1998-03-263816REPS164901998-03-26Mr SPEAKER(Rt Hon. I. McC. Sinclair) took the chair at 9.30 a.m., and read prayers.Bills1649r4651649Bill presented by Mr Costello, and read a first time.164909:31:001649Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.I rise today to introduce a package of landmark legislation to fundamentally reform the Australian financial sector. The reforms follow the policy announced in response to the 1997 financial systems inquiry chaired by Mr Stan Wallis. This series of bills puts in place a structure designed to improve the efficiency and competitiveness of the Australian financial system while preserving its integrity, security and fairness. Once implemented, Australia will have a stronger regulatory regime designed to better respond to developments in the finance sector, including globalisation and technological change and the needs of businesses and consumers. Once implemented, Australia will be a world leader with best practice, leading edge financial sector regulation.These reforms to the financial system, together with the wide ranging reform of Australia's corporate laws to be delivered under the corporate law economic reform program, provide a launching pad for this government's drive to make Australia a leading business centre in the Asia-Pacific region. In September last year, the government announced its response to the financial system inquiry which found that Australia's financial system faces rapid change as a result of technological innovation, increasing globalisation and changing business and consumer needs.To ensure that Australia secures the enormous potential benefits of these changes and keeps up with the continuing rapid pace of financial system innovation, our regulatory arrangements must be modernised. By encouraging our financial system to achieve world best practice in an increasingly competitive international market for financial services, we will see the sector contributing strongly to employment and growth prospects of the entire Australian economy. The changes will help provide not just more jobs but better jobs for Australians.The government has accepted the inquiry's recommendations that measures consistent with the basic goals of financial system safety and stability be introduced to better focus regulation on its underlying objectives, to ensure that regulatory arrangements minimise restraints on new entry and competition, and to ensure that regulation applies in a competitively neutral way across existing and newly emerging market sectors. A central part of the reform approach is the creation of a new organisational framework for the regulation of the financial system which is objectives based, in place of the current institutionally based structure.There are three fundamental regulatory objectives for government intervention in the financial system. The first is the maintenance of financial stability, including through ensuring a safe and reliable payments system. This goal, which has close links with the price stability objective of monetary policy, is to be the regulatory focus of the Reserve Bank of Australia. The second goal is the provision of specialised regulation of conduct, disclosure and dispute resolution for financial service providers and financial markets. This regulatory objective will be pursued across the financial system by the Australian Securities and Investments Commission, ASIC, which will be based on the Australian Securities Commission. The third objective is the prudential supervision of those parts of the financial system which require more intense regulation for safety and stability reasons. Australia presently has several agencies providing this form of regulation in a structure that is increasingly outdated and ineffi cient. To provide more efficient and competitively neutral regulation across all of the prudentially regulated sectors, the government will establish a single prudential regulatory authority replacing all of the institutionally based agencies. This bill, the first in a series of financial sector legislative reforms, establishes this single agency, the Australian Prudential Regulation Authority, or APRA.APRA will be the prudential regulator of banks and other deposit-taking institutions, life and general insurance companies, superannuation funds and retirement income accounts. APRA will have comprehensive powers, including for licensing and regulation of the institutions authorised to provide these financial services. In recognition of likely continuing change in the financial system, provision is made for regulations to accommodate future changes in APRA's regulatory coverage.In the case of superannuation and retirement savings accounts, APRA will also be responsible for regulation designed to achieve retirement income objectives. This reflects the close association between regulation for that purpose and prudential regulation in these sectors. While APRA will initially take regulatory responsibility for all superannuation funds, it is anticipated that this responsibility in respect of most excluded superannuation funds will later pass to the Australian Taxation Office. Provision is made for APRA to be accountable through an independent board and to operate under a charter that ensures that the safety objectives of prudential regulation are balanced with efficiency, competition, contestability and competitive neutrality considerations. The bill sets out the framework for APRA's operation. This bill establishes the powers and functions of APRA while other legislation in this package of bills will provide for the laws and regulations to be administered by APRA in relation to each sector.APRA will be an independent regulator, but, like the Reserve Bank, will be subject to an overriding policy determination power of the Treasurer in the very rare event of unreconciled disagreement with the government of the day. As a Commonwealth authority, it will be accountable to the government and the parliament, as provided for under the Commonwealth Authorities and Companies Act 1997. In addition, the bill provides for additional reporting requirements in APRA's annual report, including a report on any investigations on prudential matters under section 61 of the Banking Act 1959. Any reports presented to parliament by APRA may, of course, be referred by parliament to a committee, such as the House of Representatives Standing Committee on Financial Institutions and Public Administration, for detailed examination. APRA will also be expected to appear before parliamentary committees on request.APRA will be governed by a nine member board, whose terms and conditions of appointment will be subject to determination by the Remuneration Tribunal. To ensure that there is a close relationship between APRA, the Reserve Bank and ASIC, two of APRA's board members will come from the Reserve Bank and one from ASIC.The bill provides for the duties and statutory appointment of the Chief Executive Officer who will also be an APRA board member. It also provides for the powers of the board to set terms and conditions of APRA staff. It is envisaged that in the first instance the bulk of APRA's staff will come from the Insurance and Superannuation Commission, ISC, and the Reserve Bank supervision area, together with the staff of state based regulatory agencies when they join the regulatory scheme.Provision is made for the funding of APRA from moneys appropriated following the collection of levies paid by regulated financial institutions, and from charges for certain services. APRA is to have powers to borrow moneys, but these are intended only to facilitate its day-to-day operations. Secrecy provisions in the bill will ensure the protection of information and documentation obtained as part of the regulation process but allow for effective information exchange between the financial sector regulatory bodies, including the Reserve Bank and ASIC.The government envisages that APRA will become fully operational, at the Common wealth level, on 1 July 1998 or as soon as possible thereafter. In this context, this bill provides for the changeover of responsibilities for prudential supervision of the financial sector at the Commonwealth level. Transfers of staff and responsibilities for state based institutions may require separate legislation at a later date, once final agreement has been reached with the states and territories.As I announced on 17 March 1998, the headquarters of APRA will be based in Sydney to ensure that a close relationship is maintained with the Reserve Bank, which will continue to have responsibility for the overall stability of the financial system. This will facilitate close communication and operational cooperation between these two bodies. In addition, the government expects a presence to be retained by APRA in the major state capitals and, at least for some considerable time, Canberra, which is the current base of the ISC.I conclude by noting that this bill provides a centrepiece of the proposed new regulatory structure, a specialised regulatory agency focused on clear regulatory purposes. As the single prudential regulator, APRA will be able to provide flexible, efficient, coordinated and consistent regulation across the financial sector, particularly for financial service conglomerates which now make up the major part of the financial system. It will be in a position to achieve regulatory excellence, provide broader and more enriching career opportunities for its staff, and develop close and comprehensive links with the whole financial system.Consistent with the need for regulatory flexibility, APRA is provided with comprehensive powers, including over licensing, and generally will develop financial standards based on its own policy making capacities within the framework of laws established for it. This should ensure that APRA is adaptable and responsive to the changes occurring in the financial system, and that its regulatory work always balances the objectives of financial safety, efficiency, competition, contestability and competitive neutrality. I commend the bill to the House and present the explanatory memorandum. Debate (on motion by Dr Theophanous) adjourned.Bills1651r4661651Bill presented by Mr Costello, and read a first time.165109:43:001651Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The purpose of this bill, as well as the other levy bills which form part of this legislative package, is to impose levies on those industries that will be prudentially regulated by the Australian Prudential Regulation Authority, APRA. These levies will fund both APRA and the cost of additional consumer protection functions in the financial system undertaken by the Australian Securities and Investments Commission, ASIC. Essentially, the levies will ensure that the cost of regulation is met by those who benefit from it.These bills allow for a levy to be charged on the entity being supervised according to a percentage of the assets held by the entity, subject to minimum and maximum levy amounts. The rates, thresholds and limits will be determined by the Treasurer. This will ensure that the levy paid by each class of entity reflects the actual cost of supervising those entities and the benefits to entities and their customers of supervision. At present, the different regulatory authorities have separate funding mechanisms, which have significant disparities between the nature and level of funding associated with them. These funding disparities can act to create significant cost disadvantages for one category of financial institution vis-a-vis another.The government's aim is to establish an administratively simple and uniform scheme based on the principle of full cost recovery from the institutional categories that are regulated. Separate provision is made for charges for direct services provided—such as licences—but the major part of the cost of supervision will be met by an annual levy sufficient to cover the costs of its operations. It will be broadly similar in nature to the financial charges that building societies, credit unions, insurance companies and superannuation funds already pay. The banks at present are effectively `charged' through interest forgone on non-callable deposits held by the Reserve Bank.With the exception of the banks, the net financial effect on the institutions will be small; some institutions may fare better and some worse, and existing cross subsidies favouring some sectors will be removed. Separate levy bills have been drafted for each industry. This will provide the flexibility to determine the levy on each industry according to the actual cost of regulating that particular industry.This bill provides for a levy to be paid by the banks for the first time. The banks will, however, no longer forego a much greater amount of income on non-callable deposits. It is envisaged that once the deposit-taking institutions currently regulated by the states and territories come within APRA's jurisdiction, then they too will transfer from their existing cost recovery regime and be subject to the levy provisions of this bill.This bill will commence on 1 July 1999 or when the supervision of non-bank deposit-taking institutions is transferred from the states. The other Levy Bills will commence on the same day as the Australian Prudential Regulations Authority (APRA). I commend the bill to the House. I present the explanatory memorandum to this bill, which is also the explanatory memorandum to the other Levy Bills and the Financial Institutions Supervisory Levies Collection Bill 1998.Debate (on motion by Dr Theophanous) adjourned.Bills16521652Bill presented by Mr Costello, and read a first time.165209:47:001652Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The purpose of this bill is to impose a levy on authorised non-operating holding companies, consistent with the approach I outlined when I introduced the Authorised Deposit-taking Institutions Supervisory Levy Imposition Bill 1998.I commend the bill to the House. I have already handed up the explanatory memorandum which covers this bill.Debate (on motion by Dr Theophanous) adjourned.Bills1652r4811652Bill presented by Mr Costello, and read a first time.165209:48:001652Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The purpose of this bill is to impose a levy on non-excluded superannuation funds, consistent with the approach I outlined when I introduced the Authorised Deposit-taking Institutions Supervisory Levy Imposition Bill 1998.I commend the bill to the House. I have already handed up the explanatory memorandum which covers this bill.Debate (on motion by Dr Theophanous) adjourned.Bills1652r4791652Bill presented by Mr Costello, and read a first time.165209:49:001652Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time. The purpose of this bill is to impose a levy on providers of Retirement Savings Accounts, consistent with the approach I outlined when I introduced the Authorised Deposit-taking Institutions Supervisory Levy Imposition Bill 1998.I commend the bill to the House. I have already handed up the explanatory memorandum which covers this bill.Debate (on motion by Dr Theophanous) adjourned.Bills1653r4751653Bill presented by Mr Costello, and read a first time.165309:50:001653Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The purpose of this bill is to impose a levy on the life insurance industry, consistent with the approach I outlined when I introduced the Authorised Deposit-taking Institutions Supervisory Levy Imposition Bill 1998.I commend the bill to the House. I have already handed up the explanatory memorandum which covers this bill.Debate (on motion by Dr Theophanous) adjourned.Bills1653r4731653Bill presented by Mr Costello, and read a first time.165309:51:001653Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The purpose of this bill is to impose a levy on the general insurance industry, consistent with the approach I outlined when I introduced the Authorised Deposit-taking Institutions Supervisory Levy Imposition Bill 1998.I commend the bill to the House. I have already handed up the explanatory memorandum which covers this bill.Debate (on motion by Dr Theophanous) adjourned.Bills1653r4691653Bill presented by Mr Costello, and read a first time.165309:52:001653Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The purpose of this bill is to enable the collection of the levies imposed by each of the separate levy bills I have already introduced into the House.I commend the bill to the House. I have already handed up the explanatory memorandum which covers this bill.Debate (on motion by Dr Theophanous) adjourned.Bills1653r4711653Bill presented by Mr Costello, and read a first time.165309:53:001653Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.This omnibus bill deals with amendments to a number of acts to give effect to the new regulatory framework for the financial system being introduced, consistent with the recommendations of the financial system inquiry. These include:. the establishment of the Australian Securities and Investments Commission (ASIC), which is based on the Australian Securities Commission; . amendments to the Banking Act to establish the new regulatory regime in the banking and deposit-taking sector to be administered by the Australian Prudential Regulation Authority (APRA);. the establishment of the Payments System Board within the Reserve Bank;. the splitting of the responsibility for relevant insurance and superannuation legislation between APRA and ASIC; and. transitional provisions relating to the establishment of the new regulatory bodies and the associated regulatory reforms.The Australian Securities and Investments CommissionThe bill renames the Australian Securities Commission as the Australian Securities and Investments Commission and will result in ASIC being the pre-eminent consumer protection and market integrity regulator across the financial system. In addition to the current corporate regulatory functions of the Australian Securities Commission, ASIC will, in the first instance, be taking on consumer protection and market integrity in the areas of insurance, superannuation and aspects of banking and the payments system, and ultimately across the full financial system.Under the current system, responsibility for consumer protection functions in the financial system is split along institutional lines between a number of Commonwealth and state entities. If this situation is not addressed, globalisation, technological advances and innovations in financial products and distribution mechanisms will result in an increasing incidence of regulatory gaps and inconsistencies which are not conducive to efficient competition in financial markets.Responsibility for consumer protection and market integrity vested in a single entity will enable ASIC to adopt a functional and objective-based regulatory approach, thereby promoting competitive neutrality and permitting better comparability by consumers of different financial products and services. The amalgamation of consumer protection functions in a single regulator is supported by industry and consumer groups. There will, of course, be close co-operation between ASIC and the Australian Competition and Consumer Commission.The functions relating to insurance and superannuation were previously exercised by the Insurance and Superannuation Commissioner, a position which will be abolished with the commencement of this bill. The consumer protection functions relating to aspects of banking and the payments system were previously exercised by the Australian Payments System Council, which is also to be disbanded.Included in the functions transferred from the Insurance and Superannuation Commissioner to ASIC by this bill are functions under the Superannuation (Resolution of Complaints) Act 1993, the Insurance Contracts Act 1984 and the Insurance (Agents and Brokers) Act 1984.In addition, there are some acts currently administered by the Insurance and Superannuation Commission (ISC) which contain both prudential and market integrity and disclosure requirements and, as such, will need to be split between the two regulators, APRA and ASIC. ASIC will take on regulatory responsibility for parts of the Life Insurance Act 1995, the Insurance Act 1973, the Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997.While the bill effectively transfers responsibility for administration of existing laws from the ISC to ASIC and APRA, it does not, except to a very limited extent, seek to alter the substantive rules applying in this area. In this regard, the task of rationalising and harmonising the financial system regulatory framework with that applying under the Corporations Law will be undertaken as part of the second stage of implementation of the financial system reforms in conjunction with the implementation of the corporate law economic reform program reforms relating to financial markets and investment products.In particular, the reforms will introduce a single licensing regime for financial market intermediaries as well as a consistent and comparable disclosure regime for financial instruments. In accordance with the corporations agreement, the ministerial Council for Corporations has been consulted and has approved the relevant amendments to the Australian Securities Commission Act 1989 and the Corporations Law.Banking Act AmendmentsThe package of amendments to the Banking Act 1959 will:. establish a single licensing and prudential regulatory regime for deposit-taking institutions by providing for authorities under the act to be issued both to banks and non-bank deposit-taking institutions;. strengthen and clarify depositor protection powers;. facilitate the regulation and, hence, use of non-operating holding company structures by financial conglomerates containing a bank or deposit-taking institution; and. strengthen the regulatory powers of APRA as the prudential regulator, giving it powers to make standards and enforce directions broadly similar to those now provided under the Financial Institutions Code (applying to credit unions and building societies).The proposed single licensing regime will facilitate increased effective competition, reduce regulatory inconsistencies between institutions conducting essentially the same deposit-taking business and improve efficiency. Over time, consumers should benefit from increased choice, improved quality and lower cost products and services.Facilitating the use of non-operating holding company structures will allow conglomerates greater commercial freedom in selecting their appropriate business structure, thereby potentially lowering business costs, increasing transparency and reducing barriers to entry, with ongoing benefits both to investors and consumers of financial services. The stability and safety of the financial system will not be compromised by these reforms due to the enhanced powers provided to the prudential regulator. The three key ingredients to ensuring financial stability and depositor protection are:. strong prudential regulation to lessen risks;. effective intervention to prevent or manage a crisis; and. depositor preference to ensure confidence.APRA will be able to make standards on prudential matters in relation to banks, deposit-taking institutions and non-operating holding companies of banks or deposit-taking institutions. The standards-making power provides APRA with regulatory independence and is flexible, certain and able to be used very quickly in the event of a crisis to prevent contagion effects in the financial system. The standards themselves will not be directly enforceable.APRA will, however, have a power to give a direction to any licensed non-operating holding company, deposit-taker, or foreign bank branch, if they fail to comply with a prudential standard, regulation, or where this is otherwise necessary in the interests of depositors. Failure to comply with such a direction will be an offence. The directions power is intended to facilitate early intervention by APRA to prevent a crisis from emerging and is similar to that now provided to state and territory regulators of credit unions and building societies under the financial institutions code.Intervention powers to manage a crisis will also be improved. The amendments proposed in this bill both clarify the mechanisms by which the prudential regulator may take control of a troubled deposit-taking institution, and allow the prudential regulator to appoint an administrator for that purpose. While these statutory management powers provide the means for control in a crisis, they will also enhance APRA's capacity to act in a preventative capacity by using less direct strategies, such as facilitating the takeover of a troubled institution or its business by other sound institutions. In Australia and elsewhere, such action has provided the most common response in practice to financial distress in deposit-taking entities.These intervention powers are further supplemented by a new power clarifying that APRA may initiate the wind-up of an institution that is insolvent and cannot be restored to solvency within a reasonable period. Such action may prevent further losses from accruing and would therefore be in the best interests of depositors. Again, state supervisory authorities already have the clear power to wind-up building societies and credit unions.Depositor preference is manifest both in depositor priority on winding-up and in APRA's duty to exercise its powers within division 2 of the Banking Act in the interests of depositors. These are existing, longstanding provisions in the act. While depositor preference can mean disadvantage for other creditors, APRA's intervention powers, particularly the proposed new early intervention powers, also lessen the risks faced by such other creditors, both by reducing the likelihood of insolvency and by increasing the options for resolution in the event of insolvency.The bill also provides for the abolition of the requirement for banks to hold non-callable deposits with the Reserve Bank. These requirements no longer serve a prudential purpose but have been used to impose a form of regulatory charge. In light of the proposed imposition of levies on all industries that will supervised by APRA and consistent with the intention to remove non-neutral treatment of deposit-taking entities, the non-callable deposit requirements will be abolished consequent on the transfer to the Commonwealth of regulatory responsibility for credit unions and building societies.Payments System BoardThis bill introduces legislation amending the Reserve Bank Act 1959 to establish the Payments System Board within the Reserve Bank. The Payments System Board will be independent of the bank's main board, which will no longer have powers to make payment system policies for the bank. Rather, the Payments System Board will operate as the policy making board of the bank in relation to payments system matters. In particular, it will be responsible for ensuring that the bank's powers are utilised so as to improve the efficiency of the payments system, to promote competition in the market for payment services and to control risk in the financial system.The PSB will operate on a basis that is very similar to that applying to the main board of the Reserve Bank. For example, similar procedures will apply for the resolution of any disagreement between the policies of the government and the Payments System Board. The Governor of the Reserve Bank will chair the Payments System Board. It will also include another Reserve Bank member, one from APRA and up to five others.The Payments System Board and the Reserve Bank will be given explicit regulatory powers in the payments system. These powers will be conferred under the Payment Systems and Netting Bill and the Payment Systems (Regulation) Bill, the latter of which I will introduce shortly.Other AmendmentsTo prevent excessive compliance costs on building societies and credit unions, the bill also amends the Financial Corporations Act 1974 to exempt these institutions from the data reporting requirements under that act when they are regulated under the Banking Act 1959. The bill also transfers to the Governor of the Reserve Bank the Treasurer's present powers with respect to categorising registered corporations and exempting corporations.The transitional provisions in the bill preserve the effect of decisions made before the commencement of APRA, including by preserving existing approvals, transferring work in progress to APRA and facilitating the effective transfer of the prudential regulation of building societies and credit unions to the Commonwealth, subject to agreement.There are also transitional provisions protecting the accrued entitlements of ISC and Reserve Bank staff transferring across to APRA. The accrued entitlements of the ISC staff will be largely protected through the transfer provisions of section 81C of the Public Service Act 1922. The bill also gives the Treasurer the power to transfer the assets and liabilities of the ISC to APRA or ASIC.Finally, the bill provides for the repeal of certain acts, including the Banks (Shareholdings) Act 1972 which is replaced by the consolidated Financial Sector (Shareholdings) Bill, which I will shortly introduce, and the Insurance and Superannuation Commissioner Act 1987 consequent on the establishment of APRA. I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Mr Laurie Ferguson) adjourned.Bills1657r4771657Bill presented by Mr Costello, and read a first time.165710:07:001657Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.This bill details the proposed new regulatory framework for the payments system which is being introduced consistent with the recommendations of the financial system inquiry. Amendments to the Reserve Bank Act 1959, as provided for in the Financial Sector Reform (Amendments and Transitional Provisions) Bill 1998 provide for the creation of the Payments System Board—PSB—within the Reserve Bank to provide for policy making in relation to the payments system and to increase the accountability of the Reserve Bank in relation to its role in the payments system.The payments system plays a central role in the financial system. The government has decided to strengthen, and make more transparent and accountable, the regulation of the payments system undertaken by the Reserve Bank. Until now, the Reserve Bank has played a substantial regulatory role in the payments system as a direct participant and through the use of its banking powers.Payments system regulation is to be separated from the prudential regulation of banks because an increasing number of non-bank participants in the payments system are emerging to increase competition in the system. More direct means for achieving effective regulation are required for this purpose. Such direct means are also necessary to ensure that the payments system retains its high standard of safety while adapting to the demands of new technologies and globalisation in the payments system.The Reserve Bank will be the regulator of the system, given the importance of the payments system to the overall stability of the financial system and given the central role of the Reserve Bank itself in the core areas of the payments system, particularly settlement. As with all the other reforms I have announced, this decision highlights the government's commitment to encouraging innovation and competition while not, in any way, jeopardising the stability and soundness of the financial system. The payments system covers payment instruments such as cash, cheques and smart cards, their delivery, the exchange or clearance of payment messages and the final settlement of value between intermediaries providing payment services.This bill proposes a new regulatory framework for the payments system. While existing industry self-regulatory arrangements will be retained wherever these are performing satisfactorily, the bill provides powers to the Reserve Bank to enable it to undertake more direct regulation by designating payment systems as subject to the law where it is considered in the public interest to do so.Once a payment system is designated, the bill provides that it may be subject to the imposition of rules of access for participants on commercial terms, the determination of standards, the giving of enforceable directions, or the voluntary arbitration of disputes on technical standards. The development of access regimes and standards will be undertaken, as far as possible, in conjunction and consultation with the private sector. This approach ensures that formal regulation will be imposed on the payments system only to the minimum extent necessary to achieve the public interest.The bill also provides for a comprehensive regime of prudential regulation of the store-of-value backing purchased payment facilities. This will apply to all forms of such facilities, including stored value cards, travellers cheques and Internet cash facilities. These are all arrangements whereby payment is made for an instrument which can be used for making subsequent payments with the value available recorded or stored on the instrument. Ultimately, the value is redeemable from the holder of the store of value created by the original purchase of the stored value. Confidence in such systems depends on confidence that the store-of-value is safe.The bill provides that the holder of the store-of-value must either be an institution regulated by the Australian Prudential Regulation Authority—APRA—under the Banking Act, in which case there is no requirement for further regulation, or otherwise be authorised by the Reserve Bank, in which case further regulation may be required. The bill provides powers for the Reserve Bank to impose necessary regulation. It also enables the Reserve Bank to grant an exemption from the requirement for an authority where it is considered appropriate to do so. I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Mr Laurie Ferguson) adjourned.Bills1658r4621658Bill presented by Mr Costello, and read a first time.165810:12:001658Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.This bill streamlines the existing legislation and rules governing ownership and acquisitions in the financial system consistent with the recommendations of the financial system inquiry. It will replace the Banks (Shareholdings) Act 1972 and the relevant parts of the Insurance Acquisitions and Takeovers Act 1991.The streamlined provisions will be particularly useful for corporate groups which contain more than one licensed entity. Common rules will apply to each class of licence, simplifying regulatory applications and their assessment. Moreover, provision is made for authorisations applying to the non-operating holding companies of financial conglomerates to flow through to all of the members of the corporate group.The bill subjects all prudentially regulated financial sector companies to:. a 15 per cent shareholding limit by any one person, and their associates; or. such higher percentage as the Treasurer may determine as being in the national interest.This provides for simpler procedures than existing laws, a common threshold, which is also that applied under foreign investment policy and law, and harmonises the treatment of different licence classes. The laws are the administrative responsibility of the Treasurer, but provision is made for delegation to APRA. Delegations may be made, for example, in relation to small financial institutions.At the same time, the effectiveness of the laws is strengthened along the lines adopted in other recent shareholding restriction provisions. Provision is made for the Treasurer to declare a person to have `practical control'—that is, the power to control the policies and operations of the financial institution—regardless of the size of their shareholding. Under such a declaration the person must relinquish practical control.The bill also provides for the imposition of conditions on approvals of stakes higher than 15 percent, for the Treasurer to apply to the Federal Court for remedial orders in respect of unacceptable shareholding or practical control situations, for fees to be imposed in respect of applications and for information to be obtained by the Treasurer from applicants.The law relating to financial sector shareholdings is applied for prudential, competition and other national interest purposes. Acquisitions and mergers in the financial sector, as for other economic sectors, separately and additionally remain subject to competition regulation under the trade practices laws and to foreign investment policy and laws. I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Mr Laurie Ferguson) adjourned.Bills1659r4531659Bill presented by Mr Warwick Smith, for Mr Ruddock, and read a first time.165910:16:001659Smith, Warwick, MPMr WARWICK SMITHGJ4BassLPMinister for Family Services10—I move:That the bill be now read a second time.By introducing the pension bonus scheme, this bill fulfils another government election commitment. This scheme, which complements other government measures for the aged, is designed to provide an incentive for older Australians to remain in the work force. The scheme is voluntary and each person can choose to enter the scheme based on their particular circumstances and preferences. By choosing to work longer, people can add to their individual savings for retirement.The scheme will apply to people who qualify for age pensions or equivalent Veterans' Affairs payments, but who delay their retirement and keep working. Eligible customers will receive a tax-free lump sum bonus payment when they stop working, in addition to commencing to receive their ongoing age pension or Veterans' Affairs equivalent. By offering people an incentive to keep working, this measure will assist in reducing the ratio of retired people to working people and will increase the financial wellbeing of older Australians. This will be particularly helpful for women and small family business owners.The scheme will provide for the payment of a lump sum bonus—the amount of which will increase more than proportionally with the number of years that a person delays claiming age pension. The amount of the bonus payable is calculated by multiplying the annual basic rate of age pension payable to the person at grant by the bonus percentage—that is 9.4 per cent for each year. This amount is then multiplied by the number of years worked, up to a maximum of five years. By way of illustration: a single person who delays retirement and continues to work for five years and is subsequently granted age pension at the maximum rate would receive a tax free lump sum payments of $21,250—using the current rate of $9,042.80 per annum. If that person had delayed retirement for three years instead of five years, the bonus payment would be $7,560.20. For a couple who continue to work for five years and subsequently are granted age pension at the maximum rate, the combined payment would be $35,450 tax free.A person must be registered as a member of the scheme in order to qualify for a bonus payment. Generally, registration will occur when a person qualifies for age pension—currently 65 years for men and 61 years for women—or the relevant Department of Veterans' Affairs payment. During the registration process potential members will be required to provide information relevant to the operation of the scheme. The objective of the registration process is to ensure that people receive advice about the scheme, allowing them to make an informed choice about whether to participate in the scheme. It will also provide them with information on how to comply with the scheme's requirements.In the usual case, registered members who satisfy the `work test' will begin to accrue bonus periods. Members of the scheme who are 75 years old or older can no longer accrue bonus periods. For single people, this requires them to undertake gainful work, defined as work for financial gain or reward, for an average of 20 hours per week over 48 weeks per year—that is, a minimum of 960 hours a year. In addition, two-thirds—that is, 640—of those 960 hours must relate to work undertaken in Australia. For members of a couple, it will be possible for registered members to rely on work undertaken by their partners to satisfy the work test provided their partners are also members of the scheme.To satisfy the 960 hours requirement, members will have the choice of working longer hours over a short period in each year of deferment or working for a longer period with fewer hours per week. To be paid a bonus a person must accrue between one and five bonus year periods while deferring age pension. Domestic duties in relation to the person's place of residence as well as management of family financial investments will not be treated as gainful work for the purposes of this scheme. The operation of the work test provisions will be closely monitored to ensure that contrived arrangements are not put in place to circumvent the intent of the legislation. If necessary, further legislative amendment will be taken to ensure that the integrity of the scheme is not compromised.The scheme reflects the principles already contained in the current provisions of the Social Security Act 1991 relating to preclusion periods. Accordingly, where a person has disposed of assets in excess of the disposal limits or where a lump sum compensation payment is made to the person, the person will not be able to accrue a bonus for the relevant preclusion period. Similarly, a person cannot accrue a bonus if the person receives carer pension or an equivalent Veterans' Affairs payment or in certain other limited situations. At the end of any of these preclusion periods the person will again be able to accrue bonus periods.To assist members in gauging whether they are satisfying the scheme's requirements, they will be able to request from Centrelink an evidentiary certificate which states that they have satisfied the work test over a particular period. Members will be able to rely on this certificate as evidence that the work test had been satisfied for that period. Members will be required to keep certain documents—for example, their group certificates and income tax returns—and maintain a work record. This work record will contain information relevant to the work test, such as the days and number of hours worked in a particular period and the names of employers. This record will enable members to monitor for themselves whether they are meeting the work test. It will also provide Centrelink with sufficient information to advise members effectively and provide information essential to the determination of a person's entitlement to the bonus.This scheme provides the opportunity for people to add to their individual savings for retirement. Further, it creates choice and flexibility in decisions regarding retirement from the work force and accessing the age pension. I commend the bill to the House and present the duly signed explanatory memorandum.Debate (on motion by Mr Laurie Ferguson) adjourned.Bills1660r4601660Bill presented by Mr Warwick Smith, and read a first time.166010:24:001660Smith, Warwick, MPMr WARWICK SMITHGJ4BassLPMinister for Family Services10—I move:That the bill be now read a second time.The Commonwealth Rehabilitation Service Reform Bill 1998 is under my jurisdiction. This bill provides for transitional arrangements relating to the restructure of the Commonwealth Rehabilitation Service, also known as the CRS, which currently operates as a division of the Department of Health and Family Services. In December last year I announced that the CRS would separate from the department and be established as a Commonwealth owned company limited by shares under the Corporations Law on or before 30 June 1998. It will be designated as a government business enterprise. This initiative will separate the role of purchaser, which will remain with the department, from that of service provider and will improve transparency in the purchasing of rehabilitation services. This separation paves the way in the longer term for the introduction of competition in Commonwealth funded rehabilitation services and greater client choice of provider. It provides the CRS with a more flexible organisational structure more in line with its potential competitors.Under the Commonwealth's rehabilitation program eligible clients, typically those on a pension or benefit, are able to receive free rehabilitation programs designed to increase their capacity to obtain and retain employment or live independently in the community. To date eligible clients have had no choice but to use the CRS which has been a mo nopoly provider of such services. Separation of the CRS from the department, in conjunction with the proposed introduction of competition from 1999 is intended to provide eligible clients with choice of service provider, and to promote greater efficiency, flexibility and innovation in service delivery and best value for clients from the Commonwealth's substantial investment in this program. The government will be consulting widely with clients, industry and the general community over coming months on the best mechanisms for introducing competition, with the intention of opening the program up to other service providers from the latter part of 1999. In the interim, the Department of Health and Family Services will continue to purchase rehabilitation services from the CRS under contractual arrangements.While the new company will be established administratively under the Corporations Law, the bill provides for a range of transitional measures relating to the transfer of the current operations of the CRS to the new company, including its assets, contracts and liabilities. CRS staff will be transferred to the new company under the provisions of the Public Service Act 1922 under arrangements which will protect their accrued entitlements.The new company will pay all Commonwealth taxes. However, consistent with current taxation policy it will be exempt from state and territory taxes. To ensure competitive neutrality it will instead make payments to the Commonwealth equivalent to the level of state taxes it would otherwise have had to pay.The bill also includes a number of consequential amendments to existing legislation. The CRS currently operates under delegation from the secretary to the department under Part III of the Disability Services Act 1986. Separation of the CRS will render this part of the act obsolete. Repeal of Part III of the Disability Services Act will also require minor consequential amendments to other legislation. I commend the bill to the House and present the duly signed explanatory memorandum to the bill.Debate (on motion by Mr Laurie Ferguson) adjourned.Bills1661r3541661Bill returned from the Senate with amendments.1661Mr DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)10000PON/A10—My attention has been drawn to the alterations proposed by Senate amendments 10 and 11. I understand that the alteration in amendment 10 will extend the scope of a definition in the bill. One result would apparently be that some taxpayers will have tax deductions and other benefits disallowed, so that they would be liable to pay more tax. Amendment 11 is consequential. It appears that both of these alterations were prepared and circulated in the Senate as requests rather than amendments. This reflected advice received by the government in terms of compliance with the third paragraph of section 53 of the constitution.Following a statement by the chairman of committees in the Senate, these alterations were, however, treated as amendments. On their face, the alterations fail the test proposed by our legal and constitutional affairs committee as to the type of amendments open to the Senate—the committee referred, inter alia, to a request being required where an alteration moved in the Senate will make an increase in the total tax payable legally possible. I note, however, that the supplementary explanatory memorandum presented stated:The amendments to the bill will not affect the financial impact outlined in paragraph 1.45 of the explanatory memorandum to the bill.Matters such as these often raise difficult questions of interpretation. Having drawn attention to this matter, I acknowledge the House may choose not to take any objection and proceed to consider the Senate amendments. On this occasion the House may wish to follow that course.Ordered that the amendments be taken into consideration forthwith.Senate's amendments—(1) Schedule 1, item 1, page 45 (line 19), omit "family", substitute "excepted".(2) Schedule 1, item 1, page 45 (line 25), omit "a family", substitute "an excepted". (3) Schedule 1, item 1, page 73 (lines 14 and 15), omit subparagraph (iii), substitute:(iii) the trustees of one or more family trusts, provided the individual is specified in the family trust election of each of those family trusts;(4) Schedule 1, item 1, page 85 (line 4), after "primary", insert "interposed".(5) Schedule 1, item 1, page 85 (line 6), after "primary", insert "interposed".(6) Schedule 1, item 1, page 85 (line 8), after "primary", insert "interposed".(7) Schedule 1, item 1, page 108 (lines 16 to 32), omit subsection (1), substitute:Trusts(1) A trust in respect of which a family trust election or an interposed entity election is proposed to be made passes the family control test if: (a) the requirement in any of the paragraphs of subsection (2) is satisfied in relation to a group consisting of: (i) the individual (the primary individual ) who is to be specified in the family trust election or, in the case of an interposed entity election, who is specified in the family trust election to which the interposed entity election will relate; or (ii) one or more members of the primary individual's family (see section 272-95); or (iii) the primary individual and one or more members of the primary individual's family; or (b) the requirement in any of paragraphs (a) to (e) of subsection (2) is satisfied in relation to a group consisting of a person or persons covered by subparagraph (a)(i), (ii) or (iii) of this subsection and one or more legal or financial advisers to the primary individual or to a member of the primary individual's family; or (c) the requirement in paragraph (f) of subsection (2) is satisfied in relation to a group consisting of: (i) the trustees of one or more family trusts, provided the primary individual is specified in the family trust election of each of those family trusts; or (ii) such trustees and a person or persons covered by subparagraph (a)(i), (ii) or (iii).(8) Schedule 1, item 1, page 109 (lines 28 and 29), omit paragraph (3)(c), substitute: (c) the trustees of one or more family trusts, provided the individual is specified in the family trust election of each of those family trusts; or(d) any persons covered by any combination of the above paragraphs;(9) Schedule 1, item 1, page 110 (lines 29 and 30), omit paragraph (c), substitute:(c) the trustees of one or more family trusts, provided the primary individual is specified in the family trust election of each of those family trusts;(10) Schedule 1, item 1, page 114 (lines 7 to 11), omit subsection (2), substitute:Closely held,income test(2) A trust is closely held if: (a) an individual has, or up to 20 individuals have between them; or (b) no individual has, or no individuals have between them;directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the income of the trust.Closely held,capital test(2A) A trust is also closely held if: (a) an individual has, or up to 20 individuals have between them; or (b) no individual has, or no individuals have between them;directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the capital of the trust.(11) Schedule 1, item 1, page 114 (line 13), after "subsection (2)", insert "or (2A)".(12) Schedule 1, item 11, page 126 (lines 10 to 12), omit the item, substitute:11 After paragraph 170(13)(b)Insert:(c) Division 270 of Schedule 2F to this Act;11A After subsection 262A(4AK)Insert:(4AL) A person who makes an election in accordance with subitem 21(2A) or 22(3) of the Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998 must retain the election until the end of 5 years after the election was made.(13) Schedule 1, item 13, page 128 (lines 15 to 17), omit ", required to be taken into account as mentioned in paragraph (a) of this subitem,", substitute "(whether taking place before or after 1995 Budget time), required to be taken into account in determining whether the trust meets the condition in subsection 267-30(2),".(14) Schedule 1, item 13, page 128 (lines 20 to 22), omit ", required to be taken into account as mentioned in paragraph (a) of this subitem,", substitute "(whether taking place before or after 1995 Budget time), required to be taken into account in determining whether the trust meets the condition in subsection 267-30(2),".(15) Schedule 1, item 14, page 130 (lines 30 to 32), omit ", required to be taken into account as mentioned in paragraph (a) of this subitem,", substitute "(whether taking place before or after 1996 Budget time), required to be taken into account in determining whether the trust meets the condition in subsection 267-30(2),".(16) Schedule 1, item 14, page 131 (lines 2 to 4), omit ", required to be taken into account as mentioned in paragraph (a) of this subitem,", substitute "(whether taking place before or after 1996 Budget time), required to be taken into account in determining whether the trust meets the condition in subsection 267-30(2),".(17) Schedule 1, item 18, page 133 (lines 2 to 4), omit ", required to be taken into account as mentioned in paragraph (a) of this subitem,", substitute "(whether taking place before, on or after 1 October 1997), required to be taken into account in determining whether the trust meets the condition in subsection 267-30(2),".(18) Schedule 1, item 18, page 133 (lines 7 to 9), omit ", required to be taken into account as mentioned in paragraph (a) of this subitem,", substitute "(whether taking place before, on or after 1 October 1997), required to be taken into account in determining whether the trust meets the condition in subsection 267-30(2),".(19) Schedule 1, item 21, page 134 (lines 12 to 14), omit paragraph (2)(a), substitute:(a) a family trust election can, in accordance with subitem (1), be made specifying the 1997-98 year of income; and(20) Schedule 1, item 21, page 134 (after line 21), after subitem (2), insert:(2A) If a family trust election can, in accordance with this item, specify the 1997-98 year of income or an earlier year of income: (a) subsection 272-80(2) of the trust loss etc. Schedule does not apply to the making of the election; and (b) the election must be in writing in a form approved by the Commissioner; and (c) the election must be made: (i) if the trustee is required to furnish a return for the 1997-98 year of income,by the time when the trustee furnishes the return; or (ii) if the trustee is not required to furnish a return for that year of income,before the end of 2 months after the end of that year of income or before the end of such later day as the Commissioner allows.(2B) If a family trust election is made in accordance with subitem (2A) specifying the 1997-98 year of income or an earlier year of income: (a) if the trustee is required to furnish a return for the 1998-99 year of income,such information about the election as is required by the return must be included in the return; and (b) if the trustee is not required to furnish a return for that year of income,the trustee must, before the end of 2 months after the end of the 1998-99 year of income or before the end of such later day as the Commissioner allows, give the Commissioner such information about the election as the Commissioner, by notice in the Gazette , requires.(21) Schedule 1, item 21, page 134 (after line 34), at the end of the item, add:(4) If the revocation of a family trust election is proposed to specify a time under subsection 272-80(8) that is before the beginning of the 1998-99 year of income, then: (a) subsection 272-80(7) of the trust loss etc. Schedule does not apply to the revocation; and (b) if the trustee is required to furnish a return for the 1998-99 year of income,the revocation must be made in the trust's return of income for that year of income; and (c) if the trustee is not required to furnish a return for that year of income,the revocation must: (i) be in writing in a form approved by the Commissioner; and (ii) be given to the Commissioner by the end of 2 months after the end of that year of income or before the end of such later day as the Commissioner allows. (22) Schedule 1, item 22, page 135 (lines 6 to 8), omit paragraph (2)(a), substitute: (a) an interposed entity election can, in accordance with subitem (1), be made specifying a day in the 1997-98 year of income; and(23) Schedule 1, item 22, page 135 (after line 20), at the end of the item, add:(3) If an interposed entity election can, in accordance with this item, specify a day in the 1997-98 year of income or a day in an earlier year of income: (a) subsection 272-85(2) of the trust loss etc. Schedule does not apply to the making of the election; and (b) the election must be in writing in a form approved by the Commissioner; and (c) the election must be made: (i) if the company, the partners or the trustee is required to furnish a return for the 1997-98 year of income,by the time when the company, partners or trustee furnishes the return; or (ii) if not,before the end of 2 months after the end of the 1997-98 year of income or before the end of such later day as the Commissioner allows.(4) If an interposed entity election is made in accordance with subitem (3) specifying a day in the 1997-98 year of income or a day in an earlier year of income: (a) if the company, the partners or the trustee is required to furnish a return for the 1998-99 year of income,such information about the election as is required by the return must be included in the return; and (b) if the company, the partners or the trustee is not required to furnish a return for that year of income,the company, the partners or the trustee must, before the end of 2 months after the end of the 1998-99 year of income or before the end of such later day as the Commissioner allows, give the Commissioner such information about the election as the Commissioner, by notice in the Gazette , requires.(24) Schedule 1, item 32, page 142 (lines 4 to 8), omit the item, substitute:32 Section 43 (after paragraph (a) of the definition of adjusted taxable income )Insert: (aa) the amount (if any) by which the amount worked out under paragraph (a) would be increased if it were instead worked out ignoring subsection 271-105(1) of Sched ule 2F to the Income Tax Assessment Act; andMotion (by Mrs Bishop) proposed:That the amendments be agreed to.10:30:001664Evans, Gareth, MPMr GARETH EVANSVD4HoltALP00—There are a variety of amendments here which have been made, essentially, to cover drafting errors and technical matters. None of them are opposed by the opposition.I take this opportunity, however, to draw attention to one amendment to the legislation that has not been accomplished in our process in either house and which certainly ought to have been—that is, to deal with the absolutely unacceptable expanded exemption to the trafficking in trust loss legislation which is contained in this bill and which has been the subject of previous controversy.The Labor Party's bill, as originally introduced in 1995 to cover the problem of trafficking in trust losses, did, as a significant concession to family business situations, enable the beneficiary of a family trust carrying a loss to inject into that trust income obtained from other sources and to apply it against the trust loss which that beneficiary would otherwise have to bear, for tax saving purposes.Treasury and the tax office at the time did explicitly advise Treasurer Willis that this concession was already very generous and should certainly not extend to any further exemption. The version of the legislation, however, brought forward belatedly by the present Treasurer (Mr Costello) does include a further exemption which makes it possible for a very wide range of extended family members who are not already beneficiaries of the trust to themselves inject income to apply against a trust loss to avoid tax.For example, a non-beneficiary as remote as a wife's grandmother or a niece's husband who wants to avoid paying tax on, say, $200,000 of property income can inject that amount into the relevant family trust, write off the income against any loss up to that value being carried by that trust and then have the $200,000 distributed back tax free. This particular exemption is a classic rorters' paradise. Our estimate, on the information available to us, is that the cost to revenue of allowing this enhanced exemption is measurable at least in tens of millions of dollars.We asked a number of questions about this publicly and in the parliament during the passage of the legislation. We did not get answers to any of them. But, in a spirit of optimism, encouraged by the actual presence in the chamber on this occasion, unusually, of the Treasurer himself, I ask the questions again. What public policy justification, if any, was there for this expanded exemption, given the obvious scope for its use in tax avoidance by high-wealth families? Did up to 19 members of his front bench who have family trusts stand to benefit from this expanded exemption? Did the present Treasurer have the same negative advice from Treasury and the tax office as Labor did about any expanded exemptions for loss trafficking in family trusts? With whom did the Treasurer or his staff discuss the expanded exemption? In particular, were representatives of high-wealth individuals now being investigated by the tax office involved in those discussions? Why did the Treasurer mislead the House on several occasions by misstating, as he did, the effect of Labor's 1995 legislation, in particular refusing to acknowledge that our legislation did not allow non-beneficiaries to inject income for tax avoidance purposes? What was the precise estimated cost to revenue of this expanded exemption as compared with what would otherwise have been brought in by a properly crafted legislative package?The truth of the matter is that here, as on so many other matters, the Treasurer talks big, claims that there are major problems in the tax system which need redress and talks endlessly about fairness, but when he has an opportunity right in front of him to correct an anomaly or not to create new ones, to actually genuinely ensure that a piece of anti-tax avoidance legislation has a genuinely anti-avoidance character and does not become a birthday party for a whole new category of avoiders, he throws it away. I think he continues to have a great deal to answer for in relation to this legislation. I invite him to give those answers right now.10:35:001665Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—Mr Deputy Speaker, I happen to be here this morning, as you know, to introduce the biggest shake-up of the Australian financial sector probably in two decades. I was not aware that the Deputy Leader of the Opposition (Mr Gareth Evans) was going to try this stunt. Seeing as I am here, I will respond to his stunt. It will not take very long.This is the Deputy Leader of the Opposition who is engaged on this little stunt because yesterday he said that he discovered yesterday Australia had a tax problem. The basis on which he says he discovered yesterday that Australia had a tax problem was the release by the Australian Taxation Office of statistics about the growth in the number of trusts between 1991 and 1995.VD4EVANSMr Gareth Evans—Mr Deputy Speaker, I raise a point of order. Is it in order for the Treasurer to mislead this House by misquoting and incompletely quoting my statement yesterday, which was that we had a tax problem in relation to the scale of creation of new trusts, not more generally?10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—There is no point of order.CT4Costello, Peter, MPMr COSTELLO—There is no point of order, and you know it. Yesterday you said you had discovered that there was a problem on the basis of statistics that were released about the growth in the number of trusts between 1991-92 and 1995-96—a period during the whole of which, with the exception of March 1996 to June 1996, you were in government; a period during the whole of which, apart from those three months, the now Leader of the Opposition (Mr Beazley) was the finance minister; a period during the whole of which you had the capacity, if you were genuinely worried about that, to do something about it; but a period during the whole of which you did nothing.Gratuitously, the Deputy Leader of the Opposition discovered yesterday, on the basis of his own failure, a problem. What you discovered yesterday, the honourable member for Holt, is evidence, according to you, of your own default and failure. You come in here in relation to these amendments, which bear no wit of relation to what you have just addressed, and try to sneak around this issue and put false and misleading slurs upon the government.The truth of the matter is this: this was the government that legislated to prevent trafficking in trust losses. The measures that were always intended were to prevent trafficking in trust losses. They were not to prevent those people who had legitimately incurred losses being able to offset those losses against income, as would be the case for an individual.Let me go through it. If you as an individual incur a loss on some part of your income and you make a profit on another, you set off the profit against the loss and you pay on the balance. It is an obvious principle of tax collection. You do not have to pay tax on the profit and disregard the loss. If you made a loss on your rental property and you made a gain on your share trading, as an individual you can set the profits and the loss off and you pay tax on the balance. The same should apply in relation to a trust. The amendments that you speak of were applied in relation to a trust. So if a family group had losses and income, it could offset them. It is an obvious point and a point which, if you had turned your mind to it, would have been agreed from the outset.The second point which you conveniently and repeatedly overlooked was that the changes we made actually tighten the definition of family. In your speech you referred to a wife's grandfather. What you omit to say is that we narrowed the definition of family because under Labor Party proposals you would have included great-grandparents and great-grandchildren and a far wider class of person than is allowed by this current legislation.The proof is in the estimates. When the changes were made, the actual revenue estimates provided by the Treasury were for increased collection. To stand up here and say that this could in some way harm the revenue, when it produced an increased collection, is entirely false.The amendments that have come back here this morning from the Senate are accepted by the government. The legislation should be allowed to be put into place. It is good legislation, and the government fully supports it.10:39:001666Evans, Gareth, MPMr GARETH EVANSVD4HoltALP00—Without unduly prolonging this debate, I wish to make three brief points in reply. First, it is true that the government's present legislation does slightly narrow the definition of family of an individual as compared with the original Labor bill, although that definition is still extraordinarily wide, extending, as it does, to wife's grandmothers and nieces, husbands and so on.CT4COSTELLOMr Costello—Why didn't you narrow it?VD4Evans, Gareth, MPMr GARETH EVANS—The point, Treasurer, is this: under the Labor legislation, no member of the family group, however defined, could inject income into a trust for tax saving purposes unless he or she was already a beneficiary. That is the big difference. You had to be already a beneficiary under our definition. If you were a beneficiary, the second point I make, as the Treasurer said—XT4RONALDSONMr Ronaldson—I rise on a point of order, Mr Deputy Speaker. I refer to standing order 81. There were some comments made from both sides of the House initially in relation to this matter. The present comments bear no relevance at all to the matter currently before the House. I invite you to rule the present comments out of order so that we can return to the terms of the matter before the House.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! The question before the House deals with 24 amendments made by the Senate. Perusal of those makes it very difficult for me to adjudge how relevant the debate has been so far. I am sure that the Deputy Leader of the Opposition and the Treasurer, if he so feels inclined, will try to contain themselves within the narrow parameters for this most unexpected debate.VD4Evans, Gareth, MPMr GARETH EVANS—I propose to keep quite squarely within the parameters you have just identified, Mr Deputy Speaker. If I had not been interrupted, I would have already sat down by now. I do not propose to make any further interventions, but I just want to correct the record on this.It is the case that it is perfectly appropriate as an ordinary principle of tax law that you should be able to set off your, in effect, profit against your losses. We did make provision in our legislation to enable someone who already was a beneficiary of a family trust carrying a loss to inject into that trust income obtained from other sources to apply it against the trust loss for tax saving purposes. We accepted the principle, as the Treasurer (Mr Costello) said. It was pretty generous—deliberately generous—but we certainly did not accept the further generosity involved in allowing non-beneficiaries to leap into the act for purposes that could not be described other than for tax avoidance.The final point I quickly make is about the revenue implications of this. The Treasurer says again today, as he has previously, that these trust loss bills as a whole—and I am talking now about the bills before us and the actual language before us—will bring in more revenue than Labor's legislation, suggesting that there is no loss to legislation possibly arising from this exemption of his. There is no rort.What the Treasurer ignores now, as he has in the past, is that the problem of trafficking has grown very dramatically in the past two or three years and that his revenue gain would be larger still if he cracked down on this particular exemption. What is involved here is extra revenue that would clearly have been obtainable being forgone with this particular enhanced and absolutely indefensible exemption. My case rests.10:43:001667Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—Mr Deputy Speaker, if you are allowing the debate to go wide, I will reply to each of the points. The first point is that the Deputy Leader of the Opposition (Mr Gareth Evans) says that the definition is narrower than the Labor Party wanted but is too wide. What a proposition! It is narrower than the Labor Party wanted but still too wide. You merely have to state the proposition to realise how bizarre the claim is. It is too wide, even though we narrowed it on what the Labor Party wanted. It is really a false proposition and hardly worth replying to in the House of Representatives.The second point he makes—I do not know whether he understands it or whether it is an attempt to make a trick point—is that non-beneficiaries can now inject income into trusts. He means to say that a family can inject income into the trust if that income is another trust income, but it still has to be the family. You still have to have the same family. If the same family has income in another family trust, that trust can inject into the loss trust, or if it has it in some other mechanism.It is true that the original proposal only allowed it for individuals. That is why it was wrong. Let us take the family that has one trust conducting one business and another conducting the other. It should be able to set off the income against the loss, just as an individual should be able to set the income off against the loss. It is a point that you have never been able to grasp, regardless of the structure.If the family is conducting two businesses, or even one business, through two entities, you should be able to group the losses and the income. That is entirely what the legislation does. If you had thought about it for a moment instead of trying to make these cheap, ignorant points, you would have conceded it.The third point is in relation to the income and the revenue. When the revenues were announced as a measure—that is, a change on a previous policy—the effect of the change was to increase the revenue take. That is what we always do in budgets in relation to measures. It is the conclusive answer to this totally fabricated and weak point.10:45:001667Evans, Gareth, MPMr GARETH EVANSVD4HoltALP00—The Treasurer (Mr Costello) is being irredeemably obtuse. I do not think it is capable for me to educate him further in the time available. I make the point again that he has not answered any of the questions I have put to him, including in particular the question as to whether the tax office gave him the advice on which he is now relying in bringing this legislation forward. I have abandoned the unequal task of trying to educate and civilise him, so I suggest we move on.Question resolved in the affirmative.Bills1668The following bill was returned from the Senate without amendment or requests:Charter of Budget Honesty Bill 1996 [No. 2]Bills1668r4441668Debate resumed from 12 March, on motion by Mr Costello:That the bill be now read a second time.10:46:001668Evans, Gareth, MPMr GARETH EVANSVD4HoltALP00—This International Monetary Agreements Amendment Bill 1998 comes before us as a very direct result of the Asian economic crisis. Were it not for that crisis we would not be debating it today. That crisis is already having a profound impact on the Australian economy and will certainly dominate economic developments both domestically and internationally over at least the next year—probably rather longer than that. The wider political and social as well as economic repercussions of this are going to be felt for many years not only in the Asian region in general but also certainly in this country. This bill provides us with an overdue opportunity to debate all these things, and I will come back to them.The particular purpose of the bill is to amend the International Monetary Agreements Act 1947 to enable a framework to be put in place for Australia to provide financial assistance to a country that is undertaking an economic adjustment program with the support of the International Monetary Fund, the IMF. In the first place, it makes specific, in effect retrospective, provision for appropriations to fulfil Australia's pledges of financial assistance that have already been given to South Korea and Indonesia last year. These pledges involve loans or currency swaps of up to $US1 billion for both countries.The bill does not specifically mention the third contribution that Australia has announced, that is, the currency swap, also of $US1 billion, that has been negotiated for Thailand through the Reserve Bank of Australia. That is not in the bill because it will not involve an appropriation from consolidated revenue. It is, rather, an inter-bank arrangement.The bill is also significant because it provides a framework for future Australian financial assistance in support of IMF programs in as yet unknown and unanticipated situations. It provides what is in effect a standing appropriation to enable the government to supply this assistance from the consolidated revenue fund. While it is expected that such assistance will only be required in very rare and exceptional circumstances, this legislation could eventually involve quite significant future appropriations. I make it clear at the outset that the Labor opposition supports this bill, just as we supported the announcement by the government of Australia's participation in the programs for Korea, Thailand and Indonesia.IMF-sponsored adjustment programs of this kind are vital to restore confidence and stability in countries experiencing financial crisis. It is particularly important that Australia participates in these packages when they relate to countries in our region or countries with whom we have strong economic links. We certainly support the government's action in ensuring that Australia is in fact the only country beside Japan to have participated in each one of the three IMF-sponsored packages for our Asian neighbours.When so much else has gone wrong in Australia's relations with our region over the last two years under this government, it was very important for us to re-establish our credentials in the region; and this coming to the assistance of our neighbours has certainly helped to do that. As Paul Keating, a former Prime Minister, said in his very interesting speech—which I will refer to again—to the University of New South Wales:Some of the old brigade obviously think Asia's recent economic problems mean that Australia can heave a sigh of relief and head for the safety of old friends and familiar geography.He goes on to say:This is dangerous nonsense . . . Australian engagement with Asia is not a temporary enthusiasm.. . . . . . . . .If we know anything about dealing with Asia it is the importance of building relationships for the long term. That is the business Australia needs to be in now.The extent to which this particular willingness to come forward with these loans and currency swaps is an example of exactly the kind of commitment we ought to be continuing to make to the region. There is no question but that we in the opposition give this wholehearted bipartisan support.I should also say that we agree with those parts of the bill which refer not just backwards to what has happened so far in Asia but which do provide an explicit framework for Australian participation in future IMF-sponsored adjustment programs, not necessarily confined to our own region—in this context, building in a capacity for a standing appropriation allowing the Treasurer to make the relevant loans or currency swaps. It certainly does not seem appropriate to us that pressure be put on the Reserve Bank to assume the responsibility for managing Australia's contribution in these circumstances when the decisions involved are essentially those of the executive government.In explaining and justifying these contributions to the Australian public it is important for us all to make clear that the bill does not provide in any way for grants or donations in support of these programs but rather for loans which must be repaid in the future. Either it is a matter of the currency swap running its course and us getting back into our own reserves the US dollars or other international currencies that have been swapped for Thai baht, or it is a matter of the loans being repaid in such a way as to immunise them from any currency changes that may have occurred in the meanwhile, with an appropriate interest component for the opportunity cost of the particular loan.Short, then, of complete financial catastrophe in the countries in question making it impossible for them to repay the loan or to give back the relevant currency entitlement, there is every reason to anticipate that there will be no financial risk and no financial loss at all. You cannot remove every possible element of risk from these situations because, by definition, we are talking about situations of economic and financial crisis, but I certainly am confident, and I think all of those who have participated in this enterprise from the government are confident, that Australia will not suffer in any way financially from coming forward in the way that we have on these occasions and that we can be similarly reasonably confident about the future.The bill does contain some conditions that have to be satisfied before these arrangements or agreements are entered into. The Treasurer can only agree to provide Australian assistance if at least one other country or international organisation is participating or has agreed to participate in the program. In addition, the Treasurer can only agree to provide assistance to a recipient country at the IMF's request. The bill also requires that any agreement by the Treasurer on behalf of Australia must allow Australia to demand early repayment in the event of the suspension or premature termination of the fund program. All of those, in our judgment, are appropriate conditions.There is one obvious deficiency, however, in the bill in its present form, that is, it does not impose any explicit disclosure or accountability requirements on the Treasurer of the government of the day. While this may be unlikely in practice, the bill would, in its present terms, allow the Treasurer to commit very substantial amounts of public money to an IMF program without making any public statement at all about that assistance. More seriously, the bill would allow the Treasurer to commit substantial sums of taxpayers' money to such a program without having to justify or explain his decision to the parliament.The lack of explicit provisions requiring the Treasurer to publicly announce the size of any loan or currency swap under the bill and the reasons why it is in Australia's national interest is a clear shortcoming in the bill as it is presently drafted. So the opposition will be moving amendments to this bill, which I think have already been circulated. They will require the Treasurer to issue a public statement detailing the terms of any currency swap or loan to be provided in support of an IMF sponsored program in as much detail as is practicable, given the realities of international confidential negotiations. That statement should provide reasons why this assistance is in Australia's national interest, in particular taking into account our foreign policy, trade and economic interests.The particular national interest statement to be tabled in the parliament in this respect is also required by our amendments to be referred to the Statutory Joint Standing Committee on Foreign Affairs, Defence and Trade for inquiry and report. That is just a further means to ensure that there will be proper scrutiny and proper accountability but, hopefully, always delivered in a responsible way.The opposition believes these are important amendments. The government has given some indication that it may be prepared to accept them and we hope very much that that will be the case.There are three important general issues thrown up by this legislation which do need to be debated: the nature, causes and course of the Asian economic crisis itself; the question about the role of the IMF and the international monetary system in reacting to the crisis; and the question of the domestic impact of the crisis in Australia. I want to say a few things about each of those issues.As far as the crisis itself is concerned, there is no doubt that it is of spectacular magnitude. It is certainly Asia's worst crisis in three decades. On an international scale, the speed and magnitude of the contagion effect of the crisis from country to country has really been unprecedented. Mr Eisuke Sakakibara, the very influential Vice Minister for International Relations of the Japanese Ministry of Finance, has described it as really the first crisis of global capitalism. That is, I think, an apt description of the scale of the problem that we are now witnessing.In terms of analysing the causes of it, a great deal has been written, some of the best analysis of the situation coming from our own Reserve Bank in the papers that have been delivered by Governor Ian Macfarlane and Deputy Governor Stephen Grenville. There are, of course, a legion of other commentaries and analyses around the place, including a particularly useful presentation I heard from Saul Eslake, the Chief Economist of the ANZ Bank. In what I say now I will draw quickly on a variety of those sources, in particular Mr Eslake because he does seem to me to summarise very succinctly my own understanding derived from wide reading, travel in the region and talking to many people about what has been going on.The point to understand at the outset in terms of appreciating the causes of this crisis is that they were really very different from those of earlier developing country crises, which have not been unusual. We did not have here, driving the crisis and being the fundamental cause of it, public sector profligacy. Certainly that was a partial element in the equation but, overwhelmingly, the crisis was driven by developments in the private sector and in the institutional and regulatory structure of government bearing upon private sector activity.There were what can now be seen in retrospect as excessive levels of investment in the sense that very little attention was being paid to potential profitability, creating a massive oversupply of investment product, particularly building. There were excessive levels of private sector debt being accumulated, resulting either from so-called directed lending or from inadequate supervision and regulation of the financial systems of the countries in question. There were certainly inappropriate exchange rate regimes in place—fixed relationships between the local currency and the US dollar, which tended to foster a boom-bust economic cycle through a tie in first instance of the fall and then the rise in the US dollar against the yen. But, more particularly, what was encouraged by those fixed rates and people's belief that they would be maintained come what may was a massive accumulation of unhedged foreign exchange borrowings.There was a search around the region for higher yielding alternatives to low United States and Japanese interest rates which sucked in a lot of lenders who should perhaps have been a bit more cautious. There was certainly an insufficiently critical scrutiny both inside and outside the region of the character of the Asian economic performance in the 1990s and, in particular, the extent to which it was being fuelled by unsustainable levels of unhedged borrowing for poorly risk evaluated projects.In understanding what is actually going on in general terms, I think it can be said that the Asian crisis will pass through four phases. The first one, which we have seen unfolding before us, is that of financial market meltdown with some dramatic overshooting on the downside being very much part of that—a very unhappy part of it. Secondly, we have seen the beginnings of the policy response and the external account correction that is a crucial component of that response—higher interest rates, tighter budgetary policy, the establishment of machinery and procedures for financial system rehabilitation, and the slowing down of the economy very sharply in response to these contractionary and tightening measures, leading to a lapse into actual recession, with the current account moving into surplus, remarkably rapidly in a couple of cases, as imports in fact collapse in response to those developments internally which I have just described.The third stage, which we have not yet seen but we all hope we will see pretty soon, is that of sustainable external account improvement through a recovery in exports, through a resumption of voluntary private capital inflows, through domestic activity still remaining weak enough not to be sucking in a great heap of imports and with inflation and interest rates beginning to decline.The final stage, which we all look for with enormous hope and hope will be achieved sooner rather than later, is a recovery in domestic economic activity in the countries in question with the recapitalisation of the financial system and a recovery in consumption and investment.Even if it is the case—and it is arguable that this is now so in the region, particularly so far as Korea and Thailand are concerned—that the worst of the financial crisis has passed, the economic effects—the real economy effects as distinct from the financial economy effects—are still to be fully felt. There are a great deal of corporate bankruptcies still occurring, restructuring going on with consequent employment losses and declines in capital expenditure. There is a significant destruction of wealth occurring through asset price deflation and losses of personal savings. There are interruptions to economic activity through lack of access to credit or trade finance. There is an obvious erosion of purchasing power going on through increased inflation and unemployment, and a number of government policy changes are also having their negative effects on the real economy, including higher interest rates, tax increases, reductions in subsidies and the deferral or cancellation of infrastructure projects.There is still a lot of downside risk, it also has to be acknowledged, for the Asian financial markets and economies. Whatever is going on by way of recovery could be turned around again by breakdowns in relationships with the IMF—and it is a particularly acute concern for Indonesia. A further devaluation by China is something that would be alarming if it were to occur. Frankly, I think the jury is still out on whether some of that will occur—if not sooner, perhaps in the last quarter, or the first quarter of next year—in response to an erosion of China's competitive position with some South-East Asian economies, which is being vigorously denied by Chinese leaders and officials. But, as I say, there is a degree of scepticism about whether that position can be maintained.Violent political and social unrest is a potential problem in a number of countries, particularly Indonesia. A continued policy failure in Japan to be unwilling to give the kind of fiscal stimulus the whole region needs, as well as the domestic Japanese economy, can contribute to some further downsides ahead. Also—and this is one of the many points that is articulated by Mr Eslake—a protectionist backlash in Western economies cannot be ruled out which, if it occurred, would seriously exacerbate the global impact of all of this.The overall picture is a disconcerting one when you pull it apart and look at the causes and the likely course of future events. The current situation, I repeat, has pretty much stabilised in Thailand and Korea, very much as a result, I think, of democratic institutions proving robust and resilient, much more so than might have been expected. We just have to cross our fingers and hope that that will continue.The other Asian economies have so far been dealing with the situation reasonably well. Although there is lower economic growth in the Philippines, Singapore, Hong Kong and Taiwan, there is quite a bit of domestic cleaning up still to occur in Malaysia in its economic response to what is going on, and there is the situation in China I have described where we are all holding our breath as to whether or not devaluation can be avoided.Most of the uncertainties are concentrated and focused on Indonesia at the moment, with a very real doubt in just about everyone's minds as to how events are going to unfold. One scenario is that the IMF reforms are in fact implemented in a way that satisfies everybody and we get a reasonably rapid stabilisation of the situation, as has occurred in Thailand and Korea in that context, with the IMF activity being matched by an equally concentrated effort by private sector banking institutions and other creditors to work together to get rollovers of the private debt, which is one of the biggest problems in Indonesia at the moment.The other scenario is that doubts persist about Indonesia's capacity or willingness to follow the IMF prescriptions, and there is continued total erosion of international confidence and a continued destabilisation of the internal economy as a result of the failure of the external situation to stabilise, leading to inflation, food shortages and all the rest of the negative effects of unemployment and so on in the real economy worsening with the consequences, all too unhappily real, of rioting and major civil breakdown.The situation is nothing like as intrinsically serious as it was in 1965 when there was massive poverty, massive inflation and a massive political confrontation between right and left also going on as a backdrop to the chaos that did then eventuate. To that extent, those who say, like Paul Keating, that this is not a case again of a revisiting of the so-called year of living dangerously may well be right—and I certainly hope they are—but it is a volatile and very dangerous situation, and anyone who tries to trivialise or downplay the potential consequences of it is I think misreading the situation.One of the biggest issues thrown up by the situation in Indonesia and also thrown up generally by a recent course of events has been the response of the IMF and, indeed, the whole international monetary system to the crisis. We have had a pretty lively debate going on about the way in which the IMF has in fact handled itself and the situation. There have been two kinds of criticism essentially of the IMF's role. One that was more current in the earlier stages of the crisis was that we saw from the IMF nothing much more than the old one size fits all approach, in which the IMF reacted to the Asian crisis in exactly the same way in which it had reacted to many other developing monetary crises in the past and saw it as essentially a situation of public sector profligacy and a situation to be addressed as a result by imposing the usual set of IMF strictures with redressing big, exploding, ballooning current account deficits and high inflation environments by contractionary measures. There was a lot of that in the initial IMF reaction requirement of budget surpluses being achieved and so on in situations where to do so rapidly was going to have an accelerating, negative impact on the capacity of the domestic economy to cope.I think the current criticism is less in those terms than of a different kind—that is, the IMF, in its current round of packages that it is requiring people to sign up to, is overdoing the emphasis on structural and institutional reform, overdoing the micromanagement of the patient economies in a way that would be absolutely unacceptable in dealing with a crisis anywhere else and which really is requiring not only an economic revolution but also in some cases a political revolution to occur.The arguments here are really quite finely balanced. Those of us—and I am among them—who have had a lot of reservations about the overreach of IMF programs and demands, particularly in Indonesia, do of course also frankly acknowledge that there are many structural and institutional problems that remain to be addressed, having at their heart the problem of crony capitalism, excessive influence from high places and so on and having a lot to do with an absence of transparency, accountability and basic democratic process in the political system.The trouble is that you also have to temper your recognition that there are these problems—and they are problems that need to be addressed, certainly for the long haul—with a recognition that the reaction to too robust an attempt to impose solutions is likely to be counterproductive. Certainly, when it is accompanied by the kind of arms folding performance we had from Michel Camdessus at the time of the signing of the IMF treaty, you create a situation where the strictures, sensible as they may be in terms of getting the economy right for the long haul, are not likely to be capable of actual implementation and do in fact undermine the capacity of the international community to see the stabilisation of the currency and access to foreign capital restored. So it is a matter of achieving the balance between, on the one hand, taking the steps which are in fact necessary to maintain a flow of foreign funds by recapturing the confidence of the international financial markets and investors and at the same time not acting in a way that is counterproductive.The IMF has certainly had a pretty rough and tough record over the years. I remember vividly talking to the then Hungarian foreign minister Gyula Horn in 1989 when he was on the receiving end of a very tough IMF restructuring package. He said to me, `I have a very wistful dream that one of these days Michel Camdessus will be coming towards me on a red carpet on his knees begging me to bail out the IMF from its particular current economic crisis.' That is a reaction, of course, that one hears from many people around the world who have been on the receiving end of these strictures. The task is to somehow steer a course through all this that will in fact recognise the necessity for these bailout operations to occur and recognise the necessity for the IMF to preserve its credibility but not to operate in a way that is ultimately counterproductive.I did want to mention in passing one other major policy issue in international finance that is being generated by this crisis and the international financial system's contributions to its causes as well as to its solution, and that is the renewed debate about the scope of the Tobin tax. I would like to incorporate in Hansard if that were permissible—I have discussed it with Hansard and they say it is technically possible—a two-page document which is quite difficult and complex in its layout and certainly much too long and complex to read into the record. I would hope that I might have permission to incorporate that.Leave granted.VD4Evans, Gareth, MPMr GARETH EVANS—I think that will be a useful contribution to the debate. Finally, I wanted to say a few words about the impact of all this on our own country and our own economy. This is really an issue for a longer debate on another occasion, but just let me make some very quick points by way of conclusion. The first thing to say is that the economic impact on us in general terms is going to be big. The estimates from most commentators is an order of magnitude of around one per cent off our GDP directly attributable to the crisis.There is some very interesting analysis around the place, including a piece by Stephen Kirchner in the Australian Financial Review last week, suggesting that, given that the United States analysts are saying the impact on the US economy will be of the same order of magnitude and given that the US economy is much less trade exposed to Asia than we are, with only around three per cent of that economy being directly exposed as compared with some 12 per cent of the Australian economy, maybe there is a significant underestimate of the impact upon us.Certainly we are already seeing the impacts beginning to accumulate in a collapse in tourist numbers, a dramatic decline in live cattle exports, falling world commodity prices in response to the Asian crisis and reduced demand for Australian university education by Asian students. We have seen the car industry already being affected with Mitsubishi requiring 3,000 of its factory workers in Adelaide to take annual leave for a couple of weeks in order to reduce production of cars or car parts destined for the Asian market. No government could ever possibly have anticipated this crisis, its nature and magnitude. Of course, it is a problem for any government in dealing with it.I simply make the point in conclusion, however, that for the present Australian government to claim as it is that it has acted brilliantly over the last two years to insulate the Australian economy from the impact of this crisis is simply hogwash. The truth of the matter is that unemployment remains a massive problem for us, with a growth in both youth and long-term unemployment. We have had a rise in the current account deficit even before the Asian crisis hit. We have had a rise in foreign debt similarly. We have had an average rate of economic growth of just three per cent compared with the average 4½ before we left office.We have got a manifest decline now in both business and consumer confidence, developing at a very rapid rate. That is a product of a recognition by the business and consuming community that we simply have not got the kind of insulation of the Australian economy that would protect us from these further downside effects. (Time expired)10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Before I call the next speaker, I will say to the honourable deputy leader that the document cannot be incorporated as it does not fall within the Speaker's requirements and guidelines.11:16:001674Bartlett, Kerry, MPMr BARTLETT0K6MacquarieLP10—The shock waves from the Asian financial crisis have served to reinforce what has become obvious in recent decades; that is, that the increasing interdependence of economies in the region, in addition to bringing obvious benefits to the country, also increases our vulnerability and brings with it increasing levels of responsibility.The International Monetary Agreements Amendment Bill 1998 establishes the framework for the provision of financial assistance by Australia in conjunction with the IMF and other countries to provide assistance for adjustment programs in the threatened economies. The bill is significant in relation to Australia's participation in the IMF packages for Korea and Indonesia, and follow on a package already put in place for Thailand. It provides balance of payments support to the recipient countries to restore market confidence and to try to prevent exchange rate volatility in those countries.The legislation involves amendments to the International Monetary Agreements Act 1947 to enable the government to act swiftly in providing support for countries in receipt of financial assistance from the IMF. Under the bill the Treasurer can, in response to requests from the IMF for assistance, make an appropriate response to countries in need. This provides for an appropriation from the budget, compared with the package put together for Thailand recently that came from the Reserve Bank.There has been considerable misunderstanding and distortion in some sections of the community about the nature of Australia's assistance to Asia in this current crisis. These misunderstandings need to be addressed. Two things need to be said. Firstly, this assistance is not a give-away. Australia is not simply throwing billions of dollars of taxpayers' money into Asia, as some would have us believe. Nor, on the other hand, does it come out of the current aid budget. This package does not detract from our other aid programs.These packages—both the one already put in place and the potential under this bill for others—will consist of loans or currency swaps; not grants, not donations, not gifts. For example, the rescue package for Thailand to which Australia contributed in August 1997 pledged Australia to a currency swap between the Reserve Bank and the Bank of Thailand. The Reserve Bank provided US dollars to the Bank of Thailand in exchange for the Thai baht, with a predetermined exchange rate to unwind the swap at renewable six-monthly periods until completion date.Furthermore, the return to the Reserve Bank is equal in that case to the prevailing US Treasury bond rate. The bill will enable Treasury to make loans or similar currency swap arrangements. It does not allow for simple grants. Thus, the bill does not allow action which will impose any direct cost on Australian taxpayers. To the contrary, it provides the opportunity to earn some income as part of the process of providing much needed assistance to the region.Secondly, the bill does not expose Australian taxpayers to undue risk. As the member for Holt (Mr Gareth Evans) pointed out, obviously there is risk in assisting countries in need, but there is no undue risk or excessive risk entailed in this legislation. Any currency swaps or loans come with government guarantees and without significant exchange rate risk.Australia, furthermore, is not out on a limb on its own. It is part of an international effort. Any assistance under this legislation must be part of an IMF package involving other countries, and Australia will participate only where such an IMF package is in place. This ensures not only a productive outcome for the recipient country but the means by which Australia can be repaid at some future time. Furthermore, any agreement must allow Australia to withdraw and require repayment if the IMF program is suspended or terminated prematurely.This bill and the associated rescue packages provide two important roles for Australia. Firstly, it is an avenue for responsible involvement in the region. This is what we would expect from a leader in the region, as Australia is. It would be grossly irresponsible, on the other hand, for any international citizen to ignore a crisis on its doorstep, particularly considering the potentially grave social and political fallout which may result from financial and economic collapse.Secondly, this bill is a matter of significant self-interest to Australia since the Asia-Pacific region contains our largest export markets. It is clearly in our interests to protect these markets by doing whatever we can to restore financial and economic stability to the region and maintain social and political stability.Some figures might illustrate the point. Thailand now takes $1.7 billion of Australian exports, which is up from $1.2 billion just four years ago. Indonesia now takes $3.3 billion of Australian exports dollars a year, which is up from $1.7 billion four years earlier. South Korea, our second biggest export market, takes $7.1 billion worth of Australian exports a year, which is up from just $3.9 billion four years earlier. Japan, of course, our largest export market, accounts for over $16 billion of exports a year.Clearly, it would be suicidal for Australia to allow total financial collapse in the region; the effect on our exports would be devastating. Virtually every region around the country would feel the impact, if such a collapse occurred. As it is, we are certainly feeling some impact.My electorate of Macquarie is no exception to this. My electorate is very dependent on tourism, and the crisis in Asia has led to a significant downturn in inbound tourism figures. We have seen already a reduction of 40 per cent from Indonesia, a reduction of 30 per cent from Thailand, and a reduction of a remarkable 75 per cent of South Korean tourists. This must affect Australia's tourist industry. In fact, the hospitality industry in my electorate is so heavily based on tourism that it is one of my electorate's largest employers.Almost 2,000 jobs in the Blue Mountains are in the core hospitality industry, with more in the Hawkesbury. In the mountains alone, there are nearly 5,000 jobs in over 680 businesses which provide services directly to visitors at some time. The Blue Mountains Tourist Authority figures indicate a decline of 20,000 visitations in February of this year compared with last years figures—although there are other factors that have contributed to that downturn. A number of local operators report declines of 30 to 40 per cent in their inbound market from Asia. For those who are very dependent on this part of the market, the impact has been significant. One or two operators who have specialised in catering for the South Korean visitors have seen their visitor numbers absolutely decimated.Fortunately, anecdotal evidence is that inbound tourist numbers from Europe and North America are beginning to show signs of picking up. Timely and appropriate assistance to our prime export markets is a matter of self-preservation. Tourism provides 11.7 per cent of our GDP, 13.3 per cent of our exports, and employs 694,000 people. Therefore, it is entirely appropriate that Australia does whatever it can to protect these South-East Asian markets, and to protect the viability of the Asian economies. Certainly, it is appropriate that the Australian government does whatever it can to assist the Australian tourist industry.While we are talking about the impact, or the potential impact, of the Asian crisis on Australia, however, it is worthwhile noting that it could have been far worse. It is worth repeating again what has been patently obvious: had the coalition government not taken action to strengthen the fundamentals of the Australian economy, the fallout on Australia would have been far worse than it has. It is not good enough for the member for Holt to stand there and try to deny the obvious facts; the fallout would have been far worse.The currency collapse of the threatened Asian economy should be a clear warning to everyone. From the 1996 average to January 1998, the Malaysian ringgit has depreciated by 47 per cent against the Australian dollar, the Thai bhat has lost 73 per cent, the South Korean wan has fallen by 75 per cent, and the Indonesian rupiah has fallen through the floor losing a massive 203 per cent against the Australian dollar. South Korea and Indonesia have experienced stock market collapse, widespread financial losses and bankruptcies, and massive falls in living standards—especially in Indonesia. Further, the tightening of monetary and fiscal policies, as part of their restructuring packages, will also create significant short-term hardship.Had our economic fundamentals not been so strong, the financial markets would have brutally sold down the Australian dollar. The results would have been accelerating inflationary pressures, higher interest rates and economic slowdown. It is not good enough for the members of the opposition to deny this fact. I will just refer to a comment in the Sydney Morning Herald by that paper's financial commentator, Max Walsh, on 3 February this year. He states:. . . there is no doubt that Treasurer Costello's policy of winding back the fiscal deficit has been a major contributing factor to Australia's immunity from the direct financial contagion which has swept through the region to our north. The economy is certainly much more fireproof than would have been the case had a Labor government been returned at the last election.There it is, in black and white, in simple terms that even the opposition can understand. Yet it is evident that Labor has not learnt its lesson from this. I follow up with a comment—HE4ANDREWMr Andrew—Very briefly.0K6Bartlett, Kerry, MPMr BARTLETT—very briefly, from Mr Laurie Oakes in the Bulletin . He states:Whatever else can be said about the draft platform Kim Beazley and his shadow treasurer, Gareth Evans, took to Hobart, fiscal rectitude was not one of its more glaringly obvious characteristics.Again, if the Australian economy had not been growing so strongly, if we had not had such high levels of private sector investment, if consumer confidence and spending had not been so high, if interest rates had not been so low, our ability to cope with this impact would have been far, far worse.In conclusion, firstly, it is essential that Australia is able to respond quickly as part of an international package to help countries in crisis, as we have done with Thailand and as we have committed ourselves to doing in Indonesia and South Korea. The bill before the House provides the framework for this to happen. Secondly, it is in Australia's best interests to do whatever we can to ensure social, political and economic stability in the region. Thirdly, the message is clear: responsible economic management, as we have seen from this government, is a necessity—not a luxury, as the opposition would have us believe.11:29:001676Willis, Ralph, MPMr WILLISZJ4GellibrandALP00—I rise to support the International Monetary Agreements Amendment Bill, with the amendments as indicated by the Deputy Leader of the Opposition (Mr Gareth Evans). I recall that in our last two or three years in office we were, on a number of occasions, required or requested to provide some balance of payment support to Papua New Guinea. This occurred through the Reserve Bank on one or two occasions. Then finally in 1995, when the amount was in the order of some $70 million, coming on top of previous support, it was decided that this should be done through the budget, and it was done through the Advance to the Minister for Finance.What we are now dealing with in the context of the Asian economic crisis is much bigger balance of payments support. Clearly, there is a need for a structure for handling that, which this bill does by providing standing approval for such support so long as it is part of an IMF package. Such can be either a loan or a currency swap, both of which have been utilised in the three packages to which we are committed to this stage. The amounts of assistance which have been contained in these packages to which Australia has contributed—and our contribution to them—has certainly been large: $US1 billion to Thailand, South Korea and Indonesia. That is very big money, altogether about $A4½ billion—almost one per cent of our GDP. This is substantial assistance, but so too is the problem to which these packages are addressed. What this support relates to is, quite simply, one of the greatest financial crises in world history. Extraordinary devaluations have occurred in these countries: in South Korea and Thailand it is about 50 per cent and in Indonesia it is about 75 per cent. They are earth shatteringly large.Devaluations of these dimensions have extremely damaging effects on these countries. Obviously it makes their imports far more expensive. So it gives a major impetus to inflation. In Indonesia, which had virtually no inflation before the devaluation, just last month there was a 12 per cent increase in prices, an annual rate of inflation already of 31 per cent, and obviously it is going to go far, far higher.Monetary policy is tightened to control inflation or, more correctly, to prevent development of hyperinflation. Although interest rates in these countries were already high, they have been tightened much further. The credit squeeze inevitably means downward pressure on economic activity which brings increased business failures, reduced economic growth, rapidly rising unemployment and falling real incomes. In addition, the massive devaluation makes foreign debt servicing and repayment vastly more expensive if debt is denominated in foreign currency, as was the case generally in these countries.The borrowers of these funds—mostly local companies and banks—are faced with the impossibility of servicing such loans after the devaluation, let alone repaying them. As a consequence, many companies and financial institutions are technically bankrupt because they cannot meet their repayments or servicing obligations. The total outcome, therefore, is one of rapid reversal from strong economic growth, which in all these cases has continued for 30 years or so. These have been key elements of the East Asian economic miracle. What we have seen instead of that is a quick reversion to falling GDP, rapidly rising unemployment, soaring bankruptcies, exploding prices and general economic mayhem.How did all this happen? Not because these countries had poor economic fundamentals. Economic growth had been strong, yet inflation was low in these countries generally, budget deficits were low, current account deficits were relatively low. In South Korea they have been averaging around two per cent of GDP in the last decade and in Indonesia around 3 per cent. Certainly Thailand had moved up to eight per cent of GDP, which is getting rather high, but not exceptionally high for the region. In fact, for a couple of decades or so Singapore ran a current account deficit of some 10 per cent of GDP. Everyone thought that was okay. It was part of the East Asian economic miracle.There are a number of contributing factors which seem to me to account for these extraordinary developments. Firstly, there is the system of fixed exchange rates in all three of these countries—that is, fixed to the US dollar—which automatically caused these countries currencies to appreciate heavily as the US dollar appreciated, particularly against the yen. Exports slowed and current accounts started to increase. Secondly, there was a massive amount of short-term capital inflow into these countries attracted by growth but also by high interest rates. In 1995 they had $40 billion, in 1996 they had $100 billion and in 1997, instead of an inflow of those sorts of dimensions, they had an outflow of $12 billion.What these amounts mean for the five South-East Asian countries in trouble—Thailand, Korea, Indonesia, Malaysia and the Philippines—is that they had capital inflows of eight per cent of GDP in 1996 and a capital outflow of two per cent of GDP in 1997; a total hitting of the brick wall in this context of 10 per cent of GDP turnaround. Why such a turnaround? I would suggest because of the increasing realisation by lenders that short-term capital inflow exceeded the reserves of these countries. Once doubts were raised by some deterioration in reserves as currency appreciated, it became a race to get out before there were no reserves left. This was not a rational approach. It is what the head of the Federal Reserve Bank in the United States, Dr Greenspan, has described as nothing more than `visceral engulfing fear'. It certainly has nothing to do with the economic fundamentals.Thirdly, there was the unstable banking and financial systems. This was brought about by lax bank lending practices and poor prudential regulation. Once the edifice began to crumble with the devaluations and tighter monetary policy, bank bad loans began to soar. Non-performing loans in Thailand are about 30 per cent of all bank loans compared to about one per cent in this country and about 20 per cent in Korea and Indonesia. These numbers could become much higher as the economic crunch intensifies. Another contributing factor is seen to be overinvestment—certainly in dubious projects such as real estate developments but also in key export industries. For instance, in South Korea where the chaebols, the conglomerate bodies which predominate in that country, have heavily overinvested in steel and cars which had been made less competitive by the appreciating won and also by world overcapacity. Now the chaebols generally are in a disastrous state.In all of this one must also take into account the role of the IMF. All of the previous factors that I have mentioned—the fixed exchange rates, the large short-term capital inflows and outflows, the unstable financial systems and the overinvestment—explain why these countries quickly fell into major problems once the ball started to roll. Why did it start rolling, particularly outside Thailand, which was the only country with a balance of payments problem?What is now patently obvious is that it was the IMF's policy of moving Thailand on to a fluctuating exchange rate which sparked an uncontrollable market panic. The Thai baht promptly plummeted once it was untied, and then a contagion effect occurred for South Korea, Indonesia and Malaysia, and the Philippines to a lesser extent, which were in a similar situation. What is now clear is that no-one—including the countries themselves, the IMF, the G7—was prepared for what happened when the Thai baht was untied.More worrying still, this episode shows that no-one around the world really understands how to effectively handle an international financial system in which about $1 trillion a day in capital flows moves around. That is about twice Australia's GDP moving around the world each day, or the whole of the United States GDP moving around in one week. These are fantastically enormous capital flows which happen instantaneously through modern technology. The size of those amounts and the speed with which they can move has meant that a whole new development has occurred which, frankly, the economists of this world and the economic controlling bodies, like the International Monetary Fund, simply have not caught up with.The IMF absolutely shares this ignorance of how to deal with this. There is a definite feel that the IMF, having unleashed the contagion in the first place, is now reacting blindly by prescribing cure-alls that are the standard prescription for different circumstances. That is, it is giving prescriptions for the old type of balance of payments problem, where countries had run lax budgetary and monetary policies, run up big current account deficits and had a balance of payments crisis. They certainly could come in and prescribe tighter budgetary and monetary policies in that situation because it all made sense. But that is not what happened here.Basic economic policies have been good. Yet, in the face of severe devaluations which will clearly cause enormous economic pain, the IMF is prescribing more economic pain through tighter monetary policy which is designed to control inflation—it is understandable to do that—and is insisting that tight budgetary policies are maintained. For instance, in the face of its mammoth devaluation, Indonesia was required by the IMF to keep its budget deficit to no more than one per cent of GDP—this in the face of an economy going through the floor and the forecast escalating for what percentage of GDP will be lost in 1998. Yet the budget deficit is to be no more than one per cent of GDP.Given Indonesia's economy is likely to shrink by several per cent this year, tough measures will have to be taken to achieve such a budget outcome, including at IMF insistence eliminating food subsidies by April. This is at a time when Indonesia is short of food because of the El Nino drought effects and has to import a lot of rice, which at the devalued rate of the rupiah has become vastly more expensive. On top of that, the IMF says that they should scrap food subsidies, making food even dearer at a time when people are losing their jobs by the millions and real incomes are being slashed. This is not only socially uncaring and perverse but also politically insensitive since no government is likely to be able to carry out such a policy.Certainly the IMF has recently shown some willingness to modify its package in this area, which is welcome. Also, the actions of the Australian government in requesting the IMF to take a softer line are certainly commendable. But how much change the IMF will agree to is not at all clear. It is strongly being criticised for the extraordinary detail of the conditionality that it has attached to its agreements to provide balance of payments support. It is not just a rescue package; in the case of Indonesia in particular it is an exercise in economic and political engineering. Much of the measures which they are insisting on desirably address issues that need to be taken up eventually—for instance, the end of crony capitalism and the breaking up of marketing monopolies—but these are not first-order issues to be resolved in a crisis, especially as they are politically difficult to do. If they are not done, the government is seen to be failing to implement the IMF package, which further damages foreign investor confidence and so keeps the value of the currency down. Of course, the most important thing of all is to get the currency up. Measures like this, which almost guarantee that the currency will be kept down, are terribly self-defeating.As I have said, the really important issue at this time is to stabilise the currency: to stop capital outflow and get capital inflow if possible. This requires restoration of confidence. It cannot be achieved by setting the bar impossibly high.The IMF is also open to criticism for not addressing the key issue of the moment—indeed, making it worse—and that is the banking and debt crisis in these countries. There is nothing in the IMF packages to address debt rescheduling, without which there will be massive bankruptcies in these countries. In 1997 Korea had 17,000 bankruptcies; this year, an estimated 50,000 bankruptcies. The companies with foreign loans are already in major trouble, since they cannot repay them after devaluation, as are banks and financial institutions.The tough budgetary and monetary policy being pursued by the IMF is exacerbating this problem. For instance, bank loans to real estate projects are becoming bad loans as those projects collapse; shaky loans to domestic businesses are becoming bad loans as these businesses face higher interest rates and declining demand for their products. Thus the banking systems are becoming more and more unviable. The failure of banks and companies means that bad loans for foreign lenders increase. This is especially important for Japan, which is a major lender to the region. It lends something like $300 billion to the region.The Japanese banking system itself already has massive bad loans of around $1 trillion—about twice our GDP. Now it is estimated that another $150 billion of bad loans is going to Japan out of East Asia. At long last, the Japanese government has accepted that it needs to bail out its banking system. It has pledged several hundred billion dollars to do that, including by buying real estate, which is the cause of a lot of bad bank loans. Until Japan gets its banking problem fixed, it is unlikely that it will get its economy going again.In the meantime, Japan seems to be sliding back into recession after sputtering signs of recovery from its long period of recession and minimal growth since the early 1990s. So Japan will not be playing a role in the immediate future, or the foreseeable future, in helping to drag East Asia out of its problems by sucking in lots of imports from the region. On the contrary, the only strong part of the Japanese economy appears to be its exports sector, which is just what the rest of the world does not need.The US is calling on Japan to boost its domestic demand by a stimulatory budget package of $65 billion to $80 billion, but Japan has already had stimulatory packages since the early 1990s worth a staggering ¥77 trillion or about $A880 billion—about 1¾ times our GDP—which were to no avail because, as they blow out the budget deficit, the Japanese people seem to save more. Maybe Japan should concentrate on bailing out its banking industry, and then at least with that fixed it will have a sound basis for economic recourse.The failure of the IMF to address the banking bad loans problem in the countries to whose rescue it has supposedly come and its previous actions in making the banking crisis worse have been the subject of intense criticism by a number of highly respected international economists, both academic and market based, such as Jeffrey Sacks of Harvard University, Ken Courtice of the Deutsche Bank based in Tokyo, David Hale of the Zurich Group based in Chicago and Paul Krugman, an American academic economist who uniquely predicted the end of the Asian economic miracle. All these respected international economists, and many more, are of the view that the IMF has blundered badly in its approach.It is small wonder that the Indonesian government, faced with such a dramatic turnaround in its fortunes and loss overnight of so much of the economic progress it meticulously achieved over three decades, is acting somewhat erratically, looking around for cure-alls like the currency board, flirting with that and then dropping it, announcing a tax a few days ago on foreign exchange and then dropping it two days later and sacking the minister for finance and the governor of the Central Bank. Obviously, they are having immense difficulty in trying to cope, but who can blame President Suharto when so much has happened that is undeserved? Those who are insisting on so many changes as the price of balance of payments support are politically and socially insensitive and, arguably, not applying a prescription that is suitable to the problem.So what should be done from here? I would say that the IMF should back off on Indonesia regarding the extent and timing of a package and, in particular, soften its impact on the ordinary people of Indonesia. Secondly, there should be a major emphasis on getting a debt rescheduling exercise going in these countries, especially Indonesia. This could include an agreement to swap debt into equity, so relieving enterprises from debt servicing and repayment obligations. I understand that there are some movements that way in Korea. Japan should be encouraged to solve its banking crisis as soon as possible and deregulate its economy more and be more receptive to imports. Unless something along these lines happens, there will be the prospect of a real meltdown in East Asia.There will be a chance for a major reassessment of policy and for developed countries to discuss these issues at a meeting in April called by President Clinton and at the IMF half-yearly meeting which usually takes place in April in Washington. What is also needed, however, is a discussion of the capacity of the international monetary system to be prevented from producing extreme outcomes which have little to do with the economic fundamentals. This has now become a major issue of our time. There is no control over the outcomes produced by the international monetary system; it is panic reaction even by bodies like the IMF who are supposed to have the answers, and probably, as I have argued, the wrong approach has been taken.We need to consider what can be done to prevent the recurrence of the sorts of outcomes that we have just witnessed in East Asia and to ensure that we have a more stable international monetary system. Doing that, in the context of the enormous movements of capital inflows, is a massive challenge to the world, but it is one which we must overcome if we want to have a stable economic environment in the future.11:49:001681Southcott, Andrew, MPDr SOUTHCOTTTK6BoothbyLP10—In speaking to the International Monetary Agreements Amendment Bill 1998 , there are several points that I think need to be made in this parliament and need to be disseminated throughout Australia. The first point is that, with respect to the packages, the currency swap with Thailand and the possible loans to Indonesia and South Korea are loans or currency swaps and not development assistance. They are not aid; they are loans on which we will receive interest and they are loans which are required to be paid back at some time in the future. The second point to make—and this rebuts some of the information that has been disseminated by the member for Oxley (Ms Hanson) and the member for Moore (Mr Filing)—is that these loans are in Australia's national interest and have helped Australia's standing in the region by being the only country, along with Japan, to have actually contributed to all three packages in Indonesia, South Korea and Thailand.The third point to make is that during the Asian firestorm the pressure on the Australian dollar would have been much greater had this government not done its job of repairing and reducing the budget. When we came in in March 1996, the budget deficit was $8 billion. That was later revised up to $10.5 billion. The budget which will be delivered in May this year should show a surplus. The member for Macquarie (Mr Bartlett) mentioned the comments of Max Walsh in the Sydney Morning Herald. Max Walsh, speaking at a seminar of the Joint Standing Committee of Foreign Affairs, Defence and Trade, reiterated the same point and that was: if we had still had a budget deficit of the order of $8 billion to $10 billion, then the pressure on the Australian dollar would have been much greater. You would have seen the Australian dollar dropping to the 1985-86 banana republic sorts of levels.The second point to make is that almost every measure that this Commonwealth government has taken to reduce and repair the budget was opposed by the Labor Party. The Labor Party, in the area of health, for example, has opposed over $6 billion of budget spending. Had Labor been in government, we would be seeing an Australian dollar much lower than it is now, and that means that inflation would be much higher and interest rates would be much higher, with a high budget deficit.In moving to the packages, the first package that was announced of $1.2 billion with Thailand is a currency swap agreement. This means that the Reserve Bank will give US dollars to the Bank of Thailand in exchange for baht. It will be at a set exchange rate and it has to be paid back at a set exchange rate. The exchange rate risk is borne by Thailand, and the interest paid is equal to the US Treasury bond rate.The point to make is that this is not $1.2 billion that we are giving to Thailand; this is a loan. The risk is the sovereign risk; that is, of a country defaulting—which is quite unusual. In Indonesia, the package is that Australia has offered up to $1 billion. That support is conditional on the implementation of the IMF program and it needs to be repaid at the conclusion of the program. It also comes into effect only if the IMF funds are not enough. It is the same in South Korea; we have offered up to $US1 billion but the supplementation of the IMF resources will be required only if external circumstances change and the IMF package is not enough. That is the point to make: these three packages are loans, they are not aid. They are not development assistance and they are in Australia's interest.Australia does have an important role to play in the IMF rescue packages because Australia has more people studying Indonesian than any other Western country. It has more Indonesian scholars, not only on a per capita basis but also on a total basis. In Europe and North America, Indonesia often does not even rate a blip on the radar screen. As a consequence, we do have a greater understanding of Indonesia and we can act as an intermediary in terms of helping the interests of Indonesia.Looking around East Asia, there are remarkable differences between the countries. Japan, as the previous speaker, the honourable member for Gellibrand (Mr Willis) mentioned, has been flat for five or six years—there is still an ongoing banking crisis in Japan. More importantly, the interventionist industry model has prevented the Japanese economy from taking off. The Japanese economy now has a prime interest rate of 0.5 per cent but the interventionist industry model, the MITI, which is so beloved by the member for Hotham (Mr Crean), has contributed to the Japanese economy staying flat.In Singapore there is a sound economic policy. The open economy is being seen, rather like Australia's, as a relatively safe haven. Similarly with Taiwan, which has had ongoing economic reform since the late 1950s and a period of political liberalisation as well. In Malaysia it is a different picture. Banking, agriculture and manufacturing are all strong but there has been a misallocation there in real estate and infrastructure.Indonesia does have problems with the interventionist industry model and we have to reflect on the fact that the Labor Party's industry model is an interventionist one. The Labor Party, two years ago, was saying that their great inspiration was the MITI of Japan. That was the sort of industry policy that they wanted to apply to Australia. It is the sort of industry policy which has got many of these East Asian countries into a lot of trouble. Paul Krugman in Foreign Affairs first highlighted this back in 1994 in an article on the myth of the Asian miracle. In Australia, 22.9 per cent of our GDP is in trade and 34.5 per cent of this trade is with Asian newly industrialised and developing economies. So Australia is more exposed due to the importance of trade with Asia. That is why it is in our interests to see these economies recover some confidence in their currency.In the bill it is acknowledged that it is important that Australia does not act alone and that it acts in response to the IMF packages. The bill also avoids any problem of moral hazard by saying that we will be doing it only if it is part of an IMF program and we reserve the right not to contribute if the IMF program is not implemented. There is no cost to the taxpayers here, but there is interest income based on the US Treasury bond rate, which is to offset the risk. The point to make again is that this is not aid; this is a loan. Regarding Australia's budget position, it has been the government's fiscal consolidation over the last two years which has fireproofed the Australian economy from the Asian firestorm.Turning very briefly to Indonesia: in Indonesia, the key issue is the stabilising of the exchange rate. As the previous speaker mentioned, if you were to have the same fall in the exchange rate in Australia, we would have an Australian dollar at about US13c. What we need to see in Indonesia is a return of market confidence, a return of confidence in the exchange rate. That will not occur without banking reforms and without financial sector reform. These transactions under the International Monetary Agreements Amendment Bill 1998 will provide balance of payments support to the recipient country. I commend the bill to the House.11:58:001682Theophanous, Andrew, MPDr THEOPHANOUSQJ4CalwellALP00—We have been told that we have only a limited amount of time to speak on the International Monetary Agreements Amendment Bill 1998 so I will not be able to canvass all of the issues that I want to canvass in relation to this bill. Let me commend to everyone in this place the speech by the honourable member for Gellibrand (Mr Willis) because I think that speech was extraordinary in that it covered a broad brush of the economic background and the causes and effects which have bought us to this point in relation to the problems of the Asian countries, especially Indonesia, Thailand and Korea.I think it is important that all members understand some of the background in relation to this and that we have a debate in this place about issues concerning globalisation. Essentially, what has happened is that there has been an impact on these economies of the globalisation of economy generally. This phenomenon of globalisation, the way in which controls by the nation state are very difficult to put into place and economic forces have become dramatic in their power vis-a-vis the political power of the state to do anything about it, is an issue which is going to be perhaps the paramount issue for consideration by parliamentarians and governments in the 21st century. Unless we come to grips with this phenomenon in some way, we are going to find many international crises impacting on us.In the case of the Indonesian economy, one might have thought a government as powerful and as ruthless as the government of Indonesia would have been in a position to actually protect itself from the difficulties which have been created. But the fact of the matter is that the values of the currencies of different nations are now outside the control of governments. Even the plan by President Suharto to bring in some kind of currency board to control the currency and deal with the current crisis has been pooh-poohed around the world as ludicrous. The reason for that is not that it would have been thought ludicrous 20 years ago but that now, with the force of the market—especially the money markets around the world, what they can do with currencies, the values of currencies and, as the member for Gellibrand pointed out, the amazing amounts of money being shifted around the world every day—it obviously has a huge impact on all economies, especially on economies, such as the Indonesian economy, which are vulnerable.In that situation, Australia was faced with a choice. The choice was: do we assist Indonesia, do we assist Thailand, do we assist South Korea—our key Asian neighbours—by giving them repayable loans that could be used to help in this crisis situation? I believe that the decision to give these countries loans was a correct one. I think we have an obligation to do something about the problems of these regions for ourselves. But we also have an obligation, as I said at the beginning, to examine what is actually happening in relation to the International Monetary Fund and its role from two aspects: first, its role in the stabilisation of Indonesia and the other countries; and, second, its role and the role of the G7 countries in the stabilisation of the world's monetary systems.One of the problems we have at the moment is that, ever since the breakdown of the Bretton Woods agreement in relation to international finance and exchange rates, we do not really have a solid basis for the values of currencies. A lot of it depends on the behaviour of the marketplace. But, as many commentators have shown, the money markets can move around in ways which are independent of production, the value of labour and the value of resources. In other words, it can be a totally subjective matter.There is a lot of talk these days about the overvaluation of shares throughout the world vis-a-vis the real value or some concept of the real value of goods and services. We may have to face a crisis internationally before these matters are resolved. Hopefully not, but I might say that there is quite a lot of theory and empirical evidence which suggests that we might.Recently, I spoke with a gentleman who came to Australia, Hans-Peter Martin. He wrote a book called The global trap where he argues that we are moving towards a global crisis, especially in relation to the behaviour of the multinational corporations and other powerful economic instruments which are far beyond what many small nation states can control.The situation is not dissimilar to what existed last century before the real development of the power of the nation state. What we had then was a situation in which economic movement, industrialisation and all sorts of powerful forces were unleashed and the state did not know what to do or how to handle these. The market went ahead and crises of a massive social nature occurred until the nation state was strengthened, the welfare state came in, Keynesian economics was introduced as a way of handling these issues and redistribution was brought in as a way of helping the poorer sector.Many people are now saying that we are facing a similar situation internationally with the creation of huge groups of poor people who are left out of the globalisation and economic process—people who cannot participate in the whole information technology revolution, people who do not have the skills or the access. These people will become poorer and will have to be looked after. If they are not looked after, crises on an international scale will occur.People are talking about the consequences for Indonesia. People are saying that Indonesia is facing the creation of massive poverty as a result of this huge devaluation. Because food prices have increased dramatically, many people will be lucky, if they have a job, to earn enough to feed themselves let alone be able to purchase goods and services. In this situation where the possibility of starvation is being faced, it is very important that the International Monetary Fund's programs be directed towards resolving that sort of problem.We in the opposition have said that we support the view that the IMF should tailor its package in Indonesia to take account of these social questions, especially the questions of poverty, food shortages, starvation and the like. Unless the IMF actually ensures that its package and the measures it wants to put in place take account of this, we could be facing a situation of serious rebellion in Indonesia. I do not think that rebellion would necessarily be a bad thing in this sense.I believe that the fundamental element that is preventing the Indonesian package being put into place is the refusal of the government of Indonesia to move towards greater meaningful democracy and a legal basis for its system, especially its economic system. We should contrast what has happened there with what has happened with South Korea, where the new President, Kim Dae-jung, has been able to move the IMF reforms along. That is because we have seen the actual democratic change in South Korea with the election of Kim Dae-jung. We have seen democracy at work, we have seen more accountability and we have seen more of a legal basis for the economic processes. Unless you have that as a minimum condition, it is going to be very difficult to stabilise the Indonesian economy.I believe that we should support this package but we should also support democratic movements in Indonesia. We should ensure that, as a result of what we are doing to assist the Indonesian people, we make it clear to the government of Indonesia that we are doing this for the Indonesian people and we want to assist the Indonesian people and, indeed, the government of Indonesia but we also want to see more democratic reforms and more action in relation to human rights. I wanted to say more about a number of other aspects of this matter. I will take that opportunity at another time because I have run out of time.12:09:001684Kelly, De-Anne, MPMrs DE-ANNE KELLYFK6DawsonNP10—During the second half of 1997 three Asian countries in our region suffered severe economic crises: Thailand, Indonesia and South Korea. The International Monetary Fund has offered direct assistance in conjunction with the World Bank and the Asian Development Bank. The International Monetary Fund has also requested that Australia and other Asian countries offer support. In return, the IMF has requested extensive adjustment programs in each country.The support that Australia has given has varied for each of these countries: in Thailand, a currency swap; and in Indonesia and South Korea, repayable loans. I will go into a little more detail about the manner in which assistance from Australia has been given, the response that has been received to Australia's very swift reaction and also the effect it has had, specifically on exporting industries in my region. I would like to deal very briefly with the amendment moved by the member for Holt, the Deputy Leader of the Opposition (Mr Gareth Evans).10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Andrews)—Order! I simply point out to the honourable member that, whilst an amendment has been foreshadowed, it has not actually been moved.FK6Kelly, De-Anne, MPMrs DE-ANNE KELLY—Thank you for your sound advice, Mr Deputy Speaker. The member for Holt has referred to the changes he wishes to see. He wishes to have the Treasurer (Mr Costello) publicly release and table in each House of parliament a national interest statement relating to the agreement.The coalition government has been very transparent and forthright in all of the assistance that it has offered, whether it be a currency swap or a repayable loan. This has been very well received throughout South-East Asia. If the coalition government is so open with the Australian people and with the parliament about any assistance it offers, who on earth could the member for Holt be speaking about? Which government would be indulging in subterfuge? Who would be secretive about such a move? I can only assume that the member for Holt is referring to a future Labor government. If he has so little faith in his own future government, I am afraid that says very little for his own party. But they are the only people he could be referring to. If the Labor Party is going to be so secretive about any future moves that they make to assist in the region, perhaps he has a reason for putting forward his amendment. I would stress that the coalition government has been absolutely transparent with the Australian people and the international community about their modes of assistance and their motives for doing so.I will move on very quickly to the different countries and the situation they have faced. Thailand was the first to see a devaluation in its currency. The International Monetary Fund has offered a credit arrangement of $US3.9 billion. The total support of the World Bank and the Asian Development Bank is $US13.2 billion. Australia was one of the first countries to come forward and offer assistance. The other countries are Brunei, China, Hong Kong, Indonesia, Japan, Korea, Malaysia and Singapore. It was very well received throughout the Asian area that Australia had come forward so quickly as a responsible neighbour to assist in Thailand's time of crisis.We have undertaken a currency swap with Thailand. That means that we are giving them US dollars and receiving Thai baht in return. There is a minimal exchange rate exposure because the exchange rate is fixed for the first swap and, of course, for the final swap when we receive US dollars in exchange for our Thai baht. There have already been two swaps: one in September of $US400 million and another in December of $US200 million.At the time of this initial assistance there was concern expressed in my area. The argument was very much along the lines of, `Why are we giving money to another country when we have difficulties of our own?' The point that we have made, quite rightly, and that the Treasurer has made, is that we are not giving. It is of course a currency swap, and we will receive our money back in full. There is another reason we are lending money. Not only are we being neighbourly and putting action to our words about being part of Asia but also there is a saying that it is as blessed to give as to receive. In our case, particularly from my area, we are one of the biggest exporting regions from Australia. That is only too true.What happens when a currency devalues, as you would well know, Mr Deputy Speaker, is that imports become more costly and exports become less costly. It is often said in the bush in Australia that there are two sweet sounds we like to hear: one is rain on a tin roof and the other is the news telling us that the Australian dollar has gone down in value, because it means that our exports are more competitive. Likewise, the same is true for Thailand and the other Asian countries. When their currency drops in value, their exports become extremely competitive and their imports become quite costly.In the case of North Queensland, sugar, coal, beef and tourism are our major exports. Asia is a large customer of ours for sugar—41 per cent of world consumption is taken up by Asia. We have a 50 per cent share of Korea's raw sugar market, a 60 per cent to 70 per cent share of Malaysia's and a similar growing market in Indonesia. But, interestingly, Thailand is our competitor. They are one of the world's substantial producers of sugar. There was grave concern that, with their currency falling, they would be in a position to compete against our raw sugar exports. The very swift action by the Treasurer, resulting in our contribution to the IMF package, has assisted in keeping the Thai baht as high as it could be. It is not something one can quantify, but it has certainly assisted in ensuring that Thailand could not undercut us any more than they already do in some of our raw sugar markets.Indonesia was the second Asian country to experience an economic crisis, as it still does. The IMF has given $US9.9 billion as a stand-by credit arrangement. The World Bank and the Asian Development Bank have given $US4.5 billion and $US3.5 billion respectively and there is bilateral support as a second line of assistance. The countries involved in this are Australia—again at the forefront—China, Hong Kong, Japan, Malaysia, Singapore and the United States. In this case, Australia's assistance is a fully repayable loan. I also note that through our organisation EFIC we have agreed to underwrite agricultural exports to head off a food shortage.Indonesia is one of our biggest competitors for thermal coal. This morning I spoke to one of the executives from one of our major coal exporters in North Queensland to see to what extent Australia's loan to Indonesia has assisted us in maintaining some of the markets that we hold overseas against the Indonesians. As I have said, one of the results of a currency fall is that your exports become more competitive. That has certainly been the case with Indonesia. They are the most aggressive country in the marketplace for thermal coal. As their currency has declined, their exports have increased. There is no doubt that the currency fall is linked to the drop in price for thermal coal. Most of their contract mining operations in Indonesia sell in US dollars, so it has not been quite as severe as it could have been. Many of the smaller mines are rupiah based. The difficulties for our coal industry are still down the track. For thermal coal, which is used in power stations, we will probably not see the impact for another two years. According to this executive, there is no doubt that, although it cannot be quantified, Australia's loan to Indonesia has assisted Indonesia to prevent its thermal coal prices from falling to the extent that they could have, further undermining some of our markets overseas.The very swift moves taken by the Treasurer to assist and to be a neighbour in South-East Asia have enabled us to help ourselves as well. They have ensured that those countries in South-East Asia that purchase our products—and, as I said, they are very big customers of ours—are able to continue to do so because our exports have not become too expensive to them. Those moves have also ensured that the currency drops in their countries have not enabled their exports to severely undermine our exports in our traditional markets.I applaud the moves of the Prime Minister (Mr Howard) to see that Indonesia is not dealt with too severely by the International Monetary Fund. I would like to quote from Professor Hal Hill, the head of the Indonesia project at the Australian National University:"Australia is now beginning to take a more subtle and sophisticated approach" out of a realisation that "pushing Indonesia into a corner is counterproductive" . . . A tough approach could create a backlash, and Indonesia "might just tell the West to go to hell with (its) aid."Excuse my language, Mr Deputy Speaker. That would be a very unfortunate situation for all of us. I applaud the government's moves to see that the IMF takes a reasoned approach to the crises in our neighbouring Asian countries.12:20:001686Brown, Bob, MPMr ROBERT BROWN5A5CharltonALP00—I am very conscious of the time constraint that applies to the debate on this International Monetary Agreements Amendment Bill 1998 . I am disappointed with this time constraint and the urgency of the parliament's consideration of the bill. I have been stunned on some occasions to hear members, particularly from the government side, adopting such a blase attitude towards the question which lies behind this amendment—and that, of course, is what has been referred to as the `Asian meltdown'. One would be tempted to believe that what has happened in Asia, what is continuing to happen and what is likely to become even more severe in Asia is just some small peripheral economic skirmish. This series of incidents has been referred to as probably the first major economic crisis of the global economy and global capitalism. If it is, and if the nature of the responses to it indicate what we can look forward to in the future, it does not augur too well.The purpose of this legislation essentially is to put into place a legislative arrangement to make it possible for the Treasurer to unilaterally make appropriations in response to International Monetary Fund requests for support for the types of packages it may put into place to `assist' countries that find themselves in economic difficulties.We have indicated that there are some aspects of this legislation about which we are very deeply concerned. The first one is that the Treasurer is not required by this legislation to apply any transparency to any unilateral decision that he makes, presumably in conjunction with the government—hopefully that would be so; at least it would broaden the area of responsibility. But there is no indication of that in the legislation and there is no requirement on the part of the Treasurer to offer any transparency about the reasons why he would make such a decision. There is no requirement in this legislation for the Treasurer to be in any way accountable. There is no provision in this legislation for limits to be placed on the amount of funding that the Treasurer could apply for the type of currency swaps or loans which may be requested by the IMF. They are very serious deficiencies and we indicate our concern about them.The previous speaker, the National Party member for Dawson (Mrs De-Anne Kelly), referred to the need for transparency. I would suggest that she vote for the opposition's amendment because that is one of the things we will be seeking in order to amend this legislation to make it more acceptable not only to this parliament but also to 18 million Australians. I have no reason to have any faith in the individual, unilateral judgment of this Treasurer (Mr Costello) or the political interests in Australia which he represents. If there is no transparency, no accountability and no ceiling the opposition wants to know why and the Australian people are entitled to ask why. The Australian people are also entitled to ask why provisions of that kind are not put into place to protect them.It is quite illuminating that this economic meltdown has occurred among countries which were being identified as the Asian tigers—those which showed enormous growth and potential. One of the main reasons why that meltdown has occurred is that a lot of the investment, particularly the speculative investment but also a lot of property investment and a lot of short-term investment, was suddenly withdrawn. One reason for that was that there was probably too much investment that was finding its way into those economies, and the people and the institutions that were making those investments became a little apprehensive about the future security of their investments and they started to withdraw them.There is another reason too. Let me make it clear that I am not a conspiracy theorist—but I am a realist. There is no question that one of the things that encouraged the economic meltdown and the domino effect, first of all with Thailand in the middle of last year and then increasingly through other countries of Asia, was the deliberate ploy on the part of international financial institutions to withdraw their investment to create insecurity and to create those exchange rate variations because there were major interests around the world that were capable of benefiting from them. There is no question at all about that.Those people who adopt a blase attitude towards these developments and think it is some little economic skirmish on the periphery of the world economy should have a closer look at it. I am sure that they would then raise the same concerns that I have. There was a withdrawal of investment and the domino effect then occurred as investors started to panic. I am not saying that they were all part of a conspiracy but there is no question that a conspiratorial basis existed in relation to a lot of those developments.The response on Australia's part to the demands of the IMF in relation to Thailand, Indonesia and Korea with those loans and currency swaps was a choice to become part of what the IMF and others have referred to as—but what I do not refer to as—a rescue package. What the IMF insisted upon in making available its share of that funding was that there would be no loan defaults by those countries. To whom do those countries owe money? They owe it to the large international financial institutions. The IMF said, `Do not repudiate those debts. You meet your commitments to the big international lenders, the big investors and the big financial institutions. You make sure you meet your commitments to them.' They also said, `You have to withdraw any of your domestic support for your domestic firms and for your own finance houses.'The IMF said they had to cut programs. A good example of that was the Korean package. They had to ease restrictions on foreign investment and on foreign ownership, and they had to make it easier to dismiss workers in order to look after the big financial institutions and investors. So the burden came back on ordinary Koreans, on ordinary Indonesians and on ordinary Thais to meet those commitments. Their governments were told to cut expenditure. But there was no requirement imposed by the IMF to ensure, for example, that there was any security given to the ordinary people within those countries—the ordinary people who become impoverished and who lose their jobs. Small farmers with loans lose their farms, their houses, their jobs and their incomes when there is foreclosure.Let me make this point as well. We know that, as far as international exchange rates are concerned, whenever there is a change someone loses and someone else equally gains. There are massive funds of international currency washing around the financial conduits of the world—speculative funds—causing many people to become impoverished and causing many people to lose. Equally, many people and many large institutions make massive profits. If they can make those profits, to whom will they be responding when they are developing their own plans, their own behaviour and their own responses?They are giant international corporations. They are not just financial corporations; they are industrial organisations as well—commercial organisations with assets and income which exceed that of at least one-third of the world's nations. Of the 100 biggest economies in the world, 51 are private corporations. Let me give you examples: Mitsubishi is already larger than Indonesia, General Motors is bigger than Thailand or Denmark, and Unilever surpasses the entire economy of Vietnam.What we need to do when we see these economic difficulties develop is to look behind them to see what type of motivation may exist there. We also want to look at the impact it is going to have on ordinary people because the ordinary people in those countries are the people who are making the sacrifice. We have indicated as well that there are benefits to Australia in participating in what might be identified by some as `international rescue packages'. We have spoken about the importance to Australia of trade with Asia; it is our biggest trading area. We have also spoken about the importance of Asian tourism—$5,000 million worth of Asian tourism might be lost.We have also spoken about Australia's strategic position as far as waves of refugees are concerned. They are already starting to move out of Indonesia. Those countries adjoining Indonesia are very conscious of that; it may just be a matter of a short period of time before Australia experiences the same. So Australia does have to act as a good global citizen, to participate in these things and to assist, but we also need to look behind it and we need to expect—from the government's point of view as well—that there will be appropriate precautions built into legislation of this kind to satisfy not only this parliament but also 18 million Australians.12:32:001688Prosser, Geoff, MPMr PROSSERRI4ForrestLP10—The International Monetary Agreements Amendment Bill 1998 is important for Australia's future economic prosperity and market access in Asia. The bill enables the Treasurer to rapidly respond to the IMF economic restructuring programs in Indonesia, South Korea and Thailand. We need to do this because we have economic and strategic interests in these regions that cannot be ignored. Australia's interest in assisting the recovery of the Asian currency crisis is immense. South Korea, Thailand and Indonesia have a combined population of over 300 million people. Together, these counties constitute a $12 billion export market for Australian goods and a combined trade surplus worth $6 billion. That is $6 billion in markets that Australia has actively engaged—markets whose continued economic viability shapes Australia's future prosperity.Market access does not simply occur. It is the result of effective bilateral relations and active participation in regional and multilateral organisations. Ten years ago Australia's exports to Thailand were worth $224 million; today they are worth $1.7 billion. Ten years ago our exports to Indonesia were worth $528 million; today they stand at $3.3 billion. In the case of Korea, Australia's exports a decade ago were $1.5 billion; today they are worth $7.1 billion.This crisis provides a unique opportunity to extend Australia's presence in these markets through active participation in the IMF programs. Australia and Japan are already world leaders in this field—the only two countries actively participating in all three IMF programs. This is quite an achievement for Australia, and it is a leadership role that will not go unnoticed by our regional leaders. This is also an exercise in Australia's involvement in world affairs that will help determine Australia's future participation in these valuable export markets.We need to ensure the economic viability of these countries for Australia's continued prosperity and the security of our region. The continuation of economic and political reforms in these countries enhances peace and prosperity in this dynamic region of the world. Australia has the opportunity to participate in an international program to provide loans to our neighbours that will help alleviate their short-term economic difficulties. These are loans—not charity—that are repaid with interest.The International Monetary Agreements Amendment Bill provides Australia with an opportunity for doing good and doing well. The loans administered through the IMF offer far more than an opportunity to collect interest; they give Australia a say in the economic restructuring of countries with which we conduct a significant volume of trade, countries which consume much of our exports, and countries whose economic and political stability greatly affects our own. Participation in these IMF programs will allow Australia to shape the trading relationships that are of critical importance to our economy.Australia does not enjoy a trade surplus with America or England—quite the opposite. Our trade deficit with the United States is over $12 billion and with the UK, some $3 billion. It is Asia who needs our resources, it is Asia whose children who are educated in our universities and, increasingly, it is Asians who spend their tourist dollars in Australia.Trade also enhances security. Australia and Japan are trading partners because we stick to the principle of comparative advantage—exporting what we have and importing what we need. This is the relationship that we have cultivated with Indonesia, Thailand and Korea, enhancing not just our bilateral links but also regional security. It is an ongoing process that could suffer if these countries are unable to overcome their present difficulties.The Asia-Pacific region has not historically been peaceful. Indonesia, Thailand and South Korea all possess the potential for political unrest. Tensions between ethnic minorities, between the haves and the have-nots, coupled with territorial disputes, present serious potential for the destabilising of regional security. Notwithstanding this, the transformation of the Asia-Pacific region since the Second World War has been profound. Nations that were amongst the oldest outposts of colonialism have been transformed into successful exponents of capitalism where the seeds of democracy have begun to bear fruit.Critical to Australia's economic survival is our ability to conduct international trade, namely, the ability to get our exports into foreign markets. This is critical to Australia because of our relatively small population and vast natural resources. Australia's population cannot consume what we currently export, and we need the revenue from these exports to buy imports that our economy cannot produce. The sea lanes in the Indonesian Archipelago are critical choke points for Australia's national interests. Australia's economic success is linked to South-East Asia's markets—markets that have a less developed land infrastructure, with most trade being conducted by sea. Over half the world's shipping passes through these southern entrances to South-East Asia. Closure or blockage of the sea lanes would increase the price of Australian exports, through increased freight rates, and create temporary shipping shortages for regional economiesAs these countries have evolved economically, they have also advanced politically. Sizeable middle classes have been created—middle classes that demand a greater level of political participation. These countries have lifted millions of citizens from poverty and are now active participants in regional and international organisations. One only needs to look at countries isolated from economic development as examples of what could occur to Asia's political landscape without structural economic reform—countries such as North Korea and Burma. A similar fate could have been the case for other Asian countries if the pace of economic and political reform had not been arrested by the lack of political will from developed nations.Fortunately, this has not been the case. As these countries have undergone economic development, they have also undertaken political liberalisation. In the process they have become better neighbours, they have become more stable and they have taken a greater interest in regional security issues. A good example is Indonesia, a country that has contributed to peacekeeping efforts in Bosnia and Angola and supported non-proliferation efforts such as the comprehensive test ban treaty.Economic development in Thailand, South Korea and Indonesia has brought a better life to millions of people and reinforced peace and stability throughout the region. As a part of the world once known for authoritarian governments and domestic instability, this region is now characterised by viable democracies that are adopting more open economic policies and alleviating poverty. The present danger is that this economic development will be arrested by the currency crisis and these countries will lose the momentum for further economic and political liberalisation. The International Monetary Agreements Amendment Bill gives Australia the opportunity to reap the rewards of our neighbours' future prosperity rather than opt out and suffer the consequences.Without our involvement in this plan, we could see our export markets shrink and our trade surpluses disappear. This would have a profound impact on our domestic economy through reduced demand for our exports and the subsequent increase in unemployment. In the longer term, this could spill over into regional instability, causing security problems for Australia. Australia has a vested interest in ensuring that these regions continue to advance economically, continue to be major purchasers of Australian exports, and continue with their economic and political liberalisation programs.The International Monetary Agreements Amendment Bill is not a cure-all for the countries effected by the Asian currency crisis. Economic recovery in these countries will take time as markets undertake necessary economic reforms. Successful completion of these reforms will underpin a brighter economic future, not just for these three countries, but also Australia. These reforms will not be easy as protected industries are exposed to competition, as prudential supervision is tightened and as these economies become more transparent.Access to capital is the most immediate challenge facing these three countries and one that this bill aims to address. In the longer term, greater financial transparency in these countries will ensure the inflow of capital as investors are better able to assess the financial standing of prospective investment opportunities. The reforms will also be a major step in liberalising market access and introducing investment rules in these three countries. Using this as a foundation, Australia's trade opportunities will expand as our market access improves.The situation in Indonesia is the most serious of the three countries affected by this crisis, not because Australian exports are most exposed but because the political consequences that could follow the economic problems pose risks to Australia's security. If something is not done to shore up the Indonesian currency, the fourfold rise in the prices of basic necessities will have crippling effects on many Indonesian families. Without a corresponding increase in wages, which are already low in Indonesia, how long can the Indonesian people support these costs? How long will it be before the people vent their dissatisfaction against the government and, in the case of Indonesia, the ethnic Chinese population who own the shops and businesses?Indonesia has been the hardest hit by the Asian financial crisis due to a number of structural weaknesses in the Indonesian economy. These include import monopolies, a lack of transparency in the business environment and a weak banking system. Accordingly, the IMF package, in which Australia is involved, is aimed at liberalising foreign trade and investment, dismantling Indonesia's domestic monopolies and increasing the transparency of public sector activities. Successful implementation of these reforms will assist Indonesia's economic recovery.This bill enables Australia to ensure its future peace and prosperity by taking a leadership role in the economic restructuring of the economies with which we are most integrated. These measures ensure that our neighbours, with whom we enjoy huge trade surpluses, will have the funds and expertise to reduce the shocks of the Asian currency crisis. These three markets account for 11.5 per cent of Australia's exports—a $12 billion export market growing faster than almost any region in the world. If we do not participate in the IMF program, the rules of the trading systems will be written without Australia's interests in mind. We will not be remembered as a friend in times of need, but rather as a fair-weather friend. Our export markets will shrink, jobs will be lost and Australia's future access to these markets could be placed in doubt.If the pace of economic development and political liberalisation is arrested by the current difficulties in these countries—as may well be the case without IMF involvement—the stability, peace and prosperity of the region could be threatened, ruining the progress made over a generation.The International Monetary Agreements Amendment Bill is about Australian leadership and participation in international affairs. It is about engaging Asia and investing in Australia's future peace and prosperity. We cannot afford to let our destiny be written by anyone else.12:46:001691Andren, Peter, MPMr ANDRENKL6CalareIND00—It has become fashionable in the financial press and in the corridors of Treasury to dub any critics of globalisation as dinosaurs, out of touch, out of date and acting contrary to the best interests of this country and the wellbeing of the global village. I am not a dinosaur, but I am certainly a sceptic when it comes to international financial dealings.This bill proposes a legislative framework for Australia's participation in so-called IMF rescue packages. These are emergency arrangements to rescue economies from collapse. The Treasurer (Mr Costello) says the current unstructured process is inappropriate and cumbersome when swift action is required. The parliament and the people will have no say in this blank cheque arrangement, as the member for Charlton (Mr Robert Brown) so rightly pointed out.Such financial assistance, like that offered recently at short notice to Thailand, North Korea and Indonesia, is over and above what we currently pay in the standard membership subscription to the IMF club. The key role of the IMF when it was set up at Bretton Woods in 1944 was to provide balance of payments support for countries suffering from short-term balance of payments problems.Some may argue the IMF played a very important role in recycling petrodollars during the 1970s oil crises to enable Third World countries to ride out the massive impact of the sudden increase in outlays for their energy needs. But the loans made at this time through the IMF have had a great deal to do with the parlous economic situation and foreign debt these countries now find themselves facing. The IMF has sought to remedy this situation through structural adjustment programs, but this simply replaces one debt with another.The difficulty I have with the IMF is the membership qualifications for the club, where control is directly related to the amount each country contributes. In the same way that the US can underwrite export insurance schemes for its producers for far longer and for far greater amounts than we for instance can ever afford, so too can it and the ten wealthiest members of the club direct the fund. As in the case of Indonesia, the IMF imposes a structural adjustment program on the country in trouble; in trouble, I might say, not through its economic mismanagement alone, but through the profligate lending and investment from the very countries whose membership constitutes the top ten of the IMF club.Let me remind the House of the IMF's role in the so-called Operation Peso Shield, set up in January 1995 to deal with the Mexican crisis. A devaluation of the Mexican peso triggered panic among investment managers all over the world, because over $50 billion had been invested from these sources into Mexican government bonds, shares and debentures. In three days Mexico lost 30 per cent of its dollar value as money was pulled out of the country. In a frenzy of activity the IMF and Bank of International Settlements—in fact just half a dozen people acting without any endorsement from the US congress or any member parliament of the IMF—had used $50 billion worth of taxpayers' money from industrialised western countries to protect the investments of borderless speculators.Michel Camdessus, the boss of IMF for the past decade, answered his critics then who claimed the disaster saving exercise had plundered the tax assets of IMF contributors for the benefit of the international financiers. Camdessus admitted that speculators had taken advantage of the $50 billion credit lifeline, but, as he said:The world is in the hands of these guys.Hans Peter Martin so rightly asserts in his Global Trap treatise that:More and more often politicians and electorates throughout the world see how the anonymous actors of the money markets are taking control of their economy so that politics is left only with the role of impotent bystander.How many in this House can honestly say that this description does not largely fit their role, especially when we hand over power like this to the executive unchallenged and unscrutinised?Malaysian leader Mahatir was roundly condemned for daring to question the motives behind the currency speculation and international financial raids on his economy. Not for one moment do I endorse any of the racial overtones in his criticisms, but there were certainly grains of truth in what he was saying about the manipulation by the international financiers. Yet former British Prime Minister, John Major, complained in 1995 that it was unacceptable for things to occur on money markets `at a speed and on a scale that risks running beyond the control of governments.' French President, Jacques Chirac, also condemned these international financial pirates who were `the AIDS of the world economy.'Are we, as the member for Macquarie (Mr Bartlett) said in his contribution, assisting countries in need, or are we assisting financiers in greed? The relaxation on the cross-border exchanges of currency and the abandoning of the international exchange rates in the 1970s sowed the seeds for this epidemic. The fixed rate system based on the US dollar and gold disintegrated and the faceless, anonymous currency dealers took over the whole system, setting the exchange rates between themselves.The so-called structural adjustment programs—as our library research team so rightly pointed out—usually had the result of guaranteeing repayment of private bank debt. The World Bank is on record as saying:For the IMF the need to protect Western Banks is the driving force.Funny, that. As our major banks enter further into this globalised economy, the need to protect their interests also appears the driving force in the marketplace deregulation at the expense in this country of the small businessman and the farmer—those who were offered the bait, just like the Asian tigers were offered the bait, but are now blamed for their predicament. This is not to defend the policies of the Indonesian regime, which has been demonstrated to be self-serving, corrupt and having little regard for the impact of its actions on the living standards of its people. The IMF has, it seems, begun to realise that the demands it has made of Indonesia are too stringent and may, in fact, be economically counterproductive, and certainly socially counterproductive, and racially counterproductive.Both the Minister for Foreign Affairs (Mr Downer) and the former Prime Minister Mr Keating have raised strong concerns at the social and political impact of the IMF adjustment program in Indonesia. As the Bills Digest, the research paper prepared for this legislation, points out—and I must commend its authors for the thorough, detailed and balanced manner in which it was prepared—many experts argue that the Asian crisis is partly the result of excessive financial deregulation and a `willingness of international financiers to lend to private firms with no government regulation, resulting in a run on local currency and domestic assets when the economy showed strain'. As these rescue packages are premised on further financial sector deregulation and trade liberalisation, `this strategy will serve to further entrench key conditions which led to the crisis'.Mr Deputy Speaker, if this sounds like a gambler being told that he can get out of gaol by borrowing money from the gaoler but having to pay back the loan before he gets out, then you are not very much wide of the mark—in hock forever. Ultimately, as far as can I see, the IMF funded `rescue packages' not only rescue risk capital from the besieged Third World markets but also prepare the ground for ripe pickings for the financing sources after the struggling country's economy has been grounded. Who else but the very same international financiers are able to step in and pick up the assets of the embattled country at bargain basement prices? As I have said: economic colonialism. Just like the transfer of wealth from the middle and lower income groups to the top 20 per cent in most Western countries, so too we have this transfer of wealth on a global basis.Wade and Veneroso—two economists who the free marketeers and globalists might like to dismiss as `leftist alarmists' or `loopy loonies' or whatever—believe that the `combination of massive devaluations, IMF-pushed financial liberalisation and IMF facilitated recovery may even precipitate the biggest peacetime transfer of assets from domestic to foreign owners in the past 50 years anywhere in the world'. For, just as there is justifiable suspicion about the motives of the international Multilateral Agreement on Investment and the free kicks and unjustifiable concessions it might offer the multinationals, so too there is widespread concern in the Australian electorate about the role of the IMF.But this is not to say that everything about globalisation, deregulation and free trade is necessarily bad and that agreements like the MAI might not provide benefits for some Australians. Foreign investment capital is crucial for a small nation like Australia; there simply is not enough capital to get the investment going that we need to keep growing the economy. We have to be rational about globalisation and weigh up the costs with the benefits. We have to ensure, though, that the environment is protected, that labour standards are maintained, that foreign investors pay their fair share of tax and, most importantly, that we maintain our national identity.What we are seeing at the moment through globalisation are massive winners and massive losers. The winners are those who are fortunate enough to be involved in high-tech, high demand jobs; the shareholders in these companies; and the whole of society through the lowering of prices of consumer goods. But there is a whole raft of people displaced by globalisation and relentless improvements in technology. As I have said, parliaments can be rendered powerless in the face of such ultimatums from the IMF club, and the IMF itself is now at the beck and call of the world financial markets.So we are confronted with this amendment. We will allow the Treasurer to enter into an agreement to lend money to the recipient country or enter into a currency swap; the money is to come from consolidated revenue.I told a gathering in Bathurst several months ago that the billion dollar currency swap we made with Thailand was in our best interests, because the rescue of the Thai economy was going to be worth far more than $1 billion to us in the long run. I still believe that we need to help Thailand out. But I wonder whether we really have helped to pay out the international financiers who helped Thailand get overstretched and in trouble in the first place. I wonder whether the IMF rescue packages are really only rescuing the value of the assets of international money lenders. I do not really believe that is what our taxpayers expect me to support—especially those taxpayers so cruelly hurt by banks in this country that have entered the globalised marketplace now, with scant regard for their domestic clients' needs or financial difficulties over the past decade and a half.For those reasons, I oppose these amendments as they stand. I would ask—given the fact that haste in providing these loans is not everything, as Indonesia is showing—that any agreement to lend money to the IMF for such packages be referred to the parliament for debate prior to any such commitment. I do not believe that the opposition amendments flagged by the shadow Treasurer go far enough to satisfy my concerns or those of many Australians who do not believe that executive and cabinet decisions alone of this magnitude should be implemented prior to scrutiny by the parliament.12:58:001694Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—In summing up the debate on the International Monetary Agreements Amendment Bill 1998 , I welcome the support that the bill has received from both sides of the parliament. This is a bill which is unquestionably in Australia's national interest. It is unquestionably in Australia's national interest for Australia to be part of international efforts which have the capacity to stabilise the economic situation for its neighbours and, in some cases, social and political difficulties which would flow from extreme economic maladjustment.This is a bill which enables the Treasurer of the day to advance moneys by way of loan or currency swap and to make a contribution which is not just in the interests of those countries concerned but also in the interests of Australia itself. And I re-emphasise that, if a loan or a currency swap is made, the amount will be repaid in full—not only repaid in full but, in most cases, repaid in full with interest. In those circumstances the Australian taxpayers get value for money not only by having their loans repaid in full, and repaid in full with interest, but also by having a contribution made to those of our neighbours who should be part of those international financing packages and have their economies strengthened, which is in the interests of the export earnings of Australia and in the interests of a stronger Australian economy.I want to make the point—and this is an important point to make—that we have no interest in having weak economies amongst our neighbours. There seems to be a view which is being propagated in some quarters in Australia—the quarters that like to feed on fear in the Australian community, some of whom have opposed this particular measure on populist grounds—that somehow it is in our interests to see our neighbours poor or that somehow it is in our interests to see economic dislocation in the economies of our neighbours. It is not. It is in our interest to have strong economic growth amongst our neighbours, because strong economic growth amongst our neighbours is good for strong economic growth in Australia, is good for job opportunities for young Australians and is good for rising living standards in Australia.5A5BROWNMr Robert Brown—Who has claimed otherwise?CT4Costello, Peter, MPMr COSTELLO—The opposition has not claimed otherwise, but there are Independents in this parliament who have claimed otherwise. Also, there are newspapers which circulate widely, I notice, in rural areas of Australia making precisely that claim on populist grounds. Some of the complaints that have been made by the previous speaker in this debate, the member for Calare (Mr Andren), about international money lenders and those sorts of phrases are well known to people in this parliament, and we know who uses them and we know why they are used. The fact of the matter is this: this is not a proposition for Australia to bail out any international lenders, nor is it a proposition for Australia to help the rise of world globalisation or all of the other phrases that were being used by the previous speaker. This is a proposal for Australia to advance Australian national interests. This is what this is about. This is a proposal for Australia to see that we are good neighbours and it is a proposal for Australia to strengthen economic opportunity in our region. I welcome the fact that the opposition has joined with the government in supporting this legislation and I look forward to the bill being passed.I have had some discussion with the Deputy Leader of the Opposition (Mr Gareth Evans) in relation to some amendments which he proposes to move during the consideration in detail stage. I indicate to the parliament that I fully accept and will agree to the proposals that are contained in those amendments for the Treasurer to publicly release and table in the parliament a national interest statement which would indicate the reasons the government had entered into an agreement under this act, and I fully support the proposal that that statement have a description of the nature and terms of the agreement and the reasons the agreement is in Australia's national interest. I make this clear and I have said this to the Deputy Leader of the Opposition.The agreements themselves will be commercial-in-confidence and there will be a lot that will be confidential about them. In particular, what will be confidential about them will be the interest rate at which the money is advanced, because there will be some sensitivity for both borrower and lender in relation to that, not just as to the bilateral agreement between the two of them but, because there are likely to be numbers of countries involved, there may well be different interest rate differentials between the countries. As has been the case, some of the borrowers have asked us to keep these matters confidential. Obviously, it is a matter of some sensitivity to them if they are negotiating different rates, and obviously it is a matter of some sensitivity if the terms and conditions available to the lenders are different according to the country that is concerned. So there will be much that is commercial-in-confidence in relation to that. It will not be possible to table the agreement itself, but I have discussed that with the Deputy Leader of the Opposition and am happy with the formulation that there be a description with as much detail as practicable. I make the point that it will not be practicable to disclose matters which are commercial-in-confidence or which otherwise relate to national sensitivities.The other part that is contained in the amendment which the Deputy Leader of the Opposition proposes is that the statement itself be referred to the Joint Standing Committee on Foreign Affairs, Defence and Trade for inquiry and report within two months. I welcome this amendment and the government will agree to this amendment as well. I think that the joint standing committee will have a useful input into that, and this is consistent with the government's general view that treaties generally should be referred to parliamentary committees. We have no concern at all that a national interest statement be referred to a parliamentary committee. In fact, I think it will be a positive thing to actually engage other members of the parliament in consideration of these issues.I have indicated in advance that the government will accept the amendments which are going to be moved by the Deputy Leader of the Opposition. Part of our reasoning in accepting them is to emphasise the bipartisan nature of the support for this and a full expectation that the amendments, as incorporated in the bill, will therefore enjoy considerable support in the Senate without the need for further amendment and that the legislation can secure a quick passage because the legislation is required before Australia will be able to advance any moneys. By reason of the situation now developing, it may be necessary to secure and advance those moneys within a very short time frame. So, having accepted these amendments, which I think are good in themselves and which I hope will clear a quick passage through the Senate, I hope that the legislation can be enacted with all due haste so that we can have these arrangements in place as soon as possible.Question resolved in the affirmative.Bill read a second time.Message from the Governor-General recommending appropriation announced.1696Bill—by leave—taken as a whole.13:08:001696Evans, Gareth, MPMr GARETH EVANSVD4HoltALP00—I move:Schedule 1, item 2, page 4 (after line 21), at the end of section 8C, add:8D Public release and tabling of national interest statement(1) The Treasurer is to publicly release and table in each House of the Parliament a national interest statement relating to an agreement entered into by Australia under section 8C as soon as practicable after Australia has entered into the agreement.(2) If a House of the Parliament is not sitting when the Treasurer publicly releases a national interest statement, he or she is to table the statement in that House of the Parliament as soon as practicable after it next sits.8E Contents of national interest statementA national interest statement under section 8D is to include: (a) a description, in as much detail as practicable, of the nature and terms of the agreement; and (b) the reasons why the agreement is in Australia's national interest, having regard, in particular, to foreign policy, trade and economic interests.8F Inquiry and report by Joint Standing Committee on Foreign Affairs, Defence and TradeA national interest statement tabled in the Parliament under section 8D shall stand referred for inquiry and report within two months of the reference to the Joint Standing Committee on Foreign Affairs, Defence and Trade constituted under resolutions of the Senate and the House of Representatives.The amendment has been sufficiently described by the Treasurer (Mr Costello) in his reply on the second reading for me not to need to repeat it or indeed to canvass any further argument in support for it. The reason for the drafting, particularly on the nature of the national interest statement and why there is a qualification built into there as to the description required about the agreement, has been sufficiently explained by the Treasurer and the subject of discussion between us, and I accept the necessity for some degree of circumspection on these matters as a matter of international financial negotiation reality.I only comment finally that for the Treasurer and I to actually agree about something is bound to reinforce the paranoia in certain sections of the community which undoubtedly exists in relation to this bill, and that is to be regretted. But what is not to be regretted is the passage of this legislation, which is an important step forward in advancing Australia's interest, both domestically and internationally. I commend the amendment and the bill to the House.Amendment agreed to.Bill, as amended, agreed to.1696Bill (on motion by Mr Costello)—by leave—read a third time.Bills1696Message received from the Governor-General reported informing the House of assent to the following bills: Civil Aviation Legislation Amendment Bill 1997 Flags Amendment Bill 1996 Bills1696r4571696Debate resumed from 25 March, on motion by Dr Wooldridge:That the bill be now read a second time.upon which Mr Lee moved by way of amendment:That all words after "That" be omitted with a view to substituting the following words:"whilst not declining to give the Bill a second reading, the House is of the opinion that the Government:(a) is placing Australia's world renowned health system in jeopardy by failing to achieve new Medicare Agreements with State and Territory governments; (b) is misrepresenting its offer to the States and Territories, which amounts to little more than double-counting and putting back health funding which has been cut in the first two Howard budgets; and(c) has failed to adequately consult with the States and Territories regarding the provisions of this bill".13:10:001697Brown, Bob, MPMr ROBERT BROWN5A5CharltonALP00—I appreciate the opportunity to speak during the second reading debate on the Health Legislation Amendment (Health Care Agreements) Bill 1998 . I know there have been claims made that there is no crisis in Australia's health system. Let me refute that. I certainly would not suggest that the situation in the Australian health system would necessarily place it among the health systems of the developing world. But, in terms of the health system that the Australian people have come to expect and the health system that this country can afford, there is no question at all that the Australian health system is in crisis.The member for Dobell (Mr Lee), the opposition spokesman on questions of health, has drawn attention, as last night did the member for Bradfield (Dr Nelson), speaking for the government, to situations where, for example, hospitals are identified as bypass hospitals—not because they are providing bypass operations but because the ambulances are told that they have to go past them, bypass them, because there is no room in those hospitals to take emergency cases. We have had examples where, in the process of people being shuffled and shuttled from one hospital to another, their health circumstances have seriously deteriorated, and there have been cases where it has become so serious that death has eventuated. There are other examples as well where after serious operations people are left lying on trolleys in hospital corridors. We might find, and we will find, worse examples of health and hospital care in the developing countries of the world, but Australia should be able to apply sufficient resources to make sure that our 18 million Australian citizens have access to top quality health care and hospital care.Of course, that was the purpose initially of the Whitlam government when the old Medibank was introduced. We well recall the very firm, unqualified promise by the leader of the coalition at that time, Mr Fraser, when prior to the election in 1975 he said, `We will maintain Medibank.' No qualifications, no ifs, no buts—`We will maintain it.' There were seven changes in eight years, and it destroyed it. I well recall, as everybody else should recall, that when we came back into government in 1983 there were over two million people in Australia who were not covered by any sort of health insurance. You know, Mr Deputy Speaker, as do all of my colleagues, that there were mothers and fathers who were not covered, who did not take their kids for necessary medical treatment at the time and whose kids now are carrying the scars of that lack of treatment and will carry the scars of that lack of treatment until they die.We were not prepared to accept a situation where that prevailed, so we said in 1983, `We are going to reintroduce it, we are going to restore it and we are going to seek to lock it in.' We called it Medicare. We saw before the last election the present Prime Minister (Mr Howard) emulating the comments of Mr Fraser, when the spokespeople for the coalition said, `We will maintain Medicare.' There have been no major changes to the structure of it, but they have ripped the heart out of it. `Oh no, we will maintain Medicare,' they said, `but where the funding is coming from is another question.' We know, for example, that, in addition to the demands that were put on the states in 1996 with the first budget of the coalition, when the states were told that they would be required to help the Commonwealth to the extent of $1.6 billion, we had $800 million ripped out of the public hospital system, we had $400 million taken from the dental health program and we had $479 million taken from the mental health and the palliative care programs.The present Commonwealth government, the coalition government, is saying to the 18 million Australians, `We are packing this money back into the system. We are going to increase in real terms the funds available to the health and hospital system by 15 per cent over the next five years.' The only reason these funds are going in is that the system was on the verge of collapse as a result of the funds that were ripped out. What this coalition government now proposes to put back into the system is the money it took out.I urge people in the Australian community to understand that, and I would like in this connection to remind everyone that the 1996 Australian of the Year, Dr John Yu, a former head of the Westmead Children's Hospital in Sydney, made the following comments. These expressions of concern are not just coming from us. Dr John Yu said:I am not sure how well briefed the Prime Minister is. . . . I'm certainly disappointed that Dr Wooldridge does not have a better understanding of what's happening.Dr John Yu is not talking about some backbencher on the government side; he is not talking about some Liberal Party branch member out in the mid-west of New South Wales. He is talking about the Prime Minister of Australia and the member of the government who has primary responsibility for the administration of government programs in relation to health and hospitals and in relation to something that we still will continue to call Medicare, even though the government is trying to get away from that word. John Yu also said:Public hospitals . . . deserve a better deal.Yes, they do. We have pre- and post-operation cases lying on trolleys in hospital corridors, kids being shuffled from one hospital to another because there is no room for them, mothers in anguish taking their children into hospitals and being told to go somewhere else and mothers being told to take their kids out of the hospital before the kid should be released from the hospital.You know who is causing this, Mr Deputy Speaker, and I want to let everyone know who is causing it. It is being caused by this coalition government—a coalition government which has an ideological fix on anything that is private and an ideological fix against anything that is public. So they are happy to support all of the private health arrangements. You will recall that they did, for example, put in place a subsidy for people to pay private hospital fund fees. One would have thought that those people who were members of private hospital funds would have expected to benefit from that. Did they? Of course they didn't. The fees now, even taking into account that rebate, are higher than they were when the scheme was introduced. The sum of $1.7 thousand million has been spent on that, and it has not worked. In New South Wales there are 400 people leaving private health funds every day. The coalition government's scheme was supposed to halt the loss to the private health funds and to reverse it. People would say, `Here is a subsidy for me to go into a private health fund.'The situation is compounded by the fact that people in private health funds have themselves gone through this experience. We all know that this is true. You can have a public Medicare patient in a public hospital occupying a bed alongside a private patient for the same ailment, for the same operation, with the same doctor, with the same services, and at the end of that treatment the public Medicare patient leaves that hospital not owing one cent. The private fund hospital patient will leave that hospital owing in some cases hundreds of dollars, despite the fact that the private hospital patient has probably for decades being paying into a private fund. I would say that after one experience of that kind the private fund member would say, `Thus far and no further. Why should I pay my Medicare levy through my tax and in addition to that pay private health funds, and in the face of that leave the hospital where I occupied a bed alongside another person who had the same ailment, who had the same operation with the same doctor and who received exactly the same services owing hundreds of dollars and the Medicare patient comes out owing not one cent.'I am very conscious of the time constraints. I have been prevailed upon to cut my remarks short. There are plenty more points that I would welcome the opportunity to make, and at some time in the future I am going to take the opportunity to make them. But my colleague Michael Lee, the member for Dobell, carries this fight right out into the national community, exposes the deficiencies of this government, puts up the alternative policies and programs and says, in effect, to 18 million Australians, `We will not tolerate the dismantling of the public health and public hospital system. We will fight them right to the line.' Within the next 12 months there is going to be another election, and we will take them right to the line, and this is one of those issues on which we will win.13:22:001699Somlyay, Alex, MPMr SOMLYAYZT4FairfaxLPMinister for Regional Development, Territories and Local Government10—The Minister for Health and Family Services (Dr Wooldridge) has asked me to make the following statement on his behalf. The Health Legislation Amendment (Health Care Agreements) Bill 1998 provides the basic framework for the Commonwealth to enter into agreements with states and territories for the provision by the states and territories of acute health services to public patients free of charge in return for Commonwealth financial assistance. The bill does not contain the substance of the agreements, nor does it influence the funding of those agreements. The agreements are bilateral between the Commonwealth and each state and territory. The bill replaces sections of the Health Insurance Act 1973 which contain the provisions for the Medicare agreements from 1 July 1993 to 30 June 1998. The new provisions will facilitate agreements from 1 July 1998 to 30 June 2003.The bill contains the Medicare principles by which the states must abide. These principles are similar to those in the current act. Eligible persons are to be given the choice to receive designated health services free of charge as public patients. Access to health services by public patients is to be on the basis of clinical need and within a clinically appropriate period. The arrangements are to be in place to ensure equitable access to designated health services for all eligible persons regardless of their geographical location.Other key parts of the bill include a requirement for the development of a public patients charter, provisions for national health development special assistance and the establishment of a health care information commis sioner. Financial assistance under the new health care agreements is conditional on the development of a public patients charter. This charter will be a document for the dissemination of information about the provision of health services and the means by which complaints about the health system can be made. National health development special assistance will provide for major projects to re-engineer the acute care system, improving the efficiency or effectiveness of the delivery of health services, improving patient outcomes in relation to the delivery of these services or addressing the factors that lead to avoidable or unnecessary hospitalisation. For example, projects that seek to improve the integration of the acute care sector with the wider health care system or improve the linkage of information technology across the system may be funded. I thank members for their contribution to this debate. Question put: That the words proposed to be omitted (Mr Lee's amendment) stand part of the question.13:30:00The House divided. (Mr Deputy Speaker—Hon. G.H. Adams)80Anderson, J. D. Andrew, J. N.Andrews, K. J. Anthony, L. J.Bailey, F. E. Baldwin, R. C.Barresi, P. A. Bartlett, K. J.Billson, B. F. Bishop, B. K.Bradford, J. W. Broadbent, R. E.Brough, M. T. Cadman, A. G.Cameron, E. H. Causley, I. R.Charles, R. E. Cobb, M. R.Dondas, N. M. Draper, P.Elson, K. S. Entsch, W. G.Evans, R. D. C. Fahey, J. J.Fischer, T. A. Forrest, J. A.Gallus, C. A. Gambaro, T.Gash, J. Georgiou, P.Grace, E. J. Halverson, R. G.Hardgrave, G. D. Hawker, D. P. M.Hicks, N. J.* Hockey, J. B.Jeanes, S. B. Johnston, R.Jull, D. F. Katter, R. C.Kelly, D. M. Kelly, J. M.Kemp, D. A. Lindsay, P. J.Marek, P. McArthur, F. S.*McDougall, G. R. Miles, C. G.Moore, J. C. Mutch, S. B.Nairn, G. R. Nehl, G. B.Neville, P. C. Nugent, P. E.Prosser, G. D. Pyne, C. M.Randall, D. J. Reid, N. B.Reith, P. K. Ronaldson, M. J. C.Scott, B. C. Sharp, J. R.Slipper, P. N.* Smith, A. C.Smith, W. L. Somlyay, A. M.Southcott, A. J. Stone, S. N.Sullivan, K. J. Taylor, W. L.Thomson, A. P. Truss, W. E.Tuckey, C. W. Vale, D. S.Wakelin, B. H. West, A. G.Williams, D. R. Wooldridge, M. R. L.Worth, P. M. Zammit, P. J.40Albanese, A. Baldwin, P. J.Bevis, A. R. Brereton, L. J.Brown, R. J. Crean, S. F.Crosio, J. A. Dargavel, S. J.Ellis, A. L. Evans, M. J.Ferguson, L. D. T. Fitzgibbon, J. A.Grace, E. L.* Griffin, A. P.Hatton, M. Hollis, C.Jenkins, H. A. Jones, B. O.Kerr, D. J. C. Latham, M. W.Lawrence, C. M. Lee, M. J.Macklin, J. L. Martin, S. P.McClelland, R. B. McLeay, L. B.Melham, D. Morris, A. A.Morris, P. F. Mossfield, F. W.O'Connor, G. M. Price, L. R.Quick, H. V. Sawford, R. W.*Sercombe, R. C. G.* Smith, S. F.Theophanous, A. C. Thomson, K. J.Willis, R. Wilton, G. S.Downer, A. J. G. Ferguson, M. J.Howard, J. W. Beazley, K. C.Lieberman, L. S. Evans, G. J.McLachlan, I. M. Beddall, D. P.Moylan, J. E. McMullan, R. F.Ruddock, P. M. Tanner, L. J.* denotes tellerQuestion so resolved in the affirmative.Original question resolved in the affirmative.Bill read a second time.Message from the Governor-General recommending appropriation announced.1700Bill—by leave—taken as a whole.13:37:001700Lee, Michael, MPMr LEEMG4DobellALP00—by leave—I move:(1) Clause 1, page 1 (lines 6 and 7), omit Health Legislation Amendment (Health Care Agreements) Act 1998, substitute Health Legislation Amendment (Medicare Agreements) Act 1998.(2) Schedule 1, item 25, page 5 (line 28), omit " Health Care Agreement Principles ", substitute " Medicare Agreement Principles ".(3) Schedule 1, item 29, page 7 (lines 15 and 16), omit "Health Care Agreement Principles ", substitute "Medicare Agreement Principles ".(4) Schedule 1, item 29, page 7 (lines 18 and 19), omit "Health Care Agreement Principles", substitute "Medicare Agreement Principles".(5) Schedule 1, item 29, page 7 (line 20), omit "Health Care Agreement Principles", substitute "Medicare Agreement Principles".I note for the record that, unfortunately, the Minister for Health and Family Services (Dr Wooldridge) has left the chamber, having come into the chamber for the division. For the record I express my disappointment that the minister could not be bothered to return to the House and sum up for the government the second reading debate on the Health Legislation Amendment (Health Care Agreements) Bill, a very important piece of legislation that provides the basic underpinning for Medicare funding for our public hospital system. If the minister for health had had the courage to come into the chamber and sit here at the table for the bill's consideration in detail, we could have put to him a few questions on the state of the negotiations on the Medicare agreement.I am sure many of my colleagues are also very keen to raise issues, given that they did not have an opportunity to participate in the second reading debate. I am sure they also would like to put to the minister for health quite a few questions they would like answered about whether or not their local public hospitals will be receiving sufficient funding to ensure public patients receive the standard of care to which they are entitled.Much as we like the Minister for Regional Development, Territories and Local Government (Mr Somlyay), who is at the table, we are not quite sure that he will have at his fingertips as many answers on health policy, given that Dr Wooldridge, the minister for health, is the one who is meant to be in here at the dispatch box answering to the people of Australia about these very important issues.Perhaps I could put a few questions through you, Mr Deputy Speaker, to the minister. I know the expert advisers in the advisers box take detailed notes. They might be able to pass these on to Dr Wooldridge. If we are really lucky, he might even have the courage to come back into the chamber later on and participate in this debate.K26LATHAMMr Latham—He's probably out playing royal tennis.MG4Lee, Michael, MPMr LEE—Perhaps he is out playing royal tennis, as my colleague suggests. It is lunch time. First of all, we want a detailed comparison of the government's current proposal for the Medicare agreements compared with the current Medicare agreements with the states. We would also like a detailed breakdown and an attempted substantiation by the government of the claim by the Prime Minister (Mr Howard) that the federal government's current offer provides a 15 per cent real increase over the life of the five-year agreement. We would be very interested to go through that detailed comparison because we believe that the government is misleading the Australian people and the Prime Minister is misleading the Australian people when he makes that claim.We would also be very keen to know how the government's charges for funding for hospital care for veterans will work. The government claims that this will provide an extra $750 million to the Australian public hospital system—an extra $750 million which is meant to be addressing the crisis that currently exists in our health care system, the crisis that Australians such as Dr John Yu highlighted yesterday in his courageous comments demanding more money for the public hospital system.It is very clear that the only written material that has been given to the states on the veterans affairs proposal is a dozen words and 16 numbers. There is no way in the world that any state or territory could try to determine whether or not veterans will be better or worse off when the only documentation they get is a dozen words and 16 numbers.5A5BROWNMr Robert Brown—And little numbers at that.MG4Lee, Michael, MPMr LEE—Little numbers—as my colleague the member for Charlton interjects—that certainly will not address the crisis that is facing our public hospital system today.We would also like to know why the government has been double counting funding for mental health services and palliative care in its comparisons between the current offer and the existing Medicare agreement. We certainly believe a whole series of issues need to be addressed.One of the other questions we would have put to the minister for health, Dr Wooldridge, if he had been here, relates to what the government intends to do if it does not reach agreement with any of the states or territories. We would like to know how the government can guarantee that charges will not be introduced for public patients. We will be putting to the minister when he moves his own amendments certain questions about what the consequences will mean.The amendments currently before the House attempt to change the name of these agreements from the `health care agreements' back to the `Medicare agreements'. We know that this government and this minister hate Medicare so much that they cannot even stand for the word `Medicare' to be in the title of the agreements. That is why they have gone to such lengths to try to undermine Medicare by squeezing the GP rebate, by cutting back the federal funding for public hospitals, by winding back the subsidies for essential medicines. They hate Medicare so much they are even trying to delete the title from the very federal-state agreements that fund our public hospital system. (Time expired)13:42:001701Tuckey, Wilson, MPMr TUCKEYSJ4O'ConnorLP10—Everybody on this side of the House, including me, supports the Health Legislation Amendment (Health Care Agreements) Bill, but I never like to miss an opportunity to point out to the people who invented the system of health administration we have today how the numbers actually stack up and what it basically means. As is typical with many other issues that abound, they created a system that gives Kerry Packer a free visit to a general practitioner, and to pay for it they imposed HECS fees on young students.That is borne out in any analysis of the budget papers. We find in the budget papers that before the introduction of Medicare the government of the day spent $4.7 billion on defence, $3.7 billion on education and $3.4 billion on health. They are the figures. Today's figures are defence, $10.4 billion; education, $10.9 billion; and health, $20.7 billion.If we add those three together and divide them by three, each group should have $14 billion. Fourteen billion dollars says that you have robbed the students of Australia of $3 billion. You have dumped your Medicare system cost overruns in two areas, including on the students of Australia. I have talked to a few students about this, and they are able to understand the arithmetic. You have given Kerry Packer a free visit to a general practitioner and in the process you and Neville Wran decided to put HECS fees—your party created HECS fees; nobody else did, and you know it—on students and thereby put the hex on students.That is the reality when we look at the relative sense of the budget figures. There is none of this `think of a figure and double it', which is so common within the Labor Party. The figures show that the growth in health expenditure is being paid for by charging the students of Australia HECS.If you want some more evidence of just how badly the figures come out, let me tell you this. Pre-Medicare, the federal government spent $220 per capita on health. The Australian people could buy full private health cover for a family for $500 per annum. The figures today are that the federal government is spending $1,150 per capita and you cannot buy private health insurance—just hospital insurance with considerable restrictions, many of which were imposed on the private health funds in the original Medicare act—for less than $2,500 per annum, and you call that progress.The facts of life are that, in the end, the Australian parliament, in the interests of the defence of the country, which is a loser, and in the interests of educating our young people, who are not big claimers on health, is going to have to decide just how much more money it is prepared to find. I made a point recently to an executive in aged care, and I am quite happy to quote what he said. He said to me that Australia has one of the best health systems in the world. I said, `You are right. The only problem is that we have been borrowing between $5 billion and $10 billion a year to fund it.' And that is a reality too. You can go on doing that while you give Kerry Packer a free trip to the doctor.There were 2.5 million Australians who went overseas last year; yet none of them think they should have to pay $20 to go and see a doctor. I mentioned that to a doctor a year or so ago and he laughed. He said that his previous patient had just put the Medicare plastic across and said, `Doctor, I want to cancel my last appointment. I am going to Bali.'You tell me that that is what the Labor Party should stand for: Kerry Packer getting a free visit to a general practitioner. Then, to start and balance your budget, you rip $400 million off the students of Australia through HECS fees. There was a time when the education system in this country got more money in the budget than health did, and that was just immediately before the introduction of Medicare. (Time expired)13:47:001702Latham, Mark, MPMr LATHAMK26WerriwaALP00—I cannot resist responding to that lecture in Wilsonomics. I think the proposition developed in Wilsonomics runs something like this: you add up the pears, you add up the oranges and you add up the bananas, you divide by them three and wonder why you are talking fruit salad. I think that was the proposition that was developed in Wilsonomics—the idea that somehow HECS has gone somewhere outside the university system.The member for O'Connor (Mr Tuckey) defeated himself in his own comments, because I can recall the numbers he used. He was pointing out that at the beginning of the Hawke government we were spending $3 billion on higher education and, at the end, we were spending $10 billion. That is pure evidence that every single cent and dollar of the HECS fees went into the expansion of university places around Australia, the historic expansion developed under John Dawkins. The member for O'Connor has defeated himself by his own words. He has done many silly things in this place but today he has defeated himself by his own words.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Hon. G.H. Adams)—Order! I ask the honourable member to come back to the amendments before the House.K26Latham, Mark, MPMr LATHAM—He went on to talk about health care and was raising the point that Kerry Packer is down there being bulk-billed by the local Woollahra GP every second day. I dare say that Kerry Packer, like half the Howard cabinet, could afford his own private physician. He would be wealthy enough—8K6FITZGIBBONMr Fitzgibbon—Or a trust.K26Latham, Mark, MPMr LATHAM—The member for Hunter (Mr Fitzgibbon) is right. They would have the trust income and the private wealth and affluence to move outside the public health system. But even if he were down there, he would be exercising his right as an Australian citizen—and, I hope, taxpayer—to draw on the services provided by universal health care. There is no prouder achievement of the Australian Labor Party than the establishment of universal health care in Australia.You can go back—and your memory would go back to the time of the Gorton and McMahon governments—when up to 20 per cent of Australians had no insurance of any kind, public or private. Does the member for O'Connor want to go back to that system where we have less than universal health care in Australia? Is he seriously suggesting that we go back to a system where up to 20 per cent of Australians had no health insurance—public or private?If any citizen draws on the universal system, then that is fine by the Australian Labor Party, because we stand first and foremost for universal health care. We do not want anyone left out of the public health system. Above and beyond that, of course, if they are wealthy enough to take out private arrangements—be they in the form of a private physician or private health insurance—then they can exercise that right as well, because they have the capacity to pay. These are the fundamentals in health.The member for O'Connor's talking about the hypothecation of HECS payments to the health system just proves that he is so far off target. In fact, he is reminding the House of his record as a failed health shadow minister under the Peacock opposition and someone who totally failed when he had some responsibility in health. If he was off checking the HECS budget during his time as the shadow minister for health, it is no wonder that at the 1990 election the coalition had to put up the white flag and say, `We cannot develop a health policy. It is all too hard for us. We have been adding up the apples, the oranges and the pears and dividing them by three and we are afraid we cannot come up with any sensible health policy.' It was your Western Australian colleague, and you were his head research person at the time. He relied on your advice and, in the end, ran up the white flag.On these matters, the member for O'Connor is totally misrepresenting the nature of the Commonwealth budget and totally misrepresenting what happened on HECS payments. Every single cent and dollar went into the expansion of university places. If he has a problem with universal health care, I say to Australian patients, `Beware.' If someone in the government side has a problem with universal health care, beware, because if you are of low income standing and they are going to wind back the public insurance that you can currently access, then you will end up on the streets. You will end up on the streets in an American-style health system where, if you cannot afford to pay, you do not get treated. That is the sort of market that you want to establish in health care.We have had that in Australia, and that is why we ended up with Medibank in the early 1970s because of the Whitlam government. You were part of the shoddy crew that tried to dismantle it step by step, along with the current Prime Minister (Mr Howard) and, given half a chance, you would do it again. We are standing here defending public health insurance and arrangements in Australia and we will continue to do that until we drop.13:52:001704Baldwin, Bob, MPMr BOB BALDWINLL6PatersonLP10—It gives me great pleasure to speak to the Health Legislation Amendment (Health Care Agreements) Bill 1998 . This legislation reaffirms the government's commitment to Medicare, with the principles of free and equitable access to public hospitals on the basis of need. Furthermore, it reaffirms the government's commitment to more flexible health care agreements. Most importantly, it focuses on patients.But we have seen the bickering and the war of words over what constitutes a fair and equitable offer by the Commonwealth to the states over the past few days and in recent weeks. Rather than appealing to the hearts of the people, it is becoming more a point of the states, and particularly the Carr Labor government in New South Wales, wishing to confuse the minds of the people of the state of New South Wales and the wider Australian electorate over where this government and the state and territory governments stand on health care.We have witnessed the childish walkouts by the premiers. We have seen the churlish tap-dancing on the issue by New South Wales Premier, Bob Carr, and his deputy, the health minister, Dr Andrew Refshauge. We have heard them crying out the mantra that there is a crisis in the private health insurance sector and that New South Wales is copping it in the neck with an elongated hospital waiting list courtesy of the crisis. As you would be aware, Mr Deputy Speaker, it is a cute line. Instead of the Commonwealth giving $450 to families, $250 to couples, or $125 to singles—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Hon. G.H. Adams)—I remind the honourable member that this is not a second reading speech but a consideration in detail. I ask the honourable member to focus on the amendments.LL6Baldwin, Bob, MPMr BOB BALDWIN—With all due respect, Mr Deputy Speaker, I am referring to the amendments, which talk about the agree ment between the states and the Commonwealth. Thank you. Carr and Refshauge say that when people have the fortitude and the desire to take out private health cover to legitimately offset the costs of private health insurance, that is a waste of money and it should just go to New South Wales public hospitals.The Premier pitched his government's electoral fortunes on the mathematics of claiming to cut New South Wales hospital waiting lists by half when it came to office. Clearly, he is getting a little sweaty under the collar with that state poll just under a year away. Both Carr and Refshauge became Harry Houdinis for a day some time back when they said they had achieved their target. They had staked their jobs on driving down waiting lists in New South Wales by half. They were to resign if they did not do so, but the only thing they halved was the mathematics and the care for people in pain on waiting lists.A mark of a New South Wales public hospital waiting list of 20,000 was never discounted in their equation for success. According to the latest figures I have to hand, the current waiting list situation in New South Wales is 50,778, of which 4,602 people have been waiting more than 12 months, and the average waiting time has rocketed from 27 days to 1.5 months.In trying to politicise an important social and health issue, Bob Carr and Andrew Refshauge have fallen flat on their faces—by crying foul over apparent falling private health insurance numbers when we all know that they have stabilised.I feel it is important to reinforce for the record the facts behind the figures in the federal health minister's offer to the states. These figures need to be reinforced, given the political babble and dummy spitting that we have had to put up with in recent times. The Commonwealth has made a fair and reasonable offer to the states of an increase of around $3 billion for this 1998 Australian health care agreement.This agreement includes: $1.5 billion in health base funding over five years; $750 million for full cost purchasing of veterans services in public hospitals; $500 million for initiatives in efficiency and effectiveness in public hospitals; and $120 million for reducing public hospital waiting lists. The latest agreement on the table for the states, excluding the ACT, is an offer that represents a 6.9 per cent real funding increase over the first year of this agreement and a 15.4 per cent real increase over its five-year totality.For people like Bob Carr and Andrew Refshauge, all this money and all this good news actually gets better. You see, we have clearly answered in this agreement their greatest gripe—ideologically driven or otherwise: the level of private health insurance cover across New South Wales and the nation. Unlike the former agreement, the 1998 agreement has built into it a mechanism: the technospeak for it is `utilisation drift'. In practical terms, the agreement on the table contains an adjustment factor that for the first time will reimburse the states for any one per cent drop in the number of Australians privately insured. That adjustment factor—a mere $83 million—with no strings attached for the states, will be provided by the Commonwealth if we as a government cannot make a better go of legitimately keeping the private health insurance sector sustainable, unlike that previous mob opposite who were unable to achieve that.13:56:001705Morris, Allan, MPMr ALLAN MORRISFI4NewcastleALP00—I wish to protest as strongly as I possibly can about the fact that we were not able to debate this Health Legislation Amendment (Health Care Agreements) Bill 1998 . This is important legislation, and we have been gagged. I now have three minutes when we would normally have at least a quarter of an hour on the primary debate.We have been pushed into this because this government, as always, mismanage not just the country but the parliament. They bring forward legislation gutting and changing things, and we get two or three minutes. It is absolutely farcical. And it is about time they actually admitted why they do not want to talk about it. Why don't they want a debate?We are back on the Medicare merry-go-round. The first vote in this parliament of the Prime Minister (Mr Howard) was against Medibank. His current vote is to take the `Medicare' out of Medicare. This legislation is removing the `Medicare' out of the agreements. Whilst in the previous coalition government they kept `Medibank' as a term and took away all of its capacity, in this one they are taking out the word as well. So they are taking the `Medicare' out of the health care agreements.Why would they do that? We now know why, because the member for O'Connor (Mr Tuckey) gave it away. He is arguing now against universality. He is arguing against universal access to health. He is now suggesting that the hidden agenda of the conservatives is to restrict access to universality. Australians are no longer equal. In the terms of the member for O'Connor, Australians now should be accessing health, depending on their means. Under the previous conservative government, over one million people were not insured—publicly or privately—and it can be seen that the day is coming when that will be the case again.We have just had a farcical contribution from the member for Paterson (Mr Bob Baldwin), who, incidentally, tells the people in the south of Newcastle at Belmont, where they are closing a Medicare office, to go to Charlestown. He is telling the Belmont business people that their customers should shop in Charlestown.LL6BALDWINMr Bob Baldwin—Why not?FI4Morris, Allan, MPMr ALLAN MORRIS—What a disgrace. `Why not?' he says. The fact is that people in Belmont would like to shop in Belmont and would like to use the Belmont Medicare office, which the government are closing. The savings they may make will be more than offset by what they are going to have to pay for the rest of the contract, because the contract for the office has another 3½ years to run. And the Commonwealth will still be paying for an office which they are not using. The savings they make on that office will be more than offset by the damages. But the biggest insult is the business community of Belmont being told that their customers should go somewhere else.Last week we saw the farce of Liberal premiers Borbidge and Kennett out there bagging this government and saying that this Prime Minister cannot lead; the federation does not federate. On health care, on housing, on disabilities, on a range of issues, this government is not leading the country; it is tearing it apart. When Premier Borbidge threatens to campaign against the conservatives at the next federal election on a range of issues, then Australians should be a little bit concerned about what this Prime Minister is doing.10000SPEAKERMr SPEAKER—Order! It being 2 p.m., the debate is interrupted in accordance with standing order 101A. The debate may be resumed at a later hour.Ministerial Arrangements17061706Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I inform the House that the Minister for Immigration and Multicultural Affairs will be absent from question time today. Mr Ruddock will be addressing the Melbourne Press Club in Melbourne and opening the premises of the Australian Vietnamese Women's Welfare Association. The Attorney-General will answer questions on his behalf in relation to immigration and multicultural affairs, and the Minister for Health and Family Services will answer questions relating to his representation of the social security portfolio. The Minister for the Status of Women is absent from question time today. She is attending the Commonwealth-state conference on the status of women in Brisbane. Questions on this portfolio today will be answered by the Minister for Defence Industry, Science and Personnel.Questions Without Notice170617061706Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Mr Speaker, I seek your indulgence to add to an answer that I gave yesterday.10000SPEAKERMr SPEAKER—Indulgence is granted.ZD4Howard, John, MPMr HOWARD—Yesterday during question time the Leader of the Opposition raised the case of Murton v. Lemmon Investments, in which the Industrial Relations Commission found that the employment of an employee of a small business was terminated for taking sick leave to which he was entitled, amongst other reasons. The Leader of the Opposition claimed that this was an example of an employee who would be stripped of protection by the government's small business exemption, but the facts are completely otherwise.The fact is that all employees in such a situation will have continued protection under the government's legislation. I inform the House that the small business bill, which was rejected by the Senate, will not affect any employee's protection against termination for a prohibited reason. One of the prohibited reasons is `temporary absence because of illness or injury'. This covers an absence of up to three months because of illness or injury or any longer period if it is wholly on paid sick leave, provided the employee gives the employer medical certificates for the illness or injury or otherwise substantiates the reason for the absence as required by any industrial award or agreement. The government's bill will continue this protection. The bill should have been passed, and by blocking it the Senate is destroying 50,000 new jobs in this country.Questions Without Notice170617061706Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister. Prime Minister, when last year you withdrew Labor's legislation attacking trafficking in trust losses and substituted your own watered down legislation, did the relevant ministers with family trusts exclude themselves from the cabinet decision or at the very least declare their conflict of interest when the matter was considered around the cabinet table? Or was your reckless attitude to the concept of conflict of interest already in operation then?1706Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I would like to say a couple of things about trusts, including the legislation that was passed by the Senate. The first observation that ought to be made about trusts is that you had 13 years to fix the abuses and you did nothing. For every question that you ask about this, you will be reminded that you had 13 years and you did nothing. You had 13 years to fix the ramshackle tax system. It got worse every year that you were in office. For you now to come into this parliament and pretend some kind of latter day outrage and with confected concern talk about the state of our taxation system, I think that is an outrage that the Australian people will see through. I can say to the House that the deliberations of cabinet are not things that I normally talk about. That was the practice of my predecessors, and I am satisfied that correct procedures were followed.17071707Grace, Elizabeth, MPMrs ELIZABETH GRACEML6LilleyLP10—My question is addressed to the Prime Minister.Mr Crean interjecting—10000SPEAKERMr SPEAKER—If the honourable member for Hotham would be silent we would be able to hear the honourable member for Lilley.ML6Mrs ELIZABETH GRACE—Prime Minister, would you inform the House what action the government is taking to ensure that support provided to war widows and war widowers keeps pace with the living standards and offers financial security and peace of mind to these very important Australians?1707Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I am very pleased to inform the House that this morning during a visit to the headquarters of the RSL I announced that the government has gone much further than the commitment it made during the election campaign regarding linking pension increases to average male weekly earnings. We have decided to take that further and to afford the same linkage to recipients of the war widows pension. As a result, with effect from the pension payment on 9 April—DT4CREANMr Crean—What about TPIs?ZD4Mr HOWARD—I notice that the member for Hotham interjects when I am about to announce to this parliament an increase of $6.80 a fortnight for the pension paid to war widows. You ought to tell him to keep quiet. I am very pleased to say that with effect from the pension payment on 9 April the pension paid to Australia's 100,000 war widows will rise by $6.80 to $378.60 a fortnight.DT4CREANMr Crean—What about carers?10000SPEAKERMr SPEAKER—I warn the honourable member for Hotham!ZD4Mr HOWARD—I hope on behalf of all members of the parliament that this nation remains immensely in debt to those men and women who put their lives on the line in the defence of our country over the years, and a discharge of that debt includes properly caring for the widows and widowers that they left behind or people who were subsequently made widows or widowers as a result of the subsequent death of men and women who served in the armed forces during war.The cost of this measure will be $168 million over the next four years. It provides a continued linkage between increases in the old age pension and increases in the pension paid to war widows. I would remind the parliament that the commitment that was made at the time of the last election, and indeed the provisions of the legislation only relate to pensions generally, but the government has decided to extend this measure because of the special status of war widows and the special debt that is owed by the Australian people and the Australian community to the war widows of Australia. I say again on behalf of all the members of this parliament our thanks, our gratitude and our respect to these 100,000 fine Australians. They are deserving of every cent of this increase.17071707Evans, Gareth, MPMr GARETH EVANSVD4HoltALP00—My question is addressed to the Prime Minister. Does he recall his Treasurer's commitment announced in the last budget to review the taxation of trusts and to release a discussion paper on the issue? Can he confirm that Senator Parer's very complex family trust and company arrangements are exactly the kind of tax dodge vehicles the Treasurer was referring to in the last budget? Why has this discussion paper been buried? Is it because up to 19 members of your frontbench stand to benefit from any watering down of the Treasurer's commitment to the overhaul of the trust tax system in this respect?1707Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—The answer to the last part of the question is no. The answer to the second part of the question is that I do not accept the assessment made by the Deputy Leader of the Opposition. The answer to the first part of the question is that the assessment of trusts and the review of trusts have not been buried. I would remind the Deputy Leader of the Opposition of what I have said and what the Treasurer has said on this issue on a number of occasions—that is, that will be included in the very comprehensive tax review that we are conducting. I can remind the honourable gentleman of this again and again: it will be included when our taxation policy is released.I say on behalf of the government that we have absolutely no intention of allowing the abuse of trusts as a tax avoidance vehicle to go on unabated as the former government allowed it to do. The former government had 13 years to fix the abuse of trust, and suddenly we are invited to believe that the use of trusts as a tax avoidance vehicle arrived on 2 March 1996. The reality is that for 13 long years you had an opportunity of fixing this problem, but for 13 long years you neglected to do anything about it and so many other things.It lacks conviction and plausibility for the Leader of the Opposition, who did nothing except embrace malign neglect for 13 years, to now turn around and say, `I am the self-proclaimed concerned citizen concerned about the level of tax avoidance in the Australian community.' If you were so concerned about trusts and tax avoidance, why did you not do something about it when you were a member of the Hawke and Keating administrations? The reality is that, as in so many other issues, you say and do one thing in government and you say and do a completely opposite thing when you get into opposition.You ignored the battlers of Australia when you were in opposition. You ignored the working people of Australia when you were in government. You are now trying to rediscover them in opposition. I think they see through you as do the great bulk of the Australian community.17081708Vale, Danna, MPMrs VALEVK6HughesLP10—My question is addressed to the Treasurer. I refer the Treasurer to the government's Charter of Budget Honesty Bill, finally passed by the Senate last night, which is of great interest to my constituents in Hughes—60 of whom are present in the gallery today. Treasurer, why is it necessary to introduce such a charter? How will the charter help to ensure the honest and timely reporting of budget information to the people of Australia?1708Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for Hughes for her question and acknowledge the presence of her constituents from Hughes in the gallery. A very big welcome to all of you. Make sure you send back the member for Hughes after the next election.UNKNOWNGovernment membersGovernment members—Hear, hear!CT4Mr COSTELLO—I am sure the people of Hughes will be glad to know that last night this parliament passed world-class legislation. The charter of budget honesty will make sure that governments in this country report honestly to the people of Australia before every election and at every budget time from now into the future. This is world-class legislation. It requires twice a year an economic and fiscal outlook; it requires a pre-election report on where the state of the Australian economy is at; and it provides an intergenerational report to be delivered every five years to protect the interests of young people in the future of our society. This is world-class legislation and we can all applaud the outcome.However, I regret to say that the legislation was necessitated by some very regrettable events in Australia. This legislation was necessitated by the conduct of the Leader of the Opposition before the last election in March of 1996. At a time when the Australian accounts were $10,000 million in the red, on 1 February 1996 the Minister for Finance said:We're operating in surplus and our projections are for surpluses in the future.That was one month before the election. I do not think the Labor Party will ever show that it is equipped for office again until it has the decency to confront its past and apologise for the deceit that was practised before the March 1996 election. The failure of the Labor Party to confront the deceit that occurred before that election includes the Deputy Leader of the Opposition two years later, on 22 February 1998, saying that that $10 billion deficit, which the then Minister for Finance tried to cover up during the election campaign, was not the product of any big spend-up; it was just some lousy figuring by Treasury.Less than one month after Mr Beazley made the statement that the budget was in surplus, when we were $10,000 million in the red, the Treasury was able to come in the day after the election and tell us what the true state of the accounts was. There was no lousy figuring. The only lousy figuring was in the office of the Minister for Finance. He would not pick up the phone and ask the Treasury because he did not want to know the truth. He was trying to say to the Australian people that his failure on the budget could be covered up. Regrettably for him, he lost that election and the truth was known.The one good thing that could come out of that tawdry episode of the then Minister for Finance, Mr Beazley, is that legislation has now been passed in Australia to outlaw forever the kind of conduct that he engaged in. It makes sure that nobody in the future should ever try to repeat that episode, try to hide from the Australian public information that they need. The one good thing that can come out of the failure of the Leader of the Opposition is that he has now given birth to world-class legislation designed to stop the kind of behaviour that he engaged in, and that will be a much better thing for the Australian public.17091709Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Prime Minister. Is the Prime Minister aware that Senator Parer's employee share ownership vehicle, QCMM (ESP), was only wound down after Labor passed legislation to close down the use of such vehicles as tax rorts? I ask whether he is also aware that Labor's measure was opposed `root and branch' by the coalition, particularly the then shadow treasurer, the member for Higgins, who boasted at the time:This is [Labor's] third attempt in 13 months to wipe out [these] schemes. We've knocked off the last two and we plan to knock this one off as well . . . and in government will act to spread them wider.Prime Minister, why should the public have any confidence in your tax plans when your Treasurer wanted to make it optional for high income earners, like Senator Parer, to pay tax?1709Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—There is nothing new on Parer if this is all he has to say. I will say just a couple of things in response. As always with the member for Hotham, I will carefully check the detail of the question. The other day he asked me something about QCMM (ESP) Pty Ltd and he was wrong. The Leader of the Opposition has now caught the disease because he was wrong when he asked me a question about unfair dismissal.Can I just say generally in reply to the member for Hotham that I am proud of everything my party has done to expand share ownership in this country. One of my great ambitions is to see Australia become the greatest share owning democracy in the whole world. As I said at my party's convention, just as the founder of the Liberal Party of Australia made Australia the greatest home owning democracy in the world, it is my hope that under my government—which will stretch years into the future—Australia will become the greatest share owning democracy in the world. Unlike the Labor Party, we like the idea of people buying shares in the companies they work for. Unlike the Labor Party, we want share ownership to expand, and I defend every action taken by my colleague, the then shadow Treasurer, the now Treasurer of Australia, to expand share ownership in Australia. That is not something of which I am ashamed; that is something of which I am proud. It is about time you realised that this ridiculous muckraking is right off cue in so far as the mainstream of the Australian community is concerned.17091709Causley, Ian, MPMr CAUSLEY4K6PageNP10—My question is directed to the Treasurer. Treasurer, can you advise the House as to the level of Commonwealth government debt at the time of the government's election just over two years ago? How does this compare with debt levels in the 1970s and 1980s? How is the government acting to reduce debt for the benefit of all Australians?1710Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for his question. I think the House would be interested to get some idea of the debt position of the Commonwealth and what the government intends to do about it. Just to put this in perspective, when the Whitlam government came to power in 1972 the Commonwealth net debt was about $1 billion or 2.5 per cent of GDP. That had been the level of Commonwealth debt throughout the 1960s and 1970s. As a result of recession in 1982-83, when the Hawke government came to office in 1983 Commonwealth debt was about $9.7 billion or about 5.6 per cent of GDP.Opposition members interjecting—CT4Mr COSTELLO—I acknowledge the concern of the Labor Party that debt had gone from about 2.5 per cent to 5.6 per cent of GDP. I acknowledge their concern that it was as high as 5.6 per cent of GDP. When this government came to office in 1996, after 13 years of Labor government—which had started off with debt at $9 billion or 5.6 per cent of GDP—debt had gone to $95 billion or 20 per cent of GDP.Mr Wilton interjecting—10000SPEAKERMr SPEAKER—The honourable member for Isaacs!CT4Mr COSTELLO—I do acknowledge the concern of the Labor Party that debt was at 5.6 per cent in 1983. Where is your concern about it being at 20 per cent in 1996?Mr Wilton interjecting—10000SPEAKERMr SPEAKER—I warn the member for Isaacs.CT4Mr COSTELLO—As a proportion of a growing economy, it had quadrupled. In terms of absolute numbers, it had gone up by 10 times, from $9 billion to $90 billion. I have actually gone back and done some historical analysis. The historical analysis shows that the two worst years in the post-war era in terms of accrual of debt for the Commonwealth were the two years from 1993 to 1995, and the finance minister of the time was—UNKNOWNGovernment membersGovernment members—Beazley!CT4Mr COSTELLO—The statistical analysis concludes, without a shadow of a doubt, that the worst finance minister in Australian federal history was the Leader of the Opposition. He was the worst finance minister in Australian federal history. In two years he presided over an increase of $26 billion of debt. When Labor had come to office, the Commonwealth, in the whole history of federation up to 1993, had accumulated $9 billion of debt, and in two years he had accumulated three times what had taken 83 years to build up. This government has put Australia on a path which will take debt to GDP down from 20 per cent to 10 per cent by the year 2000-2001—isn't that great?—to get the liabilities off future generations of Australians.With the government's privatisation proposal in relation to Telstra and repaying debt we could take Commonwealth net debt back to four per cent of GDP—back to pre-Labor levels. We could finally with that privatisation get the debt to GDP level back to pre-Hawke-Keating-Beazley levels; and wouldn't that be a great achievement for the young people of Australia? The young people of Australia would have their debt liabilities brought right back to historical standards by this government. That is one of the reasons why we engage in privatisation.Just to pick up on a point that was made before: we actually believe in employee share ownership schemes unqualifiedly. To give an example of one of the best employee share ownership schemes you have ever seen, in relation to Telstra—which the Australian Labor Party opposed and which the unions of the Australian Labor Party opposed—the number of Telstra employees who took up shares was 92 per cent. That was opposed by the Australian Labor Party and opposed by the unions which pull the strings on the Leader of the Opposition. They were opposing giving the workers a share and a stake in a great national asset. That is why we stand with the employees of Telstra, 92 per cent of whom agree with us and took up shares.17111711Crean, Simon, MPMr CREANDT4HothamALP00—My question, again, is to the Prime Minister. Does the Prime Minister recall his argument of Tuesday in relation to the QCMM (ESP) sale of its Pan Australian shares to Lacetal Pty Ltd? He said:. . . the purchaser of the shares had no relationship at all to the minister or to the Parer family.Is the Prime Minister aware that, at the time of the Lacetal purchase, Mr Harold Shand was a director, the same Harold Shand who is secretary of the Parer family trust and Director of Queensland Coal, Kiskin and AQRM, and the same Harold Shand who is a long-time friend, legal adviser and golfing partner of Senator Warwick Parer?ZD4HOWARDMr Howard—So what?DT4Mr CREAN—So what, you say. Prime Minister, so what? How could you claim the purchaser of Pan Australian shares `had no relationship at all to the minister or to the family trust'? Hasn't Senator Parer caused you to mislead this parliament?1711Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—The advice that I had was that there was absolutely no relationship in a business sense—7T4CROSIOMrs Crosio—In a business sense!10000SPEAKERMr SPEAKER—The member for Prospect!ZD4Mr HOWARD—but, most importantly, there was no common pecuniary interest between Senator Parer and the company—and anybody who has an atom of understanding of commercial practice would know how absolutely ridiculous your proposition is. The fact that you might have the same lawyer involved in relation to a couple of companies does not indicate a common pecuniary interest. You just illustrate by these questions that you do not have any allegations of substance against Senator Parer. You have no allegations of any conflict of interest. You have not demonstrated that he has enriched himself, and the more you go on with these inane questions, the more you aggravate the Australian community.17111711McArthur, Stewart, MPMr McARTHURVH4CorangamiteLP10—My question is addressed to the Minister for Workplace Relations and Small Business. Minister, recent media reports have highlighted the level of remuneration received by waterfront workers. Could you advise the House of the accuracy of these reports?1711Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—In the last few days—Opposition members interjecting—10000SPEAKERMr SPEAKER—Before the minister starts, can we have silence please.Mrs Crosio interjecting—10000SPEAKERMr SPEAKER—I warn the member for Prospect!WI4Mr REITH—I am invited to start with a rort for the day. Why disappoint them, Mr Speaker? Today's rort of the day is the fact that Patricks have a terminal in Rockhampton which is idle for about 60 or 70 per cent of the time and one of their employees, in respect of the terminal at Rockhampton, actually lives in Mackay. Every now and again Patricks have work that they want done in Mackay, which is the town where he lives, but because he is registered to work in Rockhampton, when they ask him to work in Mackay they have to pay him a travel allowance to fictionally go from Rockhampton to Mackay—when he already lives there! Not only that, when he fictionally transfers himself from Rockhampton to Mackay where he lives, they have to pay him $100 a day to look after himself whilst he is living in his own home town. Then, when he has finished his job, they have to pay him fictionally to go from Mackay to Rockhampton, when in fact he lives in Mackay.Let me return to the question: there has been a debate raging in the papers in the last few days, basically under the heading, `Anatomy of a pay slip.' The wharfies are a bit concerned that the word is out about how much they earn and they have been tabling and giving to the press their pay slips to show people they do not earn 90,000 bucks a year, after all, and they certainly do not earn the $70,000 to $74,000 on average which has been shown by independent analysis.UNKNOWNOpposition membersOpposition members—Where is John Sharp?WI4Mr REITH—We can all play the anatomy of a pay slip game. Today I produce two pay slips which have been appropriately sanitised to remove all reference to any individual. One is for someone who works in Port Botany who is on $95,470 a year and the other is on a gross salary of $93,058.Opposition members interjecting—10000SPEAKERMr SPEAKER—When the House is silent, we will hear the minister. If you extend the same courtesy to him as you would expect for yourselves, this would be a far more civilised forum. I understand your emotion and your concerns. I suggest you express them in the right way.R36ALBANESEMr Albanese—We can't hear him.10000SPEAKERMr SPEAKER—I warn the honourable member for Grayndler!WI4Mr REITH—I also have here a list of the salaries paid for persons in the stevedoring industry out of particular sites showing the top gross incomes of a series of individuals. The fact of the matter is that the figures that we have produced, which are contested by the wharfies, are in fact independently assessed figures. They give you a true appreciation of remuneration.As I have said repeatedly, by any reasonable community standard, wharfies are well and truly paid in excess of community standards. Sadly, for the balance of the community, we do not receive the level of productivity we otherwise should receive.WU5O'CONNORMr O'Connor—Tell us about Parer.10000SPEAKERMr SPEAKER—I warn the honourable member for Corio!WI4Mr REITH—I conclude by saying that these figures are one of the reasons the government has overwhelming support for the reform process under way on the Australian waterfront. To give members an idea of the sense of community opinion on this, I will read from some of the letters I have received in recent days on this issue. This one says to the government:Please pursue to the end . . .which puts it rather well. Another says:A Government with enough conviction to do something about our waterfront has been a long time coming . . . This one says:Please do not lose your resolve, and be assured that the majority of thinking Aussies are right behind you.Another says:. . . I wish to express my support with any thing that you do . . . This one says:It is about time the public were reminded and informed of the frequency during W.War 2 when troops had to load the ships on the waterfront due to the contrariness of the waterside workers.Another, addressed to the PM, says:I fully support your strong stand . . . This one says:. . . Australia has been held to ransom by the—wharfies—for far too long.. . . . . . . . .. . .. the majority of Australians are definitely not in favour with the MUA stand.This one says, and I paraphrase:I recall when Bob Hawke . . . announced a great victory for his Government whereas the truth was that John Coombs and his cohorts took the Government and the taxpayers to the cleaners.Mr O'Connor interjecting—10000SPEAKERMr SPEAKER—I have already warned the honourable member.Opposition members interjecting—10000SPEAKERMr SPEAKER—The minister will draw his answer to a conclusion.UNKNOWNOpposition membersOpposition members—Wind it up!10000SPEAKERMr SPEAKER—But he will do so when the House quietens. When the House remains silent, the minister is free to continue.WI4Mr REITH—I am happy to conclude; I am concluding. This one—and this is the last paragraph of this letter—says:Your excellent and enlightening response today on John Coombs, together with an outstanding performance by the Prime Minister on Warwick Parer, is the best I've heard for a long time. I tell you what the Australian public want: they want us to keep up the reform process. We are committed to doing so.17131713Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—I wonder how many watersiders have managed to convert 44c worth of shares—10000SPEAKERMr SPEAKER—The Leader of the Opposition will ask his question or resume his seat.PE4Mr BEAZLEY—into $56,000 for doing nothing?10000SPEAKERMr SPEAKER—I warn the Leader of the Opposition! You do not start your question with a tirade no matter how much you feel inclined to do so. You will address your question.PE4Mr BEAZLEY—I think you will find, Mr Speaker, the tirades in this place have all been on that side.10000SPEAKERMr SPEAKER—The Leader of the Opposition will remain silent until I have called you. The House will resume its silence. When the Leader of the Opposition or any other member wishes to raise a question, they will raise the question and not engage in argument.PE4Mr BEAZLEY—My question is to the Prime Minister. Can the Prime Minister explain to families earning $35,000 why this government is forcing them to find an extra $55 a week to support their young unemployed adults after the youth allowance is introduced in July? Does the Prime Minister agree with the Minister for Social Security that families earning $35,000 a year can afford to pay because they are `relatively well off'? Can the Prime Minister explain why he thinks it is fair to force struggling parents to pay for their children's unemployment while wealthy parents like the Parers actually save money by distributing family trust income to their adult children?1713Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I will come to the question of family trusts in a moment. The first part of the Leader of the Opposition's question related to the new youth allowance. I am delighted that the Leader of the Opposition has given me an opportunity to explain to the Australian community the philosophy that lies behind the new youth allowance system.The purpose of this new policy—and might I say that I think it is an excellent policy—is to remove the disincentive against participation in the work force or participation in training which exists in current social security arrangements. One of the problems with the present arrangement is that you can often receive more for being out of work than for being involved in study or training. The philosophy that lies behind it is to reverse those incentives to give people an incentive to pursue training, to give people an incentive to pursue more education. Quite wisely, I think the government has adopted the attitude that people should not leave school without a job being arranged or without some—PE4BEAZLEYMr Beazley—On a point of order—ZD4Mr HOWARD—He asked me about the new allowance, and I am answering him.PE4BEAZLEYMr Beazley—My point of order goes to relevance. The Prime Minister is talking about a different situation. I am talking about adults who happen to be children in this situation—18- to 21-year-olds.10000SPEAKERMr SPEAKER—The Prime Minister is in order.ZD4Mr HOWARD—We are for a social welfare system that does not provide a disincentive to people undertaking further education and undertaking further training. One of the cornerstones of the youth allowance proposal is that people should not leave school unless they are going into some kind of training or unless they have a job arranged.The idea that people should simply leave school without any kind of job or after-school training in mind is the sort of attitude and the sort of incentive in the social welfare system that was left to us by our predecessors. That is why we are proposing to introduce the youth allowance system. I think it is a policy that has been very widely applauded.Might I say—I know this will be of enormous interest to many of my own colleagues, both in the Liberal Party and in the National Party—that the regions and the rural areas of Australia and the young people of the regions and the rural areas of Australia will be mas sive beneficiaries under the youth allowance system. Once again, by asking this question in the way that he has, the Leader of the Opposition demonstrates to the people of the country areas of Australia that he has no sympathy, no understanding and no interest in their future or in their welfare. There are tens of thousands of young people in rural and regional Australia who will be massively benefited by the new youth allowance system because it contains very significant increases in the living away from home allowances for people from the regional and rural areas of Australia.The Leader of the Opposition then moved on to the question of family trusts and the taxation arrangements that apply to them. I would remind you that essentially the taxation treatment of a family trust is a taxation structure that you created, you preserved and you did nothing about in the 13 years that you were in government. They have finally discovered—after being in government for 13 years and being in opposition for two years, and when they read a taxation office report about a period of time that ended almost coincidentally with their ejection from the government benches of this country—with phoney confected outrage, that there is a problem that has to be addressed.Let me simply say to the Leader of the Opposition and to those who sit opposite: you had 13 years; you had your opportunity to fix what you now describe as the obscenity of certain trust arrangements. The Australian people woke up to you. The Australian people threw you out. We will be producing a comprehensive reform of the Australian taxation system. That will include, unlike your pathetic attempts to reform the Australian taxation system, a comprehensive attack on tax avoidance practices that you left unattended over the 13 long years that you were in government.17141714Nugent, Peter, MPMr NUGENTUT4AstonLP10—My question is addressed to the Minister for Trade. Minister, would you inform the House of the status of the economic integration process with New Zealand? What outcomes have been delivered to trans- Tasman commercial links and what are the prospects for the future?1714Fischer, Tim, MPMr TIM FISCHERDG4FarrerNPTrade; Deputy Prime Minister10—I thank the member for Aston for his question. It is a timely reminder that this week is the 15th anniversary of the signing between Australia and New Zealand of the closer economic relations trade agreement, or CER. It is a very positive document which has done much to create extra jobs here in Australia as well as in New Zealand. We expect to exceed $10 billion in bilateral trade between Australia and New Zealand this year.The rate of growth with regard to trade between Australia and New Zealand has been around 11.6 per cent annually, greater than the growth of 8.3 per cent for Australian trade over the last 10 years. We have energised and re-energised CER over the last two years. It is a sharp comparison to the actions which took place under the federal Labor government which saw then minister Brereton sabotage the single aviation market in a way which did much to damage and bring to a new low relations between Australia and New Zealand.Mr Brereton interjecting—DG4Mr TIM FISCHER—I note an interjection from the now shadow minister, the member for Kingsford-Smith. I remind him of what Don McKinnnon said about the Brereton decision:We were dismayed at last year's decision on aviation, dismayed on substance but astonished at the way the message was conveyed by fax.That was the state of relations under Labor. What we have done is inject at the highest level between Prime Minister John Howard and Prime Minister Jenny Shipley—and previously Prime Minister Bolger—a very high degree of confidence and contact between Australia and New Zealand. We have built on that in a very practical way by putting real depth into CER relations. The single aviation market has been re-established. The updated joint accreditation system agreement was signed here yesterday. The trans-Tasman mutual recognition agreement is scheduled to be entering into force on 1 May. But, above all, we have done something else. I know that the Minister for Small Business and Workplace Relations will be particularly delighted by this, as will the former member for Hume.K26LATHAMMr Latham—The former member for Hume? He has gone?DG4Mr TIM FISCHER—The current member for Hume. What he did as minister for shipping and transport was drive forward a breakthrough with regard to the long difficulties which existed in shipping between Australia and New Zealand. The member for Hume spearheaded a breakthrough to bring about the end of cabotage between Australia and New Zealand. You may not like it. We did it. You may not like the improved efficiencies that we are bringing to coastal shipping and shipping across the Tasman. We have got the job done under the CER arrangements.It is with pleasure that I salute the 15 years of CER, a great tribute to the fundamental work of Doug Anthony and others over the years. I add one other thing: we have utilised CER to expand relations between Australia and New Zealand and South America. We do not just look to Asia; we look to the whole world for our trading opportunities. We are now building a raft of exports, mining technology and related services to South America. We are taking that a step further.Prime Minister John Howard will host the visit by President Menem to Australia next week. That underlines the links between CER and the Mercosur group of nations in South America. We are getting the job done. We are creating extra jobs here in Australia by better market access and better trade negotiations. We are delivering, especially through the CER arrangement between Australia and New Zealand.17151715Campbell, Graeme, MPMr CAMPBELLCF4KalgoorlieIND00—My question is addressed to the Minister for Workplace Relations and Small Business. Does the minister support the intention of the Western Australian government to give a monopoly to a non-union stevedoring company on the Dampier wharf because that company has been unable to compete against the unionised work force despite cutting wages dramatically? Does this run in the face of the government's professed policy on competition? Furthermore, can the minister tell the House whether he has had any dealings with or knows of any connections between the giant foreign agribusiness company Conagra and those associated with the efforts of some people within the NFF to be involved in the Webb Dock operation?1715Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—Mr Speaker, in respect of Conagra and the NFF, that is entirely news to me. As to the efforts of the Western Australian government in improving efficiency in the regional ports in Western Australia, they have my full and complete support. As I understand it, that has been an open tendering process. That is, however, a matter for the Western Australian government. They, of course, are required as others are to meet appropriate competition principles. But putting that issue, which is a separate issue in one sense, to one side, the fact of the matter is that the Western Australian government has been very strong and supportive of reform. When you look at the circumstances in Western Australia—Mr Tuckey interjecting—WI4Mr REITH—They might be keen to promote performance. Look at the circumstances in Fremantle. Fremantle container operations could be improved very significantly compared with what they are today. I know that the Western Australian government is supportive of that. But, as I say, we support their efforts with respect to Dampier and the other regional ports. They are going well in Western Australia to improve productivity. Let us wish them well for the future.17151715Neville, Paul, MPMr NEVILLEKV5HinklerNP10—My question is addressed to the Minister for Primary Industries and Energy. Minister, would you inform the House what action has been taken to improve the efficiency and effectiveness of the Australian Quarantine and Inspection Service? Could you also inform us how this contrasts with past management of this vital national organisation?1715Anderson, John, MPMr ANDERSON4K4GwydirNPPrimary Industries and Energy10—I thank the honourable member for his question.WU5O'CONNORMr O'Connor—You are still alive.4K4Mr ANDERSON—That is right. I am well, thank you. I am glad that you are concerned to know. Australia's quarantine and inspection services really constitute a vitally important insurance policy for Australia's farmers, for around $10 billion of our exports, for our natural environment and, probably, our tourism industry as well—given that about 75 per cent of people come here largely because they want to see our pristine environment.But the Australian Quarantine and Inspection Service was wrecked by Labor. And the person who had the purse strings for the longest period and who did the most damage during that regime was the member for Hotham. That is who it was. We had to fix it—and we have. We have put real resources into the restoration of Australia's quarantine services. In fact, we have overseen the injection of something like an additional $100 million into upgraded and new operations. For example, we funded the northern area quarantine strategy—over $14 million to look after our front line, if you like, across the north where we front to so many quarantine dangers. We have allocated $6 million through supermarket to Asia to technical offices in Asia.YK6WILTONMr Wilton—A couple of beagles.4K4Mr ANDERSON—`A couple of beagles,' I heard somebody say. You ran 19 dog teams around Australia. We are moving up to 42. From 19 to 42. We have put in place very significantly upgraded border control measures and they have seen, for example, new inspection systems for containers, which have detected 16 per cent of incoming containers with external contamination that was previously being missed. Cargo referrals for inspection are up 16 per cent. Mail seizures are up 127 per cent. Airport seizures are up in absolute terms and when expressed as seizures per full-time staff member they are up 18 per cent. We have redesigned and properly resourced the import risk assessment process. We have put in place vastly improved industry consultative arrangements and established a very high quality independent advisory committee known as QEAC.We have also separated out meat inspection from quarantine. The member for Hotham left it in such an utter mess that we had no choice but to completely rebuild it. It was broke—literally. The member for Hotham left it broke and it needed an injection of $44 million just to pay redundancies. Although you had been billing industry for redundancies you had been spending the money on your out of control ongoing operational expenses. They could not run AQIS. This is the bunch who, under the member for Hotham, had 63 meat inspectors headquartered in towns around Australia where there were no meat processors. Under your industrial relations policy you could not run the thing properly. You could not contain costs. It was out of control. It was nothing other than a demonstration of your incapacity to run something either in a policy or a financial sense.Under us you have had a huge improvement in operational efficiency and work practices which are widely welcomed by industry. That is concurrent with a dramatic improvement in food safety. There are seven major meat exporters to the United States. We are one of them. Under this government, for the first time—PE4BEAZLEYMr Beazley—On a point of order: while we are getting immense enjoyment out of this, it is a statement. There is no two ways about it. It ought to be delivered in ministerial statements. It is way over length.10000SPEAKERMr SPEAKER—The minister is within the standing orders but I suggest that you shortly draw your answer to a conclusion.4K4Mr ANDERSON—I have nearly come to the end of it. I just make this point: under the reforms that we have put in place we have the lowest rejection rate of any country exporting meat to the United States.We really had a model here, set up by the member for Hotham, for running something. I probably thought that that was an illustration of the way in which they ran the broader economy. It was all about, firstly, painting yourselves as competent managers while, as we can see from the example of the 63 inspectors in towns where there were no meatworks, you were grossly incompetent. Secondly, you paint yourselves as visionary reformers when you will not tackle any hard issues. Opposition members interjecting—10000SPEAKERMr SPEAKER—Members of the opposition will remain silent. The minister will draw his answer to a conclusion.4K4Mr ANDERSON—Thirdly, you shout all the more loudly that you have balanced the books when in reality what you have done is develop a big black hole. In fact—what happens?—the member for Hotham establishes the model and the Leader of the Opposition picks it up.PE4BEAZLEYMr Beazley—Mr Speaker, I ask that the minister table the paper from which he was quoting so that we may, at some point, have the House take note of it.10000SPEAKERMr SPEAKER—Minister, is it marked confidential?4K4Mr ANDERSON—`Private'.10000SPEAKERMr SPEAKER—That does not make any difference. If it is not marked confidential, I am afraid—4K4Mr ANDERSON—It is marked `confidential'.10000SPEAKERMr SPEAKER—It is confidential.Opposition members interjecting—10000SPEAKERMr SPEAKER—If it is marked `confidential' and the minister says it is marked `confidential' I accept that it is confidential.Questions Without Notice171717171717Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Mr Speaker, before the next question is asked, could I add to an answer I gave earlier to the member for Hotham.10000SPEAKERMr SPEAKER—Proceed.ZD4Howard, John, MPMr HOWARD—The member for Hotham asked me a question about Senator Parer and Lacetal and Mr Shand. I should inform the House that I have just received a letter from Mr Shand, which reads as follows:I understand the question has arisen as to whether Senator Parer or any company associated with him or his family has now or ever had an interest in Lacetal Pty Ltd. The answer is no.DT4CREANMr Crean—That wasn't the question.ZD4Howard, John, MPMr HOWARD—You owe Senator Parer an apology.Opposition members interjecting—10000SPEAKERMr SPEAKER—Members of the opposition will remain silent.DT4CREANMr Crean—Mr Speaker—10000SPEAKERMr SPEAKER—It has been tabled. The honourable member for Hotham will sit down.DT4CREANMr Crean—That wasn't the question—10000SPEAKERMr SPEAKER—The member for Hotham will resume his seat. You have not got the call.ZD4Howard, John, MPMr HOWARD—You are making an extraordinary allegation against my colleague. You are a phoney muckraker.DT4CREANMr Crean—Mr Speaker, I ask you to ask the Prime Minister to withdraw that statement against me.ZD4Howard, John, MPMr HOWARD—If the honourable member is offended, I would never want that to happen. Of course I withdraw the allegation. Of course I withdraw the allegation against the phoney. Of course I do.PE4BEAZLEYMr Beazley—Mr Speaker, I raise a point of order. The expression that the member for Hotham asked to be withdrawn was `phoney muckraker'. It was not withdrawn by the Prime Minister, as is required by standing orders. We would request that you get him to do it.10000SPEAKERMr SPEAKER—Prime Minister, the member for Hotham asked that you withdraw the words. I understand that you have partly withdrawn; will you withdraw them without qualification?ZD4Howard, John, MPMr HOWARD—It is true that I substituted another one but I would never want him to be offended. I think I have made the point that you misled the parliament about Senator Parer and you owe him an apology. Therefore, I am very happy to substitute that for what I previously said.UNKNOWNOpposition membersOpposition members—Withdraw!ZJ6BARRESIMr Barresi—He is a muckraker.10000SPEAKERMr SPEAKER—The House will remain silent—on both sides.PE4BEAZLEYMr Beazley—I raise a point of order again. The Prime Minister was invited or requested by the member for Hotham to withdraw the words `phoney muckraker'; he withdrew one. He then substituted one of the other words which he now says is the word that he puts in its place. Unfortunately for him it happened to be one of the two it was asked of him to withdraw. I might say, Mr Speaker, the thing that he thought he had done as he got up there to explain himself through that letter, I am afraid, missed the entire point. Nevertheless, we want it withdrawn.10000SPEAKERMr SPEAKER—I understood that the Prime Minister withdrew the remarks. Is that so?ZD4HOWARDMr Howard—Yes.10000SPEAKERMr SPEAKER—The Prime Minister has withdrawn the remarks—both remarks.SJ4TUCKEYMr Tuckey—Mr Speaker, I raise a point of order. I wish to draw your attention to standing order 144, which says:Questions should not contain—(a) statements of facts or names of persons . . .Mr Speaker, I put it to you that the people that wrote that standing order were the people of this House and did not believe that you should defame people by questions. I ask you to consider that in the future, considering the evidence just brought to the attention of the House.10000SPEAKERMr SPEAKER—The honourable member for O'Connor will resume his seat. I suggest that he also looks at standing order 153, which relates to much the same subject.Questions Without Notice171817181718O'Keefe, Neil, MPMr O'KEEFECE4BurkeALP00—My question is also to the Prime Minister. Is he aware of the plight of the 250 meatworkers from Grafton Abattoirs who have lost their jobs and $3 million of pay and redundancy entitlements? Prime Minister, do you recall your Minister for Workplace Relations and Small Business saying on 10 March in this place that these workers should approach the Office of the Employment Advocate and that `the government will stand shoulder to shoulder with the employees'? Are you aware that these workers have approached the Office of the Em ployment Advocate, which has responded in writing that:There is no provision under the Workplace Relations Act . . . to take action against directors of insolvent companies.How is it that you can make such an effort to protect the interests of wealthy people like Senator Parer but you will not lift a finger to help these ordinary workers?10000SPEAKERMr SPEAKER—That question is very close to being out of order.1718Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I will be happy to answer it. First of all, I certainly share the concern of many members in this House about the position of those 250 workers. I understand that my colleague, the Deputy Prime Minister, met them. I also understand from the Minister for Workplace Relations and Small Business that there is a possibility—and I do not want to put it any higher than that but I certainly hope it is realised—that the company may be sold to another interested party in which event it may be possible that the situation will turn out to be better than we now think it is. That is the advice that the minister has been given and I pass it on to the honourable member.The other point I would make is that I was a little puzzled at the member's reference to the Employment Advocate not having the power to pursue the directors of the company. Certainly I would be surprised if it had been suggested that he did because the power to pursue directors and so forth is something that would be done by the Securities Commission rather than by the Employment Advocate. Of course the government is very concerned about these situations. I think the honourable member would be aware that when his party was in power there was a very detailed examination of the law and you looked at and specifically rejected some of the things you are now asking us to do. So you cannot parade a monopoly of concern about workers in these difficult situations. I say to the honourable gentleman that everything will be done to help the workers concerned. I do not think you advance their cause by trying to draw some phoney long bows with other people. 17191719Pyne, Chris, MPMr PYNE9V5SturtLP10—My question is addressed to the Minister for Employment, Education, Training and Youth Affairs. Unemployed people across Australia are discovering the opportunities being opened up by the Job Network. Would the minister inform the House of the expertise and experience of the members of the Job Network?1719Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEmployment, Education, Training and Youth Affairs;Minister Assisting the Prime Minister for the Public Service10—I thank the member for Sturt for his question. He is obviously interested in the quality service that will be provided to unemployed people in this country from 1 May. I am pleased to get this question because there has been a deafening silence from the opposition since the member for Batman bungled his smear attack on Workskil Inc. earlier this week.HQ5FAHEYMr Fahey—Where is he?BT4Dr KEMP—I see he is not even in the House today. I wonder if he is going around the country now checking up on how many plaques the member for Hotham has left in premises around the country. The opposition has shown over time that it has no idea whatever of how to get unemployed people into jobs. The Leader of the Opposition himself was responsible for lifting the number of long-term unemployed people in this country by 95,000 and pushing youth unemployment up to over 32 per cent. The fact is you let unemployed people in this country down, and they turfed you out of office.The Job Network will be providing unemployed people in Australia with the best possible chance to get a job. One of the reasons for this is that all those who have been successfully contracted to become members of the Job Network have gone through an intensive quality assurance process through the tender which the government has run and which the smear-a-day campaign from the opposition has failed in any way to dent.There is a wealth of experience within the Job Network. Members of this House may well be interested to hear about the experience of those who have been contracted. Eighty per cent of Job Network providers are existing providers. Fifty-eight per cent of the existing skillshare providers who tendered are members of the Job Network. So that experience which has been built up over the years will be available in full measure to the Job Network. Fifty-two per cent of the existing contractors who assisted long-term unemployed people in the past are in the Job Network. The Job Network contains an excellent mix of established and experienced expertise and new innovative ideas and new players.Unemployed people have welcomed the change. I refer particularly to the comment that appealed to me of job seeker Despina Sarandogiou, who summed up the response of many unemployed people about the Job Network when she said that under the old system she felt like a number whereas under the Job Network she will feel more like a person. That is because unemployed people will have a choice, they will have personal service and they will have their dignity recognised. While the opposition has no plan whatever to help unemployed people, the government is putting into practice the most significant social reform of the last five decades to help unemployed people.17191719Morris, Peter, MPMr PETER MORRISHI4ShortlandALP00—My question is likewise to the Minister for Employment, Education, Training and Youth Affairs. Has the minister been advised that in Lismore, where unemployment is at 17.3 per cent, the number of employment agencies providing services for the long-term unemployed has been cut from six to one? Is he aware that if long-term unemployed people in Lismore want to exercise a choice of employment services they will have to travel 30 kilometres to Ballina, 80 kilometres to Murwillumbah or 110 kilometres to Tweed Heads? Minister, are you aware that the member for Richmond has told the local Lismore newspaper that he was dissatisfied with the tender process and that the same paper later reported that you have agreed to review the local tender outcomes? Finally, is there a review of the tender outcomes now taking place in the Tweed Heads-Northern Rivers region?1719Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEmployment, Education, Training and Youth Affairs;Minister Assisting the Prime Minister for the Public Service10—There is no review being undertaken of the results of the tender pro cess. The tender process that has been completed has delivered its results and the government stands by those results. In fact, this is a tender process which has delivered best practice outcomes in tendering. What the member for Richmond was referring to was that there are, as I have said before in this House, experienced providers who were unsuccessful in the tender process who have the capacity to offer training services to those successful providers who have been contracted as members of the Job Network.The government is very keen to ensure that these providers have adequate advice as to the opportunities that are open to them in the Job Network. The Job Network is going to in fact open up opportunities for many agencies beyond the members of the Job Network itself to provide services to unemployed people, particularly quality training services. That is an appropriate part of the Job Network; it is what the Job Network was set up to do. The government is very happy to get advice from the area consultative committees about the operations of the Job Network and the opportunities provided to unemployed people in that region, and that is precisely what the member for Richmond was referring to. He is completely correct in what he says about the determination of the government to ensure that people on the north coast of New South Wales get the very best services that are available.It is also the case that there will be many more outlets for unemployed people in the north coast regions of New South Wales to obtain job placement services than they have under the existing arrangements. I totally reject the claims that were made in the course of the question that, in some way, there will be a restriction on the services available to those people in Lismore. In fact, the people in Lismore will have access to excellent services under the Job Network and, like those in all other regions of Australia, they will find that the quality services in job matching, in preparation for job seeking and job searching and intensive assistance for unemployed people will be greatly enhanced by the services of the Job Network.DT4CREANMr Crean—Mr Speaker, I ask that the documents from which the minister was reading be tabled.10000SPEAKERMr SPEAKER—Was the minister reading? I didn't notice him reading.DT4CREANMr Crean—Of course you were reading.10000SPEAKERMr SPEAKER—He was not reading. The honourable member for Hotham will resume his seat.17201720Dondas, Nick, MPMr DONDAS5M6Northern TerritoryCLP10—My question is addressed to the Minister for Transport and Regional Development. Would the minister please inform the House of the progress of the Alice Springs to Darwin rail link? Also, could the minister advise us what other commitments are being taken in regard to the railway?1720Vaile, Mark, MPMr VAILESU5LyneNPTransport and Regional Development10—I would like to thank the member for the Northern Territory for his question. I know that he and all his constituents in the Northern Territory are very interested in the outcome of this project. Last year the Prime Minister announced the Commonwealth would contribute $100 million towards this project. Expressions of interest to build the Alice Springs to Darwin rail link closed on 1 December 1997. More than 30 submissions were received by the AustralAsia Railway Corporation from a combination of 60 national and international corporations. A short list has been presented to the South Australian and Northern Territory governments.The Commonwealth, together with the South Australian and Northern Territory governments, has committed $300 million towards this project—and this is being provided all by coalition governments. Compare that with the last promise that the Labor Party made with regard to this project in 1983 when Bob Hawke said:I promise you that only the Labor Government can be trusted to build the Alice Springs to Darwin line.Yet in 13 years of Labor government nothing was done. That was the last promise that the Labor Party made. But there is more. During the ALP conference on 21 January this year in Hobart—remember that fairly flat sort of an affair down in Tasmania—the South Australian Labor leader, Mike Rann, went on Adelaide radio and said:. . . so we have secured a commitment from Kim Beazley for $300 million—up to $300 million if Labor is elected, to try and make sure that we actually get some tracks laid.Is this the same sort of a promise that Bob Hawke made back in 1983? So the compere of that radio program came back and said:So, Mike, this is in fact a formal commitment so, reading between the lines, if Labor is elected to power at the next federal election, that is a done deal?And Rann started to back away. He said:Well, what we did yesterday is commit the federal Labor Party—my resolution committed the federal Labor Party to providing the capital assistance necessary to ensure that the railway goes ahead.Now we have the Leader of the Opposition making backroom deals with Mike Rann regarding this important project, promising him $300 million. We have not heard anything from the Leader of the Opposition about what is actually going to happen. The Labor Party's shadow spokesman for transport, in a press release, has said:In all our discussions with industry, we have been told that more will be required. That is why Kim Beazley committed Labor to up to $300 million over four years.Is this another unfunded commitment? Where is the money going to come from? The people should be asking the question: where is the money going to come from? The Labor Party is all over the place on this issue. The people in South Australia and the Northern Territory deserve a straight answer from the Labor Party on what they are going to do—or are they going to rely on what Bob Hawke said in 1983 and do nothing?17211721Fitzgibbon, Joel, MPMr FITZGIBBON8K6HunterALP00—My question is to the Minister for Employment, Education, Training and Youth Affairs. Minister, are you aware that the 4,000 unemployed people in Cessnock now have two choices: to line up at the office of Employment National, which will have four staff members at most, or to catch a private bus to Maitland or Newcastle, distances of 30 and 50 kilometres, at a cost of between $6 and $16? Minister, is this the choice you were talking about when you launched your Job Network?1721Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEmployment, Education, Training and Youth Affairs;Minister Assisting the Prime Minister for the Public Service10—One of the most satisfying aspects of the outcomes of the tender round for the Job Network has been the very good coverage that occurs in regional Australia. Every area of Australia which is currently served by the Commonwealth Employment Service—10000SPEAKERMr SPEAKER—The minister will resume his seat. The honourable member for Hunter, have you a point of order?8K6FITZGIBBONMr Fitzgibbon—Yes, Mr Speaker. Under standing order 145—relevance—I asked the minister a very specific question: what is he going to do about the unemployment in Cessnock?10000SPEAKERMr SPEAKER—The minister is giving his answer. The member will resume his seat.BT4Dr KEMP—This really shows that the opposition clearly do not understand the benefits and virtues of the new Job Network, because every area of Australia which is currently served by the CES—Opposition members interjecting—BT4Dr KEMP—Listen to this and you will learn something. Every area of Australia which is currently served by the CES will be receiving services under the Job Network. In many areas of regional Australia they will be receiving expanded services because of the increased number of sites that are available. This is the document I tabled for you last week. You have had a chance to consult this document and you could have been better informed. Unemployed people in Cessnock will be serviced by Employment National.8K6FITZGIBBONMr Fitzgibbon—That is it?BT4Dr KEMP—Yes.10000SPEAKERMr SPEAKER—The honourable member for Hunter has asked his question.BT4Dr KEMP—Employment National will be providing a range of services, including both basic job matching and intensive assistance.Mr Fitzgibbon interjecting—10000SPEAKERMr SPEAKER—I warn the honourable member for Hunter!BT4Dr KEMP—All that the member for Hunter has been able to draw attention to is that the residents of Cessnock and unemployed people in Cessnock received services before and they receive services now. And they will be receiving services under the Job Network. Some point!The whole benefit of the Job Network is that if you go through the areas and towns of the Hunter and north coast region, there are many more places for unemployed people to go to where they can receive services and be matched to jobs. There many more sites in that area than there are at present. The quality of services will be increased and they will have the dignity at last of being able to choose the services that are available.DT4CREANMr Crean—I now ask that the minister table the document from which he was clearly reading on this occasion.10000SPEAKERMr SPEAKER—Was the minister reading?BT4KEMPDr Kemp—No.10000SPEAKERMr SPEAKER—I did not think he was reading. I was watching him. He referred to numbers. The honourable member will resume his seat. He was not reading; I was watching. He was looking through notes.Mr Crean interjecting—10000SPEAKERMr SPEAKER—Does the honourable member for Hotham wish to leave the House? I suggest that the honourable member might look at the standing order and realise that the Speaker can look and see whether or not the minister is reading, and he was not.17221722Taylor, Bill, MPMr TAYLOROJ4GroomLP10—My question is addressed to the Minister for Defence Industry, Science and Personnel. Can the minister inform the House how the government has met its election commitment in respect of a Vietnam end of war list?1722Bishop, Bronwyn, MPMrs BISHOPSE4MackellarLPDefence Industry, Science and Personnel10—I thank the member for Groom for his question. I know his interest in this matter. Might I mention also the member for Stirling, whom I also know has a particular interest. Before the election the coalition, in accordance with its constant stand on the question of an end of Vietnam war list, promised to establish the list of people who had suffered as a result of the quota system that operated during the Vietnam war, whereby 28 people who were in fact recommended for an award were downgraded and 50 people who were recommended for an award in fact received nothing.Indeed, those awards were for meritorious service or gallantry. The difficulty has arisen with regard to the list because in 1992 the ability to recommend to Her Majesty the Queen that imperial honours be awarded was abolished. That has meant that the awards that were recommended back at the time of the war being imperial awards can no longer be given. Had something been done about it at the time that a private member's bill came through this place before 1992, then the medals as they had been recommended could have been given.Because this cannot be done, we are using the Australian honours and awards system. There are no direct equivalents and the difficulty then is to ensure that the most appropriate award is given to the person who missed out previously. In order to do that, a decision had to be made and the decision was made that no order could be higher than the order that was previously recommended.Here is the difficulty. The difficulty relates to six nominations that were made for the Military Medal. It is argued by some people, including Mr Ruxton and others, that the Military Medal should be treated the same as the Military Cross. To have done that would have meant that those six people would have received a medal higher than the 84 people who received it during the war, the 41 people who received the Distinguished Conduct Medal, the one person who received the Conspicuous Gallantry Medal and the three people who received the George Medal, all of which rank in between the Military Cross and the Military Medal. I have great sympathy for those people who would really have liked to have received their imperial awards. I understand the feeling they have towards that particular medal.But we do believe that the way we are awarding this system is the fairest outcome. To those people who say that to receive a commendation for gallantry is to be regarded as being belittled, I say that is not so. A commendation for gallantry is a ribbon with an emblem upon it which is mounted on a bar in the ordinary way and worn with pride. Our solution is the fairest solution to fulfilling our promise—and I know that people will appreciate the difficulties that were entailed.17231723Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—My question is to the Minister for Transport and Regional Development. I ask whether the minister is aware of the paper entitled `A New Approach to Enforcement' recently issued by Civil Aviation Safety Authority Chairman `Affordable Safety' Dick Smith, which states:. . . in no circumstances will suspension or cancellation of pilots licences be used as punishment.Is the minister aware that CASA has issued a notice to pilots urging them to look out the window to avoid crashing into other planes? Can the minister guarantee that `Affordable Safety' Dick Smith's new aviation safety regime will not, in fact, lead to a reduction in aviation safety, particularly at Sydney airport? Minister, what is next—hand signals?10000SPEAKERMr SPEAKER—The last part of that question is out of order.1723Vaile, Mark, MPMr VAILESU5LyneNPTransport and Regional Development10—I thank the honourable member for his question. I point out to the House that at least our government has taken the opportunity to appoint people to the Civil Aviation Safety Authority who have experience in the aviation field, who have an understanding of aviation and who know what is needed in this industry.Following the obstruction of the mates of the Labor Party over the first couple of years of the life of this government, we have taken the opportunity to get around the industry and get people from the industry into the Civil Aviation Safety Authority who know what they are talking about as far as aviation is concerned, and who have had experience with the big end of the aviation industry in Ansett and Qantas, as far as concerns the management of air space in Australia and the regulation of air safety in Australia.17231723Gambaro, Teresa, MPMs GAMBARO9K6PetrieLP10—My question is addressed to the Prime Minister. Can the Prime Minister provide the House with details on the new ABS publication of a wage cost index? Prime Minister, can you inform the House as to what this latest data tells us about how the Australian economy is travelling?1723Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—In reply to the honourable member for Petrie, I can inform the House that today the Australian Bureau of Statistics released a new indicator of wages growth called the `wage cost index'. This index, which is compiled using a fixed basket of jobs to provide a better guide to underlying wage cost pressures, suggests that wage costs rose by the very moderate annualised rate of 3¼ per cent in the December quarter. That increase is very much within the Reserve Bank of Australia's comfort band for wages and does nothing to threaten Australia's outstanding inflation performance. In fact, Australia now has a headline inflation rate which is the best in the OECD.Most importantly, it is average Australians who are getting the most benefit of this low inflation rate. If you have a headline inflation rate running at minus 0.2 per cent, and Australian workers are being looked after to the extent that their wages are rising by 3¼ per cent—in other words, they are getting a real wage increase of at least 3¼ per cent on an average basis—then that increase is not in any way being eaten up by increases in inflation. I would imagine that Australians who follow these matters would regard a government that has delivered that kind of economic outcome as a government that well and truly has the interests of average Australians at heart. If you can deliver zero inflation, if you can deliver an economic climate where you have zero inflation and wage increases, on average, of 3¼ per cent, you are adding to the real incomes of average Australians. But that is only half the story.The other part of the story is that the policies of the government have resulted in reductions in mortgage interest rates for average Australians of about $300 a month. That is the equivalent of a wage rise of $100 a week for average wage and salary earners. But the good news on the economic front—and I say this to the member for Petrie—does not end with low inflation, real wage gains and interest rate reductions; it is also the case that over the last six months more than 140,000 new jobs have been created.That figure would have been 190,000 but for the actions of the Labor Party and others in the Senate in blocking our unfair dismissal laws. What the Labor Party is doing, bound hand and foot to the trade union movement—doing the bidding of Jennie George, nodding to Jennie George and saying, `Yes, Jennie, no Jennie; I'll do whatever you say, Jennie'—is destroying jobs. I can say to the Leader of the Opposition: you will be hearing a lot more about the impact on jobs in Australia of what you have done by blocking the unfair dismissal law.You have a picture that there is only one side of politics in Australia over the last two years that has bothered to address itself to issues that affect average Australians—and that is the Liberal and National parties. We have delivered to this country the strongest economic fundamentals for a quarter of a century. We have protected this country against the economic downturn in Asia. We have lowered interest rates. We have boosted real wages. We seen 140,000 new jobs created in the last six months. We have committed ourselves to fundamental industrial relations reform. We are seeing historic reforms—absolutely historic and courageous reforms—on the Australian waterfront.All you get from the Leader of the Opposition is a promise of another meeting. He loves promising meetings. His great mentor, Bob Hawke, had a meeting on the waterfront—and $425 million later we were no further ahead. They had a meeting on native title that was presided over by Paul Keating and we were delivered the native title mess which is now the responsibility of my government to cure.The housing sector also continues to power along. Total dwelling commencements rose by 10 per cent in the December quarter to be almost 20 per cent higher than a year earlier, and there is more to come. If the housing figures are anything to go by, they are almost 25 per cent higher than they were a year earlier. I repeat: the housing commencement figures are 25 per cent higher than they were a year earlier. That I know is particularly good news in those areas of Australia that are experiencing a lot of housing growth, such as the electorate represented by the member for Hughes, whose constituents are with us today, and the electorates of many other members. We have strong economic fundamentals. I know the Labor Party hates it. I know the Labor Party does not want to be reminded of it, but we have got news for them. They will be hearing a lot more about it over the next six, nine, 12 or even 18 months.Mr Speaker, I ask that further questions be placed on the Notice Paper.Questions to the Speaker172417241724McLeay, Leo, MPMr LEO McLEAY4I4WatsonALP00—Yesterday during question time the Minister for Workplace Relations and Small Business purported to read from a letter he had received from a wharfie in Brisbane. Under standing order 321 I asked him to table the letter. He did not have the letter with him, and he gave an undertaking that he would give me a copy of it later in the day. Of course, as usual, he has broken his word.10000SPEAKERMr SPEAKER—The honourable member will not reflect on the minister.4I4Mr LEO McLEAY—It is the truth. He said that he would table the letter and he hasn't.10000SPEAKERMr SPEAKER—The honourable member will not reflect on the minister. He will withdraw that remark. He can ask his question of me quite properly.4I4Mr LEO McLEAY—I withdraw. Yesterday the minister gave his word that he would give me a copy of that letter. The minister has not kept his word because I have not received a copy of the letter. I think most people would say that means he has probably broken his word, but I will not say that.10000SPEAKERMr SPEAKER—The honourable member will resume his seat.4I4Mr LEO McLEAY—I will not say that because that would not be fair to the minister. Mr Speaker, would you write to the minister and ask him to keep to his word?10000SPEAKERMr SPEAKER—I ask the Minister for Workplace Relations and Small Business whether he has the letter and whether he will table it.1725Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—Mr Speaker, when I was asked to table the documents that I had with me yesterday, I then proceeded to table all of the documents. The member for Watson has made some accusations, and I think it is fair enough that I should answer those. I understood the position to be that, if he really wanted a copy of the letter, he would let me know.Opposition members interjecting—WI4Mr REITH—But let me finish, before you make your points, Leo.4I4McLEAYMr Leo McLeay—Mr Speaker, I raise a point of order. I claim to have been misrepresented by the minister in that he said yesterday—10000SPEAKERMr SPEAKER—You will raise that at another time. Now is not the time for personal misrepresentations.4I4McLEAYMr Leo McLeay—He has misrepresented me, and I can do that now if you have a look at the standing orders.10000SPEAKERMr SPEAKER—The honourable member will resume his seat. The minister has the call.WI4Mr REITH—Mr Speaker, I am happy to table the letter. I am happy to table all of the material that I have now with me, including that letter. I will table the letters that I read out during question time.Mr Crean interjecting—WI4Mr REITH—Well, you can read it. I will read it out for you if you like, because I rather like reading it. I am happy to table that letter. I am happy to table all the other material I have. I even have `Wharfies work for strip show Reith'. I would be happy to table that one. What about this one? This is a cartoon in the Western Australian. That is a good one.DT4CREANMr Crean—Mr Speaker, I raise a point of order. The minister was asked to table one letter—the one that he alluded to yesterday and he did not. That is what you should require him to table.10000SPEAKERMr SPEAKER—Has the minister the letter?WI4Mr REITH—Mr Speaker, I am going to table absolutely everything. In my file yesterday—10000SPEAKERMr SPEAKER—Has the minister the letter that has been requested? Has the letter been tabled?WI4Mr REITH—There it is, Mr Speaker.10000SPEAKERMr SPEAKER—Has the letter been tabled?WI4Mr REITH—Yes, it has, Mr Speaker.10000SPEAKERMr SPEAKER—The letter has been tabled. Thank you.UNKNOWNOpposition membersOpposition members—Sit down!WI4Mr REITH—The point I am making, Mr Speaker, before I am howled out—UNKNOWNOpposition membersOpposition members—Sit down!10000SPEAKERMr SPEAKER—Minister, I think you should resume your seat. Has the honourable member for Curtin a point of order?ZI4ROCHERMr Rocher—No, I ask that the minister table the documents.10000SPEAKERMr SPEAKER—Unfortunately, at this stage he is going beyond the request. I asked him specifically to table a letter. He has tabled that letter and the minister has now resumed his seat.SJ4TUCKEYMr Tuckey—Mr Speaker, in the light of the member for Watson's concern about bringing matters to the attention of this House, the member for Jagajaga yesterday advised the minister of a case that needed immediate attention. The letter that she had the minister invited her to bring across—and you haven't.10000SPEAKERMr SPEAKER—There is no point of order. The honourable member for O'Connor will resume his seat.17251725Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—Mr Speaker, I refer to your admonition of members on Monday to apply very careful judgment when making remarks about people who are not members of the House and that they should take all reason able steps to satisfy themselves of the accuracy of their comments. I refer to claims made in question time on the very same day by the Minister for Workplace Relations and Small Business that Fremantle waterside workers worked faster in order to attend a strip show and finish early. As these claims have been demonstrated to be totally false and based only on statements made by one worker to a supervisor in jest, I ask that you ask the minister to withdraw and to apologise to these workers that he has unjustly defamed.WI4REITHMr Reith—Mr Speaker, I raise a point of order. Terry Buck, who runs the MUA, has been asked to deny it 12 times, and at no stage did he deny it. In fact, he said that he wasn't going to deny nothin'.1726Mr SPEAKERMr SPEAKER10000PON/A10—The honourable minister will resume his seat. As the honourable member for Melbourne would know, if you refer to a group, it is quite different from referring to an individual. In this instance, there was no individual referred to at the time.OT4CHARLESMr Charles—Mr Speaker, I raise a point of order relating to the member for Watson's request. If the minister for workplace relations has any further documentation that will add to the letter he tabled, I ask him to do so.10000SPEAKERMr SPEAKER—Order! There is no point of order.YU5TANNERMr Tanner—Mr Speaker, I raise a point of order. The individuals concerned are identifiable. They are known by their families and their wives as having been on that shift, and some of them may be concerned that accusations about attending strip shows have been thrown unjustifiably at them by this minister.10000SPEAKERMr SPEAKER—Order! The honourable member will resume his place.WI4REITHMr Reith—They are not workers; they are wharfies.BV5ADAMSMr Adams—You're a disgrace.10000SPEAKERMr SPEAKER—The honourable member for Lyons will withdraw that remark.BV5ADAMSMr Adams—I withdraw.10000Mr SPEAKER—As the honourable member for Melbourne and all members should know— 7T4CROSIOMrs Crosio—You are a disgrace, you really are.10000SPEAKERMr SPEAKER—The honourable member for Prospect will withdraw that remark.7T4CROSIOMrs Crosio—Mr Speaker, if you instruct me I will, but only if the minister withdraws the remark, `They're not workers; they're wharfies.' You are a disgrace.10000Mr SPEAKER—The honourable member will resume her seat. As members know, unless a person is named individually, there is no breach of standing orders. I call the honourable member for Lowe.Personal Explanations172615:40:001726Zammit, Paul, MPMr ZAMMITZK6LoweIND00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the honourable member claim to have been misrepresented?ZK6Zammit, Paul, MPMr ZAMMIT—I think so.10000SPEAKERMr SPEAKER—Please proceed.ZK6Zammit, Paul, MPMr ZAMMIT—On 24 March, the Minister for Transport and Regional Development (Mr Vaile) made a personal explanation in connection with a press conference that I held in which I had referred to the possibility that the curfew arrangements at Sydney airport could be changed. The minister stated, `Any fool knows that the curfew at Sydney airport has been legislated.' I am sure that the minister had me in mind. Even though he did not identify me explicitly, I believe the remarks are very offensive. Mr Speaker, I was not present in the chamber at the time; these comments were drawn to my attention. I ask you to ask the minister to withdraw the remark. I also add that he did not pay me the courtesy of telling me that he was going to come into this chamber and make those comments.10000SPEAKERMr SPEAKER—Order! The honourable member will resume his seat. He has made his personal explanation. The honourable minister's attention will be drawn to the Hansard and to your comments.Auditor-General's Reports172710000SPEAKERMr SPEAKER—I present the Auditor-General's audit report No. 38 of 1997-98 entitled Performance audits: sale of Brisbane, Melbourne and Perth airports .Motion (by Mr Reith) agreed to:That:(1) this House authorises the publication of the Auditor-General's audit report No. 38 of 1997-98; and(2) the report be printed.ZK6ZAMMITMr Zammit—Mr Speaker, I raise a point of order. On previous occasions since you have become Speaker, you have taken it upon yourself, and obviously quite rightly, to ask members to withdraw comments that are offensive. In fact, only a few minutes ago you called on one of the members on the opposition side to withdraw. I ask you to ask the minister to withdraw his comments as I found them personally offensive.10000SPEAKERMr SPEAKER—The only disadvantage the honourable gentleman has is that it was not raised at the time. I understand the honourable gentleman was not here.4I4McLEAYMr Leo McLeay—You should have done; you did it to others.10000SPEAKERMr SPEAKER—The chair is not responsible for the views expressed by members of this place—thank goodness. As I said, I will pass on to the minister the honourable member's request. He is not in the chamber. I have no capacity within the chamber at this time to request that it be withdrawn. I can do no more, because he is not now in the chamber.Questions to the Speaker172717271727Zammit, Paul, MPMr ZAMMITZK6LoweIND00—Mr Speaker, I am grateful that you will pass on your request to him, but will you ask him to withdraw?1727Mr SPEAKERMr SPEAKER10000PON/A10—It was not raised at the time and technically I cannot, but I shall pass on your request to him.Matters of Public Importance1727172710000SPEAKERMr SPEAKER—I have received a letter from the honourable member for Dobell (Mr Lee) proposing that a definite matter of public importance be submitted to the House for discussion, namely:The widespread community concern about the damage being done to Australia's health system by the Howard government.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—15:43:001727Lee, Michael, MPMr LEEMG4DobellALP00—The Bulletin said it all this week: `Medicare's Dr No: health cuts crisis, worse to come.' The missing Minister for Health and Family Services (Dr Wooldridge)—Dr No—is not brave enough to come into the chamber and debate health legislation, Medicare legislation, agreements on Medicare and even whether or not Australia's public hospitals system is receiving sufficient federal funds.It is no surprise that the Bulletin magazine is referring to the minister for health as Dr No. The minister has been Dr No on public hospital funding negotiations with the states. He has been Dr No on rebates for GP services, which is discouraging bulkbilling. He has been Dr No on the increasing costs for ordinary Australians for essential medicines. He has been Dr No on the ability of ordinary Australians to get fair access to emergency dental care. He has been Dr No for the 44 Medicare offices around the country that have been closed by this minister and this government, including one in Wynnum and another one in Belmont to close tomorrow. They are all closing because of the decisions that this government and this minister have made.These funding cuts were needed to fund this government's failed and discredited $1.7 billion health insurance tax rebate—the tax rebate flop in respect of which the Prime Minister (Mr Howard) and the minister for health will not admit publicly what every Australian knows: that it has failed to make any difference whatsoever in the level of membership of Australia's private health insurance funds.Before the last election the centrepiece of the coalition's health policy was to subsidise private health insurance. They said it would make the premiums cheaper, they said it would increase the membership and it would take the pressure off public hospitals. We love to remind the government of this promise every opportunity we have to discuss health matters. That was your promise: lower premiums and higher membership. The intention was to take the pressure off public hospitals. But what has happened? Premium increases have hit ordinary contributors like tidal waves. Time after time health funds have jacked up their premiums after they have been approved by this minister and this government. Most of the benefit of that tax rebate has already been swallowed up by premium increases, and it is no wonder that, as a result, membership of health insurance funds has been falling by 700 a day. According to the latest figures, 700 Australians a day are leaving private health insurance funds.Instead of taking the pressure off public hospitals, this government, in its inability to turn around the decline in health insurance, has increased the pressure on our public hospital system. Added to that, in its first budget—the August 1996 budget—the government cut federal funding for Australia's public hospitals by a massive $800 million. To make it worse, this Minister for Health and Family Services—this government—has even allowed one of the health funds to impose an added fee on any of their members who have the temerity to be treated in a private hospital rather than as a private patient in a public hospital. So one of the major health funds has now introduced a new penalty fee which is imposed on any of those health fund members who are treated in private hospitals rather than public hospitals.If the intention was to take pressure off public hospitals, why is this government approving new and additional burdens and costs and fees on ordinary Australians who do have private health insurance who use a private hospital rather than a public hospital? At the end of the day, the Prime Minister said, when this government launched its health policy at the last election, that they would get such a response to their health insurance tax rebate they would lift the level of private health insurance coverage from 35 per cent of the population to 40 per cent of the population. The Prime Minister's prediction was that he would, by the year 2000, get the level of private health insurance up to 40 per cent.8T4FERGUSONMr Laurie Ferguson—Fat chance.MG4Lee, Michael, MPMr LEE—We had a fat chance, as my colleague the member for Reid interjects. It has no chance whatsoever of being achieved, and that is because ordinary Australians are questioning whether they are getting good value for money from their private health insurance premiums. They are questioning that every day. That is why 700 Australians a day are leaving private health insurance.The minister for health, in that 1996 budget, put his name to the health portfolio budget document predicting that there would be an increase to 35 per cent—an increase to 34½ per cent because of the tax rebate and then, in his own press release, another one per cent increase because of the Medicare levy surcharge on high income earners. So we have both the Prime Minister and the Minister for Health and Family Services claiming that their $1.7 billion rebate would actually increase the level of private health insurance and take the pressure off public hospitals.But what have we seen actually happen? The levels just keep falling as each quarter the figures come out. The decline in membership of private health insurance is a straight line. The government says, `It was a straight line under the former government,' and that is true. There was a decline of health insurance membership under Labor and it is a straight line today. The only difference is that this government has spent $1.7 billion of taxpayers' money to get the same result—to get the straight line. That is why Jeff Kennett—RH4KERRMr Kerr—They could have put it into the public hospital system.MG4Lee, Michael, MPMr LEE—As my colleague the member for Denison interjects, that is why Jeff Kennett has been saying that that rebate was money down the drain. That is why the Premier of Western Australia, Richard Court, said the rebate is a dud, and it is why the AMA has been saying that the money should have been spent directly on patient care.If we want any independent evidence about the pressure on the public hospital system, let us turn to a former Australian of the Year, Dr Yu. Dr John Yu is a former chief executive of the new children's hospital at Westmead and he made the following comments yesterday:I am not sure how well briefed the Prime Minister is. I am certainly disappointed that Dr Wooldridge does not have a better understanding of what is happening.Dr Yu went on to say:Public hospitals deserve a better deal. There is really a crisis in the public hospital system. We are faced with the denial of treatment for things many of us would believe were the right of any Australian.Hear, hear! When an Australian of the stature of Dr John Yu, who is not associated with either side of politics, sounds that warning bell about the need for additional funding for our public hospital system, a responsible government would be trying to find the extra resources that our public hospital system would need.Instead of this government trying to find new ways to ease the crisis in our public hospital system, we have government members trying to justify this government's cutbacks. Let me give you a good example of this brought to my attention by my friend the member for Denison. In the Hobart Mercury this morning we have a very good story that I am sure some of my colleagues will be keen to hear about. Under the headline `Liberal MPs cross swords: health funding discord widens' the article says:A major brawl has erupted between the state and federal Liberal MPs over cuts in federal health care funding.Health minister Peter McKay yesterday accused the Canberra MPs of repeating like parrots the Federal Treasury line that state health cuts were a major factor in funding problems. He warned the five senators and two MHRs they would be picked off by the voters at the next federal election.He went on to say:Mr McKay accused his colleagues of using manipulated and selective figures and said he believed they had been pressured by Prime Minister John Howard.I will leave it up to my colleagues to decide who the two Tasmanian members of the House of Representatives might be. I am sure it was not the member for Denison or the member for Franklin (Mr Quick) or the member for Lyons (Mr Adams). Can you believe that the member for Bass (Mr Warwick Smith) or the member for Braddon (Mr Miles) would be so stupid as to put their names to a press release which parrots the Treasury line according to Health Minister McKay?R36ALBANESEMr Albanese—I believe it.MG4Lee, Michael, MPMr LEE—The member for Grayndler believes it. Seeing that the Howard government's Titanic is taking on water, the minister for health is abandoning Chisholm with a margin of 2.7 per cent, desperately pushing people out of the way to get onto the lifeboat of `SS Casey' with a margin of 6.6 per cent.You can imagine the disappointment that that has caused for the member for Bass, left behind as the minister for health scrambles on to the electorate of Casey for which there had been rumours that the member for Bass might have actually have had a chance of endorsement. Having been left in the electorate of Bass, he puts his name to a press release which says that the Tasmanian hospital system has got enough money already and that the federal government should not be putting extra resources into the Tasmanian health care system.Even if the members for Bass and Braddon were silly enough to put their names to this document, why are the conservative Tasmanian senators agreeing to this Treasury line that there is no need for extra federal money for the Tasmanian health care system? Remember the line that they used to give us that the senators do not take partisan political views on things, that senators speak up for their state, that senators are there to represent the states and speak out for what is needed for individual states?What about those five Liberal senators from Tasmania? What comes first: speaking up with their Premier and their health minister and the Labor members and senators in the federal parliament that are arguing for extra resources for the Tasmanian public hospital system? No, they put their name to the line of the Prime Minister and the member for Chisholm, Minister for Health and Family Services, that the Tasmanian hospital system does not need those extra resources. And they will pay the price. The health minister was right when he said that the five senators and the two MHRs, the members for Bass and Braddon, will be picked off by voters at the next federal election. And they deserve to be picked off, because they are not prepared to speak out for their local public hospitals in their own electorates.Tasmania is an interesting case because it was only a few weeks ago that we saw something that had never been witnessed in the national parliament. We had a delegation with representatives from the Australian Medical Association's Tasmanian branch, surgeons, nurses and unions that work in the hospital system in Tasmania. They brought up a unified delegation to point out to members of the national parliament the need for extra federal funding for the Tasmanian public hospital system. What has been the response? The member for Braddon, the member for Bass and the five Liberal senators signed their names endorsing the federal Treasury line rather than speaking up for the citizens of Tasmania and the public hospitals of Tasmania.The point we make and the great tragedy is that, to fund that $1.7 billion failed and discredited health rebate, the government cut the funding from the public hospital system, they abolished the Commonwealth dental health program and they increased the cost of the pharmaceutical benefits scheme for ordinary Australians. If they had spent that same amount of money, that same $1.7 billion, directly on patient care, they could have opened an extra 3,000 hospital beds right across the country or treated another 100,000 patients. That way they could have kept the operating theatres open longer.BV5ADAMSMr Adams—How many beds?MG4Lee, Michael, MPMr LEE—That is a 100,000 extra patients who could have been treated with that $1.7 billion. You can imagine the difference that could have made to the constituents of the member for Lyons and you can imagine the difference it would have made to the Tasmanian public hospital system if they had got their share of that $1.7 billion. The problem is that this government and this minister are obsessed with private health insurance. They have tried to walk away from their responsibilities to the public hospital system because of the obsession the Prime Minister has with private health insurance. We on this side of the House are not opposed to private health insurance, but what we say is that, whether or not you have got private health insurance—YT4SCOTTMr Bruce Scott—Do you have any?MG4Lee, Michael, MPMr LEE—I do have private health insurance and I challenge the minister to tell us how long he has had his. How long have you had private health insurance?YT4SCOTTMr Bruce Scott—Since I was 18; about 40 years.MG4Lee, Michael, MPMr LEE—Let us use the example of the minister at the table. He has got private health insurance, but if he or a member of his family is really sick they will be depending on the public hospital system to provide that emergency care and treatment. That is what we depend on. Whether or not we have got private health insurance, when we are really sick we depend on the public hospital system to make sure that we are okay. You cannot simply rely on the private hospitals: they provide the supplementary care which assists. The public system maintains proper and adequate standards and we do not want to walk away from the public system, as this government has.At the Labor Party National Conference in Hobart, we made one very firm commitment: public hospital funding will be our first priority in health care under a Labor government. The contrast is that this government's agenda is to undermine Medicare by stealth. They undermined Medicare by slashing that $800 million from public hospitals in their first budget. They undermined Medicare by squeezing the GP rebate to force more GPs to switch from bulk-billing to charging up-front fees. They undermined Medicare by making it more expensive for ordinary Australians to afford their essential medicines. They undermined Medicare by abolishing the Commonwealth dental health program, to force ordinary Australians to have their teeth pulled out rather than having them filled and having the ordinary preventative dental care they are entitled to.These are the reasons that we think this government have done the wrong thing in not providing the funding that our state public hospital systems need. That is the reason why all the Premiers and the Northern Territory Chief Minister walked out when this government were not prepared to put more resources into the public hospital system. That is the reason why this government will be defeated at the next election—because of the disgraceful and miserly level of funding they are seeking to offer the state public hospital system. (Time expired)15:58:001731Worth, Trish, MPMs WORTH8V5AdelaideLP10—The shadow minister for health and member for Dobell (Mr Lee) has once again displayed his ignorance of the way the health system works. He has a lack of understanding of what Labor did over 13 years—or perhaps suitable deafness to that; not just plain misunderstanding but not wanting to know the realities. He continues to allege that this $800 million cut that he constantly refers to is just a cut from health but, of course, it is not that at all; it is the contribution that the states agreed to make when we first came to government to help fill in that horrible $10½ billion deficit. The fact that he can attribute all that to health is beyond my understanding.He has also made comment about the fact that there are Medicare offices closing around the country. There are, but what the coalition government wants to do is to spend money on providing health care rather than finding ways to be constantly administering it. Now there are 130 Medicare fax change facilities in chemists in rural areas, and we will soon have another 400. That is the way we are doing things: we really want to be sensible and cost effective about the way we are spending our very precious health dollars.We should very briefly look at Labor's record. We have only been in government for two years, and I am proud of what has been achieved. But Labor cannot be too proud of what happened over those 13 years. The member for Dobell has made much about private health insurance. To be perfectly honest, you would think the only thing to do with health was public hospitals and private health insurance. The health debate is much larger than that. We have to be tackling it in all areas. It is complex and I know it is difficult to get around, but we have to do it. It is important to the people of Australia that we do do it.In 1983, there were 65 per cent of people covered by private health insurance. That fell by more than 30 per cent during the time there was a Labor government. Labor handed the immunisation program over to the states but failed to monitor it, and never checked on what was going on. In 1996, when we came to government, the immunisation rate among Australian children was 53 per cent. That is well below China, Algeria and Vietnam. The current rate now is still lower than some rates in Aboriginal communities around Australia.Labor refused to acknowledge our ageing population. I used to say from opposition, `When is it going to be acknowledged? When are we going to be planning for it? When is something going to be done about it?' So this government is facing up to those realities.Despite the fact that private health insurance figures are not quite what we would like them to be, there are 5.885 million Australians with private health insurance, and they do value that. We have provided incentives of up to $450 per family. This benefits 713,000 families with incomes less than $50,000; half a million couples earning less than $50,000; and another half a million singles earning less than $35,000. Presumably, if there is such a commitment, member for Dobell, when you hope to be health minister—although I think that might never occur; I am quite sure it will not because the Australian people will be much smarter than that—the whole idea is to throw that all away so that private health insurance becomes even more important to the people of Australia.Last November there was legislation introduced which allows doctors and private hospitals to draw up arrangements ensuring that there is informed financial consent, which puts an end to multiple billing and which addresses the out of pocket expenses. So we are tackling these problems on a number of fronts, not just thinking, `Let's hand another bucket of money to public hospitals.' I think public hospitals are very important. They must be adequately funded. They are a very important part of our health system, but so are the private hospitals. There are empty beds in them now. If there had not been such a disgraceful decline in the private health insurance numbers over 13 years we would not be having to battle with the problems we are now.But, as I have already said, we cannot just be thinking about what happens in hospitals. We should not be just waiting for people to get sick before we treat them. We should be promoting preventative health measures. We should be looking at early intervention. We should be looking at the whole gamut of the way we ensure Australians get a good health care system and adequate health care. It is still, despite the criticisms that are made of it, one of the best systems, if not the best system, in the world.That is something we should be trumpeting. It does not mean we do not have change. It does not mean we are not always looking at things that can be done better. There will always be changes. There are scientific advances and more medical research and we are getting the benefits of that. There is telemedicine and there are different ways of doing things. If we stand still and just trumpet public hospitals and that funding them is the only way of looking at health care, then we are closing our eyes to reality.The government has introduced coordinated care trials to help 1.4 million Australians with asthma; 650,000 Australians with diabetes; and a countless number of Australians who are suffering from chronic pain. These are just some of the examples of looking at the whole gamut, the whole health picture. It should not be forgotten that the 1995-96 figures show that Commonwealth expenditure was $2,300 in health care dollars for every person, or 8.5 per cent of GDP. That does not count any private contributions that are made.The member for Dobell has mentioned the stand-off now with the states. I would have thought that stand-offs with the states were a fairly regular event when health ministers or premiers come to Canberra. That has been part of the games that one expects to see played. As long as I can remember, I have seen games being played in that respect. I personally think—and I have said it quite publicly—that every one of the premiers who walked out of that meeting was jolly stupid to have done so because they were yet to discuss guns and tax reform, which I would have thought would have been fairly important for them and their own budgets.But let us look at some of the realities. Victoria, for instance, reduced its spending on health by 23 per cent in 1993-94 and is still spending 18 per cent less in real terms than in 1992-93. Queensland reduced spending by 15 per cent in 1993-94 and did not begin spending more until 1995-96. Western Australia made similar reductions. Tasmania—and the member for Dobell was quick to cite Tasmania—reduced spending by 25 per cent in real terms in 1993-94 and has since reduced it a further five per cent. By contrast, the Commonwealth increased its funding by 13 per cent in 1993-94 and by a further six per cent over the life of the Medicare agreements.The truth of the matter is that spending on health and spending on public hospitals is very important, but let us have some honesty about it. I have to say, with almost some regret, that I recall my friend and then health minister in South Australia remarking publicly how good it was to have saved $60 million out of health spending. I thought at the time that this was really a bit of a tragedy—and we have been proved to be right. The reductions in South Australia, I hasten to add, have not been anywhere near some of those in other states.If we were to rely on the previous Labor government's forward estimates, there would be $27.3 billion to be spent over the next five years over the current Medicare agreements. But this government has increased that figure to $30.2 billion—a growth of 15 per cent over five years. In addition to this—and this is what I really think is very important, something we have not seen a lot of in the press—there was to be $83 million available for each one per cent decrease in private health insurance should that occur. However, I am also confident that as some of the incentives and a bit of the hard stick we have taken to the high income earners come into effect we will see private health insurance numbers going up again.If, by any tragedy, that should not occur, built into these Medicare agreements was $83 million for each one per cent decrease. So for the states to argue that we were letting them down over this has been less than honest. If we were to give the states exactly what they were seeking, this would amount to a 33 per cent increase in Commonwealth funding.We need some honesty in the health debate rather than just playing politics. So often it is said to me in my own electorate and other institutions and electorates that I visit around the country that ideally health would be removed from being a political debate and it is far too important to people to be a political debate. Unfortunately, while there are such philosophical differences and while the opposition chooses to play politics on this, that is unlikely to occur.Mr Lee interjecting—8V5Worth, Trish, MPMs WORTH—The member for Dobell was not listening. The member for Dobell was actually speaking when I was giving the figures and the arguments that the state Premiers had put forward and why they have been wrong.YT4SCOTTMr Bruce Scott—There's $750 million for the veterans.8V5Worth, Trish, MPMs WORTH—That is right; there is $750 million for veterans. I think it was in the member for Dobell's speech last night that I was reading in Hansard where he was saying that the states did not even know about it. It is the classic example of why they should have hung around to discuss these details. I just reiterate that if the Premiers had stuck around to talk about these things they would have been better informed.I was about to give some examples of where Labor would rather play politics, and in fact cheat and mislead the Australian people and the Australian electorate, rather than face up to some of these real issues. I offered the member for Dobell a briefing on the therapeutic group premiums. He said he would like that, but perhaps he felt he did not need it. We made sure that every member and senator in the parliament, no matter what their political persuasion, background or loyalty, received this pack of information, which provided accurate information not put together by politicians or bureaucrats but put together by some very key and well-qualified independent medical and scientific experts.MG4LEEMr Lee—Any mistakes?8V5Worth, Trish, MPMs WORTH—I am so pleased the member for Dobell has made this interjection because what we do have here, which I can present today, is a pamphlet that is being distributed around the electorates of Australia, including in South Australia and in my own electorate, headed `Unsafe and unfair'. It refers to medicines on the pharmaceutical benefits scheme. They are `unsafe because patients will be pressured to switch to cheaper, older and less effective drugs.' `Even Mr Howard's own experts have said that some of the cheaper drugs are not as safe.' I would love to use the word that we are not allowed to use, but I will not. I will just say that this is a gross misrepresentation of the truth. There would be many manufacturers of medicines, and good manufacturers at that, who would find that deeply offensive. It does not stand up to any scrutiny.I can provide the member for Dobell, and anybody else who would like to see it, a list of the medicines that are part of that policy, the dates, for instance, that they were listed on the PBS and the premiums. I could go chapter and verse on this, but I will show it to the member for Dobell afterwards so that he can be better informed and not make statements like this. In fact, I hope he will show leadership and actually ask the Labor Party to cancel this misleading brochure so that they will not be misleading the people of Australia in such an improper and shameful way.This list shows beyond any doubt at all that it is the medicines that have been most recently, except for one example that I am out on, listed on the PBS that have no or the smallest possible premium. It is other medicines that have been there much longer that have a premium. I challenge the member for Dobell to go away to the Labor Party machine and say, `Look, my integrity is at risk here. I would like you to get this right and stop putting out this stuff because really we are misleading the Australian public and, if we are going to have credibility, we should not be doing that.' The wellbeing and the health care of all Australians is far too important to be doing that.There are other initiatives that the government has taken—further examples that show we should not just be talking about hospitals and hospital funding. I would rather talk about how we care for people before they get into hospitals. There have been major initiatives for carers, unsung heroes in the Australian population who must be cared for. We have resource centres available for them. We have respite centres available for them.We have a community education program now funded to $17.25 million over the next three years for a comprehensive community-wide education on drugs and drugs of abuse and rehabilitation. We need young people to be aware of the problems they are letting themselves in for. We have made major inroads into the treatment of mental health and we are taking a national and strategic approach to that. We need young people to know that drugs of abuse as well as harming them will also cause them mental health problems. That is something that we have to be taking a lot of care of. We have embarked on the biggest campaign of all time. (Time expired)16:13:001734Brown, Bob, MPMr ROBERT BROWN5A5CharltonALP00—I am pleased to have this opportunity not only to support the shadow minister for health, the member for Dobell (Mr Lee), on this matter of public importance but, in the process of doing that, to supplement some of the remarks that were made by the member for Dobell on behalf of the opposition as far as this general area is concerned. The matter of public importance refers to `widespread community concern about the damage being done to Australia's health system by the Howard government'. I suppose some people could say, `Well, we might expect the Labor opposition to say that.'On Friday of last week an unprecedented event occurred. With the exception of one territorial Chief Minister, every Premier and the other Chief Minister at a Premiers Conference in Canberra left the meeting. Unlike on previous occasions, they did not leave the meeting to go out and regroup, redetermine their strategy, come back in and fight again for their states and territories. On this occasion they walked out and went home.DH4HOLLISMr Hollis—With good reason.5A5Brown, Bob, MPMr ROBERT BROWN—As my colleague the member for Throsby says, with good reason. Yes, indeed, with good reason—as I will indicate. Following that walkout we had these comments, for example. The first one I am going to quote is the comment from the Premier of New South Wales, Bob Carr. I want to mention him first because we know that Bob Carr is our political colleague. He is our political comrade as far as pursuing health improvements in Australia is concerned and he is a colleague of the shadow minister, who more than any other person, at least on the government side, has brought to this question integrity, vision, policy development, determination, dedication and commitment. They are just some of the qualities he has brought to this question.But what did Bob Carr say after that exercise last Friday? He said:Under John Howard (the government) is treating people with contempt, people who need access to our public hospitals.Bob Carr is speaking on behalf of every citizen in New South Wales. So when we say that there is widespread community concern about the damage being done to Australia's health system by the Howard government, they had better believe it.One might well say, `Why wouldn't Bob Carr say that? He is a Labor Premier and he is tied up with that mob in opposition.' But let us have a look at what some of the others have said. The Victorian Premier, Jeff Kennett—LN6HATTONMr Hatton—No friend of Labor.5A5Brown, Bob, MPMr ROBERT BROWN—Exactly; no friend of Labor. Nor necessarily a friend of Bob Carr's. He is a member of the Liberal Party; a member of the conservative coalition. What did Jeff Kennett say? He said that it was `absolutely essential' the base rate of public health funding be lifted by $1.1 billion over five years in the wake of the collapse of private health insurance. Listen to this. He went on to say:We have been substantially let down because the door's been slammed in our face.By whom? By this coalition government.I have just quoted Jeff Kennett. He is a member of the Liberal Party. Let us go to the National Party. Let us go to the other coalition party. He is a colleague of the Minister for Veterans' Affairs (Mr Bruce Scott), who is at the table, and from the minister's own state. What did Rob Borbidge say? He said:There is not much point all of us coming down here—that is, to Canberra—if when we get into the room what is given to us before is `first, final and absolute', regardless of the logic and the argument and the common sense we can bring to the debate.So Rob Borbidge said, as did Jeff Kennett, that they had the door slammed in their faces by their political mates at the national level.What did we have from John Olsen, the South Australian Premier? He warned:. . . the elderly would be the first to be hit by the funding shortfall with delays also likely in the introduction of new technology.That was John Olsen. What did Richard Court from Western Australia have to say?DH4HOLLISMr Hollis—What party is he from?5A5Brown, Bob, MPMr ROBERT BROWN—He is another member of the Liberal Party.LN6HATTONMr Hatton—Is he a friend of the Labor Party?5A5Brown, Bob, MPMr ROBERT BROWN—Once again the question is asked of me: is he a friend of Labor? Let me answer that question. No. Is he an enemy of Labor? Yes. Is he a colleague of the present national coalition of the Liberal Party and the National Party? Yes. What did Richard Court say? He said:What I plead the Federal Government is to look behind the actual dollar figures being provided. There needs to be a recognition at the federal level that the current finances simply can't provide the services that the public is demanding.Let me repeat that. We said that there was widespread concern about what this government is doing to health. Richard Court said that the present level of funding:. . . simply can't provide the services that the public is demanding.That is perfectly correct. We have made the point repeatedly today, and we are going to continue making it, that the federal government, the minister, Dr Wooldridge, and the Prime Minister, Mr Howard, chose to in effect take the states and territories for a ride and in the process of doing that to also take for a ride 18 million Australians. They said, `We are going to pump extra funds into the health and hospital system. It is going to represent a real increase of 15 per cent over five years.' And it has all been exposed. There are no additional funds at all. They are simply replacing the funds that this coalition government ripped out of the system. I am genuinely sympathetic for members of the government who find themselves in a public position where they have to get up and defend the indefensible. I say that particularly about Mrs Trish Worth, the member for Adelaide, who just led for the government in seeking to defend it. Mrs Worth had a very successful background in the area of health before she came into this parliament. She has now the responsibility of defending what she knows to be indefensible. I am going to give only two examples out of the comments that Mrs Worth made.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! The honourable member will refer to members by their titles.5A5Brown, Bob, MPMr ROBERT BROWN—The member for Adelaide referred to the games they play when they come to Canberra. She was talking about the premiers. The premiers and the chief ministers were not playing games when they came to Canberra. The people playing the games were the Prime Minister and the Minister for Health and Family Services (Dr Wooldridge). The member for Adelaide also said that spending on health is very important, but then she said:. . . let us have some honesty about it.Let us have some honesty about it, indeed. What are these games that are played when premiers and chief ministers come to Canberra? And who plays the games? We are talking about the health of Australians. To my mind that is something objective; it is something for which measurable and quantitative judgments can be made about the volume of funds which are necessary for it.Let me just go over some of the childish, stupid tactics of the federal government. The initial proposal, as you know, was an offer of $3 billion extra from the Commonwealth. That was over and above the amount of $26 billion that had been provided under the previous agreement. That made it $29 billion that the Commonwealth offered. After that, the Commonwealth offered another $80 million to 100 million and then upped that to $120 million because the states and the territories had dug their heels in, saying that it was not enough. The Commonwealth increased its offer from $29 billion to $30.17 billion. This is like a Persian market. These are the fun and games. This is the way the present federal government responds to the legitimate concerns on the part of state premiers and territorial chief ministers.The Sydney Morning Herald on 26 March said that the Prime Minister had indicated yesterday that the states might not get a better offer than the 15 per cent increase but he left open the possibility that they would. These are the games being played by this national government. (Time expired)16:23:001736West, Andrea, MPMrs WESTXK6BowmanLP10—I have heard a lot today. It seems to me there is a lot of huffing and puffing going on from the other side. Health has always been a critical issue in this country but I have never come across the hypocrisy of the ones elected to the other side who are just trying to cover up 13 years of guilt. It is guilt that has been expressed by the honourable members on the other side, who are trying to cover up their inefficiencies, their inadequacies and their inability to address the same problems we are facing in 1997 and 1998 as they were facing in 1990 and 1983. The more they went on nothing seemed to change, but we are now in the box seat to reform what you failed to address over 13 years of ineffective administration.MG4LEEMr Lee—You reformed the Wynnum Medicare office!XK6West, Andrea, MPMrs WEST—Yes, the member for Dobell brings up an interesting point. It is all very well for you to talk about the Wynnum Medicare office closure. It is an unfortunate situation. The reason it is closing is that there were not enough accounts going through that office.MG4LEEMr Lee—So it should have been closed?XK6West, Andrea, MPMrs WEST—Yesterday you indicated your widespread community concern in Wynnum. The Macquarie Dictionary defines widespread as `distributed over a wide region, or occurring . . . among many persons or individuals'. You attended a protest at Wynnum yesterday in my electorate. You saw around 70 people as representing widespread concern. Of course it was reported in the press as being over 100 but, then, people do tend to exaggerate when they want to make things seem more important than they are.YT4SCOTTMr Bruce Scott—Labor Party branch, was it?XK6West, Andrea, MPMrs WEST—Absolutely; all their hacks, because my people were among the crowd as well and they asked the people in the protest about whether they used the service. They did not use the service and the people they asked did not use the service either. Get your facts right. The reason the Medicare office is closing is that people are voting with their feet. They were beating up a storm in a teacup.We are in trouble if the member for Dobell becomes the minister because the public purse will be hit and hit hard. I suggest that the Labor Party will also have the old bankcard out, spending and spending or increasing taxes to satisfy the shadow minister's understanding of what he calls `widespread concern'. Who allowed the private health system to run down?YT4SCOTTMr Bruce Scott—Labor.XK6West, Andrea, MPMrs WEST—Labor. They presided over a system which, in 13 years, saw private health insurance coverage of Australians fall from 65 per cent to 34.5 per cent. It is still falling. This decline in private health cover has placed intolerable demands on the public system. The Labor legacy in 1982-83 was a cost for health of $220 per capita. In 1997 the cost has risen to $1,150. The costs of private health insurance in 1983 were $505 for a family; today they are $2,500.We have only been in office for 24 months. All that grief was not of our doing. All those increases were not because of a coalition government. Who was in power? Labor. The Labor Party created a system of unsustainable proportions. And if the trend of the decade continues, we will have gone from a $3.4 billion allocation towards health in 1983 to over $20.7 billion in the next four years. For a population of 18 million that is a huge impost. If Labor come to office again, where will they get that kind of money? There is more too, because the different shadow ministers argue amongst themselves over how much is going to be needed to address the current health care problems. Where are they going to get it? Let me think: what did they do last time? Can we trust them? Can we risk it? I do not think so. They will whack it on the bankcard and create problems for the whole Australian community.Which party created the chaos in our public health system? Labor. They presided over a clearly unsustainable budget situation. They left the Australian people a legacy of $10.5 billion in deficit. In 1996 our nation's Medicare benefit schedule was $6.2 billion. That is more than the budget of Western Australia, and it is expected to rise a further 40 per cent in the next four years. Labor increased the Medicare levy by 1.5 per cent after promising not to do so. This increase failed to add any benefit to the health system as pressures were occurring because of the declining cover of Australians by private insurance. Labor has not delivered. In 1996 Australia's immunisation rate was only 53 per cent, well below China, Algeria and Vietnam. Even the smallest island state of Samoa has a higher immunisation rate of 97 per cent.Labor's national Aboriginal health strategy collapsed; in fact in 1996 the state of health of indigenous Australians was relatively worse than it was in 1983. I am pleased to say that I am part of a standing committee that is looking into a 20-year reassessment of indigenous health problems. We are going to make recommendations, and Labor will be held accountable for the changes that need to be made by a committed government that will ensure that the health of all Australians is of a high quality. The coalition government has committed $1.7 billion to private health insurance to allow battlers to maintain their health cover in an effort to reduce the flourishing waiting lists created by 13 years of Labor government. The coalition has preserved funding for hospitals. The state governments are reducing hospital funding, not the coalition. I commend the state minister for health in Queensland, Mr Horan, who is doing an excellent job of maintaining public health facilities and doing very nicely. In fact, my electorate has two projects that will see benefits directly linked to services provided in the community by a coalition led state government.Which party watched as the aged care system declined under the cuts to funding which were invoked, despite the advice that they had received from their best mates? You could not even take the advice given by your best Labor mates to improve the system. And what happened? You did not take their advice and after 13 years you are in opposition, we are in government, and the country is absolutely awake to the lies and mythology that you perpetrated for 13 years.We inherited your mess. During your time in office there were widespread concerns. I draw attention to a briefing note from my colleague Dr Brendan Nelson, who last night quoted what the Australian Financial Review of 10 April 1992 had to say when Mr Brian Howe was the health minister. The article said:Federal and State government health ministers are expected to open next week's negotiations on the new five-year Medicare agreement with a clash over hospital funding.So what has changed? Mr Keith Wilson, a member of the Carmen Lawrence Labor state government of the day, said:. . . I want to draw attention to the major issues which are of primary concern to me as Minister for Health in Western Australia—the provision of hospital services in that state.He goes on:The pre-eminent issue, which I believe this conference must focus on, is that seriously sick Australians are daily unable to gain access to needed hospital treatment.That was in 1992. What did you do for the last six years? Nothing. There were problems in 1992, so why didn't you fix them? Why didn't you fix the Commonwealth-state funding issue? Why didn't you see the problems that needed to be addressed and do something about them? After 24 months, we are in the process of doing something positive for the health system. It will not happen overnight; it might not happen in one term, but it will happen if the community of Australia gets behind those with faith, and we have faith that the coalition government will overcome these health problems. We have a `get tough on drugs' campaign. For the first time this nation's mentally ill will have genuine representation. (Time expired)10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! The discussion is now concluded.Bills1738The following bills were returned from the Senate without amendment or request: Ballast Water Research and Development Funding Levy Bill 1997 Customs and Excise Legislation Amendment Bill (No. 1) 1998 Chemical Weapons (Prohibition) Amendment Bill 1997 Questions Without Notice173817381738Vaile, Mark, MPMr VAILESU5LyneNPTransport and Regional Development10—Mr Deputy Speaker, I seek the indulgence of the chair to add to an answer.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—The minister may proceed.SU5Vaile, Mark, MPMr VAILE—Following question time, the member for Lowe (Mr Zammit) was concerned about some comments that I made in addition to an answer I gave the other day with regard to a comment I made on Tuesday. The comment I made was:Any fool knows that the curfew at Sydney airport has been legislated and it will remain that way.If the member for Lowe takes umbrage at that and feels that way about himself, I will withdraw the word `fool' and insert `any person who reads newspapers, watches TV, listens to radio or occasionally listens to parliament should know that the curfew at Sydney airport has been legislated and it will remain that way.'10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! Whilst extending the indulgence about withdrawing without qualification, I think that that is perhaps at this stage the end of the matter.Bills1738r4571738Consideration resumed.16:36:001738Lee, Michael, MPMr LEEMG4DobellALP00—I just remind the House that these opposition amendments aim to change the name of the legislation and the names of the agreements back to Medicare agreements. This government so hates the word Medicare that it cannot even stand to have that word in the title of the Medicare agreements, and that is why we will be forcing a division on this matter. Question put: That the amendments (Mr Lee's ) be agreed to. 16:40:00The House divided. (Mr Deputy Speaker—Mr H.A. Jenkins)41Adams, D. G. H. Albanese, A.Beddall, D. P. Bevis, A. R.Brereton, L. J. Brown, R. J.Crean, S. F. Crosio, J. A.Dargavel, S. J. Ellis, A. L.Evans, M. J. Ferguson, L. D. T.Fitzgibbon, J. A. Grace, E. L.*Griffin, A. P. Hatton, M.Holding, A. C. Hollis, C.Kerr, D. J. C. Latham, M. W.Lawrence, C. M. Lee, M. J.Macklin, J. L. Martin, S. P.McClelland, R. B. McLeay, L. B.Melham, D. Morris, A. A.Morris, P. F. Mossfield, F. W.O'Connor, G. M. O'Keefe, N. P.Price, L. R. Quick, H. V.Sawford, R. W.* Sercombe, R. C. G.*Tanner, L. J. Theophanous, A. C.Thomson, K. J. Willis, R.Wilton, G. S.71Andrew, J. N. Andrews, K. J.Anthony, L. J. Bailey, F. E.Baldwin, R. C. Bartlett, K. J.Billson, B. F. Bishop, B. K.Bradford, J. W. Broadbent, R. E.Brough, M. T. Cadman, A. G.Cameron, E. H. Causley, I. R.Charles, R. E. Cobb, M. R.Dondas, N. M. Draper, P.Elson, K. S. Entsch, W. G.Evans, R. D. C. Forrest, J. A.Gallus, C. A. Gambaro, T.Georgiou, P. Grace, E. J.Halverson, R. G. Hardgrave, G. D.Hawker, D. P. M. Hicks, N. J.Hockey, J. B. Jeanes, S. B.Johnston, R. Jull, D. F.Katter, R. C. Kelly, D. M.Kelly, J. M. Kemp, D. A.Lindsay, P. J. Marek, P.McArthur, F. S.* McDougall, G. R.Miles, C. G. Mutch, S. B.Nairn, G. R. Nehl, G. B.Neville, P. C. Nugent, P. E.Pyne, C. M. Randall, D. J.Reid, N. B. Reith, P. K.Ronaldson, M. J. C. Scott, B. C.Sharp, J. R. Slipper, P. N.*Smith, A. C. Smith, W. L.Southcott, A. J. Stone, S. N.Sullivan, K. J. Taylor, W. L.Thomson, A. P. Truss, W. E.Vaile, M. A. J. Vale, D. S.Wakelin, B. H. West, A. G.Williams, D. R. Worth, P. M.Zammit, P. J.Baldwin, P. J. Ruddock, P. M.Beazley, K. C. Howard, J. W.Evans, G. J. Somlyay, A. M.Ferguson, M. J.Downer, A. J. G.Jones, B. O. McLachlan, I. M.McMullan, R. F. Moylan, J. E.Smith, S. F. Lieberman, L. S.* denotes tellerQuestion so resolved in the negative.16:45:001739Cadman, Alan, MPMr CADMANSD4MitchellLP10—by leave—I move government amendments Nos 1 to 3:(1) Schedule 1, item 12, page 5 (after line 4), at the end of section 24, add:Note: If a State does not enter into an agreement with the Commonwealth before 2 June 1998, the purpose of this Part is modified by the operation of section 28.(2) Schedule 1, item 12, page 5 (line 7), after "section 26", insert "(including section 26 as varied in the circumstances set out in subsection 28(4))".(3) Schedule 1, item 12, page 7 (lines 12 to 14), omit section 28, substitute: 28 Financial assistance conditional on entry into agreement(1) Financial assistance is payable to a State under this Part in respect of the 5 years starting on 1 July 1998 only if the State has entered into an agreement with the Commonwealth before 2 June 1998.(2) If a State does not enter into an agreement with the Commonwealth before 2 June 1998, the Commonwealth may, in a law providing for the annual appropriation of money in respect of the year starting on 1 July 1998, provide for the payment of financial assistance to the State in respect of that year on such terms and conditions, including terms and conditions requiring adherence by the State to the Health Care Agreement Principles set out in section 29 of this Act, as are determined in writing by the Minister. (3) If a State enters into an agreement with the Commonwealth on or after 2 June 1998 and before 1 July 1999, financial assistance is payable to the State under this Part in respect only of the 4 years starting on 1 July 1999.(4) For the purpose of the application of this Part in circumstances where a State enters into an agreement with the Commonwealth on or after 2 June 1998 and before 1 July 1999, this Part has effect as if each reference to the 5 years starting on 1 July 1998 were a reference to the 4 years starting on 1 July 1999.The government amendments are intended to provide a mechanism to honour the government's commitment to provide funding to the states for health care next year on the basis set out in the Commonwealth offer, regardless of walkouts by petulant premiers. If the states will not sign up, we will provide the funding through an annual appropriation on the condition that the states adhere to the principles set out in this bill.Once the states come to their senses some time in 1998-99 and sign up, the amendments will allow them to receive funding under this bill for 1999 to 2000 and later years. Many payments to the states are provided under the annual appropriation and I see there is no good reason why the Commonwealth contribution to state health budgets cannot be provided in this way for 1998-99. Of course, it will be difficult to achieve the reforms we are seeking without agreements with the states, but that is another reason why I am confident that the states will sign up sooner or later. They value reform and endorse and welcome it just as much as the Commonwealth.16:48:001740Lawrence, Carmen, MPDr LAWRENCEXS4FremantleALP00—Not satisfied with cutting expenditure on the public health system by almost $2 billion and states grants by much the same amount since its election, the government has now made the states an offer under the new Medicare agreements which will seriously exacerbate the already parlous state of our public hospital system.If we need an example, it was provided today in a story in the West Australian under the headline `New hospital hits budget problems'. The state government's first fully privatised public hospital has actually had to cancel all elective surgery because of a budget blow-out. It has not been able to get extra funds from the government, demand has been much higher than anticipated and already in the northern suburbs of Western Australian there is a two-tiered system. What is happening is that the hospitals are offering people a place for elective surgery if they can pay for it and if they cannot it has been cancelled altogether. That is what we are `looking forward to' with these changes.Having served in both levels of government, I am very well aware of the manoeuvres which can be employed by each side to make the other look culpable for any budget cuts and any systems failures. Sadly, our federal system does invite such behaviour, particularly when the governments are of opposite political persuasions. This makes this dispute all the more puzzling, because these are the mates of the conservatives in government.On many occasions during my time as minister I had to draw attention to the behaviour of conservative state governments, particularly Victoria and, at the time, New South Wales and Western Australia, who were cutting their own funds for hospital services while the Commonwealth was steadily increasing funding as a result of the 1993 Medicare agreements. The result then was a zero sum game and no discernible improvement in either the quality of services or in waiting times for elective surgery. What the Commonwealth put in with one hand, the states took out with another.I also very clearly recall the derision with which this observation was greeted by the current Minister for Health and Family Services (Dr Wooldridge) and the Prime Minister (Mr Howard). In their eyes, the conservative state governments who were pulling these funds out could do no wrong. Even the very blatant cost cutting and cost shifting being perpetrated by the Kennett government in Victoria aroused no censure at all from members of this government, including the current health minister whose state it is.It was clear at the time, and it is clear now, that any future agreements would need both stiffer sanctions—and we do not see that at all in this legislation—and better incentives to ensure that both sides stick to the rules and abrogate any tricky devices to make someone else pay the bill, often the private health insurer or the individual. The focus needs to be firmly on achieving quality services for the patient and the community at a reasonable total cost. There is no point in shifting the burden around if you are gradually increasing the costs to the community.While the Prime Minister has in recent days tried to use my arguments to bolster his current position in relation to the states, he simply demonstrates to me and to many others that he does not know, or pretends not to know, what is really going on now. The Prime Minister need only examine the figures produced by independent researchers at both the Australian Institute of Health and Welfare and the Australian Bureau of Statistics to understand the wails of the state governments. Why are they shrieking so loudly? Why have they walked out on their own political colleagues?The funding game which Dr Wooldridge boldly claimed he would personally eliminate has—courtesy of this government's budgetary strategy—now seesawed in the opposite direction. The states, poor souls, have actually been increasing their funding in the last couple of years and the Commonwealth has now pulled the funds out from Commonwealth sources. Again, the net result is no increase in hospital funding.From the time the Labor government was elected in 1983, the proportion of health funding provided by the Commonwealth increased while the proportion from the states and territories declined. We have seen a turnaround in the last couple of budgets. What has happened, of course, is that from 1990 onwards the states pulled out substantial funding. I do not know if it is permissible to incorporate this, but I have here a table drawn from the Australian Institute of Health and Welfare statistics which shows very clearly what happened. As the Commonwealth was increasing its funding under the 1993 agreement, the states were clearly decreasing theirs. By the end of 1996 they had put it back in again, and they have continued to do so. The result is a zero sum game, because the Commonwealth has not only taken money out in the last two budgets, but also is threatening to take even more in the new Medicare agreements.As a former health minister and premier, I call on this government to actually make a decent offer which takes account of the cost escalation, including the increasing number of people who need the services because of the ageing of the community and demographic changes, and not to bury its head in the sand.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! Is the honourable member for Fremantle seeking leave to incorporate?XS4Lawrence, Carmen, MPDr LAWRENCE—Yes, I am seeking leave to incorporate this graph into my remarks.Leave granted.The graph read as follows—SD4CADMANMr Cadman—Mr Deputy Speaker, with your indulgence, I table the supplementary explanatory memorandum to these amendments.16:53:001743Baldwin, Bob, MPMr BOB BALDWINLL6PatersonLP10—As I speak on the amendments which have been moved on behalf of the government in relation to financial assistance conditional on entry into agreement, I think we need to reflect on the Labor Party's record on health care over the 13 years from 1983 to 1996. That record was absolutely appalling, as we all know—and even my Labor colleagues in this chamber would begrudgingly agree.Speaking of poor records, let us look at New South Wales. For all appearances, the New South Wales health system seems to have been run into the ground. This is despite the absolute dedication of the health professionals in my electorate of Paterson and the operation of both private and public hospital institutions in areas such as Maitland, Dungog, Gloucester—and, of course, not forgetting the polyclinic at Nelson Bay. Indeed, this extends right across the Hunter, including the acclaimed John Hunter facility. No slick PR campaign across our airwaves which is supported, authorised and endorsed by the New South Wales government is going to change bald facts.The New South Wales health system has some major problems—problems such as are had in any other Western health care system—which the current health care agreement on offer now on the table will help to address. Just to keep things in perspective, the New South Wales 1997-98 base grant entitlement funding equates to $1.472 billion. The base funding under the new AHCA for 1998-99 equals $1.528 billion—an increase of 3.76 per cent for New South Wales. It equates to an extra $55.4 million extra in one year alone for base funding for New South Wales hospital services, and $58.2 million in new funding for veterans' health services provision in my state. It would deliver up to $41.3 million under the `cut waiting lists' incentive and, of course, extra money for capital works.But NSW's claim—from the mouth of Dr Refshauge—to obtain, with the rest of the states collectively, an extra $1.1 billion in the first year and $5.5 billion over five years in hospital funding is just not cricket. And that is even on top of the growth in forward estimates, which I outlined earlier. Indeed, the good doctor's claims for additional funding under the new health agreement are about wanting to take his bat and ball and head home. They ring hollow when the extent to which costs are shifted onto the Commonwealth by the New South Wales public hospital system is taken into account.According to Dr Refshauge, New South Wales does not cost shift to the Commonwealth. But example after example of cost shifting has been exhibited. For example, there is the Nepean Hospital in outer Sydney, admitting patients from accident and emergency as private patients when they have asked to be admitted as public patients. There is the St George Hospital, reclassifying public patients to private status. Then, locally in the Hunter region, there is the John Hunter Hospital, reclassifying public day-only patients for gastroscopies and colonoscopies to private outpatients, and billing Medicare. It is pretty difficult to understand how Dr Refshauge can claim to be short-changed by the Commonwealth when it appears as though cost shifting already funded under the current Medicare agreements back to the Commonwealth is endemic in the New South Wales health system.This issue is not a game; it is not about kicking the political football of health care funding around the park just for the hell of it. In fact, we should not be playing this game at all. Not only are the people of NSW—including, specifically, the people of the Hunter—quite frankly, fed up and mentally exhausted, having little idea as to what the belligerent states or Commonwealth are really on about over all this debate, but so are the people of Australia. Millions are being jumbled with billions; politicians, unsurprisingly, are taking opposite ends of an argument to, presumably, suit their own ends and their own political needs.But I do have to say this: if the likes of Bob Carr and Andrew Refshauge want to make a significant contribution to the health care debate, they need to do a few things. Firstly, they have to sign the latest Australian health care agreement; secondly, get their own financial act in order to sustain their promises on health care; and, thirdly, if they want to make a contribution in the area of private health insurance, let us go about it collectively and in an orderly fashion in the right way.I am a big supporter of private health insurance. We need private health insurance. Indeed, the time may soon come where we need to sit down and have a good hard look at prospects for its possible tax deductibility, even an assessment of the continued effectiveness of community rating or even gap insurance. But if and when that time comes, we need to do it in the right way and at the right time. In conclusion, I seek leave to table this graph: `Growth in own source recurrent hospital expenditure—Commonwealth and all states'.Leave granted.The graph read as follows—16:58:001746Fitzgibbon, Joel, MPMr FITZGIBBON8K6HunterALP00—I rise in support of the amendments put forward by the shadow minister for health, the member for Dobell (Mr Lee). I also want to express my outrage that I have been denied, once again, an opportunity to participate in the second reading debate on this bill—as I was denied the opportunity yesterday to participate in the debate on the Aged Care Bill. Both bills are very important to the people of my electorate, and they are very important to the people in the electorates of all those members on this side who have been denied that opportunity.I am a little bit disappointed with the honourable member for Paterson (Mr Baldwin). I issued an invitation to him last night during the adjournment debate. Having seen his name on the speakers list for this bill, I extended to him an invitation to come in here today and stick up for his constituents for a change. He has done nothing to support the coalminers; he does not even return their phone calls.LL6BALDWINMr Bob Baldwin—That's crap. You're a liar.8K6Fitzgibbon, Joel, MPMr FITZGIBBON—His opportunity here today was to forget about party—MG4LEEMr Lee—Mr Deputy Speaker, I raise a point of order. You might not have heard, Mr Deputy Speaker, but the member for Paterson accused the member for Hunter of being a liar. I ask that you remind him of the normal rules of behaviour in this place.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—As the honourable member for Dobell quite rightly put it, I was distracted at the time. But, if the honourable member for Paterson did use that expression, even by way of interjection, he should withdraw it.LL6BALDWINMr Bob Baldwin—I withdraw it and replace it with—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! No, the honourable member for Paterson—LL6BALDWINMr Bob Baldwin—`poorly handling the truth'.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—No. The honourable member for Paterson should withdraw unreservedly.8K6Fitzgibbon, Joel, MPMr FITZGIBBON—The member for Paterson had a golden opportunity today to come into this House and, for once in his two years here, defend the people he is meant to be representing—to come in here and criticise and recognise that his own government is screwing the people in his own electorate.What did he do instead? It was the same old line. He came in here with a written speech which was basically a tirade against the Carr Labor government. There was no mention of Borbidge or Kennett. There was no mention of the fact that all of the conservative premiers, as mentioned earlier by the member for Charlton (Mr Robert Brown), walked out of the Premiers Conference last Friday. There was no mention of any of the conservative premiers or territory leaders. The member for Paterson simply wanted to single out the Carr Labor government.But he cannot have it both ways. I am a bit mixed up about his logic. He spent half of his time trying to tell us, fairly poorly, about the situation in his electorate. He named each of the hospitals; he got them into the Hansard so that he could spit them out to the various groups in the electorate. He got all of the names in. He did not suggest any of them were in need of additional funding. What he said was that they were all doing wonderfully. But then he told us that the whole system was under stress because of the Carr Labor government. You cannot have it both ways.There is a simple fact in life, and that is that the coalition got bitten on Medicare at the 1993 election. In my view, they probably lost that election on Medicare alone. The member for Bennelong (Mr Howard) was not going to get caught twice. They went to the 1996 election with a definite different view. On this occasion—LL6BALDWINMr Bob Baldwin—Mr Deputy Speaker—8K6Fitzgibbon, Joel, MPMr FITZGIBBON—He's just using up my time, Mr Deputy Speaker.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! The honourable member for Paterson on a point of order.LL6BALDWINMr Bob Baldwin—Mr Deputy Speaker, I raise a point of order. When I spoke previously the Deputy Speaker at the time drew my attention to the fact that we were supposed to be debating the amendment before the House. The amendment before the House is financial assistance conditional on entry into an agreement. The member for Hunter has gone everywhere else except that.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! The honourable member for Paterson will resume his seat. I am sure the honourable member for Hunter knows the requirements to keep relevant to the question before the House.8K6Fitzgibbon, Joel, MPMr FITZGIBBON—Mr Deputy Speaker, I am addressing the amendments before the House but the member for Paterson does not like it. What does he do? He pops up—usually twice in every speech I make—to try to use up my time. I have already been denied a speech on the second reading stage, and the member for Paterson wants to deny me a contribution at this stage because he does not like what he is hearing.I want to return to my point. What did the member for Bennelong do in 1996? He went to the people this time guaranteeing them that he would leave Medicare alone. What has he done since? What he is doing is dismantling it through the backdoor. He is dismantling it by taking a ridiculous attitude at the Premiers Conference. He is doing it through the backdoor by squeezing Medicare rebates, which is causing general practitioners, particularly in the electorate of the member for Paterson, to abandon bulk-billing at a rate of knots. (Time expired)17:03:001747Anthony, Larry, MPMr ANTHONYXJ6RichmondNP10—Mr Deputy Speaker, I wish to make a personal explanation.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Does the honourable member claim to have been misrepresented?XJ6Anthony, Larry, MPMr ANTHONY—Most grievously.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Please proceed.XJ6Anthony, Larry, MPMr ANTHONY—There was a question today in the House asked by the member for Shortland (Mr Peter Morris) which I wish to respond to because I have been misrepresented. At no time did I claim that the government had begun a review of the results of the successful employment tenderers in the Byron Shire. Beyond the results of the Job Network tender, there are additional employment issues which I have raised and have written to the minister about and which he indicated his understanding on a recent visit to the Byron Shire. The Commonwealth's Northern Rivers Areas Consultative Committee—better known as ACC—will be looking at employment services in the Byron Shire. The ACC advise that they are examining this situation and that the minister has requested that they advise the government of their findings.8K6FITZGIBBONMr Fitzgibbon—With your indulgence, Mr Deputy Speaker, I am trying to determine whether the member for Richmond has just indicated to the House that the minister earlier misled the House?10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The chair is in no position to judge that.HE4ANDREWMr Andrew—Mr Deputy Speaker, to relieve you of what is clearly a difficult situation, let me say that I was in conversation with the shadow minister. He has sought the call briefly and I am prepared to concede that to him at this stage.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—I thank the honourable member.17:04:001747Lee, Michael, MPMr LEEMG4DobellALP00—These particular amendments before the House at the moment seek to give the government the flexibility to negotiate basically a one-year agreement or to allow the government to continue to pay the states funding for public hospitals for one year. We have a number of questions about this matter. I am sure that the parliamentary secretary at the table, the honourable member for Mitchell (Mr Cadman), has a detailed knowledge of these issues, especially considering the quality of the experts that are in the advisers box at the moment. So I am sure he can answer these detailed questions.We would like to know whether the government has received any legal advice on whether these amendments provide the same level of protection as would be the case if the five-year Medicare agreements had been concluded with the states. In particular, we would like to know whether there is an equal amount of reassurance for the patients of Australia that they will not have a state government or territory government introduce new charges or fees if they are treated in public hospitals. There is a lot of scuttlebutt in this building that, if Mr Kennett and the other premiers and territory ministers do not sign agreements with this government and you end up going down the route proposed in these amendments, this is a second-best option; that this will not provide the same level of protection as the five-year Medicare agreements.Firstly, is that the case? Will there be the same level of protection? Secondly, does the government have legal advice seeking to confirm that there will be the same amount of protection for patients and that they will not be slugged with new fees and charges? Because at the end of the day these agreements are about making sure that public patients are not charged for treatment in public hospitals. One of the essential elements of Medicare is that every Australian should have reasonable access to a public hospital in a reasonable amount of time. We would like to know before this debate finishes whether the government can give us the answers to those two questions. Will there be the same amount of protection? Does the government have legal advice to justify such a reassurance? And will they make a copy available to the opposition?SD4CADMANMr Cadman—I will endeavour to answer by the end of the day.17:06:001748Andrew, Neil, MPMr ANDREWHE4WakefieldLP10—I rose somewhat provoked by the allegation of the member for Hunter (Mr Fitzgibbon) that the government had in some way sought to so compress this debate that he was denied his democratic rights to represent the people of the Hunter. As the Chief Government Whip, I am painfully aware and I suspect that he is reasonably well aware of the fact that the very issue we are debating in the half an hour devoted now is well above what was originally negotiated and was designed to accommodate the opposition. I would have thought he may have been a little more gracious about that.In dealing with these health amendments, everyone in this House, regardless of which side they sit on, recognises the real problem. The real problem is the escalating cost of health care. No-one in this House at least over 30 years of age is not well aware that health care is inevitably going to cost whoever is in power more and more of its share of the taxpayers' revenue.Let me illustrate the point. Perhaps before the member for Hunter (Mr Fitzgibbon) was thought of, 30 years ago I had an appendicectomy with little more than a kitchen knife on a table, if you know what I mean. Today, if I fronted up to my local GP and he said, `You need your appendix removed,' I would say, as I suspect every other male and female around here would, `With a body like mine, you really cannot afford to scar it. So I would like keyhole surgery. I would like laser treatment—I want to be back at work tomorrow—and as little bloodshed as possible.' That is fine. He will do it for me. But, effectively, it will cost a great deal more than the treatment using a kitchen knife on the kitchen table.Precisely the same analogy applies to any one of the medical practices that we now take for granted. Thirty years ago a heart condition diagnosed in someone my age may well have been fatal. Today the doctor says, `We will replumb.' The question of the cost scarcely even enters into it. Even more remarkably—and thankfully—diseases of 30 years ago that effectively would have killed us, terminal illnesses, can now be kept at bay because of modern surgery. All of these practices cost money, and they cost an increasing proportion of the health budget. That is the bind that the government faces, it is a bind that the opposition faced when they were in government for 30 years, and it is a bind to which there is no easy solution.It is compounded by the fact that, for people in our salary bracket, going to the doctor is a ridiculously cheap exercise. Let us say it costs $25 for a consultation: the government picks up $18 or something like that. For those on the other end of the salary scale, going to the doctor remains an expensive exercise, much of which rightly is picked up by the general taxpayer. It is exacerbated by the fact that in 1989 many people on well below average weekly earnings, who therefore were unable to afford private health insurance, probably were forced to spend more money on maintaining their car than maintaining their health. This is the bind the government faces: how do you bridge this gap between the escalating cost of health and the willingness of people in our salary bracket to pay and the ability of people in a lower salary bracket to pay?That is why health is becoming an increasing problem for state governments. The federal government has not walked away from it, as the member for Fremantle (Dr Lawrence) had suggested. State governments increasingly have tended to depend on the federal government. As the minister made it quite obvious, the federal government is picking up more and more of the share of the health cost but, in doing so, the state governments—whether conservative or not—have tended to walk away from some of their responsibility.In the time remaining, I must add that, while this is a complex and difficult problem, it is not a problem which we should shirk. On the world scale, Australia still delivers a first-class health service at a very competitive price. We have a problem we have to resolve, but relative to our surrounding countries and relative to the rest of the world—with the possible exception of the Swedes and the Japanese—we have a health system that is the envy of much of the rest of the world, and the government is committed through this legislation to maintaining that system.17:11:001749Morris, Peter, MPMr PETER MORRISHI4ShortlandALP00—The previous speaker cannot move away from the fact that it is not the availability of resources; it is what you do with the resources. The $1.7 billion that your government has pumped into trying to prop up private health insurance is your problem.This government labours under its own mythology that the solution to health care problems is in the private sector. Fewer than one person in three across this nation, from coast to coast, thinks that putting money into private health insurance funds is value for money. So the more than two out of three persons who are left are condemned to the degradation of the health service because your government refuses to allocate resources.HE4ANDREWMr Andrew—Because those people will not accept their responsibility.HI4Morris, Peter, MPMr PETER MORRIS—It creates a triple barrel effect. You can labour on in your mythology, but do not interrupt me, please—I listened to you quietly. There are three barrels coming out of this. The first is that you slashed $800 million out of the public hospital program. Second, the movement of people into the public hospital sector, because of their lack of confidence and trust in the private health sector, is added to the burden of the public hospitals. In Maitland, which is in the electorate of the member for Paterson (Mr Bob Baldwin), who has just left the chamber and who supports this system, the cost of running its hospital has gone up by $1.5 million a year because an extra 610 patients are now being treated by that hospital because they have walked away from private health care. They do not see value in it. Do you opposite not understand that?The third effect is that, while government members are saying, `We support Medicare; we want the best health care system,' they are busily closing 43 Medicare offices across this country, striking at the people in our community who most need immediate cash payments from Medicare. They do not have the money to go to the doctor, outlay $70 to $100 and then wait two or three weeks to get the money back. They need the money immediately to go from the doctor, to the pharmacy, to the supermarket. Do you not understand that? That is the problem. They are the people you are hitting at.The member for Paterson had the temerity a few weeks ago to support the closing of the Belmont Medicare office in my electorate. Again, he is somebody who labours in mythology. He ought to face up to the facts of the situation. Medicare is desired by the vast majority of the Australian community.Let me draw your minds to 1986, when the same man who is now Prime Minister (Mr Howard), said, `Medicare has been an unmitigated disaster.' Those opposite should have the guts to go out to the community and say that to the people now rather than doing it as a subterfuge. He then went on to say that radical surgery will need to be performed on Medicare and that bulk-billing will be abolished. You are trying to create a situation where Medicare will become unacceptable and people will be angry with it, then justifying the need for another health care system. Please give a thought, through you, Mr Deputy Speaker—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Forrest)—That is better.HI4Morris, Peter, MPMr PETER MORRIS—For the people who need support through cash payments through Medicare facilities and treatment in public hospitals. As the honourable member said earlier, what needs to be done is to provide support for the improvement of care in the public hospital system. What are you asking, Mr Deputy Speaker? My five minutes have not elapsed. Why are you looking at me?10000DEPUTY SPEAKERMr DEPUTY SPEAKER—I just wanted you to be aware that when I sit in this chair I do not have the problems you are alerting that I have.HI4Morris, Peter, MPMr PETER MORRIS—I am required by the standing orders to address my remarks to you—and far be it for me to do otherwise.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Do it through the chair.HI4Morris, Peter, MPMr PETER MORRIS—I am doing that; that is exactly my point. Please do not take up my time.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—You will address your remarks through the chair; do not address them to members across the chamber.HI4Morris, Peter, MPMr PETER MORRIS—You know that I am doing that via you. I shall not comment on it; others can hear it. As the current Prime Minister said in 1986, just 12 years ago, his belief was—and the policy of those opposite was—that Medicare has been an unmitigated disaster, that it needs radical surgery and that bulk-billing will be abolished. I want to tell those opposite this: you can pretend to yourselves—like the member for Bowman (Mrs West) said—that those who turned up at her Medicare rally were Labor hacks. I dearly wish that the almost 14,000 signatures that have been gathered just around Belmont alone in my electorate in support of the retention of Belmont Medicare office were those of Labor hacks. But they are voters and, regardless of their political colour, they know they have a good service. They want that service. To hear this mythology again coming from the other side of the House shows they do not understand. My friend the member for Paterson has come back. My friend—through you, Mr Deputy Speaker—you look after your Medicare offices; I do not want you supporting the closure of my Medicare office. (Time expired)17:16:001750Cadman, Alan, MPMr CADMANSD4MitchellLP10—During the debate the shadow minister raised a couple of questions which I wish to respond to briefly. I think that his questions really revolved around the certainty of protection—to make sure that there is the same protection for individuals and for people who might be using hospital services—and around the prospect of states making further or new charges. I would like to draw his attention to the Health Legislation Amendment (Health Care Agreements) Bill 1998 , which clearly states that it will provide for payments of financial assistance to the states in respect of that year on such terms and conditions including the terms and conditions requiring adherence by the state to the health care agreement principles. So the health care agreement principles must be contained in any agreement entered into between the Commonwealth and the states. The Commonwealth minister determines the broad conditions, but those principles must be contained within those conditions.MG4LEEMr Lee—But is it as good as the five-year agreement?SD4Cadman, Alan, MPMr CADMAN—I am advised that the government's role in these things is to improve health conditions; so, yes, it certainly is as good as the five-year agreement. Those health care agreement principles are the five-year principles; they are embodied in the five-year agreement.MG4LEEMr Lee—The second question was: have you had legal advice?SD4Cadman, Alan, MPMr CADMAN—The legal advice available to me is that the conditions are determined by the minister but that the minister must include adherence by the states to the health care agreement principles within those conditions.Amendments agreed to.Bill, as amended, agreed to.1751Bill (on motion by Mr Cadman)—by leave—read a third time.Bills1751r3991751Bill returned from Main Committee with an unresolved question; certified copy of bill and schedule of unresolved question presented.Ordered that the bill be taken into consideration forthwith.Unresolved question—That the words proposed to be omitted stand part of the question. Question put.17:25:00The House divided. (Mr Deputy Speaker—Mr J.A. Forrest)70Andrew, J. N. Andrews, K. J.Bailey, F. E. Baldwin, R. C.Bartlett, K. J. Billson, B. F.Bishop, B. K. Bradford, J. W.Broadbent, R. E. Brough, M. T.Cadman, A. G. Cameron, E. H.Causley, I. R. Charles, R. E.Cobb, M. R. Costello, P. H.Dondas, N. M. Draper, P.Elson, K. S. Entsch, W. G.Evans, R. D. C. Fahey, J. J.Gallus, C. A. Gambaro, T.Georgiou, P. Grace, E. J.Halverson, R. G. Hardgrave, G. D.Hawker, D. P. M. Hicks, N. J.*Hockey, J. B. Jeanes, S. B.Johnston, R. Jull, D. F.Kelly, D. M. Kelly, J. M.Kemp, D. A. Lindsay, P. J.Marek, P. McArthur, F. S.*McDougall, G. R. Miles, C. G.Mutch, S. B. Nairn, G. R.Nehl, G. B. Neville, P. C.Nugent, P. E. Pyne, C. M.Randall, D. J. Reid, N. B.Reith, P. K. Ronaldson, M. J. C.Scott, B. C. Sharp, J. R.Slipper, P. N. Smith, A. C.Smith, W. L. Southcott, A. J.Stone, S. N. Sullivan, K. J.Taylor, W. L. Thomson, A. P.Truss, W. E. Vaile, M. A. J.Vale, D. S. Wakelin, B. H.West, A. G. Williams, D. R.Wooldridge, M. R. L. Worth, P. M.41Adams, D. G. H. Albanese, A.Beddall, D. P. Bevis, A. R.Brereton, L. J. Brown, R. J.Crean, S. F. Crosio, J. A.Dargavel, S. J. Ellis, A. L.Ferguson, L. D. T. Fitzgibbon, J. A.Grace, E. L.* Griffin, A. P.Hatton, M. Holding, A. C.Hollis, C. Jenkins, H. A.Kerr, D. J. C. Latham, M. W.Lawrence, C. M. Lee, M. J.Macklin, J. L. Martin, S. P.McClelland, R. B. McLeay, L. B.*Melham, D. Morris, A. A.Morris, P. F. Mossfield, F. W.O'Connor, G. M. O'Keefe, N. P.Price, L. R. Quick, H. V.Sawford, R. W.* Sercombe, R. C. G.Tanner, L. J. Theophanous, A. C.Thomson, K. J. Willis, R.Wilton, G. S.Downer, A. J. G. Ferguson, M. J.Howard, J. W. Beazley, K. C.Lieberman, L. S. Smith, S. F.McLachlan, I. M. Jones, B. O.Moylan, J. E. McMullan, R. F.Ruddock, P. M. Baldwin, P. J.Somlyay, A. M. Evans, G. J.* denotes tellerQuestion so resolved in the affirmative.Bill read a second time.Bill read a second time.1751Bill (on motion by Mr Cadman)—by leave—read a third time.Adjournment175110000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Forrest)—Order! It being after 5.30 p.m., I propose the question: That the House do now adjourn. 175217:31:001752Morris, Peter, MPMr PETER MORRISHI4ShortlandALP00—This afternoon I want to draw attention to action by the Federal Airports Corporation to massively increase landing charges at Sydney airport for regional airline operators. The effect of that in the Hunter area would be to increase, for instance, charges per passenger for Impulse Airlines from $6 per passenger up to $28 per passenger by the year 2000, and similarly for aircraft operating out of Belmont for Aeropelican the total effect of the increase would be to increase by 332 per cent the cost of the landing charges they would be eligible to pay—in other words, from $135,000 to $450,000 per year.What that scale of charges constitutes is effectively a strategy to lock regional airline operators out of Sydney airport. The people I represent in the Hunter and on the Central Coast are not going to accept second-class treatment in respect of airline services from this government. We, as non-metropolitan Australians, are as much entitled to easy air access to the international and national airline network as are metropolitan Australians in the Sydney region. Access to that service is critically important for family reasons, for the conduct of business, for industry reasons, for access of our customers to the Hunter region to visit and see the products we sell and to inspect the services we provide, and it is of extreme importance for the growth of our tourism industry.I call on the Minister for Transport and Regional Development (Mr Vaile) to direct the Minister for Finance and Administration (Mr Fahey), who has now joined in the attack on regional airlines in his newsletter, to cease his attacks on regional airlines and regional airline passengers. I refer to the newsletter put out by the Minister for Finance and Administration in his own electorate entitled `Airport News for Macarthur', March 1998. A paragraph in that reads:If regional and other smaller flights such as these—referring to regional and non-scheduled flights— can be diverted to another airport, perhaps Bankstown, it may be that a second airport is not required for decades to come—it's a possibility that would require detailed investigation.That is a fallacy from beginning to end. Bankstown is not an alternate airport in terms of service and accessibility for regional airlines. The linkage for regional airlines is into the national airline network and into the international airline network in both its inbound and outbound services.I also call on the Minister for Transport and Regional Development to direct the Federal Airports Corporation—he has that power under the act—to abandon its proposed increased charges. That matter would be most detrimental to the people I represent, and particularly to the people of the Hunter.I make one last plea in these few minutes to the Minister for Health and Family Services (Dr Wooldridge). I have spoken in this House several times already in support of the retention of Belmont Medicare office. I have written to the minister this week and I have spoken to the minister this week. It is scheduled to be closed tomorrow. I want to be able to go back to Belmont tomorrow and have a celebration for the people of Belmont. Not for me—it does not matter to me; it is not me that is affected—but the people in the families who need immediate cash payments after they have been to the doctor.I want him to reverse that decision. I cling to that hope. I am waiting on a response from him. I have indicated to him that there would certainly be recognition of that reversal of opinion. Sure, it would take some courage, but it can be done and in this case it ought to be done. Almost 14,000 signatures have appeared on petitions I have presented to this parliament in support of the retention of that office. That ought to be a clear indication to everybody how important that service is to Australians. They want their Medicare service. They want access to reasonable health care, to quality health care, and they want access to immediate cash payments after they have been to the doctor and paid their bills.So I appeal to the minister again, remembering also that we have seen from this government in its commitment to health care $800 million stripped from the public hospital system. We have seen a situation where $1.7 billion has been pumped into private health funds when less than one in three people in this country believe that private health funds are value for money. (Time expired)175317:36:001753Baldwin, Bob, MPMr BOB BALDWINLL6PatersonLP10—Earlier this week I received a letter in my office from a Mr Kel Snowden of Salamander Bay. It was a copy of a letter addressed to Jenny Macklin MP. You see, Ms Macklin is coming to my electorate tomorrow, and we do welcome her there. The only thing we hope is that she can continue to tell the truth while she is there.10000SPEAKERMr SPEAKER—The honourable member will not reflect on other members. I think you might withdraw the inference.LL6Baldwin, Bob, MPMr BOB BALDWIN—I withdraw that. The letter says:I'm sorry I will not be able to attend your Public Meeting in Nelson Bay on 27th inst. owing to a prior engagement. However, in your position as Shadow Minister I wish to bring to your notice and consideration on the following matters which greatly concern me as I'm just a couple of months off my 92nd birthday.First my own position as a representative of many in my personal situation. I am a N.S.W. State superannuant on a fixed income, adjusted for C.P.I. each June quarter but not payable until October. No choice—join Super or NO job in my day, no lump sum, but changes allowed commutation to part lump sum, provided always sufficient was left so a superannuee on fortnightly pension would NEVER qualify for an Old Age Pension and ALL its privileges. This is fully taxable.Now these are things in the Health System I wish to forcibly bring to your notice, especially as your purpose and the purpose of the Party of which you are a member are determined to castigate and denigrate the Howard Govt.CONSIDER these facts as under the Keating Govt.1. A close friend aged 84, only income the Old Age pension, gums continually ulcerated because of the by then ill fitting dentures sought relief under the health scheme and after making ALL the necessary applications was told she had to wait 14 months. Thirteen months later she enquired as to the date of an appointment at Newcastle and was told she had to wait another ten months. She DID get her dentures, thanks to assistance from friends and a private dentist. Just HOW could anything be WORSE than that. That was Labor under Keating.YK6WILTONMr Wilton—You closed it down.LL6Baldwin, Bob, MPMr BOB BALDWIN—Listen. I said that was Labor under Keating. The letter continues:2. During the past six years, including the Howard years, that is during the Keating years, because of ageing and physical disabilities I sought HOSTEL care—incidentally I lost my wife suddenly in 1980—and investigated hostels from Coffs Harbour to Sussex Inlet. Here are some of the results—A. Entry $150,000. Lovely bedroom with balcony annex, equity reducing 1500 dollars every six months for five years.B. $80,000 entry, equity reducing 1300 dollars every six months.C. Entry 60,000 dollars, equity reducing 1300 every six months.D. Entry 50,000 dollars reducing equity 1300 every six months.All requiring WEEKLY fees of 87½% of old age pension, just for basic care.Accommodation in B.C.D. A bed sitter, entry with porch and ablutions, room no more than three metres square and furnish it yourself.E. Bed sitter like above but only 2¾ by 2¾ metres, furnish it yourself for 35,000 dollars. Get and provide own breakfast in communal kitchen.Examples B.C. And D. Available to PENSIONERS for six thousand dollars.My experience trying to get home care since I live alone, and am in no condition such I needed help in changing sheets on my bed and hanging out the washing. NOTE this I was interviewed by FOUR different parties, one from Maitland, one from Raymond Terrace, One from Mayfield, One from Nelson Bay, all armed with a clip board and a multitude of questions, even my Mother's maiden name. The results of all these enquiries then had to be submitted to an assessment panel who would adjudge my worthiness for assistance, which was finally granted. BUT not this—I had to have the bed stripped (and that job is as bad on ones back as making the bed) have the washing machine ready to go and then "she" would perform some light duties until the machine completed its cycle. Note too. . . No furniture to be moved, no vacuuming, no dusting above shoulder height—wouldn't even move a T.V. on a trolley.Could have saved lots of money since all travelled in very late model cars, if three had been sacked and put on the dole. I went PRIVATE—told the Dept to go to B. . . I now get full and very caring assistance for the same price I'd pay these loafers.I do not agree with the fact that they are loafers; they are working under the system set up by the former government. It goes on:Now too, consider this—constant demands on the GOVERNMENT for more and more money to be put into services. There is NO Free Lunch. Who is the Government??? You and me, Tom, Dick, Mary and Jane—the taxpayers. The Government is merely a collection and distributing agency, so when some Department or organisation DEMANDS greater assistance—donations—it is you and me who have to pay. So how the hell is taxation to be reduced?I know the Public Service system inside and out being closely associated with Education, Agriculture and Lands for over fifty years. I know the dead wood and the white ants and the ways the system works . . .(Time expired)175417:41:001754Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—With the announcement of the Prime Minister (Mr Howard) that the government is to fully privatise Telstra so as to fund an election war chest, it is likely that the House will witness more of the unfettered support speeches for the sale of the kind given by the honourable member for Boothby (Dr Southcott) in the adjournment debate on Monday night. It was an adjournment speech in which he went through the ideology of the sale as he saw it, citing examples of what had happened in Cuba and Albania. I would suggest that the only people who really have a policy driven by ideology are those who sit on the government benches. They are pursuing their love for the free market and privatisation to the detriment of all else. Telstra is a classic example of this.If we look at Labor's policy on Telstra, as decided at the national conference in Hobart earlier this year, we recognise the enormous role that Telstra plays in the national economy and in the community generally. If we look at some of the polling since the Prime Minister's announcement, we see that the majority of the public also think that way. A poll in the West Australian on 24 March shows 60 per cent against the sale. The poll in the Herald Sun in Melbourne on 19 March showed 58 per cent against. This week's Bulletin shows that 62 per cent totally disagree with the coalition's Telstra sell-off. What was very instructive about that was that 63 per cent of non-Telstra shareholders and the majority of Telstra shareholders—55 per cent—are against the sale.We have the likes of the member for Boothby coming in and quoting figures on economics that he has been given by senior members of the government. I perhaps would suggest to him that he might look at articles like that which appeared in the Financial Review of last Thursday where John Quiggin, who I believe is somebody who makes a lot of sense when he writes articles about current affairs, indicated that some of the sums that are being put forward are out of order. He suggests that the saving that might be achieved by the sale based on the interest rates that prevail is about $2.5 billion, not $4 billion that has been suggested by senior members of the government or $3 billion as suggested by the honourable member for Boothby on Monday night.John Quiggin goes on to say that when you take into account the dividend and the value of return investments to Telstra, five years after a full sale, the effect of the sale of Telstra will be negative. These are the considerations that in a proper full debate about the full sell-off of Telstra should be taken into account.I also want to raise some of the information that was highlighted in the Senate committee's report of 1996 entitled Telstra—to sell or not to sell, where at appendix 8 they listed the cross-subsidies in each federal electorate. It makes very instructive reading.In the electorate of Paterson in New South Wales—the honourable member for Paterson (Mr Bob Baldwin) has now left the chamber—the cross-subsidies were $1.136 million. Mr Speaker, I understand that the National Party is looking for another candidate for the electorate of Parkes. That candidate, when preselected, will have to explain the effect on the cross-subsidy there in Parkes of $15.215 million. In my state of Victoria the honourable member for McEwen (Mrs Bailey) will have to explain what effect the full sale of Telstra will have on the $2.284 million cross-subsidy. In the state of Queensland the person who will be preselected to take the place of the honourable member for Groom (Mr Taylor)—a very fine member of this House—will have to explain what is going to happen to the $0.5 million of cross-subsidy. The honourable member for Kennedy (Mr Katter) will have to explain $10.7 million worth of cross-subsidy. What will happen to that? No wonder the honourable member for Kennedy is so concerned about the sale. And the list goes on.These are the things that those people in rural Australia are very concerned about. There is no guarantee that, under a fully privatised Telstra, the type of cross-subsidies that enable services to be put into the rural areas will continue. Even under the partially privatised Telstra very important services that apply in the rural sector have already been done away with. The employment consequences will also be seen. Twenty-four thousand was the figure suggested in the Mercury report. Many of those positions were in rural Australia. What will honourable members on the other side be saying about those issues? (Time expired)175517:46:001755Taylor, Bill, MPMr TAYLOROJ4GroomLP10—Earlier today we debated in this place a piece of relatively minor amending legislation in relation to the International Monetary Fund and arrangements which we want to put into place. I and a number of my colleagues were disappointed that we were not able to contribute to that debate. Whilst the content of the legislation was relatively minor, underpinning it was a very serious problem having not only domestic implications for Australia but also international ramifications.The Asian financial crisis, which started in currency markets in South-East Asia and spread to other markets, first undermined confidence and then faith in the certainty of continued high growth in the region—the so-called East Asian miracle—and the ensuing economic downturn has raised very serious questions about the foundations of that growth, the soundness of the region's finan cial sectors, the role of government in directing investment and lending and even the appropriateness of Asian values in the context of free market orthodoxy. It has also presented the region's economies with a number of interrelated challenges: implementing the financial sector reforms needed to attract foreign capital back into the region, establishing governance practices which will improve transparency and accountability and developing growth strategies which are both sustainable and inclusive.As a country Australia can be proud of what it has achieved, particularly over the last two years, economically at the domestic level. I listened to a number of very good speeches on that legislation from the other side of the House, in particular the speech from the honourable member for Gellibrand (Mr Willis). I do not agree with him that the IMF is the total negative factor in this whole equation. I certainly do not agree with him that, had this government not taken the measures that it has taken domestically, we would not be insulated to the extent that we clearly are, albeit with the potential for trade figures in due course to be adversely affected—hopefully, not to the degree that some in the opposition might want to see.This is not just an East Asian problem. It has economic, political and strategic dimensions. I agree particularly with an article I read in the Far Eastern Economic Review of 12 February this year. It said:What the region needs is to put in place a political system that places values on accountability and transparency, that controls corruption and sets up an administrative and regulatory system that is suited to the age of globalisation.If we do not watch it, there is also a global potential that none of us would want in relation to the Asian financial problems that exist at the moment. It is in everybody's interest—in this country and in other countries—to acknowledge that. In particular, the IMF package will not happen to the extent that it should unless the US Congress agrees to play its part in the assistance packages. When I was there six or eight weeks ago there was a very mixed reaction. I hope that when it does come to a vote later on this month or in April, congressmen and senators on both sides will see exactly what this is all about. It is a problem that we and they have to come to grips with, otherwise we will see this serious problem move into Japan—as undoubtedly it already has, to a limited extent—across the Pacific and we will have total deflation right around the world if we do not watch it. None of us want that. I just hope that the US Congress clears what is a reasonable package and that that will happen fairly soon.175617:51:001756Wilton, Greg, MPMr WILTONYK6IsaacsALP00—I rise to draw the federal parliament's attention to the plight of Carrum Downs, which is a very important part of my electorate of Isaacs. Like other regions, Carrum Downs began as a rural hamlet. Since 1978 the population has grown substantially. According to the 1996 census, Carrum Downs was the fastest growing urban centre in Victoria between 1991 and 1996. That made it the 10th fastest growing area in Australia at that time—growing at an astounding rate of 82.6 per cent during that period. Sadly, however, many of the government services it receives have been left one step behind.In Carrum Downs, 31.2 per cent of the population are under 15—the national average is 21.6 per cent—but there are very few services for these kids. It is not just that there is no youth centre, no local cinema and no easily accessible public transport that young children can access but many other things. Indeed, with little local employment opportunities it is very difficult for young kids in Carrum Downs to get on the job training at a young age to equip them with the skills that they know they will need in their later adult working lives.Of course, the government also seeks to penalise Carrum Downs families if their children cannot get jobs. The common youth allowance will no doubt hurt many Carrum Downs families. Those with an unemployed teenager may face having to come up with an extra $178 per fortnight to support their young unemployed adult. A family that earns $23,400 per year will face a cut in the amount of money their young adult receives from the government also—a further slight on families.The government's youth allowance will force families earning below average incomes to financially support their young unemployed adults. The majority of families in Carrum Downs are paying off a mortgage and also struggling to educate their young children. Now they will also have to pay food, clothing and transport costs for their young job seekers as well.In terms of child care, 13.5 per cent of the local population are aged five years and under, so child care is a big issue in Carrum Downs. Of course, I am speaking on behalf of families in that area when I say that the government's child-care cuts are really hurting them. This government has taken some $820 million out of child care in its last two budgets and it has shown, once again, that it has no regard for the provision of quality child care. This is an issue that I will definitely pursue across the area of Carrum Downs. I will certainly produce a survey for both parents and child-care centres to complete so that I can present the concerns about these government cutbacks direct to the federal parliament.Older Carrum Downs residents need the support and assistance of their government. They, of course, have paid taxes all their lives and many of them fought during World War II. They have worked hard to raise families and have made many great sacrifices. But from 1 March many older Australians, including many in Carrum Downs, needing to enter a nursing home will face an extra daily fee. These nursing home fees will amount to up to $64 a day. The money does not go to the nursing home itself; it goes to the government and is nothing more, in that sense, than a disguised new tax. It comes on top of a new annual fee for nursing home care of up to $4,380 and must be paid by anyone with assets of more than $44,400. Those with between $22,500 and $44,399 in assets will pay a lesser charge. If these assets include the family home, most will have to pay the full amount and possibly sell their home to do it.Older Australians have already had to suffer the abolition of the Commonwealth dental scheme, an increase in home and community care charges, restrictions on hearing services and, most recently, an increase in the cost of essential medicines. It is just not fair and it certainly hurts both working and retired men and women struggling in areas like Carrum Downs. But Labor, Mr Speaker, you will be pleased to know, has promised to abolish both new fees and, what is more, Kim Beazley has guaranteed that Labor will put back the $500 million John Howard has cut from aged care.There is no doubt that the community of Carrum Downs needs more government assistance to ensure that its expanding community prospers and develops into an even better place to live. The people of Carrum Downs deserve better than constant government cuts and I will do all I can to ensure that those cuts are remedied for the Carrum Downs area. (Time expired)175717:56:001757Smith, Tony, MPMr TONY SMITHSK6DicksonLP10—Francis Bacon once said:That which is past is gone and irrevocable, and wise men have enough to do with things present and to come. Therefore, they do but trifle with themselves that labour in past matters.Last year we had the rather unedifying spectacle of members of the Labor Party, night after night in the adjournment debate, reading extracts from the Bringing Them Home document. I am not suggesting that those members who were reading this document did not do it seriously. However, I believe they were also probably instructed to try to deliver a political blow to those who sit on this side of the House. The simple message was: we care but you do not; we have the high moral ground but you do not. I was not impressed with the Bringing Them Home document. I was not impressed by the bleeding heart publicity surrounding the inquiry itself, all directed at pointing the finger at us as somehow being responsible for deeds done in the past.But, more than that, the tenor of the report was rhetorical and in parts quite poorly written. It suffered no criticism, notwithstanding the comments of former judge Sir Ronald Wilson, who was the author of the report along with others, when he said:Who needed corroboration when you saw tears running down the cheeks? I must say the judge needs a lesson in what it is like in the courts at first instance. I could take him around the District Court in Brisbane on any weekday and he would find half of all the complainants with tears running down their cheeks who were later found by juries to be absolute liars. That is a lesson that the judge, who I believe never practised at first instance in criminal courts, would need to understand.Recently Canada fell into that trap. It made an apology after much cajoling by the indigenous industry and straightaway promised additional funding. However, four of the five indigenous leaders who were handed the scrolls of the reconciliation statement dismissed the apology as too weak and the funding as inadequate. The paradox is that those calling for apologies or reconciliation seem active in maintaining a political stand-off which suits their position of influence.The black American commentator Thomas Sal has noted that these people have little incentive to bring about genuine reconciliation as their position usually depends on maintaining a climate of division. Les Carlyon recently wrote that the apology was a:. . . then and now thing. You apologise for then but not for now.Tony Blair apologised for the Irish potato famine of the 1840s but not for Margaret Thatcher. President Clinton apologised for slavery but not for the CIA's roguery in Latin America or even for Michael Jackson.YU5TANNERMr Tanner—What's Michael Jackson got to do with it?SK6Smith, Tony, MPMr TONY SMITH—Carlyon concludes:What comes out of your mouth sounds grand and means nothing, which probably also means it is tailor-made for political discourse in the final days of the 20th century.The member for Melbourne laughs, but it is probably typical of the members on that side of the House. Now I am even more fortified in the belief that this debate is puerile. I firmly agree with the position of the Prime Minister (Mr Howard), as do my constituents who have contacted me and told him to not apologise under any circumstances. Dr Ron Brunton, the distinguished anthropologist, has analysed this report in detail and his report is worth reading.18:00:001758House adjourned at 6.00 p.m.Notices1758The following notices were given:Mr Warwick Smith to present a bill for an act to amend the Telstra Corporation Act 1991, and for other purposes.Mr Beazley to move-That this House:(1) notes the Howard Government's continuing poor economic performance in terms of: (a) rates of economic growth which remain below the annual average of the last term of the previous Labor Government, (b) levels of unemployment which have improved little in the last two years while the number and proportion of people who have been unemployed for twelve months or longer remain above the levels inherited from the Labor Government and (c) net foreign debt, which in the December quarter of 1997 reached an all time high of $222.3 billion, equivalent to 43 per cent of Australia's GDP; and(2) calls on the Howard Government to acknowledge its poor economic performance and admit that it has shown poor economic leadership of Australia in the way in which it has dismissed the likely impact on Australia of the current economic and financial troubles in various Asian countries.Mr Beazley to move-That this House:(1) notes the publication of the National Accounts for the December quarter of 1997 which show that economic growth, as measured by GDP(A), was (a) 2.8 per cent in calendar year 1997 and (b) 3.6 per cent in the year to the December quarter of 1997;(2) notes that the performance of the Australian economy under the Howard Coalition Government compares unfavourably with growth under the previous Labor Government when (a) economic growth in the year to March 1996 was 4.7 per cent and (b) the average annual growth over the Labor Government's last term, March 1993 to March 1996, was 4.4 per cent;(3) notes that economic growth over 1997 was (a) 0.9 percentage points lower than calendar year 1996 and (b) the lowest level of economic growth for five calendar years; and(4) notes that the Howard Government's massive cuts to employment and industry programs in its two slash and burn budgets and its constant undermining of business and consumer confidence have directly contributed to the Australian economy's poor growth performance compared with the last term of the Labor Government.Mr Beazley to move-That this House:(1) notes that, despite its rhetoric, the Howard Government has had little success in reducing the level of unemployment which, on a monthly basis, has dropped below the level in the last month of the previous Labor Government on three times; and(2) notes that both the number of long-term unemployed persons, 240 900, and the number as a proportion of the total unemployed, 32.1 per cent, are higher than when the Howard Government took office.Documents1758The following papers were deemed to have been presented on 26 March 1998:Antarctic Marine Living Resources Conservation Act—Regulations—Statutory Rules 1998 No. 40.Banks (Shareholdings) Act—Regulations—Statutory Rules 1998 Nos. 49, 50.Child Support (Assessment) Act—Determination 1998 No.CSD 1.Consular Fees Act—Regulations—Statutory Rules 1998 No. 43.Customs Act—Regulations—Statutory Rules 1998 No. 52.Family Law Act—Regulations—Statutory Rules 1998 No. 39.Health Insurance Act—Regulations—Statutory Rules 1998 No. 44.International Organisations (Privileges and Immunities) Act—Regulations—Statutory Rules 1998 No. 41.Ombudsman Act—Regulations—Statutory Rules 1998 No. 47.Passports Act—Regulations—Statutory Rules 1998 No. 42.Patents Act—Regulations—Statutory Rules 1998 No. 45.Primary Industries Levies and Charges Collection Act, Horticultural Levy Act and Horticultural Export Charge Act—Regulations—Statutory Rules 1998 No. 46. Proclamation by His Excellency the Governor-General fixing 1 April 1998 as the date on which items 1, 2 and 4 of Schedule 16 of the Social Security and Veterans' Affairs Legislation Amend ment (Family and Other Measures) Act 1997 shall come into operation.Public Service Act—Regulations—Statutory Rules 1998 No. 48.1998-03-26Mr DEPUTY SPEAKER(Mr Nehl) took the chair at 9.41 a.m.Statements by Members1760176009:41:001760Hollis, Colin, MPMr HOLLISDH4ThrosbyALP00—I want to share with parliament a big mystery. Where is the television video camera from Port Kembla wharf? I suspect many of my colleagues have video cameras either at home or in their offices, but this one is different. This television video camera—closed circuit television camera—happened to be installed in a building at the Port Kembla grain terminal. It was installed to monitor activity on the grain berth and I actually saw it during a tour of Port Kembla last year. But this piece of technological equipment, I am informed by sources, has gone missing.I was informed last year in October that it had a technical problem and was taken back to Sydney. Information I have been provided with suggests that it is still in Sydney, probably in a packed box, a full 80 kilometres away from where it is supposed to be. It is in Sydney at a time when Port Kembla is a wide open import centre for drugs.The Minister for Customs and Consumer Affairs (Mr Truss) last week made an outrageous statement that I was playing party politics with the drug issue. I do not apologise for raising this issue or campaigning to ensure that the customs officers at Port Kembla are provided with essential resources to protect the community. I cannot understand or accept that a customs service with only five officers can adequately cover an entire area from Sutherland to the Victorian border. There were 16 officers two years ago. This government, perennial penny-pinchers, are responsible for this.How can just five officers cover this massive area in a 9 a.m. to 5 p.m. shift? Now I am advised that their current office at the coalface in Darcy Street, Port Kembla has just been sold off for $180,000 and they are all to be relocated in the Wollongong central business district. If it were not so serious, it would be funny: a port, which is wide open with only five officers, one hand tied behind their backs, operating on a ludicrous office hour shift, with no monitoring equipment, and now moved away from Port Kembla itself to the central business district of Wollongong. And I am accused of playing party politics.If the minister wants me to provide bipartisan support, I am happy to do so, but only when the Port Kembla customs service is resourced properly to do their job of protecting the community. Port Kembla is in my electorate. It is the gateway to drug importation and I see kids able to get hard drugs for less than the cost of a packet of cigarettes. I will not stop raising this issue until this government takes the fight on drugs more seriously.If the minister wants me to shut up, it is possible. Put the Port Kembla customs service in a position, fully resourced, to close the huge gap which allows drugs into New South Wales and Australia. Always bear in mind that Port Kembla is less than an hour's journey from Cabramatta, the drug distribution centre of Australia. It is essential that the service at Port Kembla be restored to what it was when Labor was in power.176009:44:001760Anthony, Larry, MPMr ANTHONYXJ6RichmondNP10—The exciting communications reforms that this government has just announced are good news for television viewers in my electorate of Richmond and all over rural Australia. Thanks largely to the lobbying effort by many coalition backbenchers—from both the National Party and the Liberal Party—the government has given an iron clad commitment to ensure that regional Australia shares the benefits of the new digital TV broadcasting regime. On behalf of the people of the Tweed, Byron Bay and Ballina, I will personally make sure the government sticks to these commitments.High definition digital TV technology gives viewers movie quality pictures and CD quality sound as well as many other features. The coalition government has promised the bush will not be left behind and will get the same digital services as the big metropolitan areas. The government will make regional broadcasters in regional areas and on the North Coast—where Mr Deputy Speaker Nehl is from—meet a detailed information plan which includes a firm start date for digital services and a commitment to maintaining viewer coverage. I would like to congratulate the networks, particularly the commercials NBN and Prime, which give very good quality service to the North Coast of New South Wales. People on the North Coast will begin getting a service in less than three years, with the full gamut available by the end of 2003 and the beginning of 2004, years ahead of many other developed countries.Many other measures are also being put into place to ensure that regional broadcasters are given certain concessions so they can build this infrastructure. Clearly it will be a lot more expensive with transmitters and transponders than in the metropolitan areas.The government will also consider the issue of providing additional support to regional broadcasters once those broadcasters have developed their business plans and evaluated the costs of changing to digital. Under the government's plan, owners of broadcasting transmission facilities will have to give reasonable access to those facilities to digital broadcasters.The transition period is obviously important. TV programs will be broadcast on both digital and analog for at least eight years to give North Coast residents time to buy new sets. This is reasonable as eight years is longer than the average life of analog sets. It is very different, I might add, to the regime that was put in by the previous government on mobile telephones. Digital TV will provide viewers with far more choice. For example, you can get different camera shots of the same football match, even if it is the local team at Tweed Heads or Coffs Harbour, and selected displays of game and player statistics, as well as access to the Internet.National broadcasters—particularly the ABC and SBS, which do score very high ratings on the North Coast—are not being left out of the race. They too will broadcast the revolutionary new digital systems. This is a good policy. It is a good policy for regional areas. It goes hand in glove with the regional telecommunication fund which is looking at developing greater Internet services. I do hope that, with the full privatisation of Telstra, we see another large chunk of public money going to building better infrastructure, not just in the area of digital TV but particularly in the area of Internet—(Time expired)176109:47:001761O'Keefe, Neil, MPMr O'KEEFECE4BurkeALP00—In my electorate last weekend, we saw another example of the frailty which we all face when pressed up against the power of nature when it unleashes its forces. In this case, bushfires in the Trentham region claimed a number of houses of constituents of mine. In the circumstances and the conditions of the day, I think we are all very lucky that the damage and the potential danger to people was limited to the extent that it was, given that the conditions were almost identical to those of Ash Wednesday some years ago.It does say a lot for the people of the area that they have learned lessons from the Ash Wednesday experience. They have certainly done much more to protect their properties. We have much more sophisticated equipment and facilities in place. The whole range of the large force of emergency services workers—which include CFA volunteers, professional fire personnel, state emergency people and backup from our police officers, and health care workers and counsellors—clearly mobilises now in a way that we just did not have before. I think there is some heart to be taken from the fact that in these circumstances we now seem able to defend ourselves in a way which was not possible before.The one very sour note which has come across from this particular weekend's effort is that it does appear that the fires were deliberately lit and were not just isolated outbreaks. There were a number of fires lit in areas which meant that it was almost impossible for the emergency services personnel and the firefighters to really get a firm strategy together other than to tackle fires wherever they came up next.I would just like to express in the parliament my very sincere thoughts in respect of the people who have lost properties and homes, and to make an offer on behalf of all of us to assist them in any way we can. In particular, I would like to congratulate also the many people involved in the effort who came to their aid last Sunday and Monday morning.176209:50:001762Cameron, Eoin, MPMr EOIN CAMERON6V5StirlingLP10—A serious situation has been brought to my attention that should be of concern to all of us: a situation that affects every man, woman and child in this country, irrespective of age. I refer to the mineral degradation of the soils from which our food is derived. A United States Senate report in 1936 said that `the alarming fact is that the foods (fruits, vegetables and grains) now being raised on millions of acres of land that no longer contain enough of certain minerals are starving us, no matter how much of them we eat.' From preliminary investigations, it has become evident that our soils are equally as deficient in trace minerals as the soils in the United States are—if not more so—not only from the plants' point of view, but also from the human body's point of view.There is little, if any, consideration given to the mineral content of our foods. The only consideration to date has been to maximising the yields of any given crop. So, if the crop requires more trace minerals to grow well, it is given them; but, if we humans require trace minerals to be healthy but the plant does not need them, our requirements are totally ignored. What is more, it is not commonly realised that vitamins control the body's use of minerals and that, in the absence of minerals, vitamins have no function to perform at all. Lacking vitamins, the system can make some use of minerals; but, lacking minerals, vitamins are completely useless.This is vital to the health of our nation. Without the proper mineral balance in our bodies, we cannot function properly and we start degenerating in a progressively downward spiral—slowly at first, but then faster and faster until the degeneration gets to a point where we, as individuals, can no longer ignore the devastating symptoms that, more often than not, end up killing us. That is the way it happens to most of us. And the sad part is that we think it is natural, just a part of getting old. It is not natural and it is not part of getting old.Back in 1936, the warning was loud and clear that, if we do not get all the minerals we need to stay healthy, we will get sick, suffer and have shorter lives. Dr Linus Pauling, twice a Nobel prize winner, stated that you can trace every sickness, every disease and every ailment to mineral deficiency. What we have been doing for the past 50 years or so is taking 60 minerals out of the soil and only replacing three: nitrogen, phosphorus and potassium. If you ran your bank account like that, with $60 out and $3 in, what would happen? You would end up bankrupt.Although this is a very serious and complex situation, there are some simple, commonsense answers. For example, some very positive research has been conducted over several years in North Queensland and elsewhere, where the adding of mineral rock dust containing up to 70 mineral elements to various soils not only increased the tonnage of the crops there but also reduced the acidity of the soil, while replenishing the depleted minerals at the same time. According to our preliminary research, this Queensland quarry has an estimated reserve of around 20 million tonnes, while another 23 reserves have already been identified. There is simple evidence to support what I am saying, for all of those who would like to check it out.176309:53:001763Ferguson, Laurie, MPMr LAURIE FERGUSON8T4ReidALP00—The comments this week from the Minister for Finance and Administration (Mr Fahey) and the recent decision by the Parramatta City Council in regard to the Badgerys Creek proposal are indicative of the certain inexorable drift of opposition in western Sydney to the Badgerys Creek proposal. Recently, the western Sydney alliance of councils, representing 1½ million Australians, has produced a document that certainly slices apart, in a very definitive way, this proposal.I want to congratulate that coalition of representatives: regardless of their political affiliation, they have indicated that this proposal—which an attempt at selling was made, on the basis of jobs for the region in a period of high unemployment—is certainly engendering strong opposition from the general public. The document by the councils certainly goes to the fundamental flaws in the environment impact statement previously exposed by SMEC itself, the government sponsored analyst of the proposal.The document attacks the failure of the environmental impact statement to look at the ancillary infrastructure problems. It raises the aspects of a questionable model for regional impact analysis. It talks about the minimal analysis to justify the fancied 63,000 jobs. It indicates that this concept, that noise at 10 kilometres will wake people only once a night, is really pie in the sky, but it puts forward the proposition—which seems to have a far greater basis—that the noise will wake people as much as six to 20 times a night.The western Sydney region is already characterised by significant pollution problems acknowledged by virtually everyone as being far worse than those in the rest of the city. This document also states:Broad assumptions are made regarding major infrastructure requirements such as funding for rail links, road construction, upgrades and maintenance, and timing and the installation of a fuel pipeline. Detailed costings are not provided, nor are definite alignments for rail and road corridors. Interactions with other airports in the Sydney Region are inadequately described in the Draft EIS given they are based on preliminary flight path data.Mr Hockey interjecting—8T4Ferguson, Laurie, MPMr LAURIE FERGUSON—You might want to dissociate yourself from the comments by the Minister for Finance and Administration in the last week or so where he has made very clear the fundamental problems of this proposal.Mr Hockey interjecting—8T4Ferguson, Laurie, MPMr LAURIE FERGUSON—The member for North Sydney would better spend his time by taking the forthright position that the member for Lowe (Mr Zammit) has in basically exposing the collusion of this government in the disregard of the general public's interest.176409:56:001764Evans, Richard, MPMr RICHARD EVANS3V5CowanLP10—I want to talk about infrastructure as well, but I want to talk about the infrastructure in Ballajura, which is a suburb in my electorate. Ballajura was first established about 15 years ago, and in recent times it has had a fast growing population. We all want to see population growth in areas, but only if infrastructure is available to it.Over the last few years the population has gone from 9,000 to 18,000, and a lot of those people are quite young people who have moved into the electorate with young families. Currently they do not have a post office, and their postal requirements are dealt with by an agency at the local newsagency. You can imagine a busy suburb of 18,000 people with their postal requirements going through a newsagency where they queue up next to all those magazines and disrupt the newsagency's customers. It is unacceptable.There are other suburbs in my area that are looking for support. Greenwood, with 10,000 people, has its own post office. Warwick, where my office is situated, with a population of 4,000 people, also has its own post office.After a number of constituents approached my office, I contacted Australia Post, and we went to have a look at the situation at Ballajura. In fact, they have fixed a few things. In other words, now they do not do their tills at 4 o'clock, at peak time, and they have also organised a better queuing system. But it is unacceptable to fix queues when in fact what is needed is a proper postal office out in that community.The community in the past has had its need for schools, and we have approached that. We are trying to fix the transport needs. Two years ago they had some water problems. The local community approached me, and on their behalf I approached the state government and it was able to fix their water problems.I am asking Australia Post to have another look at the needs of Ballajura—a fast developing suburb, a good suburb with some fine people living in it, and a suburb with a population that has gone from 9,000 to 18,000. They do need an Australia Post office out there rather than an agency in the newsagency. The newsagent is a wonderful small business operator, and he probably has a lot of licence fees from those Australia Post transactions. But, unfortunately, the demand is great out there for an Australia Post office and I ask Australia Post to consider locating an office in that suburb.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—In accordance with sessional order 275A, the time for members' statements has concluded.Bills1764r3991764Debate resumed from 25 March, on motion by Mr Miles:That the bill be now read a second time.09:59:001764Evans, Martyn, MPMr MARTYN EVANSN36BonythonALP00—I would like to conclude my much postponed and interrupted speech by focusing particularly on the issues about the death benefit. If we look t the Superannuation Legislation Amendment Bill 1997 , which is before the Committee, in relation to this issue of death benefits there is a proposal—which I believe is a big step forward from the current situation—to allow fund members to nominate those who are to receive the benefit in the event of their death while they are at work. However, there are some preconditions on this flexibility: there is a three-year expiry date on any nomination; the sole purpose test must be applied to the nomination—in other words, you cannot nominate a friend as a beneficiary; the nomination must be witnessed; and the nomination is to be disclosed in the member's annual members statement.The last two matters are unobjectionable and, indeed, I believe are very desirable—that is, the nomination be witnessed and that it be disclosed each year in the annual members statement. Both those things are fully supported. However, with respect to the three-year expiry date, I believe that that is a fairly patronising attempt in the legislation to limit people's choice about the way in which they nominate beneficiaries.Most people do not anticipate their early demise. If that is to occur during one's working life, it would often be very unexpected and often quite sudden. And people do not plan well for their early death—that is the obvious reality of daily life. We all hope to live into retirement and to fully collect on our superannuation benefits. Therefore, a three-year expiry period automatically means that many people will not have a valid nomination at the very point when they need it because, if it expires every three years, only a small percentage of people will remember to renew that nomination every three years. So I would suggest that most will end up being expired at the point when they are actually required.The reality is that people are not required to update their will. A will remains valid notwithstanding the elapse of three years, five years, or any other period, for that matter. The nomination is to be disclosed each year on the annual members statement. I support that and I think that is an adequate safeguard. If people change their minds, which is presumably the intention of the three-year expiry period, then the fact that they are reminded of their nominees each year when they get their statement—and most people do look at the statement, given that it discloses the amount of money they have in the fund; it is a matter of some interest to people—means they will have the opportunity to check their nominations each year.The statement could, of course, draw their attention to the fact that they can easily change that nomination if they wish to. So while I accept that people's life circumstances do change, the reality is that for most other legal documents of much greater import than this we do not build in an automatic three-year expiry. I think that is a serious shortcoming of what is otherwise a reasonable advance in the law.The other issue which needs to be examined, but is more controversial, is the issue of the sole purpose test being applied. This seeks to limit the range of people that you can nominate. This is a very difficult question, because obviously if people had retired in the normal course of events, they would have received their cheque. They are then free to do two things. They are free to spend that money or give that money away in any way they see fit, absolutely without limitation. The other thing they are permitted to do is to leave that money in their estate through their normal will in any way they see fit. Again, there are not limitations on the way they dispose of that money, post retirement, either through their estate and their will and testament or through their spending patterns.The reality of this is that if we limit this test in this way, we are imposing an additional hardship on those who happen to die early, while still working, prior to the vesting date of their superannuation policy, and limiting their choice in a way we do not limit the choice of those who have retired. As I said the other day, it is my contention that death is the ultimate bona fide retirement. The reality is that if you have died, clearly that superannuation policy vests. While we would all want to see that fund go to the immediate family of the member, the reality is that it is the member who understands best what their needs and aspirations are and who needs to benefit from the superannuation proceeds of their estate.Often people have complicated family relations, often not following the traditional pattern these days. Therefore, to specify it to a legally predetermined limited range of beneficiaries that we decide, as the parliament, are the right people to receive this money will in many cases be correct. But in some cases—and I am aware of some from my own constituency work—this will impose a significant hardship on those people who the member would otherwise want to have benefited from their estate and who, in normal circumstances, in the event of a normal retirement, can ensure that they benefit from the estate. It is only in the event of the early death that we impose this extra hardship on people.I believe this is a significant improvement in the existing law and I believe we should empower people in relation to their superannuation to allow them to make a binding nomination. In one case in my experience a member had made a nomination, but of course, under the old law, it was not binding. Because the nomination was in some degree controversial—it left 25 per cent of the proceeds to a friend of the member, 25 per cent to a close relative and 50 per cent to her mother—the reality was that the mother and the sister did not qualify as normal beneficiaries of this person. Therefore they had to contest this payment, because the superannuation fund wanted to exercise their discretion to pay all of the money to the friend who was claiming to be a beneficiary because they were in some way that they attempted to demonstrate—which was not particularly valid, but they attempted to demonstrate it—dependent on the member.So the mother and close relative, the sister, are going to miss out on this payment because the fund wanted to ignore the nomination form of the deceased member. This law would still perpetuate the trustee's right to ignore those people. I think that is quite wrong. In this particular circumstance, those people were entitled to the member's payment. I know one can always conjure up bizarre circumstances where that would not be right, but it is better to place trust and faith in the wisdom of the member concerned to best know their own family circumstances. Therefore, I would appeal to the government to review these two particular areas and to comment on them further in the committee stage. We can re-visit this matter in another place if, on the balance of those inquiries and responses, that appears to be desirable.10:06:001766Hockey, Joe, MPMr HOCKEYDK6North SydneyLP10—The Superannuation Legislation Amendment Bill 1997 will make various miscellaneous amendments to the superannuation legislation to maintain and strengthen the efficiency and effectiveness of the superannuation supervisory framework.Many of the points are contained in the second reading speech. I would like to reflect on a few of those points which have an effect on the Superannuation Industry (Supervision) Act, the SI(S) Act, as it is known. These specific amendments include permitting a trustee of a fund to amend the governing rules of the fund to enable the acceptance of binding death benefit nominations from members.I would like to particularly focus on this proposed amendment. Unfortunately, there continues to be some discrimination in the way that we treat some nominees of people who hold superannuation accounts. I am referring specifically to the way that homosexual couples are treated. At this stage, there has been no attempt by either side of politics to permit a binding nomination to be enforced so that a partner of an individual is the beneficiary either at the time of death or at the time of maturity of the superannuation policy.As a member of the Liberal Party and as someone who believes passionately in the principles of liberalism, I strongly believe that people should be judged not on their sexuality or on issues where the community may treat them unfairly. People should be treated as individuals and equal members of the community, provided they do not themselves give up that right to be a fully fledged member of the community by committing an unlawful act resulting in gaol.I cannot for the life of me understand why a binding nomination provided by a gay person—either a lesbian or a male homosexual—should preclude a partner, a friend or any other person that they may be in a relationship with, if that is their nomination. This cuts to the very core of the principles that I believe underpin modern liberalism, which I enunciated in my maiden speech.It is time for this parliament to take a strong stand and to provide the opportunity for an individual to nominate a partner or a friend notwithstanding their relationship. That person should be a binding beneficiary of the estate, the superannuation part of the estate or the policy itself.That is particularly applicable, given the announcement by the Prime Minister on International Women's Day, which I strongly applaud and which puts on the table, at the time of the marriage break-up, the accrued superannuation entitlements of one of the working partners in the relationship. It applies equally to men and women: I may be able to access my wife's superannuation and vice versa. That is only fair and just, and at the same time it is a fundamental part of liberal principles that people should not be discriminated against on the basis of their sex or, for that matter, their sexuality. It is something that we should take forward as a parliament.This bill deals with a new division in the SI(S) Act which applies alternative in-house asset rules to certain defined benefit funds with large accumulated surpluses, subject to appropriate actuarial controls. Also, it extends from 5 June 1997 to 5 June 1998 the transitional period during which tax file numbers already quoted for superannuation purposes may be taken to have been quoted for surcharge purposes also.The bill provides greater power to the Insurance and Superannuation Commissioner so that the commissioner can revoke an approval of the trustee without ministerial clearance where the revocation is requested by the trustee. That is a particularly important power to protect the beneficiaries in this case. The bill also strengthens the arm of the Insurance and Superannuation Commissioner in relation to monitoring and investigation powers, by expanding the number of parties to whom existing powers apply and—importantly, given the size of the funds and the large risks that are involved in the funds management—by increasing the penalties for non-compliance.This bill also amends the Superannuation (Resolution of Complaints) Act to enable the Superannuation Complaints Tribunal to be constituted by one, two or three members, rather than the present mandatory three members. This improves the efficiency of the tribunal. The bill provides for an improvement in the transparency and the process of constituting tribunal panels. It will require the tribunal chairperson to make available to the public guidelines concerning the circumstances under which the tribunal may be constituted by fewer than three members.The final principal act amended by this bill is the Bankruptcy Act, which is amended to ensure consistent treatment of the superannuation benefits that are bankrupt, regardless of whether the bankrupt's benefits are in a regulated superannuation fund or an exempt public sector superannuation scheme. What this does is to create a level playing field. The playing field has for some time discriminated against members of private sector funds. But, importantly, this legislation is, in effect, again trying to repair some of the problems that have been passed on to us by the mismanaged introduction of superannuation.I personally regret the fact that we had to introduce the superannuation surcharge. It would not have been necessary but for the $10.5 billion Beazley black hole which we inherited and which we have set about repairing. We have set about repairing it for a distinct purpose: to shore up Australia for the next downturn in the world economy, to shore up Australia so that it can benefit from a sustained level of economic growth and low inflation, and to create better work practices that make us more internationally competitive.The superannuation surcharge basically ensures that the three per cent of people in the population who happen to be earning more than $70,000 a year are on an even playing field with the rest of the community. But the fundamental problems with superannuation go to the fact that governments over the last few years have continually been moving the goal posts. That is a source of great frustration to many accountants, to many lawyers, but most significantly it is a source of great frustration to contributors.I will give credit where credit is due. When superannuation arrangements were first introduced in the 1980s by Bob Hawke, it was the right decision. People had to start to put away, in a very defined way, money for their future. If you like, it was a private contribution to their own retirement.Over the last 20 to 30 years we have seen a demographic change in Australia. People once had two very distinct parts to their lives. The first part involved their education, their teenage years and their growth phase, while the second part involved their working phase and a retirement period, which for some was a comparatively short period, quite tragically.However, these days the population is living longer and there are three long phases in people's lives and retirement is a key third part. Previously, retirement was regarded as a period of 10 or 15 years from the age of 65. If we all lived to 75, that would be great. Well, of every three women born today, one is going to live to be 100. You are seeing a major demographic shift in the nation. Therefore, we need to provide for our future. As I said, I give credit to Bob Hawke for taking the major step of establishing superannuation.But the taxation arrangements in relation to superannuation have been fiddled over the years, and quite tragically so. People are now taxed on their contributions on the way in and they are taxed on their contributions on the way out. We should have followed the original UK model where tax is only applied at the point of collection and the funds accumulate pre-tax profits over the years. Regrettably, these days we have a very confused and unstable system involving the taxation of superannuation.At some point someone is going to have to take a tough decision with those people taking a lump sum payout when their superannuation matures, taking a 100 per cent payout of their funds. Quite frankly, for many people that will be the most significant amount of money they will ever have in their lives. Despite all the accumulated wisdom and despite the fact that it is their money, we need to be able to protect people from shonks out there who are prepared to say, `I want your money. Come and invest in this nice little corner store in Upper Cumbucker West and you'll be rich forever.' Some people will be tricked and will pour their life savings into that corner store in Upper Cumbucker West, a place where there are only two dingoes and a Cobb & Co cart that passes by every three months. That is tragic. We have all seen examples of that.At the same time, there is no doubt there are many people in the community who would be more prudent investors than certain fund managers, and that needs to be taken into account at well.However, I do have reservations about the current entitlement to the bulk payout. I do have significant reservations about the current taxation treatment of superannuation. We have inherited a very confused and difficult system and, at some point of time, there needs to be a bipartisan commitment to redress the imbalances of the current system and to provide people with long-term certainty about the direction in which superannuation and the taxation arrangements relating to superannuation are taken.Finally, I strongly support the proposed amendment bill before this House. I do reiterate my strong support for the entitlement of beneficiaries of superannuation accounts to be nominated and be binding in relation to all individuals and specifically in relation to gay couples. I also reiterate the fact that we do need to focus as a parliament on providing greater certainty in relation to superannuation entitlement and taxation and provide the community with that certainty, so that those young girls that are born today that will live to be 100 will not be relying on the generosity of the state in 2098. They will in fact be able to provide for their own retirement so that they can live with dignity and certainty and so that they can ensure that they pass on to their children—and I would expect their great-grandchildren even by that stage—a quality of life that is indeed better than that which was passed on to them.10:22:001769Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The member for North Sydney (Mr Hockey) was making some quite thoughtful observations about the complexity of the taxation treatment of superannuation. But it ought to be said, certainly I have found as I go around the superannuation industry, that there is no one measure which has done more damage to superannuation and which has made the taxation treatment of superannuation more complex than this government's superannuation surcharge. It was said to be a measure which would impact on high-income earners, but it has in fact damaged all workers, low- and middle-income earners as well, because of its complexity and because of the load that it has thrust on superannuation funds in requiring them to obtain tax file numbers and things of that nature. It threatens all those low- and middle-income earners who do not declare their tax file numbers with the 15 per cent surcharge. No single measure could have been calculated to do more damage to superannuation than that measure has done.To turn to the Superannuation Legislation Amendment Bill 1997 itself, this is a bill which allows trustees to accept binding death benefit nominations. Trustees' responsibilities and duties come from trust law and the Superannuation Industry (Supervision) Act 1993. They place a prudential and fiduciary responsibility on superannuation fund trustees to exercise care, skill and diligence in undertaking their duties on behalf of superannuation fund members. Trustees regard the discretionary allocation of death benefits as an important part of the prudential responsibilities. There is no question of that. It ought also to be noted that generally trustees are not paid to undertake their role and do not benefit financially from that discretion to allocate death benefits.In the area of death benefits, a superannuation fund trustee may accept a nomination by a fund member to pay any death benefits to any person or entity. However, under the present arrangements, the member's nomination is not binding on the superannuation trustee. Trustees have to ensure that any payment meets the sole purpose test, which is that a superannuation fund should be maintained solely for one or more core purposes or one or more ancillary purposes relating to the provision of benefits for use on or after retirement. The sole purpose test also allows for the provision of benefits on or after a fund member's death if the death occurred before the member's retirement and/or age 65 and the benefits are provided to the member's legal representative, to any or all of the member's dependents or both. A fund member's legal representative can also be a representative of a deceased estate.The government has before us a bill which contains technical amendments which permit superannuation fund trustees to amend the trust deed of their funds to allow them to accept binding death benefit nominations from members. There are a number of advantages in having a trustee discretion and there are also some advantages in not having a trustee discretion. This is a very interesting debate to which the members for Bonython (Mr Martyn Evans) and North Sydney have made contributions.In the area of advantages, if benefits are to go directly to an estate, you find that other creditors may have access to the funds before any dependents get access. State assets are subject to additional taxes from which superannuation eligible termination payments are exempt, so that can erode the value of the death benefit. In most cases, trustees are able to quickly deliver death benefit payments to appropriate dependents. This is unlike the delays which all too frequently occur where the assets are dealt with pursuant to a will and you get disputes and so on.Trustees can approve advance payments in specific cases to alleviate immediate financial hardship. In some cases, there may not be a will which determines who should receive assets and that can cause further delays in the payment of benefits to dependents and additional legal costs.As against that, there are advantages in not having trustee discretion. Established precedents which already exist in a state law attach rights of certain parties, either in law or by direction through wills. Probate courts have specific knowledge of these laws compared to trustees. Leaving everything to the estate creates an area for potential disputes. Discretion creates more administration delays and costs to trustees and the superannuation fund. Making it binding will improve the time and money spent on these cases, reducing the trustees' workload. We could anticipate perhaps reduced legal costs and fund administration time. We could eliminate the cross-subsidies of expenses and we could reduce disputes over trustees' decisions.We have also heard quite powerful arguments from the member for Bonython and the member for North Sydney in favour of the person who has the superannuation fund in their name being able to have their wishes given effect to and that their wishes ought to be paramount in these areas. An interesting article in the Sydney Morning Herald from Annette Sampson talked about the present situation where superannuation funds will ask you to nominate who you want the money to go to. In her words, `This is an illusion.' If someone else can convince the trustees that they have a better claim to the money, the trustees are obliged to override your preferences. She expresses the view that it is outrageous that fund members cannot treat their super and/or any death benefits emerging from it in the same manner as assets held outside the superannuation system. She points out that, while dependents can challenge a will, it has clear legal standing as a statement of your wishes and a strong case is needed to overturn it. With super, all you need is to prove dependency, which can result in some unfair distributions. She welcomes this legislation as a step forward on that basis.It is probably fair to say that there is the potential for some injustice to occur under either arrangement. If you have a situation where someone has nominated that their death benefit ought to go to a particular person and trustees determine that it should go to somebody else, that may well be a situation of injustice and inappropriate outcomes. Equally, if someone nominates that their death benefit should go to a particular person and then circumstances change, it is probable that in some cases people would not change a death benefit nomination which was many years outstanding and did not reflect their own personal circumstances. You might find the trustees being forced to give effect to that binding nomination in circumstances where it would not be just to do so and the personal relationship which had given rise to that nomination had long since fallen by the wayside. It is probably fair to say that some injustices would occur under either arrangement and it is a question of coming up with the best possible arrangements.In terms of Labor's position, we would see the measure in this bill as being a step forward. We would like to see it referred to the Senate Select Committee on Superannuation for further examination to see whether there is indeed a case for taking the matter further.The bill goes on to apply in-house assets test rules to individual subfunds. The in-house assets test rule provides protection for super fund members' contributions by strictly limiting a company from borrowing from its own super fund. The reason is that, if an employer fails, employees' super benefits are protected. This measure closes a loophole whereby some individual super subfunds—separate super funds which are subsidiaries of a larger super trust fund—have been allowed to avoid the in-house assets test. Labor supports this measure.The next provision in the bill extends the transitional period from 5 June 1997 to 5 June 1998 for funds to use already quoted tax file numbers for surcharge purposes. This will assist super funds that, for other purposes, collected members' tax file numbers before 5 June 1997 to also use it for surcharge tax purposes, thereby improving the administrative efficiency of collecting the surcharge. Labor supports this measure, as it may help some low income and middle income earners to avoid paying the surcharge.As I said at the outset of my remarks, the surcharge has been an administrative disaster from start to finish. The only thing from this government which has fared worse is the Prime Ministerial guidelines on the ministerial code of conduct. It has been a disaster. Even as recently as Tuesday, in the Sydney Morning Herald there was reference to Murray Wyatt, a director of Morrows Pty Ltd, saying to an industry conference that the collection of additional tax by the federal government through the super surcharge is turning into a debacle and threatening people's confidence in superannuation. He said that it was becoming clear how complex, unnecessary and unwieldy the surcharge was, and that the surcharge `has disrupted and undermined public confidence' in superannuation. This is entirely regrettable, and the government really ought to be condemned for the damage that it has done to superannuation through such things as the surcharge, its abandonment of the government co-contributions in super, and various other measures that it has taken.The next provision in the bill is to expand the Insurance and Superannuation Commission's monitoring and investigation powers, to widen the category of parties to whom they apply to include custodians, and to increase the penalties for non-compliance. This provision will increase the protection of members' contributions and is supported by us.It is also the intention of the legislation to allow the chairperson of the Superannuation Complaints Tribunal to convene either a one-, two- or three-member panel hearing, instead of the current requirement for compulsory three-member panel hearings. This is set to improve the efficiency of the Superannuation Complaints Tribunal. The changes to the Superannuation Complaints Tribunal are intended to speed up the current backlog of complaints, many of which are non-controversial and may not need full three-member panel hearings.While the bill does not specify what type of cases will be heard by how many panel members, the Superannuation Complaints Tribunal chairperson is required to publicly release written guidelines setting out how the tribunal will be constituted for different classes of complaints. Labor has been in contact with Mr Neil Wilkinson, the Chair of the Superannuation Complaints Tribunal, about the release of these guidelines, and we are satisfied that the appropriate transparency will take place.We need to understand that these measures occur against the backdrop of the recent Federal Court decision in the Bishop case, which has prevented the Superannuation Complaints Tribunal from making determinations which are binding on superannuation trustees. This is not an uncommon problem facing tribunals where, under the separation of powers that we have constitutionally in this country—and properly so—challenges are taken to the courts on the basis that any given tribunal is exercising judicial power which ought properly to be exercised by the courts and is therefore acting unconstitutionally.In the Bishop case, the Federal Court has held that this is indeed the case for the Superannuation Complaints Tribunal. That Bishop decision has effectively gutted the Superannuation Complaints Tribunal's powers. There is no doubt that that decision has done the tribunal some damage. That is a matter of concern to Labor, as, indeed, it ought to be a matter of concern to the wider community. Labor established the Superannuation Complaints Tribunal as a low cost, reliable, fast, dispute resolution mechanism and we think it has worked well. The alternative for low- and middle-income earners in the past was that you had to go off to the court to seek resolution of any problems that you had with superannuation trustees. We think the tribunal has functioned pretty well and has been a better alternative.I understand that the government has appealed the Bishop case to the High Court. That is a proper thing to do. But, generally, the government has been very slow in reacting to what is likely to have a massive impact on this part of the superannuation system, an important component of the system—dispute resolution. We believe that the government has not taken this issue as seriously as its significance deserves. I again call on the government, as I did at the time of the Bishop decision, to urgently address this issue in the interests of consumers. We would certainly welcome any indications from the government about the actions that they are taking with the superannuation industry to try and ensure that the very good work of the Superannuation Complaints Tribunal continues, notwithstanding the Bishop decision.Mr Deputy Speaker, I have a second reading amendment which I wish to move and I think now is the right time to move it. I understand that copies have been made available to the Main Committee. I move: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 expresses its concern about the Government's administration of Australia's superannuation system and, in particular, calls on the Government to:(1) admit that its policy announcement on divorce and superannuation was vacuous and designed to deceive the Australian public into thinking this Government has a policy on superannuation and divorce;(2) explain why it has taken two years to announce it is having discussions with industry when a substantial amount of work was done by Labor, in government;(3) release what policy information it has developed on this issue to date, if any;(4) ensure that the principles of division of superannuation apply to the ending of all relationships, not just divorces, but also common law marriages which dissolve; and(5) ensure that any policy proposals brought forward are consistent with broader retirement incomes policy".In moving that amendment, I think the government ought to be condemned for what was a vacuous policy announcement on superannuation and divorce made on International Women's Day. This is a government which has attacked women in all sorts of fashions—in relation to child care, to looking after aged relatives, to job opportunities—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Hon. N.M. Dondas)—Order! I ask the honourable member for Wills to speak to the contents of his amendment—UK6Thomson, Kelvin, MPMr KELVIN THOMSON—I am certainly doing so, Mr Deputy Speaker.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—which represents superannuation legislation.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—That is correct. I want to—DK6HOCKEYMr Hockey—You should apologise to all the women who did not get pre-selection.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—I had the courtesy not to interject on you. I would appreciate the same courtesy.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! The honourable member for Wills will resume his seat. I remind the honourable member for North Sydney of where he is. We must allow the honourable member for Wills to speak to his amendment.DK6HOCKEYMr Hockey—Mr Deputy Speaker, I ask you to bring the honourable member for Wills back to the original amendment. Instead, he is drifting off into some spurious talk about how the ALP is meant to be very supportive of women, yet they do not have any women in any of their safe seats. In fact, they do not have them in any seats, apart from Canberra, I think.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—There is no point of order because I had asked the honourable member for Wills to relate his comments directly to the amendment that he has moved. I am quite sure that the member for Wills will do that.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Thank you, Mr Deputy Speaker. The amendment which I have moved condemns the government for deceiving the Australian public in announcing a lightweight policy proposal on divorce and superannuation. The fact is that this government does not have a policy proposal to release. They looked around on International Women's Day. They could not come up with anything better, so they said, `We are going to do something about superannuation and divorce.' Well, this simply is not good enough, Mr Deputy Speaker. What the government ought to do is to explain to the Australian public why it has taken two years to announce that it is going to do something about superannuation and divorce.DK6HOCKEYMr Hockey—What did you do for 13 years?UK6Thomson, Kelvin, MPMr KELVIN THOMSON—I will come to that. You are less further advanced in 1998—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! I ask the honourable member for Wills to pass his remarks through the chair and not directly across the chamber to the member for North Sydney.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—The government is less advanced in 1998 than Labor was in 1995 and 1996. It is simply not good enough to get up here in 1998 and say, `We are going to start doing something about superannuation and divorce'. There is a failure, on the part of the government, to recognise and build on work that both Labor and the parliament generally have done on the issues of superannuation and divorce.Let me point them out to the honourable member for North Sydney, who seems to be unaware of them. A Joint Select Committee on Certain Aspects of the Operation and Interpretation of the Family Law Act recommended in 1993 that superannuation be considered as property and that the Family Court be given discretionary power to split a benefit between spouses in proportion equal to the length of marriage or cohabitation, by reference to the total period of contribution to the fund.Labor established a working group to examine this issue. It had an extensive name—the working group to develop a scheme for splitting entitlement to superannuation under the Family Law Act. It consisted of representatives from the Attorney-General's Department, Prime Minister and Cabinet, the Office of the Status of Women, Treasury, Finance, the Australian Taxation Office, the Insurance and Superannuation Commission, Social Security, Family Court, Law Council of Australia and the Association of Superannuation Funds of Australia. It was a substantial working group, and for good reason.That working group was to report in 1996 and was formed to develop a scheme whereby superannuation would be dealt with as a separate and discrete asset. That was its first term of reference. The second term of reference was that the asset would be distributed between the parties, upon breakdown of marriage, equitably within the operation of law. The third term of reference was that the distribution of the asset would be determined by the period of cohabitation and the period of contribution to the fund. The fourth term of reference was that the proposal should be consistent with Labor's retirement incomes policy generally.In June of 1995, the attorneys-general outlined their planned approach to the scheme. This was that superannuation should not be treated as property but as an asset or as a financial resource for the future. It would retain its identity as a retirement benefit for both parties—meaning that superannuation benefit would be split into two separate accounts, one for each divorced spouse, at the time of the divorce or the divorce hearing. The accounts would operate separately until vested in each individual.It is my understanding that a draft Family Law Amendment Bill (No.2) was at an advanced stage of development at the time of the last election. Why hasn't this government used this information, and this work, to come forward with a real policy rather than this vacuous announcement, saying, `We are going to do something about this; we are going to go out to industry; we are going to consult'? So we have got this deceitful announcement which is designed to—Mr Hockey interjecting—UK6Thomson, Kelvin, MPMr KELVIN THOMSON—There has been a change of government. And what has happened for the last two years? Nothing; absolutely nothing has happened for two years and now you get up and say that you are going to do something. The Australian people are not going to be deceived by such a vacuous announcement. They are too smart for that. The treatment of superannuation assets in the event of a marriage breakdown can impact significantly on the financial security of divorced women, particularly those women who have not accumulated retirement savings due to other demands being placed on them which limit their participation in the paid work force.The issue of the splitting of superannuation after the ending of relationships has been handled by the Family Court on an ad hoc basis, often without the appropriate legal jurisdiction. The difficulties for the Family Court result from the question of whether superannuation falls within the definition of property under the Family Law Act 1975—that is, whether the Family Court has a jurisdiction to include it in orders—and, secondly, how and when superannuation assets are valued. At the point of divorce, for example, they may be worth considerably less than in the future.Superannuation is not generally considered as property unless it is vested in the individual member's name. The Family Court has no power to order superannuation fund trustees to release superannuation assets before they are vested in the individual, which usually occurs once preservation age is reached or upon resignation or retirement.To date, the Family Court has been forced to adopt one of two approaches to the splitting of superannuation, neither of which has resulted in a balanced outcome. We tend to have a situation which disadvantages either women or men. If hearings are adjourned or orders deferred until superannuation becomes payable, this potentially disadvantages women. This approach does not accord with the clean break principle, which the Family Court generally supports, and it could see the property settlement deferred for many years, during which time the personal circumstances of both parties could change.Alternatively, superannuation gets considered as a financial resource rather than as property, potentially disadvantaging men in the sense that ex-wives are often compensated for the loss of the interest in their ex-husband's superannuation by increased amounts of other assets. This can disadvantage men who cannot access their superannuation and may not have sufficient other assets. They are forced to borrow, to go into debt to pay that compensation.In 1996, the coalition said that it would examine the treatment of superannuation following the dissolution of marriage. The policy stated also:Termination of marriage through divorce . . . poses a major threat to the economic security of women, particularly those who are unpaid workers.The regrettable thing is that in two years we have gone backwards from where we were in 1995 and 1996. Paragraph 8.19 of the Labor Party's national platform of 1988 states:Labor supports a fair and equitable retirement incomes system which:. . . in the event of the ending of a relationship, ensures equity and fairness in the division of benefits . . . While we can give in principle support to the government's policy announcement, which is consistent with our national policy platform, the more we look at it the less there is to see. This, in effect, has been a do nothing announcement from a do nothing government which is—DK6HOCKEYMr Hockey—You should apologise for 13 years of incompetence in relation to superannuation.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Let me assure the honourable member, in relation to superannuation, that we built it up from something which was a privilege for the well-off few to something which became available to ordinary workers. We set in place a decent retirement incomes system for this country, something which did not exist before the Hawke and Keating governments. Superannuation is one of our proudest achievements and we are happy to talk about it any time, any place.We are concerned that the government has failed to act on the working group's recommendations. It has taken two years for the government to announce a policy, which is to conduct yet another review.There is no question that this is a complex area and cannot be solved overnight. There is no question that, in terms of dealing with superannuation assets at the time of marriage dissolution, there are issues involving the taxation arrangements. I noticed that Daryl Dixon, in a quite substantial article in the Age recently, talked about some of the issues that occur.If we were to have legislation which, for example, permitted the splitting of superannuation pensions as well as lump sums between spouses, that would place divorced couples in a more favourable position than intact couples where one spouse receives all the superannuation pension and the other spouse has very little income. It would not be appropriate, in my view, for us to seek to develop policies that would encourage marriage dissolution for superannuation tax reasons. I think we would all agree that that would be an undesirable outcome.It is also the case, in my view, that superannuation ought to be treated as something for retirement, rather than something that people can or should have access to pre-retirement. So it is important in terms of developing appropriate policy that we keep sight of that and keep sight of the purpose of superannuation. There are a number of issues which Daryl Dixon identifies in that article. I think that all those who are interested in this area need to take account of those things.What we have from the government so far is a failure to release the report of the joint working group on family law reforms. We have in fact the history of inaction in this area by government, and it is something for which the government ought to be condemned. They ought to get on to some serious work in this area, taking advantage of the preliminary work which was done by Labor in years gone by.In the other areas of the bill, we support what is being proposed and we think that these things are worthwhile. We think that there is a role for the Senate committee in examining death benefit nominations to see whether that principle of people being able to make binding death benefit nominations ought to be taken further. We will take a great deal of interest in the work of the Senate committee in that area.10:51:001776Albanese, Anthony, MPMr ALBANESER36GrayndlerALP00—I am pleased to support both the amendment moved by my colleague, the member for Wills (Mr Kelvin Thomson), and this bill today. I could not agree more with the parliamentary secretary, the member for Braddon (Mr Miles), and I do not always agree with the honourable member on a lot of issues. I agree with him when he said in moving that the bill be read a second time that superannuation plays a significant role in the government's commitment to increase national saving, and in its retirement income policy.Superannuation is, indeed, an important part of our national savings plan. Legislation introduced by the Keating Labor government has ensured that all Australians have access to superannuation. Some decades ago it was the case that, whilst parliamentarians had access to superannuation, ordinary workers and those who were not at the top of their field did not have access to this. However, the Labor government put in place measures that ensured that a minimum employer contribution for wage and salary earners in Australia is contributed for everyone.Thanks to these initiatives introduced by the former Labor government, more than 93 per cent of full-time employees, 67 per cent of part-time employees, and 59 per cent of casual employees, are now covered by superannuation. It is the responsibility of government to ensure that people are encouraged to contribute to the superannuation scheme because it is a win/win situation. Individuals win because when they retire they are assured of an income. The nation wins because national savings increase, thereby delivering great benefits to the economy.Furthermore, if superannuation is to play a role in the government's retirement incomes policy, then all people who contribute should have equal access to their super upon retirement. That is an issue that I wish to go to today. I am pleased to see that in the debate earlier today, the member for North Sydney (Mr Hockey) called upon the government for action to ensure that all people have equal access to their superannuation because at the moment that is not the case. There is discrimination based upon people's sexual preference. There are a significant group of wage and salary earners in Australia who have little incentive to contribute to a superannuation scheme because their spouses do not have access to superannuation benefits upon their death. As the legislation currently stands, gay and lesbian couples are discriminated against. The Superannuation Legislation Amendment Bill 1997 aims to improve the monitoring and investigative powers of the Insurance and Superannuation Commissioner. This improvement in accountability must be applauded and must be supported.The bill also aims to improve the efficiency and productivity of the Superannuation Complaints Tribunal, once again a positive initiative. But what power does the tribunal or the commissioner have to address the legitimate equity concerns of same sex couples? The answer is `none at the moment' because this legislation is currently flawed.I have here some 450 letters addressed to federal members of parliament which I will be delivering today. These are from people who live in New South Wales in 42 different federal electorates and they are asking for the legislation to be amended. The letters draw attention to:aspects of current Commonwealth superannuation law which are highly discriminatory, particularly in regards to the payment of superannuation death benefits to surviving partners of lesbian and gay relationships.The letters go on to state:In effect, the current legislation prevents equitable payment of a person's own money, should they pass away, to their chosen partner on the basis of their partner's sex.The Labor Council of New South Wales is currently conducting a campaign which is being coordinated by members of the Inter-Union Group against Discrimination in Superannuation. They distributed pamphlets around the time of the Mardi Gras in Sydney, and they are also distributing pamphlets and information throughout workplaces to raise awareness of these issues.I applaud the Labor Council of New South Wales for taking this stance because quite often issues like this are hard to take on. I remember that the first time I raised this issue in the parliament I was heckled by another member on the basis of making an inference about people's sexual preference. In the community there is still a great deal of discrimination and a great deal of angst concerning gays and lesbians. However, the Labor Council have shown that they are prepared to provide leadership on this issue, and I am pleased to hear that members on both sides of the House have indicated that they are prepared to show leadership on this issue also.I would like you to consider this scenario which comes from the Labor Council campaign. This document says:Susan and Juan have been in a de facto relationship for less than six months.Richard and Vincent are lovers who have lived together for twelve years.Juan and Richard are co-workers. On their way to a work-related event they are killed in a car accident.Juan and Richard have both been in their industry superannuation fund for ten years and accumulated $100,000.Juan died without a will, having never completed a nominated beneficiary form. Susan is identified as his spouse by the trustees of the fund. Susan received a $100,000 benefit tax-free.And she should. However, Richard has gone a step further. He has done everything humanly possible to ensure that his partner receives the same treatment, receives benefits as a result of his death. The document continues:Richard has maintained a will which names Vincent as the sole beneficiary, as does his superannuation form. Although this assists the trustees in making the payment to Vincent, he is considered a "non-dependant" and is required to pay $15,000 tax on the $100,000 benefit.So Richard only receives $85,000 whereas if it was a heterosexual relationship the full $100,000 would be paid. The document goes on:If Vincent had died without a will, Richard would quite possibly have received even less.Certainly, if he had not nominated his partner as a beneficiary on his superannuation form, that would have made it even more difficult. The document continues:He might have received none at all and could quite possibly have been forced into prolonged legal action over the decisions regarding Vincent's estate.To me it really is an absurd situation to suggest, and I have had it suggested to me, that people might pretend that they were in a gay or lesbian relationship in order to receive benefits. Underlying it is an assumption that heterosexual couples would not do it and that somehow gay and lesbian couples are prepared to be more deceptive than heterosexual couples; whereas I think the chances of people lying about a relationship are far greater in a relationship which is totally accepted by everyone in society, as heterosexual relationships are. I do not think that a change in the legislation would lead to any abuse by people.This bill is a lost opportunity to redress the wrong in this legislation. Part of the bill seeks to amend the Superannuation Industry (Supervision) Act of 1993. Item 8 of schedule 2 of this bill will insert a new subsection 59(1)(a) relating to death benefits. The amendment would allow the trustee to provide any benefits in respect of the member on or after the member's death to a person or persons mentioned in the notice being the legal personal representative or a dependant or dependants of the member.There are two issues here: firstly, the amendment does not require the trustee to abide by the member's death benefit nomination. There is no mandatory requirement for a superannuation fund to change its rules to allow for such a nomination. Secondly, same sex couples continue to be excluded because of a very narrow definition of spouse. Spouse is defined in the same way as in the Income Tax Assessment Act of 1936 to include:Another person who, although not legally married to the person, lives with the person on a bona fide domestic basis as the husband or wife.The point for same sex couples is that they do not live as husband and wife and so cannot fall within this definition. To allow death benefits to be distributed to a member of a same sex couple, the definition of spouse would need to be changed.With this amendment there are only two possible ways a partner in a same sex relationship can therefore access their partner's superannuation but, ultimately, this remains at the discretion of the trustee of the fund. The first possible way is if the partner can prove financial dependence. It is not necessary to prove financial dependence if you are in a heterosexual relationship; the access to your partner's superannuation is accepted, regardless of your own financial position. Therefore, what this bill is really doing, even though it is a step forward, is suggesting that people in same sex relationships are discriminated against if both partners are working and contributing to the nation's economy by earning their own living. What irony we have here when this superannuation bill will benefit someone if that person is a dependant of their partner. I think the right to work, to seek employment and to earn your own living should have nothing to do with sexual preference. I think that is the problem that is identified in the changes in this bill.The other way that death benefits can be accessed is if the partner is named the sole beneficiary in the member's will. The estate can then be named as a death benefit nominee. However, apart from limited access to what should be a right, this also presents a number of problems. Instead of easily accessing the payment, the surviving partner may have to wait for probate, and the payment is likely to be taxed, therefore, at a rate of up to 21.5 per cent instead of being mostly tax free. Furthermore, the beneficiary will have to stand in line behind any creditors to the estate.I am certain that the member for Braddon and his friends in the Lyons Forum would be horrified that the legislation makes it possible—albeit by the back door—for gay and lesbian couples to have limited access to superannuation death benefits. This amendment to section 59 of the SI(S) Act goes some way towards allowing same sex couples better access to death benefits. It does not address the fundamental issue of discrimination. Certainly it is possible to access death benefits but only by convoluted means and that is not an equitable solution. Access requires a good working knowledge of the legislation. That therefore excludes people who do not have the education or the economic means to access this information.On top of discrimination on the basis of sexual preference, you effectively have discrimination on the basis of economic or class position in society. In order to address this issue of discrimination, the definition of spouse needs to be altered to include same sex partners. This is not only a view that exists on this side of the House. I have said in the House previously that, unless the government rectifies this legislation, which is possible I hope through the committee we are proposing the legislation be referred to, I have prepared a private member's bill to do just that. I am pleased that the member for Bradfield (Dr Nelson), who is here in the chamber today, last week in parliament said:. . . I have considerable sympathy for what I understand will be a private member's motion to be brought on by the member for Grayndler (Mr Albanese) in relation to superannuation entitlements for same sex couples. Today we have seen the member for North Sydney come out in support of superannuation for same sex couples and that is a very positive development.I am sure the member for Chifley (Mr Price) would be prepared to come out in support of this legislation as well. I hope that this will not be necessary because I fully support the call of the member for Wills for the bill to be referred to the Senate Select Committee on Superannuation so that this issue of death benefits can be more closely examined.I have hopes that this committee will concur with the findings of the Senate legal and constitutional committee's inquiry into sexual discrimination. The report was tabled in December 1997. Recommendation 7 states that all Commonwealth superannuation legislation and related legislation directly or indirectly affecting payment to people on the grounds of their sexuality or their gender status be reviewed and amended. That recommendation draws support across the party boundaries and is deserving of action. With this bill we have an opportunity to take action.The report further recommended that the Senate Select Committee on Superannuation be asked to consider and report further on any barriers to superannuation contributors being able to nominate a specific beneficiary or beneficiaries of lump sums, pensions or other payments. That goes to the heart of the question. Why is it that someone who contributes to their superannuation fund simply cannot nominate their partner and that partner, regardless of their gender, have full and equitable access to their superannuation benefits?In conclusion, I support the bulk of this bill. It is a positive step forward, but it can only be improved if it is referred to the Senate committee to ensure that the discrimination that I have identified is rectified. Australian society has moved a long way and, no matter what perspective you come from in this parliament, there is something to be said for rectifying this situation. If you are an economic rationalist, then surely you believe in the level playing field and therefore oppose discrimination on economic grounds. Even some people whom I would not agree with on many issues can support the thrust of what I am saying.Secondly, if you are a liberal of the small `l' variety, you have to support this proposition that I am putting forward today that people should not be discriminated against in any area of their lives. In terms of superannuation, people will live much more comfortably knowing that if something were to happen to them—say, an accident on the way to work, as in the Labor Council example—their partner will not have to engage in legal action on top of the trauma that he or she will already be suffering. This bill ensures that people in a same sex relationship will be treated in exactly the same way as people in a heterosexual relationship.I call upon the House to support the bill and the second reading amendment, and to take action on this issue. If the House does not support it, I will be introducing a private member's bill on this issue in the next session. Hopefully, I will be able to rectify it that way, with the support of all fair-minded members of the House of Representatives.Mr Hockey interjecting—11:11:001780Price, Roger, MPMr PRICEQI4ChifleyALP00—The honourable member for North Sydney (Mr Hockey) draws to my attention that, in the debate on superannuation, I am allowed—and I am honoured—to follow the member for Grayndler (Mr Albanese), who has raised an important issue about superannuation for same sex couples. I previously said in the House but I think it is worth reiterating that one of the regrets of my life is that, in chairing the committee that looked into child support, I did not address the issue of same sex couples in the report, although fully cognisant of the problem.I took the view that the recommendations we were making were sufficiently widespread that that would be a complicating factor. My optimism about either my own government or subsequent governments implementing the recommendations was widely off the mark and, hence, I have always regretted that we did not tackle that issue. I certainly think it is entirely appropriate that we should have superannuation rights for couples, whether they are heterosexual or same sex couples. I hope that the Senate committee will conscientiously look at that recommendation that has been referred to it.If we look back at the 13 years that Labor was in government, perhaps one of the best things we did—the thing that has perhaps stood the test of time most—was with superannuation. It often amuses me that we see history repeating itself. The Chifley government's National Welfare Fund was gutted by the Menzies government and then finally abandoned. We were the government that delivered the last stroke because the National Welfare Fund was a mere shell with no money in it. It is important to remind people that under that scheme—if you go to senior citizens they will certainly remind you—people paid a separate amount of income tax and a separate amount into the National Welfare Fund. To that extent, it was a fully funded fund.More is the pity that, in terms of national savings, it was not allowed to survive, because everyone who was in the work force was participating in it. The government of which John Howard was Treasurer left us in a pretty sorry state where basically public servants and executives in private enterprise were covered by superannuation but not very many other people in society. In other words, people were basically dependent on their own private savings and a pension in terms of their own superannuation.Of course, it is a pity that, if you like, the coalition—having championed the idea of the importance of national savings, both public and private—should, in the very short two years that they have been in office, have started emasculating the coverage that was inherent in the Labor Party's proposals. Of course, the real losers in all that are the ordinary men and women of Australia.I wanted to comment on the announcement by the Treasurer (Mr Costello) of his intention to have a policy about superannuation as property in marriage dissolutions. I have never seen an announcement about a mere intention to have a policy receive such wide publicity. Perhaps the member for North Sydney could enlighten me. This is a new approach by the coalition that you do not merely make policy announcements but you make announcements of an intention to have a policy.DK6HOCKEYMr Hockey—Your mob are doing that right now! Come on, Roger!QI4Price, Roger, MPMr PRICE—Well, this is the Treasurer I am talking about.DK6HOCKEYMr Hockey—For 26 months you have had the intention to have a policy on tax. And what about your intention to have a policy on airports?10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Hon. N.M. Dondas)—Order! Order!QI4Price, Roger, MPMr PRICE—The member for North Sydney is making a quite valid point that not only do you have the intention to announce a policy in terms of superannuation—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! The member will direct his remarks through the chair.QI4Price, Roger, MPMr PRICE—Mr Deputy Speaker, I bring to your attention the fact that they have now announced that—Mr Hockey interjecting—QI4Price, Roger, MPMr PRICE—after having all the information about family trusts, they are probably going to do something about—Mr Hockey interjecting—QI4Price, Roger, MPMr PRICE—With your sordid record of bottom-of-the-harbour schemes and looking after mates! I want to make the point that, in this bill, there are ordinary workers—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! I would ask the honourable member for North Sydney to contain himself. I remind him of where he is. Whilst interjections of a reasonable nature may be accepted by the chair, the constant badgering of the honourable member for Chifley will not be tolerated.QI4Price, Roger, MPMr PRICE—I am used to being constantly badgered, but thank you for your assistance, Mr Deputy Speaker. I want to make the point that, in this superannuation legislation, those workers who do not provide their tax file number are being caught up in the superannuation surcharge. I want to make the point that, if they retire or if they are retrenched, that money is caught up into it. Of course, you have the cosy and typically Liberal scheme of hitting the old PAYE taxpayer but, if you have got an accountant and a solicitor, you can get a family trust going and you can evade and avoid your fair share of tax, in this legislation.Mr Hockey interjecting—QI4Price, Roger, MPMr PRICE—If the honourable member for North Sydney—through you, Mr Deputy Speaker—is very proud of that situation, shame on him. I repeat: shame on him!Let me make the point about tax reform. Isn't it a pity that, when it was announced, there was no intention by either the Prime Minister (Mr Howard), who announced it, or the Treasurer to invite a bipartisan approach to tax reform? From a Labor perspective, we will always be concerned to ensure that the system is equitable, that it is fair and that all people pay their fair share. That will always underscore a Labor Party approach. But of course the Prime Minister and Treasurer just want to play a partisan game. Of course, the opposition is not on board on tax reform in the manner that they have announced—that is, through imposing a GST and failing to pick up—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Order! I would ask the honourable member for Chifley to contain his remarks to those relevant to the Superannuation Legislation Amendment Bill 1997 that is before us, regarding superannuation and divorce.QI4Price, Roger, MPMr PRICE—The superannuation surcharge is in fact a tax, Mr Deputy Speaker. I want to wind up with the point that I think an opportunity has been missed.JT4BAILEYMrs Bailey—You're the one who missed it.QI4Price, Roger, MPMr PRICE—The coalition has absolutely missed the opportunity to try to do something in the national interest and to develop a bipartisan approach to it.I want to return to this aspect of announcing the intention of a policy on superannuation. People have said to me, `What do you think about it?' In a sense, my first response has always been to say, `I think it is a bit unfair,' and then I have said, `No, actually there is nothing unfair in the limited amount I have known about it'—that is, that superannuation should be considered as part of the property settlement—`but the problem is that you are not fixing all the other problems at the same time.' It is as though in family law matters superannuation is the most important issue.Of course, what the Treasurer does not say is that the courts are already taking superannuation into account. You cannot go to the Family Court without your superannuation being taken into consideration. Does the government think this is a brave new policy to win over the women's vote and to give the perception that this is the government's biggest concern in family law matters? If so, it is already happening. All you will be doing is codifying it in some way but without having a decent debate about how property should be split up.I think we should have a debate about it, because it is certainly not a 50:50 split. It is certainly not proportioned between the parents with some left for the children—and I think that is worth while investigating. Let me make this point: the courts will always award more than 50 per cent of superannuation to that parent in residence with the child. I do not have a difficulty with that; that sounds logical to me. But what happens in three years time when residency is reversed? Is that property settlement looked at? Of course it is not. Is that fair? I do not think so. Can we do something about it? I am not sure, but it is worth while having a debate on it. It is typical of this sleight of hand government.I would say to you that there are many more important issues in the family law area that affect women than just superannuation. Firstly, you are carrying on the grand tradition of governments of throwing all the federal money at dead marriages and relationships. I think this is crazy—absolutely crazy.I do not know how members of parliament can sit contentedly and suggest that superannuation is the most important issue in family law, when people cannot afford the family law processes. We have absolutely no idea of what individuals are spending on family law. I can tell you what the federal government is spending: more than $100 million on the Family Court, more than $100 million on legal aid, and nickels and dimes out of the Attorney-General's Department in supporting families through the family program before the relationship or marriage is dead.The Family Court, for example, is very proud to say, `Only five per cent of cases get to the court,' as though this is some fabulous success measure. There is a very good reason why more cases do not get there: absolute financial exhaustion. People are exhausted; not only do they spend all their own money, not only do they borrow on their bankcard to the limit and borrow from their parents for as much as they can possibly afford, but they never have enough money.There is this basic lack of equity and access to family law. We are talking about what the rational economic approach should be, what the small `l' liberal approach should be. Let me tell you what a working-class, western suburbs approach is. It is to say to the parliament, to the courts, `Don't give us rights, don't tell us we have legal rights as citizens, if we cannot possibly afford to exercise them, if there are no avenues to exercise them.' I know that applies in other areas of the law. At the end of the day, when we talk about family law, sure, we are talking about parents who, for whatever reason, can no longer live together as a family, but the Family Court sees or deals with cases involving 150,000 children. So, if people cannot spare any compassion or thought for the parents, think about the children. There is urgent need of rapport.Just as the Bishop case, which has an impact on this legislation as far as the Insurance and Superannuation Commission is concerned, is saying that the tribunal cannot exercise judicial power, there is a huge gap in the Commonwealth's constitution—that is, our ability to set up proper tribunals, like the states do in residency and tenancy matters, a guardianship board, small claims tribunal, the list goes on. With the greatest respect to the High Court, they have interpreted the constitution in a way that leaves people with the perception that some of their rulings are more reflective of their desire to preserve the prerogatives of the judges than of dispensing justice to ordinary citizens.As in any area of activity, whether it is this parliament or organisations out in voter land, we all need to go through processes of change, of refining what our core missions are. Any system that seeks to preserve something that only the elite in society can afford is ultimately bringing itself into disrepute, if not threatening its own very existence. I think both the legal profession and the judges have been very selfish in these matters, and it is up to the parliament to try to work around these particular cases. Although I am scoffed at by my colleagues opposite and, I must say, one alongside, I think there is a real opportunity to do something good for ordinary people by working together.The honourable member for Bonython (Mr Martyn Evans) deserves the credit for raising this issue about employees who have superannuation and their ability to nominate the person they desire to get their superannuation in what he describes as the ultimate form of retirement—death whilst at work. That is, we have a situation where, if a person makes a valid nomination—which can only last for three years; there is a time clock on it—for a partner or a person to be the beneficiary, the trustees have the power to override that nomination. I find the power of the trustees in this matter quite extraordinary.There is also the issue with some superannuation schemes that there are not regular meetings of trustees. So the matter gets held up for their first meeting and if they decide that they want to closer investigate the nomination, or, indeed, overturn the nomination, it may not be done at that meeting. And it can take some two or three years after the death of the person with superannuation for the final decision to be made.I certainly welcome the legislation. I sincerely hope that it will find its way to the Senate Select Committee on Superannuation that has done so much good work. But I also support the amendment that has been moved by the opposition in this area. In particular, with the announcement of the intention to develop a policy on superannuation in family law matters, the government is really disappointing a lot of people. There is need for reform in the family law and child support area, but this superannuation matter has already been dealt with by the court. There are many other matters that the government should focus its attention to. I rather regret that it was a sham announcement.11:30:001784Rocher, Allan, MPMr ROCHERZI4CurtinIND00—Perhaps the most interesting schedule in the Superannuation Legislation Amendment Bill 1997 is schedule No. 3, which proposes to strengthen the Superannuation Complaints Tribunal, the SCT. The honourable member for Chifley (Mr Price) touched on it in his remarks and, I guess, earlier speakers did also.It is interesting because this bill was drafted and introduced into the parliament long before last month's Federal Court ruling that the SCT was unconstitutional and that it can only review procedures and not decisions, thus throwing the superannuation industry into turmoil. While the intent behind the third schedule, to improve the productivity and efficiency of the tribunal, to enhance its role in promoting public confidence in the superannuation regime, is an honourable one and one that is entirely supportable, it seems somewhat redundant under the circumstances. Of course, the government does not bear any responsibility for the decision of the Federal Court in this matter and nor should it. However, in the event that an appeal to the High Court is unsuccessful, it is vital that the government be prepared to legislate so that the tribunal is endowed with the power needed to resolve disputes about the distribution of benefits.Since its inception in 1994, the Superannuation Complaints Tribunal has formed a critical part of the fabric of the superannuation industry. Its present impotence does not preclude any of Australia's seven million superannuation fund members from pursuing action in the court system, if they believe they have been unreasonably and unfairly dealt with by their trustee. However, litigation can involve a substantial cost to the agreed fund member whereas disputes to the SCT could be made in writing and without requirement for legal representation.The Federal Court's determination that the cost-effective independent Superannuation Complaints Tribunal is unconstitutional in part of its deliberations and operations represents a significant lost opportunity for superannuants. As one independent analyst has noted, the SCT was `vital to protect fund members against wrong decisions by trustees'. Mr Noel Davis, a lawyer with Clayton Utz, echoed that sentiment by saying, `In some instances, trustees make decisions adverse to members that they should not make' and that the SCT was necessary for maintaining consumer protection.Assuming that the final outcome of this situation is that the SCT continues to be able to review decisions as well as procedures, the government's plan to correct the anomalies in subsections 14 and 15, which currently prevent certain complaints from being heard by the tribunal, is a sensible one. Of course, it needs to be remembered that the court decision only affects those cases where the SCT has determined to amend a trustee's original decision which, in turn, affected the distribution of payments.I understand that there have only been around 50 such cases industry wide in the four years that the tribunal has been operational. However, the total number of complaints that have been heard by the SCT is much greater, at around 4,300 cases. Experts fear that many of those who may have pursued legitimate action through the tribunal will not opt to do that in the court system simply because of the cost involved.Dr Michaela Anderson, policy director of the Association of Superannuation Funds of Australia, was reported in an article in the Australian Financial Review of 13 February 1998 to have said:It leaves us without a proper avenue of dispute resolution. We've always wanted something that's fair, quick and cheap. But all that's left now is for people to go to the courts, and most members of super funds can't afford to do that.The most common cases to have gone before the Superannuation Complaints Tribunal over the past four years have been those relating to the payment of death benefits and termination of employment payments. However, the recent announcement by the Prime Minister (Mr Howard) that the coalition will legislate to have superannuation benefits taken into account in the distribution of assets during a divorce proceeding will almost certainly see an increase in the number of complaints to be brought before the SCT. As Ms Jill Ferguson, journalist with the Age , postulated in her article of 14 February 1998, the decision to increase fund choice to all new employees as set out in the Taxation Laws Amendment Bill (No. 7) 1997 —currently before the House and on the Notice Paper —`merely underscores the need for a tribunal that is judicial in nature to deal with members' concerns'.The proposed amendments to subsection 9(1), to allow the tribunal to be constituted by either one, two or three members, selected by the tribunal chairperson, is a sensible one and will allow the SCT to deal with cases in a more timely manner. Given the predominance of disputes before the tribunal that relate to the payment of death benefits, any move to expedite the hearing process is most welcome.If the Federal Court's decision is upheld, industry experts predict that many trustees will become increasingly sensitive when directing the allocation of benefits in controversial cases. It is an untenable situation that trustees who have implemented past decisions at the direction of the tribunal may now be challenged in a court of law over their actions. Worse still is the prospect that a fund trustee may be able to be sued retrospectively by someone disadvantaged through a tribunal determination.In the interests of maintaining certainty and stability in the superannuation industry, there must be an immediate clarification of the position of the Superannuation Complaints Tribunal. If the Federal Court's decision is confirmed by the High Court, then, as a matter of urgency, legislation should be prepared and introduced in this place immediately to clarify the liability of a trustee in the event of a challenge to the earlier decision or decisions of that trustee.The Parliamentary Secretary (Cabinet) to the Prime Minister (Mr Miles) explained in his second reading speech that the coalition has taken steps to make superannuation a more attractive long-term savings vehicle for Australians. However, all the signs indicate that initiatives like the savings rebate have, at least so far, had a negligible impact on national savings. The 13 November 1997 edition of Savings Pulse, an organ of the Perpetual Funds Management organisation, noted that over the past two years the percentage of Australians who did not save at all rose from 17 per cent in 1995 to 28 per cent in 1997. The author of that article suggested that the government `needs to develop a more useful mechanism to affect the Australian attitude to long-term savings.'If government is going to reduce the growing trend towards household indebtedness, as was documented in a recent study by the Melbourne Institute of Applied Economic and Social Research, the government will have to act promptly in this instance. Superannuation is still regarded with great suspicion in this country, and the gutting of the SCT by this latest setback will do nothing to reverse that. So I commend the amendments outlined in schedule 3 of this bill to the committee and anticipate a timely and responsible determination of the status of the Superannuation Complaints Tribunal.11:40:001786Miles, Chris, MPMr MILESBI4BraddonLP10—I would like to thank the honourable members for Bonython (Mr Martyn Evans), Wills (Mr Kelvin Thomson), Grayndler (Mr Albanese), Chifley (Mr Price) and Curtin (Mr Rocher). They raised a number of issues in relation to the bill that I will address in turn.Firstly, in relation to the quotation of tax file numbers, the amendments contained in the bill extend from 5 June 1997 to 5 June 1998, the transitional period during which tax file numbers already quoted by employees to employers for superannuation purposes may be taken to have also been quoted for surcharge purposes. This transitional arrangement ensures that employees do not have to quote their tax file number twice. Importantly, to take advantage of this arrangement, the employer must notify the employee of the intention to use the employee's tax file number and provide an opportunity to the employee to object.Secondly, the honourable members pointed out that the amendments to the Superannuation (Resolution of Complaints) Act 1993, the S(RC) Act, contained in the bill, do not address the effect on the Superannuation Complaints Tribunal of the recent Federal Court decisions of Bishop and Leshem. The Federal Court found that the tribunal review powers are invalid because they involve the exercise of judicial power. The government is fully committed to ensuring that superannuation fund members continue to have access to an efficient and effective alternative dispute resolution mechanism. The government is still examining options in this area.The government has also made an application seeking special leave to appeal the Federal Court decisions to the High Court. In addition, the government is carefully examining other options to ensure that superannuation fund members continue to have access to an alternative dispute resolution mechanism. These options include replacing the Superannuation Complaints Tribunal with an industry based scheme, or restoring the tribunal's powers through legislative amendment. If this proves to be possible through the Superannuation (Resolution of Complaints) Act 1993, the relevant merits of these options, including all the legal, policy and administrative implications, need to be examined very carefully so that a sustainable solution to the problem can be found.It was not the intention of the amendments in this bill to address the effect on the tribunal of the Federal Court decisions of Bishop and Leshem. The amendments contained in this bill, which were developed when the tribunal review powers were fully operational, are intended to improve the operation and efficiency of the tribunal. It would be premature to withdraw these amendments while the possibility of restoring the tribunal's review powers remains on foot.The third issue concerns the amendment to permit trustees to accept binding death benefit nominations from members. The honourable member for Bonython questions the reasons for the proposed three-year expiry of such a nomination, and the application of the sole purpose test which limits the persons whom a member can nominate as a beneficiary. It should be pointed out that any time limit on the life of a nomination is to be placed in regulations. These regulations will be developed in close consultation with industry and consumer groups. However, as a starting point, it is our view that a three-year expiry of a binding nomination provides a safeguard against the payment of the member's death benefit in accordance with an old nomination where the member's domestic and personal circumstances have changed since the nomination was made. It should be noted that it is intended that the regulation, subject to consultation, will provide that a member will be able to easily confirm a nomination by signing a form provided to the member with the member's annual statement. The three-year expiry period will begin to run again from the date of the member's confirmation.It should also be stressed that the sole purpose test does not prevent a death benefit being paid to the deceased member's estate. Therefore the death benefit can be paid to a person who is not otherwise a dependant of the deceased.The amendments in this bill to permit trustees of superannuation funds to accept a binding nomination from a member for the payment of death benefits will provide greater efficiency in the processing of death benefit claims by superannuation trustees and more certainty for members.In conclusion, the Superannuation Legislation Amendment Bill will improve the efficiency and effectiveness of the superannuation supervisory framework. It is vital that an effective regulatory regime is maintained to ensure the security of superannuation savings, and public confidence in the superannuation system more generally.Mr Deputy Speaker, I commend the bill to the chamber.Question unresolved.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—As it is necessary to resolve this question to enable further questions to be considered in relation to this bill, in accordance with standing order 277, the bill will be returned to the House for further consideration.Bills1788r3831788Debate resumed from 4 December 1997, on motion by Mr Miles:That the bill be now read a second time.11:48:001788Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Taxation Laws (Technical Amendments) Bill 1997 contains numerous technical amendments to the taxation legislation. These include fixing drafting errors in legislation, clarifying existing provisions and reducing the compliance requirements associated with various existing provisions. We are approaching this legislation as non-controversial in the community as it appears that there are no significant policy issues raised by the bill and no representations have been received by us at this stage suggesting amendments to the proposals.The bill appears to be a move towards the United States system of an annual taxation technical amendment bill. That is to say, it is attempting to group all the non-policy legislative matters together in one piece of legislation instead of including purely technical amendments in bills with significant policy matters, as has previously been the case.The general concept of a technical amendments bill is certainly not one which is opposed by the opposition. We are not proposing that no minor policy items could be treated in such a piece of legislation in the future. It is the case that it may be appropriate for minor issues of policy detail to be addressed in the context of addressing technical problems in legislation. Indeed, it would be silly to redraft a particular provision and not deal with a minor policy issue that has arisen in the same provision.However, that is the sort of format that could be open to abuse. It must not be abused by slipping through major policy changes under the guise of purely technical amendments. If the government were to attempt to do that, then clearly goodwill from the opposition towards this type of minor legislative reform would be dissipated.The second reading speech and the explanatory memorandum explain the precise provisions and proposals. I think it is worth saying while we are discussing the issue of taxation laws that we have a situation at the moment where the government are saying in this country, `We want to have a tax debate. We have got tax reform on the agenda and we want to have a tax debate.' But in fact they do not want to have a tax debate. Everything they are doing is shrouded in secrecy. It is said that we have got a task force examining tax reform options. That is a process that has been couched in incredible secrecy. Officials have admitted that there are no written records being kept of the meetings of the task force. There are not even written agendas produced before the meetings. That is not the usual workings of a public service. That is political use of the Public Service by the government. While the government have been asserting that tax reform is essential, they have not engaged in any public debate about the plethora of reform options that are available. They confine themselves to statements getting stuck into the existing system—in my view, often without foundation. But they do not say anything about the reform options that are available. None of the information produced by the Treasury has been released about the options considered nor the relative merits of different approaches that could be taken to address various issues.We have got a situation where the government simply does not want to have a debate about the merits of various proposals. It simply wants to hide its proposals until as late as it possibly can and then pretend that its preferred model is the optimum. This is a form of deceit. It is an attempt to fool the public by not allowing sufficient time for scrutiny. The government ought to release the various options that it is considering and the options that are available. It ought to release them now so that the public can properly assess the decisions that the government is proposing to take.Mr Deputy Speaker, I want to contest the idea that there is a crisis in the tax system. Indeed, the Taxation Laws (Technical Amendments) Bill 1997 that we are debating now reflects the way in which tax works. Problems arise from time to time in any taxation system; it is the responsibility of government to address those problems as they arise, as indeed the government is doing with this piece of legislation. The Treasurer (Mr Costello) has been running around for the past six months—probably longer now—pretending that the tax system is not sustainable. The primary purpose of a tax system is to raise revenue. The taxation system, it has to be said, has to be in pretty good shape because it basically collects enough revenue to finance surpluses throughout the whole forward estimates period. Indeed, the Treasurer, in one breath, said, `The taxation system is rotten. It's had it. It's got to be thrown out.' In the next breath he went around boasting about the fiscal position. He might be prematurely boasting, but he is boasting about the fiscal position.XH4McGAURANMr McGauran—Hang on! Revenue we're spending.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—Order! We will have all comments made through the chair. The honourable member for Gippsland will have an opportunity to respond to any provocative statements when he has his 20 minutes.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—I was entertained to hear the member for Gippsland (Mr McGauran) suggesting that the tax system which raises revenue bears no relationship to the government's budgetary position and prospects. It is the first time I have ever heard such a proposition advanced that there is no connection between tax and the budget.XH4McGAURANMr McGauran—I didn't say that.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Nevertheless, the member may wish to explain his position when he gets the call. The tax system is serving this country well enough to produce a situation where the books are balanced. The tax system constantly needs renovation and refurbishment. We, in government, always acted to improve the tax system and to address problems that arose. We will continue to do so. We do not accept the argument that the system is broke and therefore we have to have a GST. We have no intention of imposing a new tax on goods and services. What we have is a government which is frightened of the tax debate and, indeed, in the House yesterday, when there was a matter of importance concerning the taxation of discretionary trusts, the Treasurer (Mr Costello) was nowhere to be found. He did not participate in that debate and he has not come forward with proposals to address the problem of the abuse of family trusts for tax purposes. That is a problem that the taxation commissioner has indeed identified for quite some time now. He put a report to the previous government just prior to the change of government drawing attention to this problem and, in particular, to the way in which high-wealth individuals were evading their fair share of tax and to the fact that family trusts were playing a major role in their doing so.We have seen precious little in the way of action from this government to address that problem and so it has got worse rather than better. We know that one of the reasons for this is that many in the government, both senators and members, have family trusts. Therefore, it appears that it is not in their own interest that the government should crack down on family trusts. Instead what they say is, `The tax system is broke and we're going to have to tax ordinary people on food and on clothing, and going to the footy, or going to the theatre, or anything they might want to do by way of entertainment; we are going to have to put those taxes on because we are not prepared to address the family trust problem.'It is worth noting that, in the trust loss legislation that did pass the Senate in the past week, we saw an exemption which dramatically diluted the effect of the crackdown on trafficking in family trust losses set in train by the former Treasurer, the honourable member for Gellibrand (Mr Willis), back in 1995. What we need to get from this government is evidence that it is fair dinkum about cracking down on tax avoidance through the use of trusts. That is the sort of thing that the community needs to make the tax system work better and work as well as it can, rather than say that this system is broke and, therefore, we have to throw it out and replace it with a system which is fundamentally unfair.Those who have had the opportunity to have a look at how a GST would work would understand that it is inherently regressive and that there is no way of addressing those problems with a compensation package. Lower income people have a higher proportion of their income go in paying the costs of a GST than do higher income people. It is inherently unfair and there is no way of fixing it up.You could have problems both with a high level of GST and with a flat rate GST. One of the problems is that the government is simply unwilling to come up with its GST model. It is scared by its previous experiences when it produced quite a detailed model that was rejected by the Australian electorate which had the opportunity to have a good look at it. It has decided, `Oh well, we're going to change; we're going to do it differently this time; we're going to hide that model; we are going to unveil it at the last possible moment'—if indeed we do see it prior to an election being called.We also have problems with what is referred to as the `compensation now' problem—that is, no-one can be guaranteed that he or she will not be worse off at the outset. This idea that you can design an effective compensation scheme to ensure that no low or middle income people are made worse off through the introduction of a GST simply cannot be done. Indeed, even if you can seek to design such a system, you have what is referred to as the compensation in the future problem. No-one can be guaranteed that they will not be worse off further down the track.One of the interesting things about a GST, and the experience in other nations of a GST, is that the rate of GST can and does tend to be increased, whereas the compensation package tends to be decreased. That is the sort of thing that has happened in New Zealand. The international experience of a GST is that, despite assurances to the contrary, the initial rate at which it is introduced is inevitably increased over time. Of the 27 OECD countries which have a GST, 21 of these have already increased the standard rate of tax from its initial level. In the United Kingdom the VAT was initially 10 per cent and now it is 17½ per cent. In New Zealand the GST was initially 10 per cent and now it is 12½ per cent. In addition, over time governments tend to eliminate or reduce the concessions on certain goods and services which are initially introduced. History shows that, once this form of taxation is introduced, it never gets repealed.The other sorts of problems that it throws up that simply are insurmountable are the problems for small business. The first problem for a small business is that of becoming an unpaid tax collector. The wholesale sales tax is a relatively easy system to administer and comply with. There are presently around 75,000 registered tax collection points. Most small businesses are not registered. They are not wholesalers. They do not need to get involved with this. But a GST would require around one million additional taxpayers to register and remit GST on a regular basis. Small businesses are not going to get paid for that tax collecting role.The second problem is that they will have high compliance costs. They will have the initial transitional compliance costs and they will have ongoing compliance costs. The initial costs will include self-education, new equipment, new business systems and related professional advice. Those things will vary considerably between businesses but you will see new hardware such as cash registers with a GST tax capacity, computer software, accounting software, new sales dockets and forms to include provision for GST, and that is on top of the time that small businesses will need to spend learning how a GST works and registering with the Australian Taxation Office. The ongoing compliance costs will include the time taken for GST paperwork, professional advice, record keeping for possible GST audits, the cost of being audited and so on. We will see very significant problems for small businesses.I also want to refer to the black economy problem. A lot of people say that one of the problems with our existing tax system is the problem of straight evasion. There is no question that that is a problem but a GST will not fix it. Indeed, it increases the incentive not to report transactions because by doing that you not only avoid the income tax that may be payable on those transactions but also you avoid the GST.I have spoken to people in Canada about this matter. I said to them, `How is it that the progressive conservative party managed to be reduced from a parliamentary majority to two seats in a single election?'—that is a pretty crushing election defeat; it makes some of the election defeats we have seen in Australia seem pretty mickey mouse—and they said, `GST.' When I asked them why the GST was such a debacle, one of the things that they mentioned was the avoidance. No-one wanted to pay it so they were not reporting transactions. So far from dealing with the black economy it provides incentives for the black economy to increase in size.In addition to those things, it is clear that GST is no solution to unemployment. Internationally, there is no relationship between consumption taxes and unemployment rates. The United States, for example, does not have a GST and it has one of the lowest levels of unemployment among advanced economies. We have the inflation problem. There is no doubt that a GST would generate a price surge, an inflationary surge. For example, a 15 per cent GST would generate a surge of around five per cent. There is no guarantee that inflation would fall quickly to its pre-GST level.We have a whole series of problems with GST. The government has failed to put forward a model so that we can have some discussion about how that will impact on ordinary Australian people. I call on the government to release this model, not to keep us in the dark. It is time that we had a decent tax debate in this country, not a phoney one. The obligation is on the government, which is arguing the case for change, to put forward its model and not hide its light behind a bushel with secret meetings that are not even being put down on paper. It is high time that that was done. Having said that, as I indicated at the outset, the opposition does not propose to oppose this legislation.12:04:001792McGauran, Peter, MPMr McGAURANXH4GippslandNP10—On behalf of the government, I accept the congratulations of the member for Wills (Mr Kelvin Thomson) for this innovative reform, namely the Taxation Laws (Technical Amendments) Bill 1997 . Again, it is a reform introduced by the Treasurer (Mr Costello) after Labor's 13 barren, hollow years of inactivity on tax. I will come to that in a short moment. We have introduced a housekeeping measure that those opposite applaud.A central feature of the address to the chamber by the member for Wills has been that there has been no tax debate, that we are hiding details regarding the introduction of a goods and services tax or the like. Where has he been for the last few months? You cannot open a newspaper these days without columnists or editorialists waxing lyrical on the subject. There is enormous debate in the community, very much fostered—indeed, generated and promulgated—by the government.We started the whole tax reform debate, and, indeed, the first instalment of the government's transparent encouragement of public transport has been the Treasurer's publication In need of reform, which is easily available to the member for Wills and to any of his constituents. It does two things. The first is that it shows that the government is serious about an informed public debate with regard to tax reform. People are not going to be able to participate fully and in a knowledgeable way until they accept the case for reform—which you do not. That is the second thing: you do not believe there is any need for tax reform. In fact, your incredible statement—as I took it down accurately—was this: `The tax system works satisfactorily and the books are balanced.' We have not balanced the books by raising taxes. We have not used the tax system to introduce fiscal discipline. We have cut government spending and have eliminated waste to a very large extent.Mr Kelvin Thomson interjecting—XH4McGauran, Peter, MPMr McGAURAN—You are saying that there is no need for tax reform because we are in a balanced budget or a budget surplus.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—The honourable member for Wills has had his go.XH4McGauran, Peter, MPMr McGAURAN—For heaven's sake! You would have used the tax system to balance the books by way of increasing the taxes—as the Labor party sought to do in the Dawkins budget of 1993. The only way they could address the budget deficit which they created themselves was by increasing taxes. We will not increase taxes; instead, we will reform the tax system. The idea that the government's departmental task force on tax reform should involve the opposition is so absurd, so ludicrous and so impossible that the member for Wills could not have said it with any seriousness.Why would a government involve an opposition that has already declared its hand on the issue of tax reform and has again reinforced that, through the member for Wills, here today? Why would we involve such blind opponents of tax reform in the tax debate and the discussion within government ranks? It would be rare enough anyway for any government to involve their opposite number in internal policy making, let alone involve an opposition that has categorically ruled out any support whatsoever for tax reform involving a GST.It is an absurd and really pointless argument for the member for Wills to make. It shows how shallow has been not only his contribution this morning but also the whole opposition approach to tax reform. Who does not believe we are in need of tax reform—other than the member for Wills, who has told us that the tax system works satisfactorily and that the books are balanced? The Treasurer, in the booklet he has published in the past few weeks, makes out a compelling, convincing and unassailable case for tax reform.I could not help thinking, when I decided to speak on this legislation, `Here we go again: yet more legislation on tax!'—even though they may be technical, correction types of amendments. After this debate, we will debate the tax law improvement bill; there is a welter of tax legislation entering the parliament and being imposed on taxpayers, their financial advisers and accountants and the like—and the Treasurer knows it. The Treasurer is not happy about this at all. In fact, he states how complex this system has become.He states that the income tax legislation is just too complex. When the Income Tax Assessment Act started off in 1936, it was 120 pages long; now it is 3,300 pages long. It has doubled in size over the past seven years, and it may well double in size over the next seven years. It is an intolerable situation. Again, with regard to sales tax the Treasurer, in the interests of an informed public debate, sets out what an administrative and compliance nightmare it is, with its complexities that are mind-boggling even for specialists in the area. It leads to absurd situations, as he points out, where basic necessities of life, such as toothpaste, are being taxed but where others, such as toothbrushes, are not being taxed.Then there are the philosophical arguments about incentive and reward for effort and work. So there is a need for tax reform. We would happily involve the opposition with it, as we do other members and representatives of the community. The tax task force is of course taking advice from right across the economic, even political, spectrum. But we have to exclude the opposition. Who will ever forget their conduct during the 1993 election campaign—the distortions, the exaggerations, indeed, the outright lies often told. We are not going to involve—JT4BAILEYMrs Bailey—I remember it well.XH4McGauran, Peter, MPMr McGAURAN—The member for McEwen was one of the major spokespersons for the then opposition at that time, putting the case in a very genuine and honest fashion and finding that, at every turn, her political opponents were distorting her message dishonestly. So, really, why do I even have to rebut the suggestion that the opposition wants to be involved with the government's tax reform task force. The absurdity of it is only too obvious to anybody.At the same time the member for Wills tried to tell us about family trusts and the like. This is a very important area of public policy. It deserves an informed debate. Reforms or amendments to tax laws may well be needed, and that is under active consideration by the government. But do not blame us for this. In fact, the member for Wills cited, in a very generalised, unattributed way—QK6SERCOMBEMr Sercombe—A what?XH4McGauran, Peter, MPMr McGAURAN—Unattributed. You know how you unattribute things? Well this was an unattributed argument that he made about tax losses—tax avoidance he called it. Tax avoidance is a crime. Tax minimisation is a moral issue. Of course, most of these family trusts involve tax minimisation, not tax avoidance, I would have thought.In any event, without getting into a discussion of the merits or otherwise of this area of taxation, let me make the point that the figures now available to us surrounding family trusts and any tax lost to the revenue were during Labor's years. Again, he was pontificating about the need for reform for an area of tax that his government studiously, and deliberately, ignored or neglected over many years. So don't, for a moment, any member of the opposition think that they can lecture the government about tax policy and the need for tax reform. But, again, they are confused here. On the one hand, the member for Wills will tell us that the tax system works satisfactorily, the books are now balanced, but, on the other hand, for political reasons he will selectively pick out different areas that may suit his attacks on the government.The point is that this government is serious about tax reform. It has nailed its colours to the mast on the need for tax reform. It will see this through. We will not shirk. We already see the beginnings of a scare campaign being mounted by the opposition. It will not distract us from what we know needs to be done—that is, a fundamental overhaul of the tax system for the benefit of all Australians.I will draw my remarks to a conclusion and again make the point that the bill before the chamber is a very important one, despite the fact that it is adding further to the length of the Income Tax Assessment Act. One final point I will make is that there is a technical amendment to those provisions dealing with capital gains tax rollover relief for small business. A major reform of this government when it came to power was that we assisted small business to deal with Labor's capital gains tax, so as to provide that incentive and that reward so necessary for people who invest their life savings and their family security in small business. The way we have reformed that area very substantially is something we are very proud of.12:15:001794Martin, Stephen, MPMr MARTIN8I4CunninghamALP00—It is always a pleasure to follow my colleague the member for Gippsland (Mr McGauran) in debates about taxation reform or anything else, because we get an opportunity to remind each other about a few of the facts associated with the whole issue of tax reform over the past 13 to 15 years and to set the record straight. Even my colleague would have to concede that, in 1983 when there was a change in government, one of the priority areas of the new government of the day was to look at the tax system to see what reforms were necessary.Similarly in 1996, it became an issue for the incumbent government to say what was necessary to try to improve the tax system, and to build on what was there—admittedly, in line with the different philosophies that political parties have to see whether other emphases needed to be placed. I am interested that, in the next bill to be debated here, we are talking about another issue associated with taxation and taxation reform. I am sure a few issues will be raised there. This particular bill, though, does tidy up a few of the existing taxation laws and, far from introducing any sweeping changes, it simply makes some technical amendments to the existing legislation.I agree with the member for Gippsland when he says that, over the last several years, taxation law has grown enormously in size and complexity. That is, I think, without dispute. Anybody who has had anything to do with the taxation system knows this is the case. There have been a lot of cases, and I have witnessed some in parliamentary committee work in previous years. One of the reasons that has occurred is that there is always a group of smarties that are out there trying to be ahead of the Australian Taxation Office and the government—and I use that in a broad sense—to see ways in which they can not only minimise their taxation obligation to Australia but also engage in outright avoidance. Therefore, any government is caught behind the eight ball and always has to play a catch-up game in this respect.The Treasurer (Mr Costello) might think that, by putting out this document, he is trying to get ahead of the game. In fact, what he has signalled is his government's belief that there is a need for some further taxation reform. If you believe what the member for Gippsland has said, it has stimulated debate in the community. I think debate has been stimulated in the community but not necessarily for the reasons that he believes.Debate has been stimulated in the community because the taxation system does have a need for reform. I believe that to be a fundamental case that cannot be argued. But the methodology that is required in that reform is where we see the difference, and where we see people in the community expressing differences of opinion. For example, very early on in the piece when it was suggested that, by eliminating a wholesale sales tax regime and replacing it with some form of a goods and services tax across the board with minimum exemptions, there was a group in the community who thought this was the greatest thing since sliced bread. Organisations, such as the Business Council of Australia and ACCI—representing large businesses with their own taxation departments, corporate and taxation lawyers and a string of accounting departments willing to put in place the necessary wherewithal to introduce something like that in terms of a change in the taxation system—were quite happy about that. But I am not so sure that those one million small business people out there were exactly rubbing their hands with glee.As my colleague the member for Wills (Mr Kelvin Thomson) pointed out, the compliance costs associated with existing systems, let alone the compliance costs associated with the imposition of a goods and services tax, are yet to unfold. On the GST itself, we are now really talking about the grandson of GST. It got a run back in 1986; it got a run in 1993; and it is getting a run in 1998. One has to wonder when it will actually run out of legs. Despite the best endeavours of the member for Gippsland and the Treasurer, you cannot escape from the fact that, whatever proposals the government has to reform the tax system, there is nothing out there for people to judge it by. He is right that debate has been stimulated throughout the Australian economy and the Australian electorate, but it is not necessarily informed debate because we do not know what form the taxation reform proposed by the government will take.Yes, there is the document that is referred to, and yes, you can point to discrepancies between toothbrushes and toothpaste. You can talk about the fact that, for example, you pay wholesale sales tax on a brand new motor vehicle but you do not pay it on a used car. There are the fleet systems and so on, and those at the upper end of the spectrum are the ones that buy the new cars, but most of the punters in Australia do not. They go for the used cars, so they are not going to be caught with that. If they get a 10 per cent or a 15 per cent goods and services tax, however, that is going to increase the actual cost of that particular product that they themselves want.My point on this is quite simple: it is all well and good to talk about the need for tax reform, and Treasurer Costello was trying to make a case for that, but we do not know what that reform is going to entail. We have had people talking about eliminating things like the payroll tax; we have talked about BAD and FID that operate and are collected by the Commonwealth on behalf of states. Those are two state issues, so when are we going to see what the Commonwealth government has in mind to recompense the state governments for, perhaps, taking off those taxes and taking away the ability of the state governments to raise much needed revenue to replace the revenue they are not getting from the Commonwealth at the minute for things like hospitals, nursing homes, child-care centres and all the rest that have been slashed and burnt out in the last couple of budgets?The states have a vested interest in this. They have a clear interest to say to Treasurer Costello and Prime Minister Howard, `Show us what you have got in mind, so that whatever necessary adjustments we have to make at a state level to change our taxation regime we can put in place.' Similarly, when we start to talk about eliminating wholesale sales tax and replacing it by a goods and services tax, what rate are we talking about at which that is going to apply?There seems to be a general view in the community that we are talking about 10 per cent only. Why? It is because politically we could not go any higher than that. We saw the nonsense that the Treasurer tried to put out a couple of weeks ago, when he was trying to suggest to people that the government would absolutely, in legislation, lock it in that it would be at a rate that would never change. He knows, I know and even the member for Gippsland knows that that is just impossible. It is impossible for technical reasons, but it is impossible also because governments just cannot do that.In every country where a GST has been introduced at a particular rate it has changed, and never downwards. If it becomes the major source of a government providing income to itself, then to be spent on a variety of programs which the constituency at large expects of the Commonwealth government, then clearly the government cannot lose revenue by locking itself into a particular rate.When we start to talk about some of the other taxation measures that perhaps are going to be examined, there are issues of fuel taxes. I know the member for Gippsland, representing a rural community, very much has an interest in this. What is going to be the outcome there? What about some of the other provisional tax arrangements that might be in place? What about the arrangements associated with superannuation? Are these going to be picked up as part of the broader taxation reform process? That we do not know is the simple answer to that.We read in the financial press today that it will be at least two months—or at least that is what the government is saying—before the actual package is dropped. I hope it is not so long. I hope it appears a bit sooner so that we can sit back and debate the issue. The member for Gippsland has repeated a nonsense that has been stated in the House in the last couple of days when the issue of taxation reform has been debated, both in question time and on a matter of public importance, that Labor did nothing. Half of these technical amendments that we are debating here this afternoon are fixing up the taxation changes which Labor put in place.I remind the honourable member for Gippsland, and many other people on the other side, that in 1983 the biggest growth industry in Australia was tax avoidance and bottom of the harbour tax schemes. Who fixed it up? P.J. Keating, Treasurer, Labor Party. What was the next thing that he did? He looked at what the personal income tax scales were in this country and said, `This is unfair. Most people are getting very close, with bracket creep and everything else, to the top marginal tax rate', which was 60c in the dollar. He then dropped it to 47c or 48c, and then when you add the Medicare levy you get another 1½c on top of that. The bottom rate was 30c in the dollar, for people in Australia who are the so-called battlers that the Prime Minister likes to talk about; now it is 20c, with a changed scale in the middle. That was tax reform of a personal tax nature and yet people say that Labor did nothing.We then had the tax summit, and arising out of that, of course, was an options paper prepared by Treasury with the famous options A, B and C. There were various elements of a consumption tax in option C, with capital gains tax and fringe benefits tax and a whole range of the other so-called nasties. If the Treasurer of the day had not been knocked over by the Prime Minister of the day and the ACTU at the hotel up the road, that might have been put in place. That is history. That is the way of it.As a consequence, we ended up with taxation reform sponsored by the Labor party. It saw the so-called nasties—which really are an important element of taxation revenue—put in place. These reforms attacked the avoidance and minimisation areas, fringe benefits tax, capital gains tax, and so on. As a government we went to great pains on capital gains tax to say that we were not going to tax it on the nominal value. We were actually going to make some allowances for inflation, and all the rest of it that was tied into that. There were reforms and a carefully thought through taxation system put in place to deal with issues on the way through. That raised the issue of things like dividend imputation, so that taxes were not levied twice on businesses. We saw the business tax rate lowered to stimulate the businesses in this country—and on it went.I simply say to those people that would argue that there was no reform under Labor that they should go back and read their history books. There was. Those on the other side of the House may not agree with it. They may not think that the crackdown on bottom of the harbour tax schemes, or tax in capital gains, or putting fringe benefits things in to knock off the free lunches by some of their mates in the Victorian parliament—these sorts of things—were Labor reforms, but that is the way of it. That was bringing equity into the system, but it was also attacking it at the source in personal income tax rates. Those people who march around this place and say that Labor did nothing should go back and read their history a little bit.The other thing that we have been talking a great deal about here is the issue of trusts, because it is picked up in the legislation we are debating today. It is a very important issue. As was suggested yesterday—and I think that the member for Gippsland also talked about this today, asking why Labor had not done something about it—in 1995 when the size of the problem became known to the Treasurer, Ralph Willis, he did do something about it. He put a piece of legislation into the parliament to crack down on the use of trusts for tax avoidance. An election was called—we lost—and it was two years down the track before the government then put in, last week, their watered down version of this issue.My friend the member for Richmond (Mr Anthony) has a bit of a smile on his face because this was an argument he used yesterday in the MPI. But it is true. It is simply a fact that it took two years before you decided you wanted to do something about it—or at least the government did.The simple fact is that the amendments here contained in the Taxation Laws (Technical Amendments) Bill 1997 go to a number of tidying up exercises that are required to give some further transparency and ease of understanding of what is required. I wish it speedy passage through the parliament.Motion (by Mr Rocher) agreed to:That further proceedings on this bill be conducted in the House.Adjournment179710000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—Order! It being 12.30 p.m., I propose the question:That the Main Committee do now adjourn.179712:30:001797Mossfield, Frank, MPMr MOSSFIELDMK6GreenwayALP00—My speech on the adjournment debate goes to the need for additional federal funding to complete the greater western Sydney orbital roads system and for further development of cross-regional links between employment zones and regional centres.The completion of this roads network is to allow full development of industry in western Sydney and to ensure that this region benefits economically both during and after the Olympic Games. The federal government has recognised the western Sydney orbital between the M2 at Seven Hills and the M5 at Preston as part of the future national highway link through Sydney. As such, its funding is the responsibility of the federal government.The western Sydney orbital is estimated to cost $800 million to build to a national highway standard with divided carriageways and graded, separated intersections over its 43-kilometre length. The previous federal government in its May 1995 budget committed $260 million to commence construction of the first stage of the western Sydney orbital between Prestons and Cecil Park. Construction was to start in 1996. Additionally, in August 1995 the then federal minister for transport committed $220 million for the second stage of the western Sydney orbital between Cecil Park and the M4 at Eastern Creek. Construction was to start in 1998.The present federal government has reneged on that commitment. In November 1996 the then federal Minister for Transport and Regional Development, the member for Hume (Mr Sharp), announced that the federal government had set aside only $109 million, over five years, towards restructuring works comprising environmental assessment, land acquisition and other planning activities.Based on advice from the federal minister at around that time, the New South Wales government has included $7 million in the New South Wales budget for the western Sydney orbital in 1997-98. However, the federal minister has yet to announce the funding allocated for this project for that 1997-98 period.The completion of economic development of a region is affected by the capacity and efficiency of the existing transport network to service commercial vehicles and freight movements. Greater western Sydney has a population of 1.6 million people. It has a gross national product of $35 million and produces 10 per cent of New South Wales's agricultural output, yet it has not one freeway standard cross-regional road.Road transport is the major contributor to the distribution industry. New and expanding industries are increasingly seeking proximity to major road networks to reduce transport costs. Development in technology also leads to companies locating near other industries and local markets rather than close to their own headquarters.The existing road network out from Sydney's metropolitan CBD is radial and lacks direct cross-regional links between employment zones and regional centres. High levels of congestion are increasingly being experienced on the existing freight corridors serving greater western Sydney, including the M4, the M5 and Cumberland highways. The capacity of the M4 has already reached 4,200 vehicles at peak hour traffic times.This congestion is threatening the competitiveness of industry and commerce located in greater western Sydney due to insufficient freight movements and longer transport travel times. If real industrial and commercial development is to be achieved, attention needs to be paid to the movement of freight both within greater western Sydney and to the major terminals at Port Botany and Kingsford Smith airport and to the rail terminals at Chullora and Enfield.There is also a need to take into account the likely trends in freight demand based on both future industrial growth and changes in freight activity such as just-in-time, centralised distribution, cross-docking, outsourcing of transport and distribution processes, smart warehousing and electronic trading.The region's business community has identified the completion of what is termed the arterial road grid consisting of the existing M4, the Cumberland Highway, both Windsor Road and Old Windsor Road, the M2 under construction, the planned M5 East, and the western Sydney orbital as essential for western Sydney's economic development.Finally, this clearly means that the federal government has to add additional finance to complete this work.179912:35:001799Barresi, Phil, MPMr BARRESIZJ6DeakinLP10—The introduction of Job Network on 1 May will give job seekers far more choices in selecting job referral centres and a greater opportunity to match employment with their aptitude. In Melbourne's eastern suburbs we have been well served by the employment initiatives of the Howard government.Apprenticeships and training programs have been brought back from the dead after 13 years of Labor neglect and my electorate of Deakin has benefited greatly from these increased vocational opportunities.Job Network will expand upon gains already made by this government in helping people find work. For too long the unemployed were treated like products riding a conveyor belt on a production line. If one passed all the checks along the way, there was a slim possibility of a job at the end of the line.For the many who did not make it to the end, there would be training programs where long-term unemployed without skills for the work force were directed toward positions for which they may or may not have been suited. But more importantly for the ALP and the former employment minister Beazley, they had them off the books of long-term unemployed.Mr Deputy Speaker, the retraining gurus got their money whether there were successful job outcomes or not. Everyone was a winner, except the unemployed who genuinely wanted work. Constituents in the electorate of Deakin have consistently made two points to me when telling me about their treatment as job seekers: firstly, they had little or no contact for months with their case manager and secondly, their time was being wasted by attending compulsory group sessions. The minimum level of assistance was all they received. We believe that people deserve better and Job Network in itself, will become a departure from Labor's failed policies that delivered programs but no jobs.Job Network is also a timely recognition that new ground must be broken to drag down unemployment levels and the time spent between jobs. With the organisations that will comprise the Job Network, the pay-off will come at the same time that it comes for their client: when that client is placed in a job. This should ensure that there are significant efforts on behalf of each client.I am pleased to inform the unemployed in Deakin—the seven per cent according to the December figures—that many of the Job Network providers have considerable experience in placing people in positions. Deakin and Melbourne's east will be well served by the network. The 10 providers judged the most suitable have been Inner East Group Training; Connect Employment and Trading Services; Job Support Vic; Mission Australia; Indo-Chinese Employment Service; Salvation Army; AHEIC Chandler; Melbourne East Group Training; Employment National, which is the revamped CES; and KYM, which is the amalgamation of three skillshare providers in the eastern suburbs—Yarra Ranges, Krest and Merit of Ringwood. Of those 10 job providers who won contracts for the eastern suburbs, five are existing local providers.To those who tendered and missed out, opportunities exist for subcontracting to the winning providers. I note, Mr Deputy Speaker, with interest that Saturday's press featured in its employment pages an advertisement from Melbourne East Group Training, a very reputable and well-known organisation in the eastern suburbs. They were calling on applications for 49 positions, including field staff, customer service personnel, job club leaders and administrative assistants. No doubt, the other organisations will also be looking for new personnel to serve their clientele.These changes will provide a level of service and opportunity not before offered to job seekers. Job matching, job search training, intensive assistance, new enterprise schemes and apprenticeship and training services are the types of services which will be available for those hunting for a job. Of course, this comes on top of the very successful job pathway program in the eastern suburbs—$348,000, the largest job pathway program in the country. They are very close to meeting their targets by the end of April. It comes on top of the one-stop shop in Ringwood, the only one-stop shop that actually looks after the needs of the young kids as well as serving the needs of the employers. They are very successful programs that have been initiated by this government.In the very near future, I will be hosting a meeting of all of these providers to find ways in which we can work together to maximise the impact of the scheme. Mr Deputy Speaker, all these providers should be congratulated and I will certainly be endeavouring to work with them in partnership as I have done in the past two years. I congratulate them and look forward to continued successful outcomes for the eastern suburbs of Melbourne. (Time expired)180012:40:001800Crosio, Janice, MPMrs CROSIO7T4ProspectALP00—The failure of the federal government to reach an adequate Medicare agreement with the states and the territories has to be one of the major concerns to this nation. The Premier of Queensland called the government's funding offer a `son of dud'. The Premier of Victoria called it `totally unrealistic and very unfair'. The Premier of Western Australia said he would cause the Prime Minister `a political problem' if he did not increase his offer. The Premier of New South Wales said that John Howard was `treating Australians with contempt'.We have heard in broad terms how dramatically the Howard government's obstinate refusal to compromise on this issue will affect the public health systems of the states and the territories. What does it mean to the health professionals on the ground? What does it mean from hospital to hospital, from patient to patient? It means longer waiting queues for surgery and care. It means people will not get the best treatment that our world-class public hospital system is capable of giving. They will not have access to the most advanced technologies and medicines. It means health professionals will be run even more ragged trying to give people a higher standard of care without the necessary financial support. It means bed closures; it means ward closures; it means hospital closures.The human cost of the Howard government's failure on public health funding will be heavy. In my own state of New South Wales, an estimated 400 people per day are dropping out of private health insurance. This presents an annual cost to the state's hospital system of $260 million. The current Medicare agreement states that, for every two per cent fall in the amount of people holding private health insurance, an equal adjustment in funding should take place. Not only has the current federal government not lived up to this agreement, but it has directly cut funding to the New South Wales public hospitals by another $34 million.To make up for the thousands leaving private health care the New South Wales government needs an extra $350 million a year to take the strain off the public health system. The Howard government has offered them a mere $17 million. Yet while this is happening before our very eyes, this Howard government continues to throw $600 million a year down the drain at a failed scheme to coax Australians into maintaining or picking up private health cover. With 66,000 people dropping out of private health in the three months to December, it is obvious that the scheme has been an unmitigated disaster.The Howard government's failure on health is beginning to have a dramatic effect in my part of western Sydney. Those constituents of mine who are now seeking public health care have three major choices in our area: Liverpool Hospital, Fairfield Hospital or Westmead Hospital. All three are fine health establishments. The children's ward of Westmead especially is known for its standard of care throughout the world. However, despite the fact that the New South Wales government has now ploughed an extra $1 billion into the health system over the last three years, hospital waiting lists are increasing and will increase more because the Howard government cannot see fit to provide adequate funds for public health care.Fairfield Hospital now needs an extra $3 million per year, which is just enough money to cater for the 1,251 extra people they are expected to have to care for as more and more people from our community leave private health cover. Liverpool Hospital needs an extra $8 million to cope with the 3,320 extra patients that are expected to be coming through its doors in the next 12 months. Westmead Hospital needs over $20 million to look after the extra 7,862 patients who will now be dependent on its care. The predicament facing these three public hospitals serving my community is very real and very desperate. The Howard government must bring itself to understand the human cost of its failure to provide the adequate funds needed under the Medicare agreement.As the premiers displayed at their conference last Friday, this is an issue that crosses party boundaries. It is about health and is about the care of all Australians. The longer the Howard government fails to see that the more people in my community and communities like it across Australia will continue to suffer.In the very limited time I have left to me I would also like to bring to the attention of the House that we have also experienced the closure of two more Medicare offices in my electorate. The Medicare offices at Marylands and Cabramatta have been closed by this government. We are looking now at a population of over 1.1 million for whom the only Medicare office between Liverpool and Parramatta is in my own area of Fairfield. The queues are excessive and the staff are doing an excellent job. I congratulate them for handling the business that is now coming to them. It is a disgrace. These offices were closed without any proper consideration given to how it was going to affect the people. This, on top of what is happening to our public health system, is something that this government must bow its head in shame about.180112:44:001801Draper, Trish, MPMrs DRAPER0L6MakinLP10—I would like to speak about the Makin Tough on Drugs campaign which was officially launched in my electorate on Wednesday 18 March 1998. We all know that our most important resource for our nation's future is our children. As a parent of three children, I am very concerned and disturbed about the extent of the drug problem in our community. However, I believe that the war has not been lost as some try to suggest. It is up to us as a community to work collaboratively. As we all know, one of the best ways to deal with the issue of the misuse of drugs is to educate not only our children in schools but also our families at home. It is the Tough on Drugs package which will deliver this education to the community.Senator the Hon. Nick Minchin, Special Minister of State, and I have undertaken to implement a drug education campaign within Makin, with the aim of reducing the number of illicit drugs in our schools and the demand for illicit drug use among school children. The launch was a very important day for everyone in Makin. Among the guests were the South Australian Minister for Police, Emergency Services and Correctional Services, the Hon. Ian Evans; Senator Grant Chapman; Mrs Jill Grove, from the Drug and Alcohol Services Council; and Sergeant Bob Kemp from the Para Hills police station, who addressed the issues surrounding drugs in our community and the adverse effects of drug use.It was also a delight to have in attendance representatives from many of the churches, community groups and organisations within Makin and, most importantly, the SRC representatives who attended from schools across the electorate. Channel 9 Adelaide identity Xavier Minniecon hosted the launch, which also featured the local band Cabinet, who delivered a strong message about the use of drugs and peer pressure, particularly among school children.At this point I would like to acknowledge the outstanding work over many years and the achievements that have already been made in the area of drug awareness and education, not only by our schools councils but by programs being run by our service clubs, such as the Lions Drug Awareness Foundation and the Rotary International Drug Abuse Prevention Committee. I am also aware of the work being done by Apex Clubs in their research for the prevention of youth suicide, which research does suggest has a link with the misuse of drugs, both legal and illicit.Prior to the launch of the Tough on Drugs campaign I had the pleasure of meeting with all of the school principals in my electorate to discuss the launch. All of the principals stated that further funding for the program was a necessity, as well as teacher-friendly packages for the implementation of the program. I am happy to report that the Makin community have welcomed the announcement from the Prime Minister (Mr Howard) of a further $100 million for the national Tough on Drugs campaign for treatment, counselling and education.Our teachers and school community in general have, over the past decade or so, carried the tremendous burden of an overcrowded curriculum, to the extent that our society expects so much from our teachers—from teaching our children, literally, to tie their shoelaces, to improving their socialisation skills and a myriad other skills that were once part of family education in the home. Overall, teachers do a great job. When I visit our schools I am constantly amazed at the extraordinary talent and abilities of our students, which have been fostered and nurtured by our teachers and for which they must take credit.However, in relation to drug education it is now time for our parents and families to take a proactive role by taking ownership of the problems facing our kids and talking to their children about drug use. As a community we need to take responsibility for our children and not expect our schools to tackle the problem on their own. Senator the Hon. Nick Minchin and I will be co-sponsoring parent information nights across the electorate of Makin over the coming weeks and months, so that parents can become much more involved and informed of the services available to them.As I have said, the war against drugs is not lost. In Makin we have commenced a full frontal assault because our kids are worth the effort. I commend the Prime Minister for his stance on family values and his Tough on Drugs campaign.180312:49:001803Griffin, Alan, MPMr GRIFFINVU5BruceALP00—I rise on the adjournment today to talk a little bit about codes of conduct and what they actually mean. Codes of conduct have been in the news a fair bit during the term of this government. I have had some trouble defining code of conduct, given that the question of what the code itself actually is has altered considerably in the time of this government.Initially, I thought the code of conduct related to guidelines—rules, if you like—for ministerial responsibility and under what circumstances and in what way a minister should act on the question of propriety. But I have decided that it is now not that at all. I think I have really understood it. The wording is not `code of conduct', but actually `in code of conduct'. The code is the issue. It is not the conduct; it is the code.It is a bit like a Cheshire cat. I am sure that you, Mr Deputy Speaker Nehl, recall in your youth—not that long ago—Alice in Wonderland and the Cheshire cat. The Cheshire cat said, `Words are what I mean them to mean, not what I say, what I mean them to mean.' The circumstances change on an ongoing basis. I think we are in a land where there are many Cheshire cats. But the king of the cats at the moment is, I think, the Prime Minister on this issue of the question of what the code is.The other thing is whether this code should be a written code of conduct. I have pondered that as well, Mr Deputy Speaker, and I have decided it should not be. Maybe it should be on a tape or on a CD, sort of like in Mission Impossible. I am sure we all recall Mission Impossible, the series, where Jim Phelps would go along to a bus stop or a park and he would come across a tape machine. He would turn it on, and the tape would play and tell him something. I suspect in the case of this government the tape would say something along the lines of, `Your ministry, should you choose to accept it, is to be resources, transport, small business, administrative services, assistant treasurer,' et cetera. `Of course, if you, or any member of your administrative team are apprehended, the Prime Minister will deny all knowledge, all responsibility, for your actions. Good luck, Jim. This tape will self-destruct in five seconds.' Let us face it, the tape took five seconds to self-destruct, which is a bit longer than it took for the Code of Conduct under this government.But then, as the Prime Minister (Mr Howard) said, and we have seen this develop over time, as a code of conduct it started off as `This is the new way forward.' This was the new, better standard, including steak knives! Then it went to a situation where it was very similar to the standard practised by previous governments but with some improvements. It went on from there to being the same. I am a bit worried, Mr Deputy Speaker, that if this government goes on much longer, the circumstances may well be that it is actually something beyond that—that it will go back further than that to a situation where it is something akin to the last century. It is only a matter of time.When I look at some of the ministers who have gone already, I do express quite a bit of sympathy. I want to stress that I know a number of the people who have in fact paid the price with respect to the Code of Conduct. I, for one, and I think it is true of most, do not question their integrity but neither do I question the fact that they have breached the Code of Conduct. When you set a high jump, and you set a level that must be passed, people have to pay the price when they fail it. But certainly, Jim Short, amongst others, was unlucky in the circumstances. I think one person who has been very lucky has been the current Minister for Resources and Energy (Senator Parer), who I also know quite well and have a lot of time for. But there is no doubt that he is in breach. I am sure that Jim Short, who is in London now, will be looking down here and wondering what the fuss is all about, and probably in his own way is happy.0V5SLIPPERMr Slipper—On a point of order, the honourable member opposite cast a reflection on the Minister—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Which minister?0V5SLIPPERMr Slipper—The Minister for Resources and Energy. He said that the minister was `in breach'. The Prime Minister has said that the minister is not in breach. There are forms of the House that the member can use if he wishes to make allegations.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—I did not hear the actual words that the member for Bruce is charged with using. I do admonish him to stick to the standing orders, which I am sure he will try and do.VU5Griffin, Alan, MPMr GRIFFIN—I will stick to the standing orders, Mr Deputy Speaker, much better than the minister has stuck to the Code of Conduct. Certainly, I find it interesting that John Howard's statements—(Time expired)180412:54:001804Grace, Elizabeth, MPMrs ELIZABETH GRACEML6LilleyLP10—The speech I am about to read was written for me by young Lachlan Kay who is a year 10 student at Sandgate High School. Lachlan has also been nominated Youth Governor of Queensland. Over the past six months I have been working with a group of young people in my electorate who have now formed a task force. This group of eight young people, after several meetings with me, decided that it would be beneficial to hold a forum for the youth in my electorate in which they could express their views on issues that are relevant to them. The task force, with my assistance, will now hold a youth forum which they have called the Lilley Youth Conference. It will be on 5 April at one of the local high schools. The youth attending will range in age from 15 to 25. The task force has recognised four main issues to be discussed at the forum. These are education, employment, self-esteem, and youth welfare.We have invited young people that are either full-time or part-time students, those who work part-time or full-time, and those who are currently seeking work. This is to ensure that the outcomes of the forum are truly representative of all youth in the electorate. The issues that are to be discussed were chosen for the specific reason that the youth felt that these were the issues that were of concern to them and that the government should hear their viewpoints and ideas about them so that, when it is making decisions on these matters, young people would have some input into policies that are aimed at, or directed to, them.Education was an obvious choice, as this is an issue which inevitably affects all youth. Another obvious choice was employment, as it is a major issue for youth today. The task force decided to call the topic `Employment'—which has a positive outlook—rather than `Unemployment', a term which is immediately fraught with negative connotations. Self-esteem is a relatively taboo term, as there are of course ties with low self-esteem, chronic depression and, to a more serious extent, suicide. However, it must be recognised that this is a major problem for youth in our society. The fourth choice, youth welfare, is another key issue in today's society. The financial assistance offered by the government and available to youth is quite often imperative for the standard of living of young people.Such a forum as the one that the Lilley Youth Task Force and I are holding is a vital tool to bridge the gap between young people and their parliamentary representatives. If we do not know what it is that young people need, how can we help them? The youth task force is one of many active discussion groups currently running in my electorate. These include a group for youth suicide prevention and also a group looking at finances and problems with the elderly. However, the special thing about this forum is that it will include the views of those people who live in my electorate but have not been able to have their say via the ballot box, as either they are too young or an election has not been held since they have become legally recognised as adults.The guest speakers at the youth forum will be Dr Cheryl Hurst, who was nominated Queenslander of the Year and also received an award on Australia Day. She has done extensive research into breast cancer, and she is going to be talking to the young people on the topic of education. Mr Craig Maney from Albion McDonald's, will be talking to the young people on employment. Mike Young, who is the Olympic coach for the Australian baseball team, will be talking on self-motivation. Ben Myers, who was selected as Queensland's youth representative at the people's Constitutional Convention—0V5SLIPPERMr Slipper—An outstanding young man.ML6Grace, Elizabeth, MPMrs ELIZABETH GRACE—Thank you. He will be talking on youth welfare and the benefits that we can give young people. The main idea of this forum is to inform the government of the views of young people. I am confident that the outcomes will be positive, constructive and truly representative of what young people would like to see happening in these areas. I look forward to presenting the findings of the forum to the House, so that young people's voices will be clearly heard and so that their ideas might be a help for change in areas that are to be reviewed.As I said at the beginning, this speech was written by a young man in year 10 at Sandgate High School. It is always a pleasure to be able to give young people a chance to develop their skills and express their views. I congratulate Lachlan Kay on an excellent speech. I have every confidence that the youth forum will be a resounding success, when it is considered that young people of this calibre are taking an active part.180512:59:001805Slipper, Peter, MPMr SLIPPER0V5FisherLP10—In the couple of minutes remaining, I wish to congratulate Kate Carnell and the ACT Liberal Party on a fine victory in the recent ACT elections. The election victory was not only a win for our side of politics but also an incredible setback for the Australian Labor Party. The ACT traditionally has been an area where the Labor Party has polled strongly. The government inherited a $10.3 billion deficit, and we had to make some very hard decisions. The Public Service has in fact had to bear the brunt of some of those decisions; yet, despite that, the ACT Liberal Party did remarkably well at the election. Graham Richardson commented on the ALP and said that behind Wayne Berry is `an organisation run by the last of the hard-line lefties.'XJ6ANTHONYMr Anthony—They are over there.0V5Slipper, Peter, MPMr SLIPPER—They are indeed! Richo said, `Go anywhere in Canberra, and people will tell you how hopeless they are. I just wish the National Executive would put an end to this farce.' He also said that ACT Labor was `led by a group of maniacs who are out of touch with the people of Canberra.'I would also like to congratulate Brendan Smyth, a former colleague in this place, on his election to the ACT Legislative Assembly. He will be an absolutely fine representative of the people.Main Committee adjourned at 1.00 p.m.Answers to Questions in Writing1807The following answers to questions were circulated:1807(Question No. 2662)26621807Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 2 March 1998:(1) How many persons (a) in total and (b) by country of origin entered Australia under the temporary business entry (short stay) visa category 456 in (i) 1994-95, (ii) 1995-96 and (iii) 1996-97.(2) How many persons (a) in total and (b) by country of origin who entered Australia under visa category 456 in 1996-97 subsequently successfully applied to change to temporary business entry (long stay) visa category 457.1807Ruddock, Philip, MPMr Ruddock0J4BerowraLPImmigration and Multicultural Affairs10—The answer to the honourable member's question is as follows:(1) See the table below of sub-class 456 visa holder arrivals by nationality.Arrivals in this sub-class were zero in 1994/95 as the sub-class did not exist until 1 November 1995.(2) See the table below of sub-class 456 arrivals subsequently granted 457 visas.Arrivals of 456 Visa Holders by NationalityCitizenshipFY1994/95FY1995/96FY1996/97Afghanistan055Africa (So Stated)020Africa (So Stated)012Albania01917Algeria01437America (So Stated)01261Angola0516Antigua and Barbuda041Argentina0213696Armenia0211Australia013Austria05311083Azerbaijan033Bahamas034Bahrain01530Bangladesh034239Barbados0136Belarus03050Belgium09471939Belize0711Benin020Bhutan0224Bolivia0629Bosnia-Herzegovina01723Botswana0156Brazil05691224Brit Dependent Terr. Citz.0513446Brit O'Seas Citizenship0510British National Overseas015994430 Brunei Darussalum0132195Bulgaria083126Burkina Faso026Burma07467Cambodia, The Kingdom of087Cameroon039Canada047399110Central African Republic010Central America (So Stated)011Chad030Channel Islands032Chile097428China (So Stated)052127China, Peoples Republic of01354532674Colombia03490Comoros011Congo011Costa Rica02528Cote D'Ivoire0412Croatia0160284Cuba01118Cyprus0615Czech Republic0147378Czechoslovakia0340Denmark011992223Dominica034Dominican Republic0919Ecuador01013Egypt, Arab Republic of0202402El Salvador01646Eritrea001Estonia03557Ethiopia036Europe (So Stated)001Faroe Islands028Fed States of Micronesia015Fiji0580901Finland07481448FMR Yugo Rep of Macedonia08766France030697059French Guiana001French Polynesia001Gabon042Gambia002Gaza Strip004Georgia01115German Democratic Republic0922Germany (So Stated)0356916Germany, Federal Rep. of041378247Ghana03659 Gibraltar010Greece0231930Guatemala0818Guinea032Guinea-Bissau020Guyana048Haiti022Honduras0819Hong Kong02377Hungary0262813Iceland03481India036197138Indonesia0649514900Iran0168342Iraq03230Ireland (So Stated)05471451Irish Republic058138Israel0342733Italy022814832Jamaica02842Japan01735132305Jordan072101Kampuchea05786Kazakhstan010862Kenya064139Kiribati0601978Korea (So Stated)03863Korea, Dem. Peoples Rep. of01230Korea, Republic of026477408Kuwait05445Kyrgyzstan033Lao Peoples Democratic Rep.05628Latvia02694Lebanon04084Lesotho004Liberia011Libya0329Liechtenstein026Lithuania052133Luxembourg02861Macau014Madagascar038Malawi0423Malaysia0570010466Maldives089Mali044Malta04024Marshall Islands028Mauritania048Mauritius0105234 Mexico0210547Micronesia002Micronesia, Fed. States of01244Moldova0138Monaco003Mongolia033105Morocco01459Mozambique0520Myanmar02250Namibia01842Nauru0105223Nepal0110104Netherlands021544540New Hebrides012547New Zealand01841Nicaragua026Niger030Nigeria03252Nigeria0028Norway08191784Oman01240Pakistan00408Pakistan0527442Palau01319Panama0723Papua0328Papua New Guinea08412053Paraguay034Peru02859Philippines030736405Poland0261842Polynesia001Portugal0294626Qatar0513Refugee004Rhodesia001Romania096252Russian Federation013752106Rwanda021Samoa0118275San Marino015Saudi Arabia046147Senegal01041Seychelles016Sierra Leone01314Singapore038007685Slovakia0109243Slovenia01632Solomon Islands0303824South Africa, Republic of023355228 South America (So Stated)001Spain06301583Sri Lanka0507897St Kitts-Nevis033St Lucia011St Vincent & The Grenadines002Stateless06081160Sudan02440Surinam075Swaziland079Sweden023864478Switzerland010582099Syria01731Tadjikistan033Tahiti010Taiwan025565639Tanzania01732Thailand052209392Togo0310Tonga0115290Trinidad and Tobago01737Tunisia01641Turkey0196611Turkmenistan003Tuvalu04928Uganda0838Ukraine0135200UN Convention Refugee033United Arab Emirates06278United Kingdom0192778United Kingdom002United Kingdom039123United Kingdom001United Kingdom015United Kingdom01806539648United States of America03069864549Unknown05187Uruguay02352Uzbekistan01721U.S.S.R.0111187Vanuatu064206Vatican City017Venezuela028133Vietnam08191740Virgin Islands (British)001Yemen066Yemen Arab Republic001Yugoslavia0147149Zaire039Zambia02932 Zimbabwe088204Total01565133297241996/97 456 Arrivals Subsequently Granted 457CitizenshipArrived in 1996/97 and Subsequently Granted 457Albania3America (So Stated)1Argentina3Australia1Austria20Bangladesh3Belgium26Belize4Brazil6Brit Dependent Terr. Citz.3British National Overseas170Canada415China (So Stated)4China, Peoples Republic of1045Croatia7Cuba3Denmark49Dominica2Dominican Republic2Egypt, Arab Republic of2Fiji12Finland29France222French Polynesia1Germany (So Stated)23Germany, Federal Rep. of175Ghana1Greece7Haiti1Hong Kong9Hungary8Iceland2India175Indonesia94Iran16Iraq1Ireland (So Stated)92Irish Republic5Israel39Italy38Jamaica2Japan571Jordan1 Korea (So Stated)1Korea, Republic of176Lebanon9Malawi1Malaysia68Maldives2Marshall Islands1Mexico1Nepal3Netherlands156Nigeria2Norway27Pakistan17Philippines82Poland2Portugal22Romania4Russian Federation60Sierra Leone2Singapore176Slovakia5Slovenia2South Africa, Republic of449Spain20Sri Lanka9Stateless76Sweden109Switzerland67Syria1Tadjikistan1Taiwan175Thailand22Tonga6Trinidad and Tobago5Turkey5U.S.S.R.19Ukraine9United Kingdom2062United States of America2139Uruguay1Venezuela1Vietnam11Yugoslavia2Zimbabwe4Total93051814(Question No. 2667)26671814Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 2 March 1998:(1) Are foreign doctors entering Australia on temporary visas required to pass examination before being allowed to practice in Australia.(2) Are there exceptions to the requirement referred to in part (1); if so, what are the exceptions.(3) How many doctors referred to in part (1) have (a) passed examination or (b) been excepted from examination.(4) How many overseas trained doctors entered Australia in 1996-97.(5) From which countries did they originate.(6) How many doctors from each country referred to in part (5) (a) entered Australia, (b) passed examination, (c) were excepted from examination and (d) applied from within Australia to extend their residency.1814Ruddock, Philip, MPMr Ruddock0J4BerowraLPImmigration and Multicultural Affairs10—The answer to the honourable member's question is as follows:(1) Foreign doctors entering Australia on temporary visas are not required to pass the Australian Medical Council examination. Temporary resident doctors are, however, required to obtain registration with the relevant State or Territory Medical Boards before practicing in Australia.(2) There are no exceptions to the requirement referred to in the response to question (1).(3) See response to questions (1) and (2).(4) 898 doctors on temporary resident visas entered Australia in 1996-97.(5) The temporary resident doctors were from the following countries: Bangladesh, Belgium, Canada, Denmark, France, Germany, Greece, India, Ireland, Israel, Italy, Jordan, Malaysia, Myanmar, Namibia, Netherlands, Niger, Nigeria, Pakistan, Papua New Guinea, Philippines, Poland, Singapore, South Africa, Spain, Sri Lanka, St Lucia, Switzerland, Tonga, United Kingdom, United States of America and Vanuatu.(6) (a) The following number of doctors referred to in part (5) entered Australia during 1996-97: United Kingdom (516), Republic of Ireland (87), Canada (69), the United States of America (62), South Africa (54), India (27), France (18), Vanuatu (11), Tonga (10), Malaysia (9), Germany (7), Pakistan (3), Nigeria (2), Belgium (2), Philippines (2), Bangladesh (2), Papua New Guinea (2), Sri Lanka (1), Greece (1), Switzerland (1), Israel (1), Jordan (1), Myanmar (1), Singapore (1), St Lucia (1), Niger (1), Namibia (1), Italy (1), Spain (1), Netherlands (1), Denmark (1) and Poland (1).(b) See response to questions (1) and (2).(c) See response to questions (1) and (2).(d) In 1996-97 there were 353 visas granted in Australia to temporary resident doctors seeking to extend their stay.1814(Question No. 2675)26751814Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 2 March 1998:(1) Has he consulted the Minister for Health to determine how many non-residents or non-citizens have undergone surgical procedures using Medicare; if so, what are the details; if not, why not.(2) What statistics are available on the misuse of Medicare referred to in part (1).(3) Do the statistics indicate the extent to which the misuse relates to medical conditions which existed before arrival in Australia.(4) Is he able to say how many persons referred to in part (1) returned voluntarily to their country of nationality after treatment.1814Ruddock, Philip, MPMr Ruddock0J4BerowraLPImmigration and Multicultural Affairs10—The answer to the honourable member's question is as follows:(1) to (4) I have asked my Department to consult with the Department of Health and Family Services (DHFS) on this matter. DHFS advises that non-residents do not have access to the Medicare arrangements except to the extent to which access is provided under the terms of a Reciprocal Health Care Arrangement.The Health Insurance Act 1973 (HIA) defines which people are eligible for Medicare. Eligibility for Medicare is generally restricted to an `Australian resident' as defined in Section 3 of the HIA, and the person must reside in Australia. Therefore, generally, non-residents do not qualify for, nor receive access to, Medicare benefits.No data distinguishes between access to Medicare by non-citizens as opposed to citizens, as once a person meets the definition of Australian resident in the HIA, they are an eligible person and may use Medicare.Data regarding numbers of persons accessing surgical procedures in public hospitals are held by the States and Territories. 1815(Question No. 2702)27021815Lindsay, Peter, MPMr LindsayHK6HerbertLP10 asked the Attorney-General, upon notice, on 2 March 1998:(1) How may residence/residence orders enforcing a minimum stay with either parent of 40 per cent has the Family Court issued since the Family Law Reform Act 1995 was implemented.(2) What percentage does the figure referred to in part (1) constitute of the total number of Family Court orders issued in the same period.(3) How many residence/residence orders have been issued since the B&B case was concluded.1815Williams, Daryl, MPMr Williams7V5TangneyLPAttorney-General10—The answer to the honourable member's question is as follows:(1) The Family Court has advised me that the number of residence/residence orders enforcing a minimum stay with either parent of 40 percent, issued by the Family Court of Australia since 11 June 1996 (when the Family Law Reform Act was proclaimed) is not readily available, as information about the proportional split is not entered onto the Court's case management system. However, the Family Court has further advised me that it is estimated that the total number of all residence/residence orders (including consent and other court orders) made in the period from 1 July 1996 to 28 February 1998 was 1,280.(2) The Family Court has advised me that the total number of orders made in respect of children (including residence, contact and specific issues orders) made in the Family Court of Australia during the period from 1 July 1996 to 28 February 1998 was 76,750. The Family Court has further advised me that residence/residence orders therefore constituted approximately 1.7% of the total orders relating to children made during this period.(3) The Family Court has advised me that the total number of residence/residence orders (including consent and other court orders) made in the Family Court of Australia since judgment in the B&B case was handed down, on 9 July 1997, to 28 February 1998 is estimated to be 470.1815(Question No. 2719)27191815Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister representing the Minister for Communications, the Information Economy and the Arts, upon notice, on 5 March 1998:(1) Can the Minister say (a) what items of indigenous cultural property have been repatriated to Australia since 1988 and (b) when, whence and in what circumstances they were repatriated.(2) What decisions and recommendations were made concerning indigenous cultural property and archives at the 13th meeting of the Cultural Ministers Council in Adelaide on 27 February 1998.(3) When and where will the 13th meeting of the council be held.1815Smith, Warwick, MPMr Warwick SmithGJ4BassLPMinister for Family Services10—The Minister for Communications and the Arts has provided the following answer to the honourable member's question:(1) The return of indigenous cultural property from overseas falls within the portfolio responsibilities of the Minister for Aboriginal and Torres Strait Islander Affairs.(2) At the 13th meeting of the Cultural Ministers Council held in Adelaide on 27 February 1998, members endorsed the approach set out in the strategic plan for the repatriation of indigenous ancestral remains and secret/sacred objects by 2001. The objectives of the strategic plan are to:. identify where possible, the origins of all ancestral remains and secret/sacred. objects held in museums, with records placed in national databases;. notify all affected indigenous communities; and. negotiate with museums and communities concerning repatriation when and. where requested.Ministers undertook to consider funding for the implementation of the strategy in accordance with the agreed CMC formula and agreed to report back on deliberations by 30 June 1998 or at the next Standing Committee meeting, whichever is the sooner.(3) The 14th meeting of the Cultural Ministers Council will be held in June 1998, in New South Wales.1815(Question No. 2738)27381815Campbell, Graeme, MPMr CampbellCF4KalgoorlieIND00 asked the Minister for Workplace Relations and Small Business, upon notice, on 10 March 1998:Are harbour masters or officers in his Department empowered under federal legislation to prevent a ship from sailing if they believe that ship's master or crew are suffering from fatigue.1815Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:Harbour masters' authority is vested in them through State legislation and the honourable member should approach the relevant State authorities on this issue.Officers of the Commonwealth Department of Workplace Relations and Small Business do not have these powers.