provided. The proposed amendments remove that uncertainty. As with the comparable provisions of the National Health Act 1953, clause 9 enables an approval in principle to be granted for the construction or purchase of a new hostel, for an extension to an existing hostel, for the demolition and reconstruction of an existing hostel on the same site and the transfer of some or all hostel places from one site to another existing hostel or proposed hostel on another site. In line with the Government's commitment to improved financial management and planning in the hostel sector, the Bill-clauses 15 and 24-amends the Aged or Disabled Persons Homes Act 1954 to ensure that all Commonwealth funded hostels, existing and future ones, are approved for a fixed number of hostel places. In future, an organisation wishing to receive recurrent subsidy for an extension to an existing hostel facility will first be required to seek an approval in principle for those additional places. These amendments enable the Commonwealth to control growth in the number of subsidised hostel places, to ensure that any additional places are located where the need exists and, consequently, plan for recurrent expenditure by way of hostel, personal care and respite care subsidies. Clause 17 paragraph (g) concerns the individual entitlement to respite care. In April this year I announced that one of the new measures to improve availability of, and access to, respite care would be an individual entitlement to respite care services of 63 days across all hostels or nursing homes. To satisfy my own concerns and those of the industry that the respite arrangements operate effectively, the arrangement proposed in the Bill will enable payment of recurrent subsidy in respect of an eligible person occupying an approved respite care place for a maximum of 63 days in the same hostel in a benefit period. This will be welcomed by organisations providing much needed respite care services for aged people and by those who require such hostel respite care. The Commonwealth has, on numerous occasions, expressed its policy to target subsidised care services to aged people. This Bill-clauses 19 and 20-introduces measures to ensure that approved hostel places are made available to eligible people, that is, those aged or disabled people assessed as requiring hostel or personal care services, a person who was residing with such a person prior to their commencing to receive care services on a permanent basis and who wishes to continue to reside with that person, and persons who wish to receive hostel care services on a temporary basis, or who wish to receive, and are assessed as requiring, hostel care and personal care services on a temporary basis. Subsidised hostel services are thereby targeted to aged or disabled people who are assessed as requiring such services. In order to ensure that organisations satisfy, on an ongoing basis, the conditions of recurrent subsidy, the Minister's powers, in the event of a breach of conditions, are to be expanded by this Bill-clause 20-to enable the revocation of the approval of one or more hostel places. The decision to take such action will be subject, of course, to appeal by the organisation and review by the Administrative Appeals Tribunal-clause 23. Clearly, it is important that existing hostels should not be disadvantaged by the introduction of these new provisions. The Bill therefore proposes transitional arrangements to deal with the entitlements of all hostels presently in receipt of recurrent subsidy and those for which a capital grant has been made, in part or in full, but which are not yet receiving recurrent subsidy. In particular, the Bill proposes an arrangement to allow organisations conducting existing hostel facilities a transition period of approximately five years during which to adjust their existing resident population so as to comply with the requirement that approved hostel places be occupied solely by eligible persons-clauses 24, 25 and 26. In addition the Bill enables the formulation of principles for determining, inter alia, the number of hostel places for which an approval or an approval in principle will be granted to an organisation to which these transitional arrangements apply. These principles will be tabled and subject to possible disallowance. By clause 27 of the Bill the Aged or Disabled Persons Hostels Act 1972 is repealed. This repeal is in fact long overdue, as new approvals under this Act ceased in 1975. The so-called `Hostels' Act provided for up to 100 per cent capital funding for hostels approved under the Act between 1972 and 1975. No recurrent subsidies were provided under the Act. However, organisations which receive capital under the `Hostels' Act are eligible to receive recurrent funding under the Aged or Disabled Persons Homes Act 1954. There are a small number of organisations which have outstanding approvals under section 5 of the Act for which, to date, the organisations concerned have not sought capital. This Bill proposes that any such outstanding entitlements would be preserved through the grant of an approval in principle under the new provisions introduced by this Bill. In order to ensure that these organisations receive the most appropriate funding possible, organisations granted approval in principle under these arrangements are to be permitted to elect to receive either the capital grant they would be entitled to under the `Hostels' Act 1972, or that which would now be payable under the Aged or Disabled Persons Homes Act 1954. Let me assure the House that these new arrangements for managing growth and strengthening the hostel approval process will enable the Government to encourage, direct and target appropriate hostel services in a rapidly expanding sector. I commend the Bill to the House. I now present the explanatory memorandum to the Bill. Debate (on motion by Mr Downer) adjourned. Mr BEDDALL(Rankin) —On behalf of the Standing Committee on Industry, Science and Technology, I present the Committee's report on superconductivity and related new materials, together with the minutes of proceedings and the evidence received by the Committee. Ordered that the report be printed. Mr BEDDALL —by leave-I will not take much part in the debate that will take place over the next 30 minutes. I wish only to offer my congratulations to members of the subcommittee, which comprised the honourable member for Chisholm (Dr Wooldridge), who chaired the subcommitte, the honourable member for Sydney (Mr Baldwin) and the honourable member for Wannon (Mr Hawker). This subcommittee brought about what I think is quite a substantial report. I put on record also my appreciation of the members of the secretariat who assisted. I am sure that this report will be received widely and will be very much supported by the Minister for Science, Customs and Small Business (Mr Barry Jones). Dr WOOLDRIDGE(Chisholm) —by leave-When the Standing Committee on Industry, Science and Technology received its reference six months ago the dust was only beginning to settle after the onset of what could be likened to a latter-day goldrush. The discovery in 1986 of superconductivity in a new class of materials and at higher temperatures than were previously thought possible caught the imagination not only of feature writers but of scientists right around the world. A cover story in Business Week International declared, `Our life has changed: the light bulb, the transistor-now the superconductor revolution'. Time magazine described it as `The startling breakthrough that could change our world'. Only a fortnight ago the Australian ran an article under the heading `The discovery of compounds that will forever alter the way we live'. What has caused all this excitement is a phenomenon which was observed over 75 years ago: if sufficiently cooled, certain materials will conduct an electrical current with practically no loss of energy. The first superconductors had to be chilled to the temperature of liquid helium, almost as cold as is theoretically possible. Because of this and other problems, the property was at first largely relegated to the status of a scientific curiosity. Nevertheless, some of the possibilities were recognised, among them far more efficient distribution and storage of electricity. Over time, other materials were discovered, superconducting at modestly higher temperatures, and other properties of superconducting materials were observed. Chief among these was the Meissner effect, a phenomenon whereby a superconductor causes a magnet to levitate above it. It is the Meissner effect which opens up the possibility of magnetically levitated trains and mechanical coupling with no physical contact, that is, frictionless bearings. The Meissner effect is simply stunning to observe. If one takes a superconducting ceramic and places a magnet on top of it, nothing happens. One then pours liquid nitrogen into a dish and as the superconductor cools the magnet levitates. It is really one of the most fabulous things I have ever observed. Further properties, collectively referred to as Josephson effects, were discovered in the 1960s. These are devices that have the ability to detect extraordinarily small changes in magnetic current. These afford a range of uses in microelectronics, particularly in the areas of scientific instrumentation, communications and computers. Perhaps, fortunately, superconductors also have potential in defence applications. There are still properties of these materials to be discovered. By the early 1980s, low temperature superconductors, known since 1911, had been put to work. Superconducting electromagnets were being used in magnetic resonance imaging for chemical and biochemical analysis and for medical diagnosis. Such machines are in operation in Melbourne and Sydney. High gradient magnetic separation, through the use of powerful superconducting magnets, is a technique with a wide range of applications in ore processing, water treatment and pollution control. The market for existing superconductor technology continues to grow. Known superconducting materials had been improved to the stage where prototypes for some of the predicted electrical power applications could be made. The breakthrough which caused the recent excitement came in early 1986, when two scientists at an IBM laboratory in Switzerland, Karl Muller and Johannes Bednorz, observed superconductivity and the Meissner effect at higher temperatures than previously seen, and in a completely new class of materials. This was the beginning of a series of breakthroughs that has followed. From an economic and technological point of view, the most significant of these has been the breaking of the liquid nitrogen barrier. Materials have been discovered which will superconduct at temperatures above that of liquid nitrogen. Because nitrogen is much more abundant and significantly cheaper than helium and because the refrigeration technology required to maintain liquid nitrogen temperatures is much less cumbersome, the recent and continuing discoveries are indeed of potentially enormous economic and technological significance. The temperatures we are talking about may, to the average person, seem inconceivably low. Liquid nitrogen boils at minus 196 degrees centigrade. The lowest recorded climatic temperature is about minus 80 degrees. But the advances which have been made over the last two years are so dramatic that the new materials are commonly referred to as high temperature superconductors, as distinct from the older, low temperature superconductors. The more forward-looking dare to countenance room temperature superconductors. In talking about superconductors, I implicitly refer also to a wide range of other exciting new materials. After all, the subject of the inquiry is superconductivity and related new materials and the report opens with a discussion of their interrelationships. Presently, it is difficult to predict how rapidly superconductors will impact on the way we live. In fact, it may be so gradual a process that the average person will take it for granted. Few people today reflect on the massive changes which have occurred in the past three decades which followed the invention of the transistor or attribute those changes to the discovery of the semiconductor. Superconductors may be similar. It is as challenging now to predict the full impact of high temperature superconductivity as it would have been in the 1950s to predict those changes. Despite the nonchalance with which the average Australian responds to science and technology, the technological and economic impact which superconductors will have must be recognised and an active Australian response commenced. At this stage, it seems that applications for high temperature superconductors will be developed in three general technologies: electrical power engineering, electromagnets and microelectronics. The first two of these are widely recognised as being long term prospects, with commercial applications not being developed until beyond the turn of the century. However, microelectronics applications are expected both to be developed and to find a market well within a decade. Both Japan and the United States of America have entered the race early on, dedicating large amounts of government funding specifically for high temperature superconductivity research with significant involvement of many large corporations. For a nation desperately needing to strengthen its technological capacity, the recent breakthroughs could not be more timely. Here is an opportunity to get in at the genesis of an exciting cluster of new technologies. We should know only too well, after forsaking our early competence in the computer and space technologies, how difficult it is later to compete, from a standing start, with mature technologies. Much of the current problem with Australia's balance of trade can be attributed to the degree to which we are overwhelmingly a technology importer. If we are not to let the technological and trading gaps widen between ourselves and other industrially advanced nations, we must avail ourselves of every opportunity to become technologically competitive. Primary industries and mining alone cannot reverse the decline of Australia's share of world trade. Australia must overcome a number of fundamental problems to make the most of the opportunities offered by high temperature superconductivity. First, it is essential that we have manufacturing industries which can capitalise on Australian applied research. Australia has excellent scientists and a commendable track record in basic research. Unfortunately, all too often, Australian inventors of experimentally proven applications have had to take their inventions overseas to be commercially developed and marketed. This reveals a traditional weakness in the relationship in Australia between science and technology on one side and manufacturing industry on the other. The subcommittee was disappointed that it did not hear more from Australian industry. Those companies which did contribute to the inquiry were, by and large, those few already very active in locally based research and development, such as Metal Manufactures Ltd, ICI Australia Ltd and Telecom Australia. Academics and scientists were far more forthcoming and it became abundantly clear that the linkages in Australia between business and the research community in our universities and research organisations are poorly developed in Australia compared with other industrially advanced nations. Secondly, Australia is not well prepared for the sudden appearance of the opportunities offered by high temperature superconductivity. In addition to the problems in our manufacturing sector, which I have already mentioned, we face a crisis in the availability of sufficient numbers of research personnel. Research into superconductivity involves a range of highly skilled people in a range of scientific disciplines: theoretical and applied chemistry, physics and materials sciences. The extent of our longstanding shortage of scientists and engineers is now being recognised but corrective action is yet to be resolved. On this point, I was saddened to hear the Minister for Employment, Education and Training (Mr Dawkins) totally fail during Question Time today to acknowledge the enormous staffing problems that Australian universities and research institutes are facing. I find it difficult to understand how one can compare the import of a science graduate from the university of the Outer Hebrides with someone with three years post-doctoral experience going overseas. Yet the raw statistics do not differentiate. We went around Australia and heard the same story from Australia's leading physicists, material scientists and chemists-the total lack of inability to attract PhD graduates. We have little hope until Ministers such as the Minister for Employment, Education and Training are prepared to recognise the problem. Ideally, Australia must meet its own demand for research personnel. In the meantime, however, it must make best use of the availability of foreign scientists willing to work in Australia. The Committee has recommended that the Government act to expedite procedures for processing immigration applications by key scientific personnel, as we found that on several occasions an entire project was delayed for up to nine months while the Department of Immigration, Local Government and Ethnic Affairs processed the application to immigrate of one key team member. I note in passing, that this was a recommendation also of the FitzGerald Commission of Inquiry to Advise on Australia's Immigration Policies that has yet to be acted upon. Funding of Australian research and development is another matter which is currently receiving belated attention. The problem is not simply one of the raw quantity of money which should be allocated. Questions of striking a balance between basic and applied research and of allocating public funding to research in the various industry sectors arise. Here, a very striking example of Australia's poor scientific effort was given by one witness. He likened Australia as a $75 billion business to General Electric. He said, `They are about the same size'. General Electric spends one per cent of its total outlays on basic research. We do about the same. We are different in that a company such as General Electric, again the finances of which are about the same as those of the Australian economy, will spend 10 per cent or $7.5 billion a year attempting to acquire new long term business. While our basic research effort is good, our applied research effort and our strategic effort are hopelessly poor. In talking to practising scientists, we are struck by their general disenchantment. The morale of Australian scientists is being adversely affected not only by the decline in public funding of research and development but also by the relatively low pay levels of post-doctoral research staff and the poor prospects for researchers wishing to remain in Australia. The Committee is well aware of the current debate between the scientific community and the Government on the matter of research and development funding and believes that the first steps are being taken to resolve this issue. Given the current state of flux the Committee has not made a general recommendation on public funding of research and development. However, it has made two specific recommendations. The first of these is a reiteration of a recommendation made in the Committee's report on investment in Australian manufacturing-a report we presented to the House in August this year-that the tax incentive scheme for research and development expenditure not be further altered for at least five years from 1 July 1991 to ensure stability and predictability for business in making plans. The second relates to existing funding mechanisms, specifically the procedure by which the newly instituted Australian Research Council awards grants. The existing procedure involves a long lead time which is not amenable to rapid responses to new developments. If a new discovery is made today, it may be 18 months before the first grants are in place. Clearly this is inadequate. The Committee recommends that the Australian Research Council implement a fast-track method of awarding grants to research projects in rapidly developing fields of potential importance to the national economy. Another factor which Australia must take into account is the magnitude of the competition it will face in claiming a part of the ultimate market for high temperature superconductor applications. Japan and the United States of America are now dedicating large sums to strategic research and development. Australia will be unable to match the efforts of the major competing nations across the spectrum of superconductivity and related research. Perhaps the most imponderable difficulty in attempting to gain a foothold in the market for high temperature superconductivity will prove to be in the general area of patents. Recent reports in the media suggest that this will not be a problem peculiar to Australia. Different patenting requirements in different countries seem to have led to the position where it is not clear who can claim a patent to the initial invention. The Committee recognises that international competition for patents will pose challenges to successful commercial development by Australians but the problems are so uncertain and complex that the matter warrants its own inquiry. These and other problems are discussed in the report. Clearly the broader problems which will stand in the way of success are matters not specifically within the realm of the inquiry and the Committee has not made recommendations in respect of many of them. In the light of these problems and our relative strengths and weaknesses, the core recommendation in the report derives from the need for a national strategy to maximise the benefit to the national economy and minimise any further erosion in Australia's relative position. To this end the Committee has recommended that the Government coordinate the development of a strategy which would involve State and Federal governments, research organisations and industry. Such a strategy would entail assessing existing and potential markets here and abroad, evaluating the feasibility of local manufacture, and exploring the setting up of an autonomous national superconductivity research and development centre. This centre would involve participation of researchers, potential manufacturers and potential end users; coordinate research and commercial development of applications employing both low and high temperature superconducting materials; conduct to the development of local manufacture of both low and high temperature superconductor applications; coordinate funding; establish working relationships with similar groups overseas; advise Government on policy preferences; and provide common services to all participants. These would include the collection and distribution of international information relevant to research activities; advice on patenting; and advice on Government funding mechanisms. The collection and distribution of information was a particular problem that came up time and again in evidence. This area is expanding so rapidly. In so many journals, it is nearly impossible for any single research institute or organisation to keep up. Clearly some coordination would be of major benefit. The Committee feels it is vital that the limited resources available to Australia be harnessed in the most effective and efficient manner possible and the way to achieve this is through national coordination. Our final recommendation is probably our most significant. It relates to the power utilities, one of the main beneficiaries of the successful commercialisation of high temperature superconductivity. In the power generating industry, superconductors may be employed not only in the distribution of electrical power but also in its generation and storage. In carefully considering the proposals put before it, the Committee felt that there was considerable merit in the imposition of a research levy on the industry similar to that which funds the electrical power research institute in the United States. We came to this view when looking at the nature of the power utilities in Australia. Power generation is an $8 billion business, yet the power utilities themselves spend only $800,000 a year on research-a pitiful amount. Witnesses from one of the State power authorities put it to us thus, `We don't need to do research because we have all the technology available to produce power'. If they had said that 120 years ago we would still be burning candles. More importantly, the power utilities are near monopolies that are behaving as if they are going out of business. Indeed, with extraordinarily high and secret levels of debt and high interest repayments, they would be out of business if they were private companies. This, coupled with the fact that they are near monopolies, makes it understandable as to why they put so little effort into research and development. It was for these reasons that we reached a bipartisan view in the subcommittee that the only way that the power utilities could be reasonably expected to undertake a respectable level of research would be through a levy. An organisation, the Australian Electrical Research Board, already exists which could channel these funds. Expenditure should continue to be on research into a range of technologies, including superconductivity, which may benefit the industry. The Committee feels strongly that the existing level of expenditure on research and development, derived from voluntary contributions, is woefully inadequate. In advocating a research levy, the Committee does not dismiss lightly the economic argument of externalities, that an impost may be placed on an industry whose research and development expenditure will perhaps benefit others more than itself. However, it should be noted, that the ultimate benefit to the electricity generation may be huge. The levy imposed in the United States is 0.3 per cent. The Committee proposes a levy of 0.125 per cent. This would have a minimal impact on the consumer but a major impact on the industry. Clearly, Australia cannot pin its economic recovery on the opportunities which superconductivity itself offers. There are major obstacles to be overcome. What this promising new technology does offer is the chance for Australia to prove to itself that it can adapt to new challenges. We started this inquiry asking ourselves, `Can we afford to compete?' We reached the unanimous conclusion that we cannot afford not to compete. In concluding, I would like on behalf of the Committee to thank all those individuals and organisations which contributed to the inquiry. This inquiry has been something of a trailblazing exercise for a young committee inasmuch as it arose out of a first reference. I would also like to give personal thanks to the honourable member for Sydney (Mr Baldwin) and the honourable member for Wannon (Mr Hawker) who served with me on the subcommittee. I also thank the Chairman of the Industry, Science and Technology Committee, the honourable member for Rankin (Mr Beddall) and the Minister for Science, Customs and Small Business (Mr Barry Jones) for their support and enthusiasm. I would also like to thank the Secretariat of the subcommittee on Industry, Science and Technology, and in particular, Mr John Craig, for hard work, advice and assistance. I commend the report to the House. Mr BALDWIN(Sydney) —by leave-I would like first of all to join with the previous speaker, the honourable member for Chisholm (Dr Wooldridge), in thanking all those who contributed to the report. Apart from the other two Committee members we had the work of the Committee Secretariat, particularly John Craig and also Paul McMahon who were responsible for producing a report which I believe to be exceptionally well written. They deserve to be congratulated on that ground. I also acknowledge the role that the Minister for Science, Customs and Small Business (Mr Barry Jones) has played in this whole area. A lot of the discussion in the report goes to the need to engender a better attitude towards scientific research and activity within the community generally. The Minister played, and will continue to play, a crucial role in that area. This was the first inquiry by the Standing Committee on Industry, Science and Technology on a specifically scientific or technological subject. In that sense, as the previous speaker indicated, it is something of a trail blazer. It has been an extremely interesting report for a number of reasons. Quite apart from the conclusions we arrived at concerning the specific reference of the inquiry which relates to superconductivity and related new materials, it also gave us some very useful insights into the state of the scientific and technological research in this country. Some pretty disturbing messages came through. There seem to be significant inadequacies in our funding mechanisms, the main ones being through the Australian Research Council (ARC) grants and the grants for industry research and development (GIRD) scheme. There is an inadequate mechanism for responding rapidly to new technological changes, and that has been clearly indicated in this case. Because of the timing cycle for the awarding of ARC grants, there was about an 18-month lag between the major new discoveries in the superconductivity area and the funding of research through the ARC program. That is a pretty disturbing facet, and one of the Committee's recommendations goes to that point. It is also clear that the general complaint of the lack of research and development by Australian industry in both the private and public sectors is also borne out by our inquiry. One of the more woeful performances in that area comes from the electricity generating authorities, who spend a minuscule proportion of their turnover on research and development. That has to be turned around somehow. The Committee saw little in the responses from the witnesses who came before us to indicate that that would be achieved without some mechanism to bring it about; thus our proposal for a levy of 0.125 per cent of turnover. A major thrust of government effort to improve the performance of Australia in the scientific research and development areas is related to creating appropriate incentives for the private sector to enhance its effort-for example, the 150 per cent tax write-off for research and development expenditure. Those activities have started to produce some significant results. However, there is argument about whether, if we take away those sorts of incentives, that upturn will be sustained. One of our recommendations is to lock in the level of tax assistance for research and development at the 100 per cent level, down from 150 per cent at the moment, for a five-year period to provide a degree of continuity and predictability. So the thrust of Government policy is very much towards producing an enhanced private sector effort in that area. If one makes international comparisons, our public sector aggregate expenditure on scientific research is not out of line with other Organisation for Economic Cooperation and Development countries. It is the private sector that seems to be falling down. However, having said that, and I think those measures are very worthwhile, I believe there is still a great need for a substantial publicly funded effort in this area. The Committee was concerned at the restrictions that have been placed on publicly funded scientific research in recent years. In the most recent Budget there has been about a 9 per cent real decline in the funding for the Commonwealth Scientific and Industrial Research Organisation. We are concerned about that. I think there will be a heavy price to pay if we continue with that pattern; it is a false economy. If we are going to restructure the economy and improve the level of high value added manufactures and services in our export sector, I believe it is a false economy to cut back expenditure in that area, amongst a number of others. The Committee also acknowledged the need for a coordinated national approach. That is the central recommendation. Given our limited resources, which are microscopic in comparison with those being deployed in countries such as Japan and the United States of America, it is important that we achieve the maximum benefit from what we have got. There is a detailed resolution within the report that goes to that. I conclude by thanking, once again, all those who had an input into it, and I hope the report is well received. Mr HAWKER(Wannon) —by leave-I join my colleagues the honourable member for Chisholm (Dr Wooldridge) and the honourable member for Sydney (Mr Baldwin) in speaking to this report. I believe it is a most worthwhile exercise. For the first time it has probably brought to the attention of the scientific community the concern of members of Parliament that there has been a significant cutback in government funding in some areas of scientific research, particularly to the Commonwealth Scientific and Industrial Research Organisation (CSIRO). I endorse the words of the honourable member for Sydney when he said that this is a false economy; it certainly is. I believe that the Minister for Science, Customs and Small Business (Mr Barry Jones), who was instrumental in getting this inquiry under way, would wholeheartedly endorse that. Regrettably, he has not always been able to have his way in the Ministry and in the Cabinet. The concept of superconductivity and some of its related developments, along with the new materials, and the gains that could come from this have been fairly well explained by my colleague the honourable member for Chisholm. It is a very exciting development and offers enormous potential, although at this stage that cannot be quantified. The Committee on Industry, Science and Technology heard extensive evidence on the first term of reference particularly, namely, our core capacity, and that is where we found a lot of shortcomings. As we listened to members of the scientific community, a very alarming picture becoming apparent. It was alarming particularly in the light of the present debate about falling government support for scientific research. Of equal concern was the way it manifested itself through falling morale in the Australian scientific community. The disenchantment was most disturbing. People in the scientific community have relatively low pay and poor career prospects in many cases, and unfortunately all too many are going overseas to better themselves. The concern does run deeper, because it is not just a short term thing. Research is very much long term. It is going to take years to reverse some of the losses we have had. The Committee in its recommendations addresses this point. It also addresses the difficulty of replacing people, with delays of up to nine months in getting replacements from another country. I shall refer briefly to a couple of the recommendations which have been covered, by and large. We believe there is a role for Government to coordinate development of a strategy to address the problem of improving our research efforts in high temperature superconductors and also some of the new materials that have been developed. The Committee also looked at how we could be better placed for developing manufacture. It also looked at the tax incentive scheme, which the honourable member for Sydney touched on; and at the need for a fast track method of rewarding grants from the Australian Research Council. One of the most significant recommendations is the one the honourable member for Chisholm mentioned in some detail, namely, the fact that our power utilities are making a woefully inadequate contribution to research. It is about 0.01 per cent of their turnover, which is very disappointing and very disturbing. If we are going to do something about this, we have to do more than just use kind words. For that reason, the Committee felt it necessary to make a recommendation that a levy is the only way to get them to provide reasonable funding for research. Not all those funds would necessarily be directed towards high temperature superconductors. There is no reason why Australia should not be able to make a much more worthwhile contribution into research in the whole area of power generation and power distribution. Some of the comments of the honourable member for Chisholm highlight the weaknesses of our power authorities. They run much deeper than the question of whether they are spending money on research. I say as an aside that if ever there were a case for privatisation, it is in that area. I conclude by saying that the Committee tackled an exciting area. It is obviously very much looking forward to the long term future, which is something that, unfortunately, because of the short terms of Parliaments, people do not spend as much time on as they should. Research into applications and potential applications for high temperature superconductors and their related new materials is very worthwhile for Australia to get far more involved in. The recommendations of this Committee point out some of the ways and means by which we could get involved. While some parts of this inquiry, among other things, highlighted the weakness of the present approach, in other ways it is hoped that the report will be a spur to improvement and will give support to the Minister for Science, Customs and Small Business (Mr Barry Jones) to improve our effort in this area, not only in funding but also in its coordination. I, too, congratulate the Chairman of the Subcommittee, the honourable member for Chisholm (Dr Wooldridge), and thank the other member of the Subcommittee, the honourable member for Sydney (Mr Baldwin)-the three of us conducted the inquiry. I particularly thank the Committee secretariat for their support: the Secretary of the Standing Committee on Industry, Science and Technology, Mr McMahon, and John Craig who was the Secretary to the Subcommittee along with Mr Doug Capp. Mr BARRY JONES(Lalor-Minister for Science, Customs and Small Business) —by leave-I congratulate the honourable member for Chisholm (Dr Wooldridge), the honourable member for Sydney (Mr Baldwin) and the honourable member for Wannon (Mr Hawker), the Subcommittee members who worked on producing a report of quality on such an important and dauntingly complex subject. The report is a welcome sign that the parliamentary committee system is alive and well and is capable of making a very valuable contribution to analysis and understanding of the challenges, threats and opportunities in these new areas of science and technology which will become increasingly important as we rush-perhaps we should say `lurch'-towards the year 2000 and the beginning of the twenty-first century. It emphasises the need for long term thinking. We have tended to be reactive all too often. This is the time we need to get out and think, determine where we are going, and, particularly, take advantage of the fact that together, China, Brazil and Australia have between them an overwhelming proportion of the world's rare earths which, certainly in the foreseeable future, will be critical in high temperature superconducting material. There will be a formal response from the Government later on. I hope that we can initiate a longer debate in the next session. In the meantime, I congratulate members of the Subcommittee. Mr HOLLIS(Throsby) —On behalf of the Parliamentary Standing Committee on Public Works, I present the interim report of the Committee relating to the construction of the national medical cyclotron facility, Royal Prince Alfred Hospital, Sydney; new communications and recruitment schools, HMAS Cerberus, Crib Point, Victoria; and the National Biological Standards Laboratory, Symonston, Australian Capital Territory. Ordered that the report be printed. Mr HOLLIS —by leave-The interim report I have just tabled relates to three projects referred to the Committee by the House on which the Committee will be unable to report until the 1989 autumn sittings. However, the Committee wishes to inform the Parliament that it has concluded its inquiries into these projects and will be recommending the construction of the proposed works. Mr MARTIN(Macarthur) —On behalf of the Standing Committee on Finance and Public Administration, I present the Committee's report entitled A nail in times saves nine: review of the Auditor-General's efficiency audit report-Department of Housing and Construction: repairs and maintenance of Commonwealth assets, together with the minutes of the proceedings and evidence received by the Committee. Ordered that the report be printed. Mr MARTIN —by leave-The report which I have just tabled reviews the Auditor-General's efficiency audit report which dealt with the repairs and maintenance of Commonwealth assets; a function of the former Department of Housing and Construction. The Auditor-General's efficiency audit report was tabled in the House of Representatives on 7 May 1987 and subsequently referred to the Finance and Public Administration Committee for review. A number of previous reviews have been conducted into the administration of planned specific maintenance which have been critical of some aspects; in particular, the asset database, asset control system, the level of the maintenance backlog and program formulation and management. While conducting the review, the Committee travelled to Townsville and inspected aspects of Lavarack Barracks. The Committee saw first hand repairs and maintenance that had been carried out in the last five years and was briefed, from a client's perspective, on the procedures and difficulties associated with current procedures and processes for repairs and maintenance. From Townsville, the Committee travelled to Brisbane and inspected parts of the building in which the Brisbane Taxation Office resides. The Committee saw obvious signs of neglect and evidence that there had been, over the last 10 years, a major breakdown in the repairs and maintenance process resulting in the floors occupied by the Brisbane Taxation Office being in a less than satisfactory state of repair. In the course of the inquiry, the Committee also inspected aspects of Larrakeyah Barracks, the Darwin naval base and immediate post-cyclone Tracy staff housing. It also had the opportunity of inspecting the Australian Construction Services' regional office and the Hollywood Repatriation General Hospital in Perth. What struck the Committee throughout the review was the inordinate amount of time spent on carrying out the bureaucratic requirements actually to get to the stage of carrying out the maintenance or doing the repair job. On average, this took 18 months. This, coupled with the shortage of funds required to effect the recommended repairs and maintenance, has resulted in a significant maintenance backlog. Of concern to the Committee is the apparent lack of a national strategic plan covering not only repairs and maintenance but also the timely disposal of those Commonwealth assets which are a burden on the taxpayer. Of further concern to the Committee is the lack of a database listing all Commonwealth assets and comprehensive information relating to each asset. The Committee firmly believes that the Australian Construction Services cannot effectively carry out the role of asset manager without it. The Committee's review has, to some extent, been overtaken by recent government decisions reforming the operations of the two groups within the Department of Administrative Services; the Australian Construction Services and the Australian property group. However, the Committee believes that many of the Auditor-General's recommendations are still relevant and have indeed already been implemented by the Australian Construction Services. In conclusion, I express my thanks to my fellow Committee members, particularly the honourable member for Scullin (Mr Jenkins) and the former member of the Committee, the honourable member for Wentworth (Dr Hewson), who both served on the Subcommittee and provided expertise and experience in a bipartisan spirit. I also pay tribute to the Committee secretariat, particularly the project officer, Dorothy Miles, whose administration, dedication and determination has ensured that this most comprehensive report has been presented in less than a year since it was referred to the Committee. I also mention the administrative assistance, initially Kaye Buckley and later Sharon Fisher and Celeste Conlan whose efforts at the keyboard have ensured that the report is presented today. Debate resumed. Mr LANGMORE(Fraser)(5.39) —We are debating the general capital increase for the International Bank for Reconstruction and Development, more commonly known as the World Bank, and, in particular, the Australian entitlement to subscribe an additional 10,734 shares. As the Minister for Industrial Relations (Mr Peter Morris) said in his second reading speech, the Bank does not require full subscription from members immediately and members have until 1993 to subscribe. So the Government has decided to subscribe 7,880 shares over the next four years at an estimated cost of $35.65m. The setting for this general capital increase is the depression in the Third World in the 1980s. During the 1980s the level of income in much of the Third World has declined sharply. Developing countries have gone through a depression more severe than that experienced in industrialised countries in the 1930s. In sub-Saharan Africa living standards have fallen by 25 per cent, in Latin America by about a seventh, and in large parts of south Asia there have been substantial falls as well. The World Bank estimates that 950 million people are living in absolute poverty-a condition of life so appalling as to be quite unsustainable. It defines absolute proverty as a condition of life so degraded by disease, illiteracy, malnutrition and squalor as to deny its victims basic human necessities. About 380 million of that figure of nearly a billion people live in our region in south Asia, another large portion live in sub-Saharan Africa and the rest in Latin America. The situation is intolerable. There are many causes for it, not least the Third World debt, which in the last 15 years has multiplied. At the beginning of the 1970s Third World debt totalled $US80 billion; by 1980 it had risen to over $US500 billion; it now totals $US1,250 billion. The problem of that debt is not the size itself, because borrowing can be justified as long as it generates income which enables the country to repay. The problem is that at the beginning of the 1980s that enormous debt was linked with a rapid rise in interest rates, a decline in commodity prices, and therefore a decline in the capacity to service the debt, and at the same time a collapse in commercial lending to developing countries. The developing countries were squeezed from both sides-an increased cost in servicing the debt and a reduced capacity to borrow. The solution to that crisis must include increased financial resources for the developing world. The principal problem of many developing countries is that they are so caught up in the repayment and servicing of that debt that they cannot use their own savings to invest in order to develop again, nor can they borrow funds to build up their total supply of resources. Therefore, they cannot invest and without investment they cannot grow and develop. That is why this Bill is important. It will contribute to increasing the capital of the World Bank by about $US75 billion. That will enable the Bank to borrow much more and in turn to build up its lending by between $US10 billion and $US20 billion per year. Mr Tim Fischer —How many head office bureaucrats do you need? Mr LANGMORE —I think only a small number. I am being interjected upon sceptically about the World Bank. There are reasons for being sceptical about it, and I am happy to deal with them, but I am puzzled by the amendment moved by the honourable member for Kooyong (Mr Peacock). Much of what he said suggested a bipartisan approach to the World Bank. He outlined, as I have, the extent of the problem in the developing countries, he described the need for capital flows, he emphasised the importance of an Australian contribution to this capital subscription, but then went on to move an amendment which implies that we might reduce our capital subscription. It is a very puzzling amendment. Mr Kent —He has gone in two directions before. Mr LANGMORE —Indeed. What he is doing is quite inconsistent. He might-if he were here-argue that the problem lies with the efficiency of the Bank, but there are very few people who would argue that the Bank is not a very well run financial institution. The criticisms of the Bank are far more to do with the intensity and pervasiveness of the conditions that it imposes on developing countries. Many criticisms can be made about the bank, but they are not about the efficiency of its financial administration. They are much more to do with the lack of wisdom and lack of understanding of the developing countries with which it deals. There is a misjudged conditionality about much of what the World Bank does. That conditionality is linked with the growing strength of its link with the International Monetary Fund (IMF). There is a cross-conditionality which makes it more difficult for developing countries to borrow. For example, both institutions often have a deflationary bias in the conditions under which they will lend to developing countries. They require that countries cut their public expenditure and that they reduce wages and social programs. They never have anything to say about military expenditure, by the way. They require liberalisation of trade and financial institutions and privatisation. The net effect of those policies is to reduce the level of economic activity-and not just temporarily. They would say that they were encouraging countries to restructure, but that process tends to be continuous. Many countries which borrowed in 1982 and 1983 are still having to reschedule. Every country which has to reschedule in the first year of debt crisis is still having to reschedule now. Not one of those countries has come out of the debt crisis as a result of World Bank or IMF policies. The net effect of that conditionality is to drive down investment, to reduce the capacity for economic growth, and therefore to reduce the capacity of those countries to develop out of the crisis. There is a simplistic, doctrinaire quality to much of the conditionality that is imposed on developing countries by both the bank and the fund. The World Bank has also been much criticised, including criticism by the honourable member for Kooyong, over the environmental consequences of its lending. It is not to do with the efficiency of its financial management, but is a criticism of its environmental insensitivity and lack of thought about the environmental consequences of what it does. Many of the consequences are now getting much more publicity and I am glad to say that the bank is starting to respond to that, principally because it has been under great pressure from environmental groups in the United States, but also from some other countries. I was delighted to see in the Minister's speech mention of the fact that Australians, too, have expressed concern about the environmental impact of some World Bank lending. Another criticism that is commonly and justifiably made relates to political bias in World Bank lending. It seems to be easier for countries such as Zaire and Chile, which are authoritarian and repressive, to borrow than it is for socially responsible countries such as Tanzania and Zambia, which are sensitive to the effect on the poorer people in the communities of the kinds of conditions imposed by the World Bank. Therefore, they are reluctant to accept that conditionality. There are other criticisms that one could make, but the important point is that some of these are now being recognised as problems, and that certainly applies to the environmental consequences. The World Bank has set up an environmental department containing 35 people, which is starting to make an impact on its policies. At the Berlin annual meeting of the World Bank there was rhetorical recognition of many of these problems. Much information was provided by the bank itself on the extent of poverty and its growth in developing countries. Many speakers emphasised the need for a poverty focus in World Bank policies. That was a rhetorical shift, but it has not yet been adequately reflected in the programs of the bank. The need for that shift is not a justification for talk about reducing the capital subscriptions to the bank, as the Opposition proposes. Quite the contrary, it is a reason for continuing to maintain our voting strength within the bank. We will be able to do that only if we make these subscriptions so that we can influence the bank's policies in more constructive and socially responsible directions. I conclude by referring to one central point of neglect in the bank's policies. There have been many criticisms, which I have mentioned, about what the bank actually does, but a central point needs to be made about what it has not done; that is, to address adequately the debt problem. The bank is in a pivotal position to be involved in negotiating solutions to the Third World debt problem. Yet, so far it has confined itself to providing useful information on the extent and growth of the problem. Its annual debt tables are a very useful source of information and they include a lot of very constructive comment. But that has not generated any specific policy change, nor proposals for change, in member countries' policies. It is absolutely essential that there be a global conference of creditors and debtors to address the Third World debt problem and come up with much more constructive steps than are being taken currently. The US has been prepared to rest on its laurels with the Baker plan, but that has not been an effective means of addressing the problem so far. It has simply tinkered at the edges. The size of the debt has gone on growing and the risk of default is greater than it was when the crisis began. The central point is that much more substantial, constructive policies are required in order to address the problem adequately. Those policies must include extending the principle which was accepted at the Berlin annual meeting of writing off debt of some of the poorest sub-Saharan African countries and other indebted countries which clearly do not have any capacity to pay off all their debt in the long run. Write-offs and partial write-offs must be extended much more generally. In addition, a number of other solutions are gaining ground as acceptable approaches. They include, for example, the establishment of a debt management authority within the bank or the fund and the possibility of a moratorium on interest payments by debtors, which would permit them to accumulate funds for the moratorium period-say, five or six years-allowing them to invest, grow again and, in many cases, develop out of the problem. It is important that Australia join with other countries in proposing such solutions, but a prior condition is that we support wholeheartedly this general capital increase by the bank. I am glad to see that the Government is doing that. I hope that the Australian people will give full support to that and that the Government will take up its total entitlement by 1993 and contribute, through the bank, to an extension of funds to developing countries which are desperately needed to help them cope with the crisis they are in. Mr TIM FISCHER(Farrer)(5.54) —The House is considering a Bill relating to the purchase of further shares of the capital stock of the International Bank for Reconstruction and Development, or World Bank. Let me say at the outset that the International Bank for Reconstruction and Development (General Capital Increase) Bill comprises just two pages of fairly simplified wording in terms of the six clauses in the Bill, which makes a pleasant change. The engine room clause of the Bill is very understandable. It says: The Treasurer may, on behalf of Australia, make an agreement or agreements, containing such terms and conditions as the Treasurer determines, with the Bank for the purchase by Australia of 7,880 additional shares of the capital stock of the Bank at a price per share that is the equivalent of 120,635 United States dollars. I believe in giving credit where credit is due and, for once, we are considering an understandable piece of legislation which, in terms of its draftsmanship, is perfectly explicit, direct and straightforward. By and large, we welcome the Bill, although I strongly support the amendment to the motion that the Bill be read a second time which has been moved by my colleague, the honourable member for Kooyong and Deputy Leader of the Opposition (Mr Peacock). I want to address three broad areas of the Bill. I do so as a member of the Federal Parliament who, since being elected in 1984, decided deliberately to focus on one part of the world for that proportion of my time that I can spend on foreign affairs and trade policy matters. I chose deliberately the region of Asia and Thailand. I have developed a pro-Asian strategy from that base to further enhance our political, cultural and economic links with Thailand and Asia. I make no apology for doing that. I will continue to do that so that I might build up some specialist contact and knowledge with younger members of the Thai Parliament in particular but also people throughout that region. I am always happy to have the opportunity to speak about our bilateral relations and the aid picture when measures of this kind come along. One needs to examine the overall aid picture which shows, in the financial year just completed-1987-88-a $1 billion Australia overseas aid program. As one moves around one's electorate and visits places such as Deniliquin, Berrigan or Tooma, one often sees raised at branch meetings of various organisations the criticism: why are we giving, in these difficult economic times, $1 billion of hard-earned Australian taxpayers' money in the form of overseas aid? As a member of the State Parliament I used to dine out on that question at some length and query it from go to whoa. As a member of the Federal Parliament, and in the light of further research and perhaps a slight maturing of my political process, I respond quite aggressively to that question. It needs to be said that there are justifiable humanitarian reasons and hard-nosed economic reasons for an aid program. For example, some $5m of direct and indirect Australian overseas aid has been given to a lignite project in northern Thailand, which is located just near Chiang Mai. Following that foot in the door by the provision of $5m for that specific project, it has been shown that some $30m-worth of exports of one form or another for Australian companies have been generated. Our aid program is necessary. Its actual contents and associated details will be debated vigorously, but there are good and proper reasons for such a program. It is certainly in the interests of any country member who represents industries which want to export to Asia and the world to make those industries aware that our aid program does help facilitate exports. It needs to be said from time to time that there is a very positive dimension to our aid program and to the reconstructed Australian International Development Assistance Bureau. It is relevant to point out that for the last financial year the overall figure of $1 billion can be broken down as follows: assistance to Papua New Guinea, 29.9 per cent; other country programs, 36.6 per cent; corporate services, 2.2 per cent; other departments, 4.4 per cent; international financial institutions, 8.4 per cent; and other global or multilateral programs, 18.5 per cent. A great deal of our effort goes to Papua New Guinea. When one analyses that component of the $1 billion-around $350,000 is embraced by the country program for the last financial year-one sees that the actual figure for Papua New Guinea rises to 45 per cent; for the South Pacific 10.2 per cent; for South East Asia 17.6 per cent; for other regions 12.7 per cent; for the student subsidy 12.7 per cent; and for other country activities 1.8 per cent. In backgrounding this overall aid picture I would say two other things. In the last year in relation to aid we saw the strong intervention of the then Minister for Foreign Affairs in putting a sharp tilt towards the black African states with approximately $100m worth of aid. It was a straight political gesture to a region beyond our immediate environs on the planet Earth. The coalition strongly challenges whether it is a correct priority, whether it is the best priority, or whether it was a last minute fling by an egotistical Minister making that grand final tour through the African continent. I tend to be attracted to the notion that somehow it might have fallen into that category. Suddenly one-tenth of that $1 billion aid effort is being directed towards black African states with little direct relationship to immediate Australian national interests or priorities, particularly as they pertain to relations between Australia and Asia, between Australia and the south Asian nations, between Australian and the Association of South East East Asian Nations. I stress very strongly that in the context of this legislation and our overall aid effort, we ought to be reviewing that black African initiative and looking again at our own region. I will give a good reason why we should be looking more at our own region. I learnt this afternoon that Bangladesh, a country with 110 million people and little or no natural resources, had a huge flood in 1987. Again this year, 1988, another huge flood came down the massive Ganges River system and delta. In the last 48 hours it has been hit with a massive cyclone. There have been reports of hundreds of deaths and of winds in excess of 100 kilometres an hour. Again there have been massive dislocation, devastation and death in Bangladesh. To be fair, I point out that the Government took some steps to improve our aid package to Bangladesh following the flood in the middle of calendar year 1988, but now a further response may need to be forthcoming to help this nation. I might add that a good deal of Australian wheat and other exports totalling in excess of $50m are sold to Bangladesh. It may be a small figure in terms of our total export effort but the country does trade with Australia by degrees. There is a need for us to respond to our own region and our own priority interests rather than being distracted by the grand debate in the African continent, where we cannot even successfully send a well led parliamentary delegation. It has emerged that that delegation was not well led, but I will not dwell on that because you would rule on that, Mr Deputy Speaker. Mr Dawkins —What does Malcolm say? Mr TIM FISCHER —I do not for a moment defend, answer for or regard myself as having to answer for actions taken by governments prior to my entry into this Parliament, I say in answer to the passing comment of the Minister. Turning to the specifics of the Bill, which increases the capital of the World Bank, the House will recall that the honourable member for Kooyong (Mr Peacock) told us that the World Bank was doing better in its performance and productivity. The International Bank for Reconstruction and Development, as it is known, has reduced its staff at a head office level by some 320 people. Mr Rocher —To 6,000. Mr TIM FISCHER —These things should be seen in perspective, and I am pleased the honourable member for Curtin will develop this point further in his contribution. It is high time we began to focus on the international agency headquarters of one kind or another. Let us consider the United Nations, the Food and Agriculture Organisation (FAO), the United Nations Educational, Scientific and Cultural Organisation (UNESCO) and the International Labour Organisation (ILO). Australian taxpayers will be interested to know that since 1980 Australia has paid directly to the administration and program activities of those organisations in the case of the United Nations $113m; in the case of FAO $30m; in the case of UNESCO close to $29m; and in the case of ILO, where the Prime Minister would really like to go as Director-General-we would be happy to facilitate that, and he may one day-we have paved his way by providing since 1980 some $20m. They are considerable amounts of money and we have a right to demand performance and productivity in relation to the allocations we have made. One should consider the staffing of the headquarters of these organisations. I started to become a little interested in this subject when I began to read of the rorts perpetrated by the previous Director-General of UNESCO and others which almost destroyed the purposefulness of these organisations which were supposed to be helping countries. In fact UNESCO, in its worst period a couple of years ago, was doing anything but contributing any worthwhile help. There are 4,869 staff at the United Nations headquarters per se in New York. We receive some payback on that because, quite separate from our own Australian mission to the United Nations and separate from our two members, who no doubt are doing us proud in the General Assembly at this time, there are 40 Australians out of that 4,869 staff. They are bureaucratic staff. One has to see for oneself some of those sections, although they have had some cutbacks in recent times and some ceilings imposed. There are sections that have joint headquarters, with half in Geneva and half in New York. The UNESCO headquarters is in Paris but they have to have a cell in New York to relate to the UNESCO headquarters in Paris. The whole thing becomes extraordinary, although I relate to the House that some steps are being taken to improve the situation. The FAO has a headquarters staff of 2,063 in Rome, of whom 48 are Australians. Some effort is being made to improve the performance of the FAO and, indeed, at the moment an Australian is at the top of that organisation and spearheading that improvement. UNESCO headquarters in Paris, after an ugly period under the former Director-General which almost became a civil war, has a staff of 1,788 administering UNESCO. One of the submissions from a section of the staff when there was talk of cutbacks said, `You must maintain us and allow us to maintain our intellectual elbow room to think about world problems in an abstract way'. Six of those 1,788 are hardworking Australians. There are also 1,287 staff at the headquarters of the International Labour Organisation in beautiful Geneva, of which 16 are Australians. Bob Hawke would make the seventeenth if he became the Director General of the ILO. He will not be lonely. One must ask the question: What are 1,287 people doing at ILO headquarters which is truly productive for the quite reasonable objectives of the ILO? I do not think anyone has got around to answering that question because too many of these international agencies are beyond accurate auditing and accurate accountability for a host of reasons. I do not blame the Government for that as it is, in a broad sense, accountable to all its member nations. That effectively means it is accountable to itself and its own bureaucratic procedures. So we have Directors-General around the world stage becoming very emperor-like in their approach to their organisations and being anything but answerable during extended rules of their particular Taj Mahals. It is sad to relate that whilst all this is going on those who are meant to be benefiting from the activities of the World Bank-the subject of this legislation-or the United Nations, the FAO, UNESCO, or the ILO, are not benefiting anywhere near as much as they could or should be. We need more auditing of an appropriate nature of these organisations. We need more accountability from these organisations. If times are tight and economic times are difficult, as they are in Australia-we will see a lot more of that in 1989-that tightness, that reduction in largesse, has to be sheeted home to these international organisations who should not be allowed to carry on in some dream world of their own, fortifying their intellectual elbows, creating their intellectual elbow room and pontificating about rather than acting on some of the problems that are faced by Third World nations. Even when the World Bank does pick up one or two key projects it seems to do that wrong, with the Amazon River to wit as one glaring example of how a project can go wrong and in such a way that it is even damaging to Australia in an indirect sense in terms of the impact that the clearing of timber in that part of the world is having on the ozone layer and the world environment as a whole. Finally, let me take this opportunity in declaring my support for an increase in capital for the World Bank, qualified as it is, of saluting many Australians who are at the operational end of aid projects in very isolated circumstances. They are carrying the burden of the work, not at some headquarters in Geneva, New York or Rome, but in places such as Nepal-and not even in the capital, Kathmandu-but up-country carrying out vital aid work in very lonely circumstances-- Mr Peter Fisher —Particularly agricultural technology. Mr TIM FISCHER —To a very large extent, as the honourable member for Mallee pointed out, they tend to be agricultural aid projects, forestry conservation related projects or soil conservation related projects which are all essential to the world environment, quite apart from the direct environment of the countries concerned. I mention Nepal; Bhutan; the World Bank officials, for example, Mr Dean Wallace at Thimphu, the capital of Bhutan and the five MPW workers and multilateral aid projects in that country; aid workers in Bangladesh; and Mandalay in Burma, where there is a major dairy development project nearing completion which is not closely linked to the regime-it is anything but-but which has been a very complex project in which Australia has made a very positive contribution. I mention those in Thailand in the Tung Kula Rong Hai project and also in north-east Thailand. Indeed, I take this opportunity to salute and pay tribute to all those aid workers around the world who are doing their best for Australia in difficult circumstances. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member's time has expired. Mr KENT(Hotham)(6.14) —The International Bank for Reconstruction and Development (General Capital Increase) Bill 1988 will give parliamentary approval for Australia to take up 7,880 shares as part of 10,734 of our entitlement of the general capital increase of the International Bank for Reconstruction and Development (IBRD). According to the second reading speech of the Minister for Industrial Relations (Mr Peter Morris), the general capital increase will underpin the Bank's operations well into the 1990s and allow the Bank to carry through its programs aimed particularly at the most heavily indebted countries. The general capital increase will allow the Bank to increase its lending by approximately $6 billion from $14.8 billion in 1987-88 to more than $US20 billion by 1992-93. I certainly-unlike the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock)-very strongly support the Bill. The Deputy Leader of the Opposition moved an amendment to the Bill. My colleague the honourable member for Fraser (Mr Langmore), who spoke previously, pointed out that while he did not speak against the Bill in any way it was implicit in the amendment that he moved that we somehow should re-examine our taking up further shares and assisting the Bank to help the most impoverished countries in the world. The speaker before me, the honourable member for Farrer (Mr Tim Fischer), also questioned the Bank-not the policies of the Bank, which I certainly have some doubts about, but the number of employees of the Bank, other United Nations agencies and the United Nations itself. He questions how much we spend on the United Nations and yet forgets that for 45 years, thanks to the United Nations to a great extent, we have avoided a world war. We have to keep these things in perspective. When we talk about the general capital increase of the World Bank this will hopefully enable the Bank to carry out its program. According to the Minister, the program should include, inter alia, the need to pursue poverty alleviation and environmental aspects. May I, from the outset, express my doubts about the ability and, indeed, the intention of the IBRD, or as it is better known, the World Bank, to alleviate poverty. If that is the aim of the Bank's operation it has failed dismally. Not only are there more poor people in the world today than there were 10 years ago, but also the degree of poverty has increased. Approximately 1 billion people are starving-a quarter of the world's population-while another billion is rapidly approaching that level. It can be said that only the top quarter of the world's population, mostly those in the industrially developed world, have an adequate standard of living. Only recently, a Canberra conference organised by World Vision of Australia was told, and I quote from an article in the Canberra Times of 14 October 1988: It's never been more evident than in today's debt crisis that the World Bank is indeed a bankers' bank. The International Bank for Reconstruction and Development was established as a complementary institution to the International Monetary Fund (IMF). Its membership is conditional on the membership of the IMF. Both the International Monetary Fund and the International Bank for Reconstruction and Development were established at Bretton Woods after the Second World War to coordinate internationally attempts to deal with world monetary and financial problems. It was envisaged that the IMF should finance short term balance of payments deficits while the World Bank was to finance long term development projects. The idea was that these two institutions should maintain the equilibrium between the surplus and deficit countries by recirculating surpluses and promoting worldwide economic growth. However, a number of events, culminating in the oil crisis in the early 1970s, changed the intended financial agenda. While the result of the oil crisis imposed heavily on many developing countries, it also poured 80 billion petro-dollars into European and United States banks to recycle. The money was duly lent to developing countries at low interest rates. High commodity prices at the time made many countries that are now in trouble look good and credit worthy. It is history now that the situation changed dramatically in the late 1970s and early 1980s when the rich western countries induced a recession to restore the profitability of capital. They increased interest rates to fight inflation and slowed down their economies to reduce demand. By this, they imposed a double burden on the indebted Third World. They did this, firstly, by increasing interest rates on Third World debt and, secondly, by reducing commodity prices-by means of the export of which Third World countries were hitherto servicing their loans. As the world economy shrank, as the crisis deepened, a horrible scramble ensued. The rich, industrially developed First World countries unloaded their problems and troubles onto the Third World by maintaining high prices for the industrial products which they exported and by reducing commodity prices, the produce of the Third World. Parallel to this, there ensued a scramble inside each country whereby the rich did everything possible to unload the burden of hard economic times onto the poorer sections of the population. However, the international situation is even worse. In the last decade, the Third World countries have experienced growing poverty, manifesting itself in increasing malnutrition and hunger, growing child mortality, increasing food prices and growing deprivation of the population. On top of all this the IMF and World Bank imposed conditions of monetarist New Right solutions, plunging the underdeveloped countries into a further morass of poverty. Not since the slave trade has the North so cruelly exploited out of the poor Third World countries to service their debt. For the first time in history, the flow of capital is reversed and there is a net flow from the developing countries to the industrial countries. I would like to point out to the House the facts relating to world debt and the situation which the World Bank has helped create. At the time of the Mexican default in 1982 the Third World owed a total of $US600 billion or $A720 billion. By August this year this figure, it is estimated, had increased to $US1.2 trillion or $A1.5 trillion. By the end of the year it is estimated that this figure will increase by another $500m. These figures are from the Australian Financial Review of 22 August this year. The 10 biggest debtor nations alone owe $US527 billion. Serious debt problems are concentrated in sub-Saharan Africa and Latin and South America. However, the problem is getting significantly worse in our own Pacific region also. The ratio of total external debt to GNP is very high in many neighbouring countries. In Vanuatu it is 95.6 per cent, the Philippines 93.6 per cent, Malaysia 76 per cent, Indonesia 58.5 per cent and Papua New Guinea 45.2 per cent. This is according to the World Bank debt tables, 1987-88 edition, volume 2. Australia is not completely isolated from these problems. Australian banks have not been seriously affected by this debt crisis as have the large United States finance institutions. However, we have not been completely isolated either. In dollar terms, the major Australian trading banks were owed $A2.2 billion by developing nations. The ANZ banking group has 2.1 per cent of its total assets tied up in loans to developing countries. The figures for the National Australia Bank and the Westpac banking company were 0.33 per cent and 0.48 per cent respectively. As my colleague the honourable member for Fraser pointed out in a recent address, developing countries are currently paying almost $35 billion more to Western countries than they receive, and this is despite the fact that the ability of debtor nations to repay debts has deteriorated. This has monstrous consequences. For example, in Mexico-the world's second highest debtor nation-real wages have fallen by around 40 per cent since 1982 when the country nearly defaulted. Investment has dropped by 25 per cent in Latin America because a large proportion of national savings now have to be used to service debts. Now I do not contend that there were no attempts to resolve the debt problems. Recently, in April 1984, the IMF interim committee agreed on the establishment of a new contingency lending facility to help indebted countries affected by unforeseen circumstances like sustained higher interest rates, or droughts or floods that can severely affect their ability to meet debt service requirements. There has also been rescheduling under strict conditionality, as well as structural adjustment on some loans. However, the conditions imposed by the IMF, and to a lesser extent by the World Bank, deteriorated during the last couple of decades into imposition of strict monetarist measures and severe austerity programs which on occasions provoked riots and political unrest. The conditions demanded by the IMF are public expenditure cuts, wage cuts, trade and exchange liberalisation measures, devaluation, deregulation and so on-a list only too familiar. Other official and private lenders tend to lend or not to lend according to whether the government concerned has the seal of approval of the IMF or the World Bank. Especially now that private banks have become overextended and fearful of defaults, these two institutions are being called upon to make sure that banks get their money back and that they can lend in future without fear of losing. The World Bank and the IMF are working together in tandem; no conflicts are admitted between them. They frequently go on joint missions to various countries. Although the IMF has been criticised, even in the Brandt Commission report, for example, for excessive harshness in the conditions it puts on its lending, and may possibly have responded a little to these criticisms, it certainly has not changed a great deal. The implication is that the World Bank has not done so either and that the governments of underdeveloped countries are still subject to pressures from these institutions to carry out orthodox monetarist policies. Of course, to satisfy the world bank or the IMF the countries that are exposed to the banks conditionality are forced to cut public expenditure. The pattern of advice received from the World Bank and the IMF is inevitably based on right-wing monetarist ideology. As my friend the honourable member for Fraser said, they were never advised to cut military expenditure for instance. In May of this year, Zambia decided to reject an IMF austerity program. Since that time the World Bank has offered financial assistance in exchange for an end to food subsidies, a cut in government spending and a currency devaluation which increases the prices of imports, leading to further hardship. Each of these measures would have hit the poor. It is no surprise that the Zambian Government refused. Such measures inevitably lead to social and political instability, which subverts the ability of democratically elected governments to stay in power. The requested conditions are not surprising as both the IMF and the IBRD are dominated by the major industrial powers, promoting the New Right ideology, the sanctity of private investment and private profits and the reliance on free market forces. The World Bank, the IMF and the United States Agency for International Development in many cases work out detailed programs which the government concerned is to adopt as a condition of getting its money. All three agencies work closely together even to the extent that they use US embassies as meeting places from where they coordinate their activities in the countries concerned. Of course, the Central Intelligence Agency has a hand in determining which regimes are given credits. We have yet to hear any criticism of this behaviour from our Treasury officials attending the International Monetary Fund and IBRD conferences. However, it is encouraging to hear that the Minister, in his second reading speech, is keen to use our influence in the World Bank to help rectify many of the problems confronting the international financial system including protectionism, debt, poverty and environmental damage caused by inappropriate development aid. The Treasurer, too, has stated the need for the large developed economies to take measures to assist the ability of developing debtor nations to repay their debts. He said at an IMF interim committee meeting on 25 September 1988: . . . another threat to the world economy is the debt burden of many developing countries. This has imposed significant adjustment cost on debtor countries. And while there have been some successes, many are worse off in 1988 than they were in 1982. This reflects external as well as internal reasons-notably, low prices have continued for some key agricultural commodities. Western financial officials are always seeking adjustment from debtor nations in an effort to solve the debt crisis. It is time that the burden of this adjustment was placed on the shoulders of those most able to carry it. Long and short term solutions need to be considered. The most important long term solutions are, as the Treasurer pointed out, lifting trade barriers and increasing the prices and volume of their export commodities, in other words, creating an increased demand by controlled growth in the world economy. In particular, countries with large trade surpluses, such as Japan and the Federal Republic of Germany, should be urged to embark on a program of domestic expansion. Steady growth in the world economy is the most important factor. To prevent inflation this growth must be steadied and managed. These developments need to be complemented by shorter term measures, including rescheduling of debt, lower interest rates, longer maturity, grace and consolidation periods and increased lending, lending directed at development which will assist the most impoverished sections of developing nations. It is imperative that an international conference be convened as soon as possible to discuss and implement urgent solutions to this problem and with the view of establishing a debt management authority. We can be flexible about which solutions we adopt. But sooner or later the fact has to be faced that creditor nations have to take the responsibility for ending the crisis which they are responsible for starting and take on part of the burden of adjustment. In conclusion, I would urge Australia, through the purchase of these additional shares, to use its influence in the International Bank for Reconstruction and Development to promote measures to ensure that the debtor nations can solve their financial and development problems whilst reducing poverty and social inequality within their countries. Mr ROCHER(Curtin)(6.34) —Leading to, as it will, a further payment for a general capital increase, the International Bank for Reconstruction and Development (General Capital Increase) Bill represents a major renewal of Australia's commitment to pick up the tab for the World Bank in the future. Parliament should not be taking such decisions lightly. No matter what the immediate cost to the Budget, we are offering to support a major international financial institution which dispenses funds and favours that have a significant effect on many countries. We have a responsibility to our taxpayers to examine carefully the use of Australian money by foreign agencies over which the Government and the Parliament have so little control-in fact, one might say virtually no control at all. I suggest that if the Government were taking these duties seriously, it would have been very reluctant indeed to subscribe to this general capital increase. Instead, we have this continuing quest by Ministers for status in the eyes of foreign governments and foreign officials, bought and purchased by the reluctant and generally unknown generosity of the Australian taxpayer. Australia has been a member of the International Bank for Reconstruction and Development (IBRD) since 1947. The Bank was formed to aid in postwar reconstruction and the development of newly independent countries. After Europe rapidly recovered from the ravages of the Second World War, the financing of Third World nations became the predominant function of the IBRD and its soft loan affiliate in the World Bank group, the International Development Association. When originally constituted, member countries envisaged an organisation which would facilitate the development of the private sector. Financing of specific productive projects, the use of guarantees to facilitate the private sector loans, and the sale of the existing World Bank loan portfolio to private financial institutions are all functions which tend to foster the private sector, and they have declined significantly over the last two decades. The IBRD no longer effectively promotes the private sector, which is, after all, an essential part of the development of the economy of any nation. It acts as a bulwark for the activities of inefficient and often less than democratic governments against the disciplines of international markets and the responsibility to provide a government under which its people have access to such basic essentials as food, shelter, education and their own prosperity. All too often it confers a spurious respectability on despotic or poor rulers which helps them to maintain their office. Project lending has increasingly given sway to structural adjustment loans or lending for infrastructure, which in itself, of course, produces nothing. These changes in the operations and priorities of the IBRD indicate the lack of direction or clear objectives which has plagued the bank, despite, I might say, the best intentions of some of the bank's senior staff. Conscientious and capable senior staff are torn between competing demands for the bank to act as a bank, an aid agency, a development body, or a long term lending equivalent of the International Monetary Fund. None of these goals any longer requires the continued growth of the World Bank. Those ends, I postulate, can be more efficiently delivered by private sector finance, private aid, or the bilateral assistance of governments. This Government has continued to offer virtually uncritical support to international financial institutions which do not necessarily act either effectively or in the interests of our foreign policy objectives. The World Bank represents yet another large, self-perpetuating bureaucracy, which acts to further its own institutional interests rather than the diverse interests of member countries. More than 6,000 people work for the World Bank, enjoying generous remuneration and conditions of employment. Mr Tim Fisher —Not accountable to anyone really. Mr ROCHER —It is not accountable to anyone, in effect. Australia's aid agency, the Australian International Development Assistance Bureau (AIDAB) estimates that the World Bank is some three times less efficient in the disbursement of funds than AIDAB itself. The World Bank is not accountable to the many taxpayers around the world who finance its operations. The Government makes a number of claims about the success of the World Bank and multilateral aid organisations which cannot simply be justified after examination of their actual record. It is not surprising in this case. The qualifications needed for the receipt of loans from the World Bank on the most favourable terms are in fact to have the largest possible economic disaster and to be able to demonstrate the greatest need within that particular country. The more successful in its economic policy, the more likely that a country will not get, or need, large loans from international financial institutions. There is no evidence that starting a nation on the debt treadmill is an effective means of promoting economic progress. None of the economic success stories of the Third World such as Taiwan, Korea, Hong Kong and others have achieved success because of the help of the World Bank. Any success they have enjoyed is the result of deliberate decisions by governments to allow the private businesses and individuals to secure their own progress within a stable, market-based economy. Loans to support government spending for either its budget or for running businesses which could be privately operated, are not a good way of encouraging the sort of government policies which will improve the well-being of people in Third World countries. Peter Bauer, Emeritus Professor of Economics at Cambridge University has said: Aid is demonstrably not necessary for economic development. This is evident from the progress, both of the West and of much of the Third World, long before the advent of aid. That is equally true of aid disguised as loans from international financial institutions, such as the World Bank. Professor Bauer makes the obvious point, which is so often forgotten by the apologists for bad government policies which impoverish their citizens, when he says: Lack of money is not the cause of poverty: it is poverty. Conversely, to possess money is the result of economic achievement, not its precondition. Supporters of the World Bank seem to think that simply by lending money to Third World countries development will automatically follow. If it does not, then they suggest that more lending and aid is needed. That is what this Bill is all about. Few have stopped to observe that, after many years of following the development policies of the World Bank, it still requires an increasing rate of contributions to expand an exponentially growing demand on its funds by more developing countries than ever before. Surely that is an indication of either the irrelevance or failure of the World Bank and the programs that it fosters. The numerous expensive projects which have become white elephants in Third World countries are an eloquent testimony to the fact that one cannot buy prosperity for millions by throwing money at their governments. While governments can destroy wealth, they cannot create it. Unless governments pursue policies which allow their citizens to freely invest, trade, produce and reap the rewards of their efforts, it does not matter how much capital the international financial institutions are able to loan. The World Bank has expressed concern about the low success rates of some of its projects. The 1987 annual report of the bank expressed concern at `the relatively large number of projects with unsatisfactory or uncertain outcomes'. Of projects in Africa, 40 per cent had `unsatisfactory or uncertain results', double the high 20 per cent failure rate overall. The failure rate in agricultural projects was twice as high as that in all other projects combined. It should also be noted that the bank's criteria for the success or failure of a project is not based on commercial returns but includes consideration of the achievement of social objectives, whatever they might be. Particular problems have emerged with the structural adjustment loans administered by the IBRD. Indeed, such loans to support the general budget of particular governments were never envisaged by the founders of the World Bank, who specifically precluded such open ended lending. The rationale for structural adjustment loans is that the bank can encourage improved economic policies, promote trade liberalisation, and other desirable goals, through loans conditional upon those policy objectives being met. A World Bank analysis of 10 structural adjustment loans that it made reported that `none of the 10 succeeded in fully implementing the reforms on schedule', although four of those countries were said to have made some progress. That report by the bank was scathing in its condemnation of the unrealistic expectations held for the structural adjustment loans. The largest problem it identified was the inability of the borrowing countries to achieve the changes required. It was suggested that this was caused by both institutional restraints and the tendency of some countries to take the money offered and then ignore the World Bank. The record of structural adjustment loans is scandalous. Despite this, one of the stated aims of this general capital increase is to provide further resources for this type of lending. The World Bank is consistently increasing its loans loss reserves. That is a matter of record. It is obvious that it has little confidence in a number of its past decisions. This Bill seeks approval for Australia to subscribe to the 1988 general capital increase for the IBRD. Furthermore, the 1988 capital increase is the largest capital increase in the history of the bank. It represents a massive 88 per cent increase over the previous authorised capital of the bank. Although the bank risked breaching its sustainable level of lending in 1988, this capital increase will do much more than maintain the financial stability of the current operations of the IBRD. It will in fact fund a significant expansion of the bank's activities. Mr Bilney —Hear, hear! Mr ROCHER —A wanton desire to throw good money after bad, which the honourable member for Kingston seems to approve of, will do little for the world's poor or for those countries funding the World Bank. A general capital increase has been proposed for a number of years. However, member countries were very reluctant indeed to endorse the proposals of the IBRD. The United States Congress seriously considered placing a capital freeze on the IBRD and delay making a final decision on funding the bank as long as it possibly could. The carrot offered by the bank to secure support for the capital increase was a reduction in the paid-in proportion of capital to 3 per cent from levels in earlier years as high as 10 per cent. Despite the rhetoric of the Government, this low paid-in capital does not offer any advantages to member countries. It shows the reluctance of other member countries to continue their unconditional support for international financial institutions. Yet every time over the past five years we get a Bill such as this before the House, the Minister responsible trots out the same old tired reasons for wasting taxpayers' money without any indication of how shallow his arguments really are. I will briefly attempt to dispense with a few of these myths now. The World Bank does not achieve high returns on its loans. If it did, there would be little need for the huge capital increase which we are considering today. The bank measures returns according to non-commercial criteria, which might be applicable to assessing the results of aid policies but have little relevance to large loans. Ministers insist that repayments to the World Bank are rarely defaulted on, despite the fact of increasing numbers of countries that have rescheduled their debt or entered into new financial arrangements to postpone difficulties with their existing repayment level. Membership of the World Bank does not assist Australian exports in any significant long term sense. Exports to other countries, paid for by capital outflows from Australia in the form of funds for the World Bank, are no more likely to improve our exports in the long run than any other subsidy. Free trade has not been successfully fostered by the World Bank. The American economist Alan Reynolds observed that the economic wisdom of the International Monetary Fund and the World Bank insisted that every country in the world should be a net exporter and a net creditor. There is no evidence that the countries supported by large IBRD loans are less protectionist than other nations. Indeed, the opposite is probably true because it seems that it can lead to highly protectionist policies. Finally, the supporters of the World Bank point to the political advantages of membership. This is often little more than a desire, common amongst present Government Ministers, to be seen to be generous with other people's money. It is relevant here to make a few points about the debt crisis, which has produced so much talk and so few solutions. While debtor countries continue to borrow to avoid the reality of their failed policies, no solution to debt problems will be forthcoming. The solution to debt problems must ultimately be found within debtor countries themselves. Proposals for debt forgiveness or for heavy subsidy of existing debts by Western governments are foolish. They provide rewards to irresponsible governments at the expense of those who meet their commitments. They are shallow solutions because they treat debt, the symptom and evidence of economic problems, rather than the economic problems themselves. Continued support for the growth of the World Bank and the IBRD costs Australian taxpayers an increasing amount of money without clearly achieving its stated objectives. Involvement serves the vanity of the Treasurer (Mr Keating) in his journeys to overseas meetings of the Board of the World Bank more than it serves the interests of Australian taxpayers. The entire field of assistance to Third World countries has gone sadly astray. Whilst some countries of the Third World have rapidly growing standards of living for all their citizens, others continue to live in abject poverty. The difference is not one of IBRD support. It is not one that warrants support from the World Bank in the way it has been forthcoming in the past and in the way it promises to continue in the future. This is the second Bill this year that commits taxpayers to finance the operations of the International Bank for Reconstruction and Development, which, with the International Development Association, forms a major arm of the World Bank group. Each and every time such a commitment is made we are told that our contributions are only small compared to the benefit gained from being an active participant in the World Bank. I dispute that seriously on the grounds that I have already mentioned. The small amounts add up over the years to a very significant contribution indeed. We never receive a realistic assessment of the claimed benefits in this Parliament. I support the amendment moved by the Deputy Leader of the Opposition. I add that my disenchantment with these programs is growing greater every year. It gives me no pleasure to come into this place each year-in this case twice this year-to express those sentiments and views. Mr BILNEY(Kingston)(6.53) —It is a consolation that the Opposition is not opposing this Bill, after hearing the remarks of the honourable member for Curtin (Mr Rocher). One feels that, given his druthers, he would oppose it. For that reason, it is a pleasure to see in the chamber today the honourable member for Boothby (Mr Steele Hall), whose views would be considerably more enlightened than those of the Opposition in general. I rise to speak in support of the International Bank for Reconstruction and Development (General Capital Increase) Bill 1988 and I want to make a number of remarks. Since its formation immediately after the end of World War II, the International Bank for Reconstruction and Development (IBRD), or the World Bank, as it is commonly known, and its companion organisation, the International Monetary Fund (IMF), have played a crucial role in improving the economic fortunes of the world's poorest countries. The World Bank has been able to do this because of its unique financial structure, which at present requires its 151 shareholders to lodge with the bank only around 9 per cent of their portion of the bank's subscribed capital, thus enabling them to retain the bulk of their subscriptions for themselves as callable capital. This means that, while the bank's total equity capital currently stands at around $US78 billion, only around $US7 billion of this has actually been called up. The significance of this is twofold. First, it provides the bank with a very large equity base at minimal upfront cost to shareholders, enabling it to operate with a comparatively conservative debt to equity gearing ratio of 1:1-a ratio which is also about the same as that in the Asian Development Bank. That enables it to tap world bond markets on a large scale without breaching its charter. Secondly, having a such a large nominal capital base gives the bank tremendous financial strength when it borrows funds by selling bonds in international capital markets. This is essential because 90 per cent of the money loaned by the bank is raised in such markets, the balance coming from the bank's members. These bond issues, which amounted to $10.6 billion in the 1985-86 financial year, consistently achieve a AAA credit rating and, consequently, are the bank's most important source of funds. It is because of the bank's ability to raise such bonds that it is able to lend such large amounts of money to developing countries for long term capital intensive projects which it is hoped will eventually improve the quality of their economies. Mr Tim Fischer —Some of which are disastrous. Mr BILNEY —A great many of the loans that are made by some banks are disastrous, but the World Bank is an extremely prudential lending institution whose probity would, I suggest, be greater than that of the institutions associated with the Liberal Party of Australia. Mr Dawkins —And not the National Party? Mr BILNEY —Or the National Party, for that matter. Indeed, without the IBRD, most developing countries would face great difficulty in raising sufficient amounts of development finance. Moreover, those that could find commercial bankers willing to provide such finance would find themselves paying a far higher price for it than that charged by the IBRD. However, in recent years it has been increasingly difficult for the IBRD to continue the level of lending required to sustain the demands of all the countries which approach it for long term development finance. That is why this Bill is before us today. Until the early 1970s it was always assumed that development finance could be neatly divided between short term balance of payments adjustment financing-the role of the IMF-and the longer term project finance I have just spoken of, handled by the IBRD. The oil shock of 1973-74 destroyed this neat little dichotomy and subsequent events such as the 1983 commodity price collapse have not helped matters. The effect of the 1973-74 oil price shock badly reduced the terms of trade in the non-oil producing developing countries, which inevitably resulted in current account problems. For example, in the six major Latin American debtor countries, interest payments accounted for more than 20 per cent of all export earnings in 1984. That compared with just 5 per cent in the early 1970s. In other words, the balance of payments adjustment problems of typical developing countries have become increasingly linked with their requirement for long term financing to expand, improve and restructure their productive infrastructure. As a consequence, the IBRD in particular is finding its role rather more difficult. Not only is it having to become more and more involved in questions of short term economic policy in borrower countries; it is also finding a greater proportion of its loans are at risk; hence, its bond issues are becoming less attractive in international capital markets. All that has made the need for increasing the IBRD's equity capital quite urgent if it is to remain a respected and viable financial institution. Accordingly, in April of this year, the bank's governors approved a resolution which authorised a $US74 billion general capital increase to enable the bank to expand its borrowings on world capital markets. If they had not done so, borrowings might well, indeed would, have had to decline because, according to Barber Conable, the bank's President, the World Bank's capital base would have actually shrunk in real terms. The general capital increase will enable the bank to avert the consequences of this and allow it to carry through its programs aimed at the world's most heavily indebted countries. As a result, the World Bank hopes to increase its annual lending from around $US14.8 billion today to more than $US20 billion per annum by 1992-93. Under the terms of this increase Australia is entitled to subscribe to an additional 10,734 shares in the IBRD, of which I note from the second reading speech of the Minister for Industrial Relations (Mr Peter Morris) the Government has committed itself to taking up 7,880. While I commend that move, I believe it would be an improvement if the Government also committed itself to taking up the remaining 2,854 general capital shares to which it is entitled. I believe that Australia could relatively easily afford to do this since it would require an increase in paid up capital of only $A12.91m over the next five years. Furthermore, I think we have a duty to do this. As many honourable members will know, now is not the time for Australia-which is the World Bank's thirteenth largest source of funds, having subscribed just under $500m through the Australian International Development Assistance Bureau (AIDAB) in the last 10 years-to reduce its commitment to the bank. Why not? Because to do so would be to set a very poor international example at a time when the Reagan Administration and the bank's President, Mr Conable, are experiencing very great difficulty in trying to persuade a lame US Congress to ratify United States approval of the capital increase. The conservative opponents of the IBRD capital increase in the US Congress have tended to base their opposition on claims-very silly claims it seems to me-that the bank's lending policies promote communism and that somehow IBRD lending thwarts United States foreign policy. On that basis I am sure that those who make those claims would be only too ready to distort any reluctance by a nation like Australia to take up its full share entitlement. This is something we can ill afford to let happen. As Paul Volker-a person conservative enough, I believe, to appeal to anybody-the former Chairman of the US Federal Reserve Board, told congressional representatives on 7 July, their refusal to ratify the IBRD capital increase could well put the bank and, thus, the world financial system itself in jeopardy. That said, however, I am not an uncritical supporter of the IBRD and I believe that the bank needs to take a long look at how its lending policies are working, in particular, and how it is approaching the global debt crisis, in general. I know that many other members of this House and this Parliament share these same concerns, as do some of our international colleagues. For example, this year I was proud to be amongst the eight lead signatories of a letter which was put together by Ms Karen Cloud, the dedicated Director of the Results Australia organisation. In the end that letter was signed by 107 members of this Parliament and 57 members of the Victorian Parliament and sent to the World Bank President, Mr Conable, asking him to remember that the alleviation of poverty was the ultimate goal of the bank and also of a pledge that he had made to concentrate on the eradication of poverty in Asia. This letter, which was also signed by more than 450 members of the British Parliament, the Canadian Parliament and the US Congress, then went on to specify how the signatories believed this could be achieved. The first way the IBRD could improve its lending practices would be to make greater use of social indicators, as well as economic indicators, to measure progress in development. As our letter said: The conditions of the poor can best be measured by social indicators such as the mortality rate of children under 5; life expectancy; access to safe water; the adult literacy rate, particularly amongst women; and the proportion of children suffering from malnutrition. Public support of funding for the World Bank and other development institutions ultimately depends on their contribution to progress in key areas such as these. In this light, I was glad to have Mr Conable's reply to the effect that he believed that social indicators `add a valuable dimension to more strictly economic measurements' and that they are often used in benchmarks in lending operations in the social sectors such as health, education and population. He also said in his reply that he had directed the bank to improve the statistical capability of recipient countries. But while the bank's current use of social indicators is in the context of specific lending operations in particular sectors, and these may relate to only part of a recipient country, the bank must be urged to make sure that the social indicator targets which are agreed with recipient countries can be made to relate to the country as a whole. While one can accept the bank's comments about the difficulties of measuring some social indicators, they are also true of some economic indicators. Reliable data on key social indicators, such as child mortality, exists in many recipient countries. The reliability of those data is improving and it could be improved still further. I believe therefore that the bank should initiate discussions with borrowing countries on country-wide targets for improvements in a small number of key social indicators on which reliable data is available in those countries. There should be target dates for achieving those improvements and bank activities should be planned to help meet those goals. The forthcoming round of consortium and round table meetings between donors and recipient countries should then be used to discuss coordination of donor and recipient efforts to achieve these country-wide targets. Elsewhere, as we said in our letter to Mr Conable, the IBRD could make a greater contribution to alleviating the global debt crisis by approaching member countries with the proposal that funds they supply for the IDA should be provided to the poorest countries on grant terms. This would help many of the poorest countries, particularly those in sub-Saharan Africa which, unlike those in South America, are mainly indebted to governments and inter-governmental financial institutions. When the IDA started lending to the Third World's poorest countries in the early 1960s, its terms at that time were amongst the most concessional of any aid donor. However, since then the governments of many countries-Australia always had a wholly grant program-such as the United States, the United Kingdom, and the Federal Republic of Germany have switched to providing nearly all of their bilateral aid to the poorest countries on grant terms. I believe that now is the time for IDA to follow suit. It would also be helpful if the IBRD based its future lending practices on the six guidelines for structural adjustment which were agreed last September by the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development. The DAC is a body on which I was proud to represent Australia for some three years a decade or so ago. Given the World Bank's central role in structural adjustment since the 1973-74 oil crisis, it should be in the forefront of implementing those guidelines. It is pleasing, however, to learn that President Conable has introduced a requirement that each report to the IBRD Board on an adjustment program should comment specifically on the program's social impact on the poor. I also welcome his assurance that compensatory measures will be built into future adjustment programs that will benefit, as well as protect, the poor during the period of adjustment, as well as his decision to expand the bank's consideration of environmental factors when it makes loans. Amongst other things, this should prevent the repetition of projects which are as environmentally disastrous as the Brazilian Polonoroeste highway, which has cost the Brazilian Government a great deal to finance and resulted in the destruction of a major part of the Amazon jungle. Similarly, it might prevent a repetition of the equally disastrous $US340m Chixoy hydroelectric dam in Guatemala, which has left an impoverished population having to foot the bill for a white elephant dam and increased electricity costs that went with it. For these reasons, while I support this Bill to increase Australia's stake in the IBRD, I urge the Government to take it one step further and set aside the money needed to take up our full share allocation. We can well afford to do this and it would put us in a good position to aid Barber Conable and the Reagan Administration in their efforts to persuade the US Congress to ratify the whole IBRD capital increase program. Equally importantly, it would put us in a better position to lobby the bank's management to pay greater attention to the social needs of recipient countries-something for which there is a greater need than ever before. I commend this Bill to the House. Mr RUDDOCK(Dundas)(7.09) —Madam Speaker, thank you very much for the call in this debate on the International Bank for Reconstruction and Development (General Capital Increase) Bill 1988. I spoke in March on a similar Bill in relation to this organisation. I offered some comments on that occasion in relation to correspondence with the President of the World Bank, Mr Conable, about which the honourable member for Kingston (Mr Bilney), who spoke before me, addressed this House. I was intending to cover much the same ground as he has done so helpfully for us. Interestingly, I was one of those who had the privilege of signing earlier this year the letter to Mr Conable about which he spoke. This included a number of Labor colleagues to whom I would give credit, such as the honourable member for Hughes, Robert Tickner, the honourable member for Fraser, John Langmore, who spoke earlier, and Senator Olive Zakharov, and among my colleagues Senator Hill, and from the National Party, the Hon. Ralph Hunt, member for Gwydir, and the honourable member for Gilmore, John Sharp. In that sense, it was a bipartisan effort-an effort that I was pleased to see received wide endorsement from our colleagues. As the honourable member for Kingston mentioned, 770 members of the United States Congress and the Parliaments of Britain, Australia and Canada received that letter which was delivered to the World Bank President, Barber Conable, back in early June. I was delighted to receive a letter from the President on 21 July responding to the matters we raised. It was the letter from which the honourable member for Kingston quoted. In this debate today we have seen a number of approaches taken to this Bill. It is interesting that there are divergent views on this topic-views which on this side of the House have been brought together in the amendment moved by the honourable member for Kooyong (Mr Peacock). I shall address the amendment because it is important that people understand that the approach I am taking-and I suspect that that approach is not too far divorced from that taken by the honourable member for Kingston-gives rise to some doubts about the way in which this organisation is operated. The Deputy Leader of the Opposition was suggesting that we should not be uncritical of the organisation. In fact, those words are used in the Minister's second reading speech, to which I shall come in a moment. The Bill empowers the Treasurer to make necessary agreements on behalf of Australia to purchase additional shares on terms and conditions as he determines. It empowers the Treasurer to issue securities in payment and it appropriates the necessary funds to make payments under the agreements. In that sense it is a very simple Bill. The Minister Assisting the Treasurer (Mr Peter Morris) in his second reading speech made the following comments: Australia is a strong, but not uncritical, supporter of the IBRD. We are concerned that the bank maintains the high quality of its lending and continues to be cost-effective. Australia has criticised the bank when appropriate with the aim of improving its overall efficiency. In particular, Australia has expressed concerns about the very fast rate of growth of large scale fast disbursing structural adjustment loans, the growing incidence of arrears on bank loans, and the need to further enhance the Bank's work on environmental matters. Although the Minister goes on to say that the bank plays an important part in lending to support the adjustment processes in developing countries, his comments on the alleviation of poverty leave a little to be desired. When one relates the Minister's comments to those of the honourable member for Kingston and my own observations, I think the honourable member for Kingston will be disappointed, as I am, at the approach the Minister Assisting the Treasurer has taken in this instance. However, I assume he was speaking for our representative on the Board, P. J. Keating-a gentleman whom I understand to be the Treasurer of this country. He is the man we send to the World Bank, the man who represents us there and presumably forms a view, perhaps with the assistance of Treasury advisers-maybe they had an input in developing this speech as well; I do not know. The speech says: The bank needs to pursue poverty alleviation and environmental aspects of its work, but it cannot compensate for all the shortcomings which might exist in national policies affecting the environment, poverty or anything else for that matter. Key issues such as population growth, natural resources, land ownership and government expenditure are sensitive matters of national policy. The bank can assist in these areas but cannot dictate solutions. That may well be the approach of bankers, but I am afraid that when the political masters were offering comments, a large number of members of the Australian Parliament, perhaps the majority, across political boundaries, expressed the view which they put to the president of the bank. I would be disappointed if those views which were so widely expressed by members of this Parliament and by other members of parliament were not supported by our representatives at the bank. I would be disappointed to think that those representing the Executive branch went along to represent this nation at board level and decided that the views of members of parliament, unless expressed precisely in the form of a resolution, or perhaps a Bill, were not to be heeded. The reason that we have the amendment before us today is that Opposition members are now saying that we cannot look uncritically at the funding of this organisation without flagging the fact that, at the end of the day, the only way in which the Parliament can deal with the matter, if writing letters is not sufficient, is to deny the passage of the Bill. That is what the amendment is about. The only step we can take is to deny the Bill's passage-in other words, to deny the funds, the capital. We are doing so not because we want to punish the poor, or to deprive the bank of its capacity to carry out its work in this area, as the honourable member for Fraser suggested when he criticised the amendment proposed by the Deputy Leader of the Opposition. We are taking this step because we are saying that if the bank is not responsive, the only weapon we have is the extent to which we contribute further funds to this organisation. Therefore, we have moved our amendment in the following terms: `whilst not declining to give the Bill a second reading, the House is of the view that: (1) a thorough analysis of Australia's contribution to the International Bank for Reconstruction and Development is long overdue; and (2) in future, the Australian Government should take a more active role in the forums of the International Bank for Reconstruction and Development to explain this nation's growing concerns with the bank's management and direction, and to convey the message that a more efficient utilisation of the bank's existing resources must eventuate before further contributions to its capital base will be provided'. In other words, the comments from people such as myself and the honourable member for Kingston should be put by our representatives to the bank. I take this opportunity, as did the honourable member for Kingston, to say that I was one of the members who signed the first letter, on 22 September 1987, expressing support for the bank's efforts to help the world's poor and suggesting that the bank should adopt a new and more operational approach to women in development. It suggested that it should further provide for increasing investments in the future productivity and well-being of people in the developed world through increasing lending for primary health care and primary education. Thirdly, it suggested support for the bank's approach to adjustment programs being modified to learn more about how to protect the interests of the world's poor. I was interested to read the annual report of the World Bank for 1988. The bank is giving a good deal of discussion to these issues that were first raised. On page 41 of the bank's report we find in box 3.3 a statement on `The Banks Support of Poverty Alleviation: A Status Report'. It details the way in which the bank is dealing with some of these matters and raises a number of questions. It makes the point that the bank's experience has demonstrated that because growth alone is not sufficient to alleviate poverty, programs and policies must be carefully designed to ensure that the benefits of growth reach the vast numbers of poor in developing countries. The report states: Substantial efforts are being made to strengthen the Bank's understanding of the operational implications of the social costs associated with adjustment. Given the necessity of undertaking adjustment programs, the Bank study concludes that it is particularly important that parallel actions be taken to protect the poor . . . Under footnote 6, the bank indicates that it has a program of action over the next five years which is designed to help eliminate the worst forms of poverty in developing member countries by the year 2000. It has a task force which is looking at this matter and its report is to be discussed by the executive board in fiscal year 1989. It is in that context that the matters I have raised are being addressed today. The operational approaches to women in development (WID) are discussed at page 44 of the bank's report. A number of comments, under various headings, encapsulate the work that the bank is doing to try to come to grips with some of the matters that we pressed in our first letter. The report mentions the country WID action plans. The bank has been looking at the division's work program to develop effective approaches in relation to forestry and agricultural extension and credit to ensure that women's difficulties in those areas are particularly addressed. Operational support is dealt with under the heading `Women farmers and food security in Africa'. Under the heading `Safe motherhood', the report outlines the research and staff training that are being undertaken by the bank. The report does not give results, but it does at least indicate that the issues are being addressed. It was in that context that the second letter, about which the honourable member for Kingston spoke today, was developed. I do not wish to use the same quotes from the letter that the honourable member did, but it was clear that we were pressing three issues: the use of social indicators to measure development progress; the future terms upon which funds from the International Development Association (IDA) would be used; and structural adjustment lending. In relation to the use of social indicators, I was somewhat disappointed with the response that I received from Mr Conable. What we said was: The conditions of the poor can best be measured by social indicators such as the mortality rate of children under 5; life expectancy; access to safe water; the adult literacy rate, particularly amongst women; and the proportion of children suffering from malnutrition. Those issues are addressed even in some of the poorest countries. It is our aim to collect statistics in relation to each of those matters. Mr Conable's letter made all the right sounds. For instance, it said: We have been using such indicators for some time in our economic and sector work- I welcome those comments- . . . in the context of our lending operations in the social sectors (such as health, education and population), we often set as benchmarks expected future changes in key social indicators. He went on to say, and I guess this is jargon: However, a cautionary note is required with regard to the immediate prospect for greatly expanded use of social indicators. While we are sympathetic to the suggestion that we define . . . data is often difficult to obtain . . . He told us that frequently the information is limited and unreliable and that social indicators tend to be meaningful only over the long term. He said that the material is often collected by census, typically conducted 10 years apart or at even longer intervals and `we cannot always await the result of census'. Those matters need to be addressed much more fully and creatively by our own people, drawing upon the wide range of programs that our agencies have and the way in which they undertake measurement of these issues. When the IDA started lending to the world's poorest countries in the 1960s, we suggested that its terms were among the most concessional of any aid donor. We indicated that most of the aid from countries such as Australia, the United States, Great Britain and Germany was being given bilaterally on grant terms. We were saying that that ought to be looked at as being a better way to do it. What Mr Conable is saying is: `Look, we have been involved in discussions in these matters over a period. We had the IDA-8 discussions and we increased some money that was going to sub-Saharan Africa, but the terms and conditions and size of the IDA are determined by donor countries'-that is, countries such as Australia. He is also saying that the new terms were resolved in the course of the replenishment negotiations. He said that when the IDA-8 discussions were held, the donors agreed that the terms which had remained unchanged since their inception should be hardened because they wanted to increase the size of the replenishment. What Australia was doing-contrary to the views expressed by members-was arguing in those negotiations that we ought to make it more difficult for those countries to get moneys in grant terms; that we ought to require a greater contribution from those countries so that the amount of resources available to the IDA would be increased. In respect of the structural adjustment issue, again we set out some views as to the way in which the major aid donor countries could assist. One issue that we pressed particularly was the development of what we called poverty impact inquiries. While the letter from Barber Conable attempted to address some of those questions, I do not think that the question of poverty impact statements came through as clearly as I would like. I indicate, as did my colleague the honourable member for Kingston in this debate, that a good deal of the effort that has been undertaken to try to ensure that I am appraised of the issues involved in relation to the funding of the World Bank has come about as a result of the efforts of an organisation about which I think little is known. It is an organisation called Results. While that organisation has made some submissions to parliamentary committees, and honourable members might have become aware of its work in that respect, not a great deal is known about it. It is largely a voluntary organisation. An interesting article in the Christian Science Monitor of 24 October gave some detail of the organisation. Honourable members who would like to know something about it and its work and understand its importance could well read that article. Madam SPEAKER —Order! The honourable member's time has expired. Debate (on motion by Mr Ronald Edwards) adjourned. Motion (by Mr Humphreys) proposed: That the House do now adjourn. Mr ALDRED(Bruce)(7.29) —I wish to use tonight's adjournment debate to say a few words about Max Fox, who preceded the Speaker and me as the representative for the division of Henty in this chamber from 1955 to 1974. Max passed away last Sunday and his funeral was held this morning at the Uniting Church in Ormond, Melbourne. I regret very much that I could not attend because of commitments in this Parliament. Max Fox was Chief Whip of the Liberal party and, appropriately, the Opposition was represented at the funeral by my colleague the honourable member for Cook (Mr Dobie), himself a former Chief Whip. Before making some personal observations about Max Fox, it is worth recounting aspects of his life and career. Max Fox was born in Oakleigh, Victoria, on 27 April 1912. He was educated at Melbourne High School, the same high school attended by his electorate chairman for many years, Mr Paris Chambers. On 26 September 1936, Max married Edna Elizabeth Bowra and from the marriage came two daughters. During World War II Max served in the Royal Australian Air Force, completing his service as a sergeant. He was elected as the Federal member for Henty in 1955, at the same time as the late Sir Billy Snedden, Malcolm Fraser and Jim Killen. During his 19 years as a member of the Parliament, Max Fox took an active role in a wide range of parliamentary and party committees, far too numerous to mention here. Mr Fox was a Deputy Chairman of Committees from February 1967 until October 1969. He spent five years in the exacting role of Chief Whip. Three of those years were served as Government Whip from February 1969 until December 1972, and another two as Opposition Whip until May 1974. I understand Max brought to the role of Whip the same hard work and dedication I personally know he gave to the general community. In recognition of his long and valued parliamentary service, Max Fox was made a Commander of the Order of the British Empire in 1972. Max worked particularly tirelessly over many years for organisations concerned with ex-servicemen, migrants and the elderly. He was a well known and greatly loved figure among these people, as is his wife Edna. After leaving Federal Parliament, Max Fox continued in further public office as a councillor and also Mayor of the City of Moorabbin. I express my own gratitude for the kindness and advice he extended to me over a long period and extend my sincere condolences to Edna and the family. It was a privilege for me to have him as a friend. Most of all I remember Max Fox as a man of resolute and uncompromising principles who always took what he considered was the honest and decent approach in any situation. Abraham Lincoln said on one occasion: Character is like a tree and reputation like its shadow. The shadow is what we think of it; the tree is the real thing. Madam Speaker, Max Fox was always the real thing. Mr RONALD EDWARDS(Stirling)(7.34) —Tomorrow is the first anniversary since the ban on smoking on all domestic commercial passenger flights came into effect. I recognise that for some smokers that has been an imposition. However, I thought it appropriate to report to the House the effect of this ban and to take this opportunity to acknowledge the support from my Caucus colleagues who, in my view, responded intelligently to the proposition put to them in 1987. I am sure there are honourable members opposite, particularly those with some background in medicine, who would recognise that there have been some gains. Dr Woods —Hear, hear! Mr RONALD EDWARDS —I thank the honourable member. I spoke to both commercial airlines which, in a nutshell, reported to me as follows: They described the introduction of the smoking ban as causing very few problems and they reported a significant gain in terms of cleaning costs and the morale of personnel. They break down into two groups, the first being the counter staff at the terminals where people check in. All honourable members will realise that now all one has to do is advise the counter staff of one's name and one is processed immediately and given a seat, whereas before counter staff had to inquire as to whether the passenger wanted a smoking or non-smoking seat and that caused problems. It also entailed problems for the airlines in configuring aircraft. One of the problems was that often customers could not be offered non-smoking seats when they keenly sought them. That problem has now disappeared. The second group is flight attendants and in that area there has been a significant gain, of which there are three elements. Firstly, a significant improvement has been reported in their general health. Working in a smoke-free environment has been a big plus for them. Secondly, they report that the difficulties in handling passengers in flight have shown an improvement. In the past, often non-smoking passengers would complain that smoking passengers were infringing their right to clean air, and that caused many difficulties in the air. Thirdly, it had become a practice for women flight attendants, in the early months of pregnancy, on medical advice, to take leave because it was claimed that there was a health related problem. All that has been eliminated. The Australian Flight Attendants Association has reported to me the result of a survey and I shall acquaint the House with a couple of figures. When asked for an opinion of the ban on smoking on domestic flights 82 per cent of the membership strongly agreed with the ban; 12 per cent agreed; only 2 per cent strongly disagreed. So there was significant support for that. The next question asked: Currently, any problems with complaints from smokers? The response to `Yes, a few' was 33 per cent; to the response `Yes, a lot' 2 per cent; to the response `No problems', 65 per cent. Clearly very few problems are being experienced by the flight attendants in handling passengers. There is a further statistical data, and subject to the normal procedures, I seek leave to have this material incorporated in Hansard. Leave granted. The table read as follows: QUESTION FROM AFAA MEMBERSHIP SURVEY CONDUCTED DURING OCTOBER 1988 IN CONJUNCTION WITH DR CLAIR WILLIAMS, FLINDERS UNIVERSITY, SOUTH AUSTRALIA Col. No. Var. No. Content of question Code Percent 16 V.85 (3a(a)) Opinion of the ban on smoking on domestic flights Strongly agree 1 82 Agree 2 12 Neither agree nor disagree 3 2 Disagree 4 2 Strongly disagree 5 2 Other 6 .1 No answer 9 .3 17 V.86 (3a(b)) Currently, any problems with complaints from smokers? Yes, a lot 1 2 Yes, a few 2 33 No 3 65 Other 4 No answer 9 .3 18 V.87 (3a(c)) Currently, any problems enforcing the ban? Yes, a lot 1 .9 Yes, a few 2 21 No 3 78 Other 4 No answer 9 .3 19 V.88 (3a(d)) Affect of ban on work performance Yes, improved it 1 67 Yes, reduced it 2 .8 Not sure 3 9 No 4 23 Other 5 .5 No answer 9 .8 20 V.89 (3a(e)) Description of smoking habits I have never smoked 1 36 I have never smoked regularly 2 15 I no longer smoke regularly, stopped before the ban 3 16 I no longer smoke regularly, stopped after the ban 4 4 I am currently a regular smoker 5 27 Other 6 No answer 9 2 Mr RONALD EDWARDS —In this community there is a recognition that smoking is a health problem but a number of people who are decision makers are now beginning to think realistically about their own circumstances and about the circumstances of the community at large. I do not intend to preach against those who smoke. In my view, it is a free choice for people, but I believe non-smokers would, if they had the opportunity, choose to operate in a smoke-free environment. In conclusion, a couple of remarks are worth making. The time is now right, I believe, for Qantas Airways Ltd to consider introducing smoke-free flights on a trial basis on routes such as Perth to Bali and Perth to Singapore, which are not of long duration and which would give a clear commercial advantage to Qantas over any other operator. I suggest a trial basis because we do not want Qantas, if it proved to be commercially disadvantageous, to be in a difficult situation. However, the experience of someone like Niki Lauda with Lauda Air shows that a clear commercial advantage can be achieved by banning smoking on flights. Many people now say to me that that is the way we should be proceeding. I am happy to advise the House that commercial airlines have found it to be a satisfactory innovation, passengers certainly find it so, and so do the operating staff. The question now is: Where to next? Perhaps we should be examining the option of introducing non-smoking flights on some limited Qantas routes. Mr DOBIE(Cook)(7.38) —It was my sad and privileged duty this morning to attend the funeral service for the late Edmund Maxwell Cameron Fox at the Ormond Uniting Church on behalf of the Leader and members of the Parliamentary Liberal Party. I pay tribute in the House today to this man, who was a friend and colleague of mine for a very long time. The Uniting Church in Ormond this morning was crowded to overflowing by a wide range of community interests and ordinary citizens of that part of Melbourne which, Madam Speaker, is so well known to you. In this few minutes of tribute I would like to read out a death notice that appeared this morning in the Melbourne Age. Max Fox-His passing will be mourned by all those people who knew him as a friend and know of his interest in people of non English speaking background who passed through the doors of the Good Neighbour Council of Victoria with which he was actively associated for so many years. The Committee of Management, staff and members of the Migrant Resource Centre, Melbourne, deeply regret his passing. He strongly believed that our Centre should be established to follow on from the Good Neighbour Council, and worked hard and successfully towards that goal. As a founding member he contributed a great deal to our work with people of non English speaking background. Those of us still working together-Wah Yeo, Nora Cobby, Dina Taraviras, and Margaret Dewez-feel a loss today. Our thoughts go to Mrs Fox in her bereavement. Also in the death notices there was another short notice: Fox, Max. C.B.E. M.H.R. for Henty 1955-1974.-A fine servant of the people, an example to many.-John D. Jess The service was conducted this morning by the Reverend Rod Horsefield of the Ormond Uniting Church, himself Moderator elect of the Uniting Church in Victoria. The extent of the wide affection for Max in the district was also seen in the fact that the Catholic parish priest from, I believe, Murrumbeena, a long associate and friend of Max Fox, also took part in this service. John Jess read the eulogy. He spoke with passion and feeling of this man who served his community all his life. He spoke of the need for people in Parliament who are concerned with ordinary people. He spoke of the need for this House to have people who were not representatives of big business or big unions. He spoke of a Max Fox who had dedicated his life to the ordinary people of his part of Melbourne. We have heard the tributes that the honourable member for Bruce has read. Although it is a long time-14 years-since you, Madam Speaker, replaced him in this House, it should be known, and it should be said in this tribute, that there are still five of us in the Federal Liberal Party in this House who served with him. They are the honourable member for Kooyong (Mr Peacock), the honourable member for Moreton (Mr Donald Cameron), the honourable member for Sturt (Mr Wilson), the honourable member for Warringah (Mr MacKellar) and myself. Max was a dynamo. He worked hard. He gave so much of himself to everyone he knew. As someone said today-and I think it is the greatest tribute that could be paid to him-he was a gentle man. So to this gentle man I too pay a deeply felt personal tribute to Edna, the children and their families who today were delighted to hear the people who paid tribute to him say that he was truly a great Australian. Mr JENKINS(Scullin)(7.42) —I was interested to read in last Friday's Melbourne Sun that a new splinter group of the coalition parties has been formed. This splinter group takes the form of a club-The William Pitt Club. Members mentioned in the report include the honourable member for Chisholm (Dr Wooldridge), the honourable member for Flinders (Mr Reith), the honourable member for Barker (Mr Porter), the honourable member for Richmond (Mr Blunt) and the man who would be leader if only he could teach pigs to fly, the honourable member for Tangney (Mr Shack). What really interests me is why this group has chosen William Pitt as the name of its little club. It is mentioned in the newspaper report that all members of the Pitt Club are under 40. William Pitt was 22 years old when he entered the House of Commons in 1781. He became Chancellor of the Exchequer at 23 and Prime Minister at 24. Is it Pitt's youth which appeals to the relatively young members opposite? It is also mentioned in the report that members of the Pitt Club share a dissatisfaction with the leadership of the honourable member for Bennelong (Mr Howard). If that were the sole criterion for membership, the ranks would surely be overflowing; nevertheless, this may be the reason for championing Pitt as he is also remembered for deposing his mentor, Lord Shelbourne, from the prime ministership. Or does the admiration for William Pitt relate to aspects of his 18-year rule of Britain? William Pitt led Britain into a war against revolutionary France, a war which had the aim of restoring the Bourbon Monarchy in France and defeating the revolution and all that it stood for-liberty, equality and fraternity. Not only did Pitt ruthlessly prosecute the war against the French but also his Government conducted a systematic and brutal attack on the rights of the English people. The Habeas Corpus Act was suspended in October 1790 and again in 1794. In 1795 and 1799 new stringent Acts against treason and sedition were introduced. Democratic societies were ruthlessly suppressed. In addition, in 1799 the notorious laws against combination were introduced. The combination Acts made working people meeting together for the purpose of improving their working conditions and wages guilty of criminal conspiracy. To quote the historian J. H. Plumb: It enabled manufacturers to keep down wages in spite of the rising price of food . . . Time and time again these Acts were invoked to suppress savagely and indiscriminately the movement towards trade unionism. Is it here that we find the source of admiration for William Pitt-for his loathing of democratic sentiments; for his ruthless and indiscriminate persecution of trade unionism and all forms of political and industrial organisation of working people? It is the sort of record that the fanatical ideologues in the New Right would seek to implement. This would be alarming if it were not so amusing. Indeed, it is probably nothing more than a distraction aimed at relieving the boredom of opposition. There is an element of juvenile prankishness in the compulsion to form little clubs named after historical figures. Perhaps they have also developed a secret Pitt Club handshake and a password. Given Pitt's classical education he would undoubtedly see the appropriateness of reductio ad absurdum as a password for a splinter group of malcontent Liberals formed 200 years after his rise to high office. Historical parallels are rarely appropriate but in this case there is perhaps one similarity in circumstances that can be drawn. William Pitt became Prime Minister in 1783 and served for 18 years. Bob Hawke became Prime Minister in 1983 and is well on his way to an 18-year stay in office. Mr NEHL(Cowper)(7.46) —I rise tonight in this adjournment debate to speak on behalf of a constituent of mine, Mr Russell Hancock, who lives at Valla Beach. Mr Hancock has a long-standing argument against several agencies of the Commonwealth and believes that he has been subjected to fairly monumental injustice. I use the word `monumental' with some cause because he has provided me with 65 documents which are germane to his case. I seek leave to table them. Leave granted. Mr NEHL —I thank the Minister at the table, the Minister for Veterans' Affairs (Mr Humphreys). Mr Hancock's case is a very complex one. Apparently, he had a problem with the Australian Taxation Office in 1972-that is how far back it goes-after he had made profits from the sale of shares and other things. He received concessions under section 77d of the Income Tax Assessment Act but the Taxation Office claimed tax on the transactions. He took his case to the Taxation Board of Review and, in his own words, `lost the decision'. He felt that the Board of Review hearing was not as well ordered as it should have been. His first real clash with agencies of the Commonwealth came with the Commonwealth Reporting Service, which destroyed the master tape of the hearing before he could check the transcript against it. I will come back to that in the limited time available to give other details but, as he said, important sections of the transcripts taken on 13 and 15 August 1979 are still missing. He earlier had a problem with the Department of Mineral Resources and Energy. In 1969 he applied to the Commonwealth Department of National Development in respect of a number of off-shore areas for various minerals. He feels that he has been unjustly treated in this area too. He has tried to obtain certain documents under the Freedom of Information Act. His case was eventually taken to the Administrative Appeals Tribunal (AAT) on 9 May 1986. He got a decision on 2 June of that year. He did not receive it by mail. When he called in on 10 June he found that the decision read out to him over the telephone was not the same as the one given to him on 10 June. He has had difficulties with the Taxation Board of Review hearing and the hearing of the AAT. It is undoubtedly true-at least I believe it is true; this part at least of his voluminous evidence is correct-that the master tape should not have been destroyed. In fact, the Australian Archives looked at the matter as a result of Mr Hancock's agitation and recommended a longer retention period, of 12 months. That memorandum was sent to the Attorney-General's Department in February 1987. In a letter to me dated 7 October 1988, I am advised that the Australian Archives office has so far only had an interim acknowledgment. The Attorney-General's Department has not given the Australian Archives a final position. I would like to read briefly some points from a letter from a Mr Ken Bickle, a pharmacist and elected member of the New South Wales Pharmacy Board, at the time he wrote to the Attorney-General (Mr Lionel Bowen) on 30 January 1986 on behalf of Mr Hancock. He made the point that he was very concerned about the casual way master tapes of all types had been destroyed and continued to be destroyed. He said: Alteration to the Records Disposal Schedule on 6.9.80 at a time when the master tape of his Board of Review hearing had been erased or destroyed. Certainly Mr Hancock believes it is very significant that the appropriate public servant, a Mr A. T. Green, believed that to destroy a master tape six months after transcription was a maximum time and not a minimum time for tape destruction. It seems strange-Mr Hancock cannot understand why-that just a few days after the finding by Todd, Grant and Taylor was handed down and received, some 5 1/2 months after the tribunal, to have the master tape-- Madam SPEAKER —Order! The honourable member's time has expired. Mr O'NEIL(Grey)(7.52) —In areas such as my electorate of Grey many families and young people are finding the need to seek employment in other areas of the State or, in some instances, interstate due to the lack of employment opportunities. At present the fares assistance scheme provides assistance with travel costs for job seekers to attend interviews for employment. The prospective employment opportunities must be of a continuing nature in an area beyond reasonable daily commuting distance by public transport of the job seeker's residence. This is indeed an incentive for job seekers and provides them the opportunity to seek work further afield. However, the necessity to use public transport in some instances is a disincentive to some people. Employment prospects are limited in many areas of the electorate of Grey. The necessity to seek employment in other areas of the State is for many people a serious problem; but for many it is a problem which must be tackled to gain employment. For many people the prospect of relocation from an area which will have been their home for a number of years, is a daunting experience. Added to this, the need to find the relevant services that the family requires-for example, health and education programs-is a time-consuming exercise and could not be dealt with in the short time at the disposal of the job seeker. In summing up, I would like to see a way in which the job seeker, upon return, may provide documentation to prove that attendance at the interview was fulfilled. Reimbursement to the job seeker could then be provided at the equivalent public transport rate. This would bring the fares assistance scheme into line with the relocation assistance scheme, whereby travel may be undertaken by the use of private transport, which in many cases allows the participant to make more use of his or her travel timetable. Another area which needs to be examined is the inclusion of young pre-vocational men and women for eligibility for the fares assistance scheme. These young men and women are registered with the Commonwealth Employment Service but are not paid a benefit. Many of these young people are required to travel long distances to enable them to be assessed by prospective employers, for selection for job openings, traineeships or apprenticeships. Many are required to sit an entry exam prior to assessment. I would ask that the Minister for Employment, Education and Training (Mr Dawkins) look into this area to change the guidelines for eligibility for financial assistance for job seeking. An example of this is the entry examination required by Australian National. Examinations are held in the city of Port Augusta, which requires a journey of 75 kilometres from the closest neighbouring town. In some instances a journey of many more kilometres is involved. Many of these young men and women are on a very limited budget, with the cost of travel to seek assessment beyond their financial means. I do not believe that these young people should be placed in the situation where they are unable to apply and be tested for job openings, traineeships or apprenticeships on the sole basis that they do not have the financial means to travel to the town or city of assessment. These young men and women have proven their commitment to gaining employment through the hard work and study required in a pre-vocational course. They have shown their intentions to gain suitable employment in an area requiring skill and training. They should be rewarded for their efforts in undertaking the necessary steps to acquire employment in their chosen fields. They aspire to be the skilled young men and women of tomorrow-this country's future. It is absolutely vital that these young men and women have access to the assistance they need. This must be provided. The inclusion of these young men and women for eligibility in the fares assistance scheme would help those who do not have the financial means to cover the costs associated with travel. The current assistance provided under the fares assistance scheme in many cases does not assist the job seeker to make the effort to journey to areas to seek employment or to undertake an exam for assessment. These people have shown their desire to seek and, hopefully, gain employment. Many are willing to take the enormous step of relocation in an effort to fulfil their desire for employment. Many find the lack of available funds to cover travel expenses the only obstacle preventing them seeking employment or placement further afield. If they are willing to take this enormous step to satisfy their desire to find work, it is up to us to give them the backing they need to support their efforts. I trust that honourable members who are present here tonight will give their support to these proposed changes, to have this present situation which many face corrected as soon as possible. I urge the Government to look at these areas to provide this assistance. Madam SPEAKER —Order! The honourable member's time has expired. Mr TAYLOR(Groom)(7.57) —Much of the law touching compensation for wrongfully inflicted death has rendered true the adage that it is cheaper to kill than to maim. The death in my electorate of seven-year-old John Benjamin Kirkby on 8 March of this year leads me to draw the attention of this House to what is clearly an unacceptable and outmoded approach to this area of the law. John, a year 3 student, was found dead at the bottom of the Wilsonton State School swimming pool in Toowoomba, at the conclusion of a swimming class. The coroner, Mr Bruce Zahner, made certain recommendations in relation to the conduct of swimming classes by the Queensland Education Department. I earnestly hope that such recommendations are given serious consideration and acted upon by the Queensland Government as soon as practicable. It is imperative that everything possible is done to ensure that such unnecessary loss of life does not occur again. What I wish to pursue, briefly, is what I have described as the unacceptable and outmoded approach of the law relating to compensation for wrongfully inflicted death-a law that precludes parents from recovering damages by way of solatium for the suffering caused by the wrongful death of their child. The common law did not recognise any claim for damages arising from death. Lord Campbell's Act of 1846, adopted throughout Australia, provided some degree of relief from the harshness of the common law but this has been interpreted as allowing recovery purely for pecuniary loss to the survivors. To suggest that the pain and suffering inflicted upon the parents of a child whose life is ended by some wrongful act is not deserving of compensation is nonsensical. Sadly, however, that is the state of the law at present. The parents of John Kirkby are to be commended for their efforts, under very trying circumstances, to bring the attention of this iniquitous state of affairs to the attention of the public. The Kirkbys' sole motivation in all this is simply to ensure that John's death has not been in vain. I am aware that certain provisions exist, for example in South Australia, which permit recovery of some damages, generally restricted to either a low monetary limit, or a fixed sum. Unfortunately, such provisions tend to limit the awards made to unrealistically low amounts, and also tend largely to avoid any real inquiry into civil liability in relation to the causation of the death. It is incumbent upon all State governments to examine the state of the law, and to make suitable corrections to it, where antiquated or unnecessarily harsh provisions stand in the way of true justice. That is one of the basic responsibilities which all legislatures have to the electors. It is one which I call on the various State governments to pay regard to in relation to the matters I have raised here tonight. Perhaps then John Kirkby's death will not have been in vain. Question resolved in the affirmative. House adjourned at 8 p.m. The following papers were deemed to have been presented on 30 November 1988: Canberra College of Advanced Education Act-Statute-No. 65-Honorary Degree 1988. Commonwealth Employees' Rehabilitation and Compensation Act-Notice of Declarations and Specifications, dated 28 November 1988. Extradition Act-Regulations-Statutory Rules 1988, Nos. 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 303, 304, 305. Federal Court of Australia Act-Rules of Court-Statutory Rules 1988, No. 306. Proclamations by His Excellency the Governor-General fixing the dates on which the following Acts and sections of Acts shall come into operation- Admiralty Act 1988-1 January 1989. Foreign States Immunity Act 1985-subsection 18 (2)-1 January 1989. Radiocommunications (Frequency Reservation Certificate Tax) Act-Regulations-Statutory Rules 1988, No. 311. Radiocommunications (Receiver Licence Tax) Act-Regulations-Statutory Rules 1988, No. 308. Radiocommunications (Temporary Permit Tax) Act-Regulations-Statutory Rules 1988, No. 310. Radiocommunications (Test Permit Tax) Act-Regulations-Statutory Rules 1988, No. 309. Radiocommunications (Transmitter Licence Tax) Act-Regulations-Statutory Rules 1988, No. 307. Seat of Government (Administration) Act-Ordinances-1988-No. 76-Credit (Amendment). Regulations-1988- No. 18 (Noise Control Ordinance). No. 19 (Magistrates Court (Civil Jurisdiction) Ordinance). No. 20 (Gaming Machine Ordinance). The following notices were given: Mr Lionel Bowen to present a Bill for an Act to give effect to the International Convention Against the Taking of Hostages, and for related purposes. Mr Dawkins to present a Bill for an Act to establish and incorporate a university in the Australian Capital Territory to replace the Australian National University, the Canberra College of Advanced Education and the Canberra Institute of the Arts, and for related purposes. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Fitout works at 110 Goulburn Street, Sydney for the eastern region headquarters of the Australian Federal Police. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Construction of new Commonwealth offices at: Frankston, Victoria and Oakleigh, Victoria.