1999-02-163912REPS282901999-02-16Mr SPEAKER(Mr Neil Andrew) took the chair at 2.00 p.m., and read prayers.Questions Without Notice282928292829Swan, Wayne, MPMr SWAN2V5LilleyALP00—My question without notice is directed to the Prime Minister. Prime Minister, yesterday you advised the House that the GST will increase the cost of funerals by significantly less than 10 per cent. You said:. . . I understand, less than five per cent.Prime Minister, isn't it a fact that, before the end of January, the tax information hotline told the Australian Funeral Directors Association to advise its members to charge the full 10 per cent GST on pre-paid funerals? Prime Minister, isn't it now a fact that the tax hotline is telling people that they do not know how much extra should be charged on pre-paid funerals and that they should ask an accountant? Prime Minister, if you and the ATO do not understand how the GST affects pre-paid funerals, how do you expect ordinary citizens to understand?2829Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Mr Speaker, I will naturally make some inquiries about what the hotline has been saying. Yesterday I was asked a question; the answer I gave was absolutely correct. Indeed, subsequent information I received indicated that the figure was between three and four per cent—which, when all of us were at school, was less than five per cent.28292829Lloyd, Jim, MPMr LLOYDIK6RobertsonLP10—My question is addressed to the Prime Minister. Can the Prime Minister inform the House of Australia's recent performance in job creation and how this compares with the rest of the world? How will the government keep working to improve job opportunities for all Australians?2829Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I thank the honourable member for Robertson for that question about something of ongoing interest to all of the people of Australia—that is, the generation of jobs. I am very proud to say to the honour able member for Robertson that employment in Australia has risen by around 400,000 since this government came to office in March 1996. In 1998 alone, 177,500 new jobs were created in Australia. This represents an annual growth of 2.1 per cent.I might point out to the honourable member for Robertson that this 2.1 per cent growth figure compares to the figure of an average of 0.7 per cent for the whole of the OECD area. In other words, jobs growth under this government in this country is three times the rate of jobs growth throughout the OECD area. That is a direct consequence of the policies that have been followed by the coalition government, despite the obstruction and the objections and the obfuscation of the opposition and other parties in the Senate.Recent job growth has seen Australia's unemployment rate fall to 7.5 per cent, and that, I am pleased to say, is the lowest level since September 1990. Despite that, there is still a lot more that needs to be done to get that rate lower. You will not get that rate lower unless you take the shackles off small business to employ more people. You will not get that rate lower unless you further reform the unfair dismissal laws. The Labor Party and the Democrats will have an opportunity in the very near future to cast their votes for and against lower unemployment in Australia. They will have the opportunity to support or oppose the government's further stance on unfair dismissal. They will have an opportunity to oppose or support our attempt to further entrench the rights of 225,000 young workers in Australia.If the Labor Party votes against both of these measures, the Labor Party will be voting to increase unemployment in Australia. If the Labor Party votes against these measures, the Labor Party will be voting to condemn tens of thousands of young Australians to the unemployment queues of this country.28292829Wilton, Greg, MPMr WILTONYK6IsaacsALP00—My question is addressed to the Minister for Aged Care. Minister, do you recall giving an undertaking to consider information provided by the member for Newcastle concerning the application of a GST to pre-paid funerals? Now that you have seen the documentation showing a funeral director charging 10 per cent for GST, what steps have you taken to ensure that elderly Australians are not being ripped off by a tax that has yet to become law?2830Bishop, Bronwyn, MPMrs BRONWYN BISHOPSE4MackellarLPAged Care10—Indeed I do recall giving such an undertaking. I then called the office of Mr Morris, the member for Newcastle, on a number of occasions on the following day to try to get the information which he promised to send to me. He subsequently put out a press release and, attached to it, was a single piece of paper—the bill from a single funeral director. He did deliver the press release to my office. As I promised in my undertaking, Prime Minister, I sent it to the Treasurer.4T4MELHAMMr Melham—`Undertaking'—that is appropriate!SE4Mrs BRONWYN BISHOP—My God, you are a clever little lot, aren't you? Undertaking and funerals—that is really very good. Nine out of 10 for you.So I did indeed send it to the Treasurer's office and the Treasurer has indeed sent it to the ACCC to be investigated, all in accordance with my undertaking and the comments I made thereafter.28302830Billson, Bruce, MPMr BILLSON1K6DunkleyLP10—My question is addressed to the Treasurer. What is the government's timetable for the introduction of a new tax system? How would a delay in the legislation introducing the new tax package impact on the Australian community?2830Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—When the government released its tax policy and sought the endorsement of the Australian people in the last election, it made it entirely clear that this was a policy which was on a timetable for full introduction as from 1 July 2000. Indeed, we set out on page 31 of the policy the timetable and process for reform, indicating quite clearly then that the government would in January 1999 commence the private health insurance initiative. I am pleased to say that the government has. We indicated that in the first half of 1999 we would enact legislation to broaden the indirect tax base and repeal wholesale sales tax and that the personal income tax cuts and the new broad based indirect tax would commence from 1 July 2000. That was the timetable that was laid down in advance of the election, and the government seeks to do no more and no less but to deliver on time, in full, for the Australian people.I noticed yesterday that there was a suggestion from some of the senators that they would not be in a position to finish the debate and vote on this legislation by 30 June 1999. I would like to actually table in the House of Representatives a press release from Senator Meg Lees dated 24 November 1998, in which she says:Democrats Leader Meg Lees has successfully brokered an agreement on a Senate inquiry into tax reform.She said that the elements of it are a select committee of seven members, separate inquiries by three reference committees, a guaranteed start to debate on 19 April and `a fixed sitting pattern for the first half of 1999, moved by the government.' She said:This provides a possible 84 hours of debate before June 30th according to figures provided by the Government. Previous debating `records' are Telstra (29 hours) Workplace Relations (48 hours) and Native Title Amendment Bill (56 hours).I formally table that media release in the House of Representatives. As Senator Lees said on 24 November 1998, she had brokered an agreement for 84 hours of debate, beating every single record for a debate in the Senate since the start of Federation. In addition to that, the four inquiries which were established according to Senator Lees's timetable in December have until April to report, which means four inquiries going nearly four months each—more than 52 weeks of Senate inquiry, more than a year of Senate inquiry, which is longer than any other Senate inquiry in the history of Federation. It is 84 hours of debate, longer than any other debate in the history of Federation.You can imagine the government's surprise to hear the suggestion yesterday, on 15 February, some three or four months before the debate is scheduled to conclude, that some senators may not be in a position to vote. The Australian Labor Party has made it clear that it is going to vote against everything, so it does not need any time to open its mind or consider Senate inquiries. The Australian Democrats are hooked on their own agreement for the longest inquiry and the longest debate in Australian federal history. As for this side of the parliament, this side of the parliament says that we intend to deliver in full what the Australian people were promised. All of the palaver that is going on in the Senate at the moment boils down to one proposition: that the Australian people should have income tax cuts taken away from them. On this side of the parliament, we intend to deliver income tax cuts in full, on time and on budget. This side of the parliament is determined to make sure that, when the Australian people are promised income tax cuts, they get those income tax cuts. There is one way to deliver that, and that is to pass in the Senate what the government put to the people.I see that the member for Dickson is quite vocal in this debate. She is a former Democrats economic spokeswoman.Mr Beazley interjecting—CT4Mr COSTELLO—No, there were such things, Mr Speaker. After the 1993 election, when the Labor Party promised before the election not to put up any taxes, she led the Democrats to vote with the Labor Party to break their promise. How much more important would it be for the Democrats to vote with the government to keep a promise? This is a government which wants to deliver to the Australian people deserved income tax cuts. They voted for income tax cuts and, if the government has its way, they will get income tax cuts.28312831McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—My question is to the Minister for Health and Aged Care. Minister, can you confirm that you had discussions with the President and other members of the Council of the Royal Australasian College of Radiologists in the fortnight commencing 29 April 1998—that is, in the fortnight before last year's budget? Was the college's concern that supply control of MRI scans should not be achieved by the government being involved in restrictions on particular sites for new MRI scanners raised with you? Did this result in your agreeing to instead control supply by limiting the Medicare rebate to existing sites and those under contract by budget night?2831Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I can confirm one such meeting. From memory, it was around 5 May. I was accompanied by my staff and departmental officials. I have asked departmental officials for their recollection of the meeting and theirs confirms mine—that in fact the college said to us they did not want to know what the supply measure was, and it was not discussed with them. I am sorry—in very general terms they put a point to us, but we did not tell them what we intended to do.28312831Neville, Paul, MPMr NEVILLEKV5HinklerNP10—My question is addressed to the Minister for Employment, Workplace Relations and Small Business. Minister, the government has put in place several job creation initiatives that have won widespread support from mainstream Australia in general and the business community in particular. What direct action has been taken to prevent the creation of jobs that would flow from these initiatives, particularly in the small business area?2831Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I thank the member for Hinkler for his question. In the last election the government advanced, as one of our policy proposals, that we should provide a fairer deal for small business in respect of unfair dismissals and we are entitled, under the Workplace Relations Act, to move to implement a regulation to achieve that objective. It was also part of our policy that we would act quickly—that this was an issue which required a determined, resolute government to get on and start to fix some of these fundamental problems. For that reason, prior to Christmas, under the auspices of the Workplace Relations Act—which was, of course, supported in the Senate, supported by the member for Dickson, a Labor Party frontbencher—we were entitled to provide that exemption and so a regulation was enacted, brought into being.When the Labor Party vote down that regulation in the Senate, they will not be just voting down a proposal; they will be taking the black letter law of the country today which provides a benefit to small business—which is a law in operation today to encourage small business to give people a job—they will be taking an existing federal law, and throwing it out for the benefit of the trade union hacks that they respond to and which are so heavily represented by those on the other side.This is a sensible proposal in conformity with international conventions, provided for by the Workplace Relations Act and which we know would genuinely provide real opportunities for people to get jobs with small business. The consequence of this was very neatly summarised by Helen Hughes in an article recently. In effect, she said this policy approach of Labor was saying to small business, `If you have a choice between giving a person a job or investing in new equipment, go for the new equipment every time'—because the policy position advocated by the trade union movement, and just repeated here by their lap-dogs on the front bench of the Labor Party, is against the interests of small business.The fact is they do not really have their own policy; they have got the trade union policy. Why don't they have their own policy? Because they are split amongst themselves about the future direction of workplace relations policy. The Leader of the Opposition says, `Let's have a policy review,' but of course he said before Christmas that by not one jot or tittle would they change Labor's approach to workplace relations.We are now seeing the splits within the Labor Party splinter right across the factions. We had, for example, a very entertaining piece written just a few days ago on 12 February in the Daily Telegraph by the member for Werriwa, which had a shot at one of his left-wing colleagues, the member for Grayndler. He said this about one of his policy proposals:Talk about a confused politician. The establishment of a big government bank would destroy the prospects of successful community banking in regional Australia.So they are fighting over that policy. Laurie Brereton, the member for Kingsford-Smith, is attacking the former foreign affairs minister—another split—and we have also got Senator George Campbell running a proposal for shorter working hours and that has been attacked by the member for Melbourne. Talk about a confused politician: they are a confused opposition, a split opposition, devoid of any leadership.28322832Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—My question is to the Minister for Health and Aged Care. Minister, do you recall yesterday describing the MRI loophole which came to your attention prior to the budget last year as follows:The loophole was essentially that they could gain on the decision so that we could have found we had a very large number of MRI scanners coming in, or coming in after the event.Minister, isn't this an admission that you knew there were people who did have knowledge of your MRI rebate decision before it was announced on budget night and who therefore could take advantage of it before it was announced. Will you now concede that a large number of contracts were signed a short time before the budget?2832Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—Absolutely not. I will not make any such concession because you have provided no evidence that that is the case whatsoever.Opposition members interjecting—10000SPEAKERMr SPEAKER—Order! The minister has the call.8E4Dr WOOLDRIDGE—If you had listened to my last answer last week, you would know that I did tell you that in October the year before last the Australian Health Technology Advisory Committee said that the government should fund MRI. I started consultations with the Royal Australasian College of Radiologists in December 1997. I had specific authority from the ERC to go out and negotiate because the overall package was a savings measure for which we needed the cooperation of radiologists. Whenever I was asked, from the time of the AHTAC report in October 1997 up until the announcement, I would say privately that we would attempt to fund MRI. It was well known and well expected and did not require any inside knowledge.28332833Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—My question is addressed to the Minister for Agriculture, Fisheries and Forestry. Can the minister inform the House how the government is improving the financial certainty of farmers in my electorate of Eden-Monaro?2833Vaile, Mark, MPMr VAILESU5LyneNPAgriculture, Fisheries and Forestry10—I thank the honourable member for Eden-Monaro for his question. We all recognise that the honourable member is a hard worker on behalf of the rural constituency of Eden-Monaro. We also recognise that the Carr Labor government are having a meeting there today trying to pay a bit of lip service to the rural community in Eden-Monaro after they have basically closed down the forestry industry in New South Wales.The question the member has asked is a very important one because the farm sector knows very well the benefits that have already flowed from the sound economic management of the first Howard-Fischer government. A lot of difficult decisions were made in that first term of our government which resulted in a much better fiscal position and outlook, particularly with regard to the budget surplus that has been put together. The best part about it was that it produced six consecutive interest rate cuts resulting in the lowest interest rates in nearly 30 years. What that means to the farm sector is $550 million worth of savings on interest per annum. From the good economic management of this government, the farm sector is saving $550 million every year. That is $550 million that can be put into retiring debt, reinvested in new infrastructure on the farm property or used to alleviate other difficult circumstances that they have faced over the years. That is a direct result of the sound economic management of our government.But to get to that point we had to fight the Labor Party every inch of the way. They opposed every single measure that we went to put in place to achieve those interest rate cuts. They blocked every single one. And that was on the back of their interest rate regime of the late 1980s and early 1990s that pushed interest rates way above 20 per cent and saw a lot of farm families having to leave the land because they could not cover the interest rates that the Labor Party drove to those high levels.For the future we are proposing a tax reform package which the Labor Party are again opposing. We are putting forward a tax reform package that will see $880 million worth of benefit annually to the farm sector. And they are not just our figures—they are the figures of the NFF. They are the figures the NFF put out in a release when they made their submission, and I quote:The NFF's submission accepts the Government's claim that the package would remove $880 million of costs . . .Every year a further $880 million worth of savings to the farm sector on top of the $550 million that they are already benefiting from because of the interest rate cuts. But what are the Labor Party doing? They are opposing them. They opposed the changes to improve the economic management of Australia and they are opposing the tax reform package that will see these benefits go to rural Australia. The Labor Party are opposed to any benefits going to rural Australia. The Labor Party are opposed to industrial relations reform which will see a much better circumstance for rural Australia, particularly with regard to unfair dismissal.People in rural Australia should not forget the fact that, over the last three or four years, at every opportunity the Labor Party have opposed what this government has been doing to improve the circumstances of people operating in rural Australia.28332833Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Minister for Health and Aged Care. Can the minister confirm that the budgeted provision for MRI scans will treble from $19.5 million in 1997-98 to $59.5 million next year, based on a ceiling of 403,000 scans over a three-year period? Is he aware that already 11,000 publicly funded scans are being done each month and just the existing number of ma chines will exceed the ceiling? Why did you not take decisive action to prevent people taking advantage of the loophole that you knew had been created and which will expose the federal budget to increased costs, given the view of the College of Radiologists that any additional scans above the ceiling will require additional Commonwealth funding and renegotiation of the 1998 radiology agreement?2834Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—The Leader of the Opposition clearly does not get it, but I suppose he is judging things by his own standard in government, which in this area was absolutely abysmal. The fact is that this was a savings measure. This saved money. If you have a look at the budget there was a positive and negative side. We would never have got the radiologists on board for the cooperative approach that they have taken to help us in other areas unless we funded MRI, which quite frankly should have been funded years ago and has disadvantaged many Australians.When the whole thing is in place it will be seen that what we have done is something that very few other countries in the world have ever been able to achieve: we have introduced a new technology in a cost controlled manner. I would think that 403,000 scans would be about right because we are planning on about 120,000 a year. I am advised as of last week that, even in the worst case scenario, which is 20 per cent increase in the number of scans per month, every month, for the rest of the year, we will come in under 120,000 scans this year. We will spend less than has been budgeted this year. So the fact is we have introduced a new technology in a way you were never capable of. We have brought radiology, pathology and general practice expenditures under control in a way you were never capable of doing, by working with the profession.28342834Elson, Kay, MPMrs ELSON6K6FordeLP10—My question is addressed to the Minister for Employment, Workplace Relations and Small Business. Minister, are you aware of the submission made by the Queensland government to the Australian Industrial Relations Commission's safety net review and can you inform the House of the contents of the submission and how it compares with the position adopted by various other parties?2834Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I thank the member for Forde for her question. We have three state Labor governments. Two of them have lodged submissions with the Industrial Relations Commission on the living wage case. They make very interesting reading, I must say, about the approach and attitude of those state governments towards current economic management and to the Workplace Relations Act and the reforms that we have introduced. In fact, I think it would be fair to say that, unlike the federal Labor Party, who can do nothing but entirely praise everything that the ACTU does, the two state Labor governments have to deal in the real world. Whilst both submissions contain an assertion of support for the ACTU, I must say that the ACTU has a case of damnation with faint praise.The New South Wales government says that it supports the ACTU claim, but then it argues that the commission should alternatively `grant the maximum increase that is consistent with the economic material'. In other words, if you do what is economically responsible then you will soon throw out the ACTU claim. The Queenslanders are not quite so subtle, I have to say. They say that they support the ACTU claim but, in the same sentence, they go on to say:. . . but only on the basis that the commission should consider the claim on the merits in the light of the good economic performance during `98 and economic forecasts for `99.Queensland Labor argues that—QJ4THEOPHANOUSDr Theophanous—Mr Speaker, on a point of order: this matter is before the commission. Is it appropriate for the minister to try to prejudge the decision of the commission by the comments he is making in relation to this matter? I think it is entirely inappropriate and he should not continue.10000SPEAKERMr SPEAKER—The member for Calwell raises the question as to whether or not the matter should be considered sub judice. I will listen closely to the minister's answer.WI4Mr REITH—Mr Speaker, if it helps you, the submissions have been made public and are simply a reflection of the publicly stated policies of the respective governments. The Queenslanders say that, as a minimum, the commission should adopt the outcomes of last year's decision. So much for supporting the ACTU—go back to where the commission was last year!In what would have to be an embarrassment for the federal Labor Party, the Queensland Labor government's submission also then goes on to provide us with an endorsement of the federal coalition's economic management. Just to take a couple of aspects, they say that, amongst other things, the chart shows the positive movement of labour productivity, especially in the latter part of the 1990s. Why would that be? It is because we have introduced significant reforms. We are actually getting a benefit, and even a Queensland Labor government can see it. They then say that, with the possible exception of unemployment, the available public economic analyses indicate that the national economy is sound and performing within acceptable parameters. Treasurer, take a bow, because that is the Queensland state Labor government reflecting on your economic management.What do they say about the Workplace Relations Act? They say:The Workplace Relations Act 1996 focuses on the need to create a framework of cooperative workplace relations which will promote economic prosperity and enhance the welfare of the people of Australia.I could not say it better myself.ZD4HOWARDMr Howard—Minister, take a bow!WI4Mr REITH—Thank you very much, Prime Minister. Then they say:In short, there is to be a focus on developing a mature workplace culture at the Australian workplace which encourages employers and employees to take primary responsibility for their working arrangements and which leads to formalising those arrangements through agreement making. In a sense, the process of agreement making can be said to be a manifestation, at least in part, of a maturing workplace culture.I take that as a compliment. That is exactly what we are doing and I have a Queensland state administration saying so. Then they say that there appears to be a renewed growth in the pace of agreement making under the Workplace Relations Act. They are dead right—of course there is. What is the federal Labour Party's policy? They want to put a halt to agreement making and go back to elements of the previous centralised system.The fact of the matter is, I would say that Peter Beattie has been talking to the member for Dickson in writing a complimentary report on the Workplace Relations Act. I thank her for whatever part she has played in it. It demonstrates again, on an absolutely key issue—namely, the wages of hundreds of thousands of Australian employees—that the federal Labor Party is riven by division. It has no policy position other than what the ACTU dictates. It has adopted that now; it is not to be changed one jot or tittle. Labor is simply to respond to the ACTU's agenda. As the Queensland Labor Party shows, at least they are in part in touch with reality. You are out of touch, you are behind the scenes, and it is time you undertook the major policy revision which your ex-frontbencher and your current frontbencher require of you.28352835Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—My question is to the Minister for Foreign Affairs. It concerns the government's diplomatic lobbying in the lead-up to the July meeting of the World Heritage Committee. Is it the government's view that you face a difficult task in persuading members of the committee to keep Kakadu off the List of World Heritage in Danger? Minister, can you guarantee that the government's international lobbying on Kakadu will be conducted in an open and transparent manner, based solely on the merits of the case and without consideration of any offers or inducements to other countries?2835Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—I can give the member for Kingsford-Smith one assurance: this government will always stand up for Australia's interests. We will, of course, lobby in support of our interests and we will obviously do so in a principled way. We will not do so in an unprincipled way. This issue is of concern to the government, and we make no apology for our determination to lobby to ensure that there is an appropriate outcome in the World Heritage Committee's consideration of the whole issue.You can rest assured that we will do all we possibly can to get an outcome that is in the best interests of those jobs that would be created for Australians from this project. Off the top of my head, I think the figure is something like a thousand jobs in the Northern Territory. The Labor Party obviously does not support those thousand jobs, despite all the crocodile tears they shed over the issue of unemployment—and they are indeed crocodile tears.The answer to the question is quite simple: we will do what we can in a principled, constructive but determined way to promote our national interest. But the House may be interested to know that it is now 531 days since the member for Kingsford-Smith has asked me a question. I congratulate him—in 1997, no questions, and in 1998, he did it.28362836Lieberman, Lou, MPMr LIEBERMANXU5IndiLP10—My question is directed to the Minister for Employment Services. Can the minister outline to the House the benefits of the Work for the Dole scheme, particularly for young people in my electorate of Indi? Is the minister aware of any differing views on the Work for the Dole scheme?2836Abbott, Tony, MPMr ABBOTTEZ5WarringahLPEmployment Services10—I thank the member for Indi for his question and for his support for this program and also for the very different but equally excellent Green Corps program. I am aware of differing views about Work for the Dole, in particular the view of the member for Batman, who said last week that this program was a poll driven stunt. I do not, for a moment, doubt his sincere desire to help the unemployed, but he should not use young job seekers who are doing the right thing by themselves and their community as a political football, because this an excellent program which is getting better all the time.I am advised that some 40 per cent of Work for the Dole graduates have proceeded to unsubsidised work or to further education and training, and this compares very favourably with much more expensive programs under the former government's Working Nation program. I am advised that 85 per cent of participants report that the program has helped their determination to get a job. Eighty-three per cent of employers, according to Morgan and Banks, say that Work for the Dole increases participants' chances of gaining permanent work. So on this issue, the member for Batman and the Leader of the Opposition are the last of the Bourbons, railing against a world that has changed.In Australia, a form of work for the dole first appeared as the Community Service Scheme, which the coalition took to the 1987 election, at much the same time as Professor Lawrence Mead, in America, was developing notions of responsibilities to match welfare rights. Since then, many others have caught on. Just last week David Thompson, of Jobs Australia, said:. . . in principle, the idea that people in receipt of benefits . . . having some obligation to help themselves, there's no argument at all with that principle.Michael Raper, the head of ACOSS, said:We have no problem with the concept of mutual obligation. Indeed, we too feel that mutual obligation ought to be expanded.And then none other than the member for Werriwa wrote on Friday the week before last:The Federal Government should invest heavily in a major expansion of mutual responsibility. . . . . . . . .That is why the old welfare system—that is to say, Labor's welfare system—was failing. Because it gave money to people for being inactive, it actually worked against the best interests of the disadvantaged. It was slowly destroying the people it was supposed to assist.That is what the member for Werriwa thinks. If the Leader of the Opposition was at all serious about rebuilding Labor's policy from the ground up, he could demonstrate that by immediately inviting the member for Werriwa to return to the frontbench.28362836Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—My question is addressed to the Minister for Foreign Affairs, and again concerns the lead-up to the World Heritage Committee meeting next July. Is it not a fact that DFAT has developed a secret strategy that includes targeting key decision makers overseas, developing country-specific lobbying efforts, and exploiting upcoming international candidacies? Just which countries have or will be offered Australia's support for their candidatures or offered any other inducements in exchange for a vote to keep Kakadu off the world heritage in danger list? Why is it proposed that our diplomatic service should be engaged in such shabby deals?Mr Tuckey interjecting—10000SPEAKERMr SPEAKER—Minister for Forestry and Conservation! The Minister for Forestry and Conservation is warned. I am not sure whether members on my right heard the speaker above the hubbub. I have warned the Minister for Forestry and Conservation. I call the Minister for Foreign Affairs.2837Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—This gives me the opportunity to correct the years 1999 and 1998 for the two years I mentioned in my earlier answer. The Department of Foreign Affairs and Trade operates in Australia's national interest, and it is our national interest that the Jabiluka mine is able to proceed. I said, in answer to an earlier question, that I thought a thousand jobs—from memory—would be created by this project, and I see that I was right. But, over and above that, an estimated $12 billion will be earned from this mine for Australia—$12,000 million.The honourable member for Kingsford-Smith thinks there is something wrong with the Department of Foreign Affairs and Trade developing a strategy to ensure that this perfectly legitimate, safe, and properly considered project be kept off the world heritage in danger list. We are absolutely determined to prosecute this case, as I said earlier, in a principled, but determined, way. As we do when we lobby for Australian interests, and as we did during the climate change negotiations, we will promote Australia's interests with a considerable degree of energy and—I very much hope—success. We have nothing to apologise for, nothing to be ashamed of, and there is absolutely nothing unprincipled about promoting Australia's national interest.28372837Secker, Patrick, MPMr SECKER848BarkerLP10—My question is addressed to the Minister representing the Minister for Family and Community Services. Could the Minister inform the House how many new Centrelink offices will be operating in rural and regional areas this year and advise how this compares with the quality of service delivery provided under the former Labor government? What other improvements and benefits do Centrelink offices offer to Australian families?2837Truss, Warren, MPMr TRUSSGT4Wide BayNPCommunity Services10—I thank the honourable member for his question, which gives me the opportunity to again reinforce the initiatives that Centrelink is taking to ensure that its services are provided to all Australians, including those in rural and regional areas. At least 100 new services will be established over the next few weeks, including 74 newly appointed agents. There will be a range of other services as well to comprehensively add to the network of facilities that Centrelink offers to make contact with its clients so that people are able to access government services. This government has done more than any to ensure that services in rural and regional Australia match as widely as possible what is available in the cities.Centrelink recognises its particular responsibility as the service delivery agency on behalf of the government to ensure that its services are available not just in the capital cities but also in the small towns, including the small towns in the honourable member's electorate. I welcome the representations I have received from members in country electorates who are conscious of the importance of ensuring that their constituents have access to these services in a personal way. That is a part of Centrelink's new service model—the way in which personal contact can be maintained with the six million clients whom the organisation serves. This extension into rural and regional areas marks a major advance in ensuring that all Australians have access to government services.28372837Snowdon, Warren, MPMr SNOWDONIJ4Northern TerritoryALP00—My question is addressed to the Minister for Workplace Relations and Small Business. Minister, will you rule out establishing a new minimum conditions award for the no disadvantage test?2838Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—The government's policy in respect of the no disadvantage test has been established in the Workplace Relations Act and I think the arrangement we put in place is very fair and reasonable. It has been accompanied by charging the commission with the responsibility to also look after the interests of the low paid, particularly in the living wage case. The fact is, when you compare what we have done in the last three years with what Labor did over 13 years, you will see that during our government people on low incomes, in particular, have enjoyed a far more benign economic environment than Labor was ever able to put in place. Labor's record was the highest level of unemployment since the Great Depression.PE4BEAZLEYMr Beazley—On a point of order, Mr Speaker: the minister is clearly way off the point of the question. The question asked him whether or not they were going to establish a new test, simply that.10000SPEAKERMr SPEAKER—The Leader of the Opposition will resume his seat. The minister will respond to the question.WI4Mr REITH—In the three years we have been in government, we have seen an increase of five per cent in the real wages of people who are low paid and a wages system with the commission having responsibility for looking after the interests of the low paid. In conclusion—IJ4SNOWDONMr Snowdon—On a point of order, Mr Speaker: the minister has not responded to the very direct question which has been asked of him. Would you direct him to do so, please.10000SPEAKERMr SPEAKER—The minister has indicated that he is winding up his answer and I invite him to do so.WI4Mr REITH—I have been asked what our intentions are. Our intentions are to continue to look after the interests of the low paid. In respect of the specifics of our policy, unlike the opposition, we had a forward looking progressive policy, which we announced in the last election, and that is the policy we will be implementing.28382838Barresi, Phil, MPMr BARRESIZJ6DeakinLP10—My question is addressed to the Minister for Foreign Affairs. Is the minister aware of the general election which is scheduled to take place in Indonesia on 7 June 1999, an election which will be a massive undertaking involving 120 million voters? Can the minister inform the House what the government is doing to assist Indonesia with these forthcoming elections?2838Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—I thank the honourable member for his question. It is a substantially more intelligent question than the previous two questions I have been asked in question time, not that that would be difficult.10000SPEAKERMr SPEAKER—The minister will come to the question.4G4Mr DOWNER—There are indeed elections in Indonesia due to be held on 7 June. These free and fair elections are critical to ensuring stability of Indonesia and enabling that country—the world's fourth most populous country—to become a true, open, liberal democracy. Through the Australian Electoral Commission, Australia will provide technical assistance to Indonesia for the preparations and for the conduct of the election. The commission has so far identified some broad areas of initial Australian assistance: electoral administration, including support for the identification of sites for registration and polling, ballot production and distribution, polling station layout and configuration and results compilation. The commission has also identified assistance to domestic monitoring groups to facilitate development and adoption of a common monitoring methodology.It is the view of the government, in the light of the importance of these elections not just to Indonesia itself and to ASEAN but also to Australia, that Australia should provide additional assistance over and above the assistance I have identified. Further proposals will be considered, including with the United Nations Development Program (UNDP), which has the carriage of international assistance for these elections.We have also sought support for the UNDP effort in Indonesia from the United States, the European Union and Japan. I know that the United States and Japan and I also hope the European Union are going to provide considerable assistance to make these elections not only successful but also to ensure that Indonesia becomes the world's third largest operating democracy.28392839Lee, Michael, MPMr LEEMG4DobellALP00—My question without notice is directed to the Minister for Education, Training and Youth Affairs, and it again concerns the establishment of Greenwich University on Norfolk Island, the holiday isle. Is today's statement by Greenwich University correct which says:At all times the Commonwealth and its agencies were fully informed of, and involved in, the process. Greenwich University is now an autonomous self-accrediting university.Minister, isn't it a fact that the Administrator of Norfolk Island could only give his assent to the legislation creating Greenwich University under instruction from the Commonwealth minister for territories? Minister, isn't it also correct that your department was aware of this issue for more than a year, was consulted by the minister for territories, and raised no objections? If the university fails the quality tests which you are now seeking to impose after the horse has bolted, what power do you have to stop it continuing to advertise itself in Australia and throughout the world as a `fully accredited Australian university'?2839Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—It is interesting to see the shadow minister's interest in Norfolk Island and its educational system. I am aware of the press release issued by Greenwich University. That press release contains a number of incorrect statements. It is incorrect to say that my department was fully informed and involved in the process leading to the establishment of Greenwich University.I understand that in the period during which Norfolk Island was responsible for the establishment of Greenwich University in Norfolk Island, there were some inquiries of my department at an informal and junior level. I am not aware of any significant documentation relating to Norfolk Island in my department.Mr Lee interjecting—10000SPEAKERMr SPEAKER—The member for Dobell.BT4Dr KEMP—As a consequence, it would be quite inaccurate to say, as the press release says, that the establishment of Greenwich University was under active consideration by my department. There was no decision to be taken—Mr Lee interjecting—10000SPEAKERMr SPEAKER—The member for Dobell.BT4Dr KEMP—in relation to Greenwich University. My department was not required to give approval or otherwise for the establishment—Mr Lee interjecting—10000SPEAKERMr SPEAKER—The member for Dobell chooses simply to ignore the chair, and I warn him.BT4Dr KEMP—As I said yesterday to the House, the minister responsible for education in Norfolk Island has requested the Ministerial Council on Employment, Education, Training and Youth Affairs to consider giving approval to Greenwich University to operate on the mainland of Australia. In the course of considering that application, the Commonwealth and other states and territories will be satisfying themselves or otherwise that the procedures are in place to ensure the quality of the courses offered by that institution. However, I repeat my advice and caution to students relating to Greenwich University that if they are proposing to select courses at that university they should ensure that those courses are of quality and will provide them with the kind of instruction that they are seeking.28392839Macfarlane, Ian, MPMr IAN MACFARLANEWN6GroomLP10—My question is addressed to the Minister for Aged Care. Can the minister inform the House how the coalition's `safe at home' initiative is benefiting individual older Australians, including those in the seat of Groom?2839Bishop, Bronwyn, MPMrs BRONWYN BISHOPSE4MackellarLPAged Care10—I thank the member for his excellent question, because I know how concerned he is about people who will remain at home and need means of communicating in the event that they perhaps take a fall or have some crisis. Accordingly, the government has introduced a trial `safe at home' initiative in which we are investing half a million dollars with 13 organisations across Australia. They will focus on 270 individual Australians who will benefit from this trial. The trial is designed to have this help in place 24 hours a day for 365 days of the year. It is a very important trial, and I might add that this is in addition to the $280 million over four years that is being committed to the stay at home package. We in the government believe that the quality of life for individuals who need help in their home is better when they are able to stay home with access to care that may be able to be brought to them. And we believe that the evaluation of this trial will be an important new development in allowing more Australians, as they age, to remain in their own home with dignity and independence.28402840Kernot, Cheryl, MPMs KERNOTXW4DicksonALP00—My question is to the Minister for Transport and Regional Services. Minister, isn't it now a fact that the Chairman of the Civil Aviation Safety Authority, Mr Dick Smith, has had his allegations on the class G airspace trial directly contradicted or rejected by the Bureau of Air Safety Investigation, by the RAAF, by the major airlines, by pilots, by CASA's own pilot council, by air traffic controllers and by flight service operators? Minister, how do you intend to deal with this public loss of confidence in Mr Smith across the entire aviation industry? Do you and the government still have full confidence in Mr Smith?2840Anderson, John, MPMr ANDERSON4K4GwydirNPTransport and Regional Services10—I thank the honourable member for her question. The member for Dickson has been very fond of trying to claim in this place in recent times that things have never been worse at CASA, that she has no confidence in CASA, and she apparently believes that we all ought to be thoroughly concerned about the way things are in aviation safety in Australia. The member for Dickson has evidently forgotten the years of the previous Labor government. No, she was not part of it.5I4McMULLANMr McMullan—We are getting a history lesson from the minister when we want to know what his confidence is in Mr Smith. That is the clear question. This is not relevant.10000SPEAKERMr SPEAKER—Does the Leader of Opposition Business have a point of order?5I4McMULLANMr McMullan—That is right. I am raising the question of relevance. This is not relevant.10000SPEAKERMr SPEAKER—The member will resume his seat. The minister has the call. The minister is responding to the question.4K4Mr ANDERSON—I think it is really quite relevant to consider that in the seven years that Labor oversaw the Civil Aviation Authority—before they replaced it with CASA—they had four different chairpersons.CE4O'KEEFEMr O'Keefe—Mr Speaker, again a point of order according to the relevance section. If he is not prepared to give a statement of confidence in Mr Smith, he might as well sit down.10000SPEAKERMr SPEAKER—The member for Burke will resume his seat. The minister has the call. The minister is responding to the question. Whether or not the minister responds in the way—Opposition members interjecting—10000SPEAKERMr SPEAKER—The member for Batman and the Leader of the Opposition! I was responding to the member for Burke. The minister has the call. The manner in which the minister answers the question is the minister's prerogative. I will endeavour to ensure that he gets relevant to the question. What he has said thus far does not rule the answer irrelevant to the question.4K4Mr ANDERSON—Four different chairpersons in seven years, four different chief executives and six heads of safety regulation. Quite frankly, the shadow minister wants to take us back, it would appear, to those sorts of days of instability. Aviation safety is an extraordinarily important area—Ms Kernot interjecting—10000SPEAKERMr SPEAKER—The member for Dickson!4K4Mr ANDERSON—Issues like airspace management are, by definition, extraordinarily complex. There are from time to time professional differences of opinion about how they might best be taken forward, but the areas of agreement— Ms Kernot interjecting—10000SPEAKERMr SPEAKER—The member for Dickson! The minister will resume his seat. The member for Dickson persistently interjects and persistently ignores the calls from the chair. She is warned! The minister has the call.4K4Mr ANDERSON—If I can conclude, it will be short and sweet. The fact is that something as sophisticated and technically complex as airspace management does sometimes result in a difference of views about how it might be best executed, but the things that Australia's aviation safety leaders agree on far outweigh the areas of difference. I see no reason at all to move from my clear statement of support for the people who are responsible for aviation safety in Australia, including Dick Smith.28412841Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—My question is to the Minister for Employment, Workplace Relations and Small Business. Is the minister aware of a report produced by the Office of Small Business in his department, which indicates that the proportion of small to medium sized businesses with no unionised employees grew to 91 per cent in 1996? How does this report reflect on the relevance of unions to the small business sector? What is the government doing to help small businesses get on with the job of creating employment?2841Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I thank the member for Latrobe for his question. That study does reveal some very interesting statistics. As the member says in his question, we have seen quite a jump in the number of firms with no unionised employees. In fact, in one year alone it went from 88 per cent to 91 per cent—that is over the 1995-96 period—which, I must say, does speak volumes about the relevance of the trade union movement, particularly within the small business community.The political consequence of that is that we have 52 per cent of the frontbench on the Labor Party side who are ex-trade union officials but, in the vast mass of the small business community, people who once were in unions are getting out of unions. Why are they getting out of unions? They are getting out of unions because they are irrelevant to what most employees and most small businesses are trying to do—that is, work sensibly together to try to improve their business so that they have more take-home pay, more profits in their business and more investment in expanding their business, thereby generating growth in the Australian economy.The fact of the matter is that, on this whole issue of unfair dismissal, we have yet another symptom of the problems within Labor's ranks, and that is that they are so overwhelmed by the trade union interest they are simply incapable of understanding the circumstances facing small business, the demands on small business and what we as a parliament need to do to encourage small business.In conclusion, the Australian workplace industrial relations survey might point to one reason why some people have been leaving unions. That 1995 survey showed that a sense of insecurity is more prevalent amongst unionists than non-unionists regardless of which sector they are employed in, and that workplaces with union delegates were relatively more insecure than those without. My advice is that this is largely a result of the negative attitudes presented to workers by unions, which is the old traditional `them versus us' attitude. I suppose it is also the case that in some of the unionised industries we have had historically high levels of industrial action.It is a good point that the member makes in his question, and that is that the trade union hierarchy today is virtually irrelevant in the small business community. Therefore, the explanation for Labor's disinterest in small business is that 52 per cent of their frontbench, and something like 17 or 19 of the 20 senators to join the Labor Party in recent years, have all been trade union officials or ex-party secretaries. They are unable to see the national interest. They are certainly unable to see the interests of small business and, as a result, they are opposed to sensible measures which would help create jobs.ZD4HOWARDMr Howard—Mr Speaker, I ask that further questions be placed on the Notice Paper . Questions to the Speaker284228422842Mossfield, Frank, MPMr MOSSFIELDMK6GreenwayALP00—Mr Speaker, has your attention been drawn to a misleading article in the `Stay in touch' column of today's Sydney Morning Herald which alleges the sale to MPs and their staff of old computers from MPs' offices instead of giving them to needy schools? As the only contact I have had with the department is a letter two weeks ago to say that computers would be given away, and a letter last week to say that they would not be, is this matter one that should be referred to the Privileges Committee, as the allegations affect every other MP in this place as well as me?2842Mr SPEAKERMr SPEAKER10000PON/A10—The member for Greenway raises an issue that is somewhat outside my jurisdiction in that the computers referred to are ones that are in electorate offices, from memory, not in Parliament House offices. I will nonetheless instruct my staff to investigate the matter and get back to him. If that is not satisfactory, clearly he can raise the matter again.Personal Explanations284215:07:002842Morris, Allan, MPMr ALLAN MORRISFI4NewcastleALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the honourable member claim to have been misrepresented?FI4Morris, Allan, MPMr ALLAN MORRIS—Yes.10000SPEAKERMr SPEAKER—Please proceed.FI4Morris, Allan, MPMr ALLAN MORRIS—In question time today the Minister for Aged Care made reference to phone calls to my office and material delivered to her. In so doing she implied that: (a) I had failed to respond; and (b) responded with one page.SE4BISHOPMrs Bronwyn Bishop—No, press release and attachment.FI4Morris, Allan, MPMr ALLAN MORRIS—Attached was one page. Last Tuesday I was in caucus until lunchtime. When I returned to my office I became aware of the request. I supplied to the minister's office before question time that page, plus five more pages of ATO advice. Also, by way of clarification, on the day before—the Monday—the minister had refused to allow that material to be tabled in the chamber.10000SPEAKERMr SPEAKER—The member for Newcastle has made his point and will resume his seat.Documents28422842Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—Papers are tabled as listed in the schedule circulated to honourable members. Details of the papers will be recorded in the Votes and Proceedings .Ministerial Statements2842284215:09:002842Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—I present for the information of honourable members the second report on the deaths of Australian based journalists in East Timor in 1975, prepared by Mr Tom Sherman AO. I watched the report on the ABC's Foreign Correspondent program on 20 October last year concerning the deaths of five Australian based journalists at Balibo in 1975. While not usually persuaded by journalistic crusades, I was struck by the account presented by the alleged new eyewitness to the deaths of the journalists. Having taken a transparent and open attitude to this matter over the years, I felt that further inquiry into this new account was justified and that I owed it to the families to see that all available information relating to the deaths of their loved ones was thoroughly examined.I therefore asked Mr Sherman to look again at the deaths of the five Australian based journalists. Mr Sherman's brief was to evaluate any information about the deaths emerging from or relevant to the Foreign Correspondent program which was in addition to that covered in his first report. As the new information related to the deaths of the journalists at Balibo, Mr Sherman did not look again at the death of Roger East, nor was he was offered any new information on the death of Roger East.As I did when I tabled Mr Sherman's first report in 1996, I emphasise that the govern ment has been thoroughly transparent on this issue. At the beginning of the second evaluation I said that Mr Sherman would have full access to all material held by the government on this matter. Mr Sherman did ask for access to a variety of material, including relevant intelligence material and interviews with a number of former government officials who worked with this material. The government cooperated fully and respected Mr Sherman's independence at all times. Mr Sherman sets out his account of the information from government sources in chapter 5, and his conclusions about it are on page 139. The government is also giving favourable consideration to the publication of documents relating to this historical period and a final decision will be made in due course.In his letter to me covering the second report, Mr Sherman states that he recognises the government may be concerned that his references to intelligence material disclose details of sources and methods relating to the gathering of intelligence. The government takes disclosure of such information very seriously, and we have therefore decided not to include in the tabled version of the second report some references which could disclose sources of intelligence. These references are a very small component of Mr Sherman's report, and their length is apparent in paragraphs 5.28, 5.29 and 5.30. While the government regrets having to take this action, it does not affect the conclusion Mr Sherman makes about the intelligence material or his overall findings about the deaths.I thank Mr Sherman for the care and attention he has devoted to this important task. I want to express the government's appreciation for the manner in which he has discharged his responsibilities. The conclusions of Mr Sherman's second report are in chapter 8. Mr Sherman concludes that the Balibo 5 were killed at Balibo early in the morning of 16 October 1975, probably before 7 a.m.; by an attacking force consisting of both Indonesian troops and anti-Fretilin East Timorese under the control of Indonesian officers; in circumstances of continuing fighting between attackers and defenders or at least before the attackers had secured their objective.Contrasting with the hearsay accounts of the deaths in the l996 report, the bases for these conclusions include the accounts of three individuals who claim to have witnessed at least one of the killings. I am not going to comment in detail on Mr Sherman's findings as the report speaks clearly enough for itself, although I would note that he concludes that the evidence available on the Balibo killings is quite inconsistent, particularly as to the circumstances of death.Mr Sherman produced his report on the basis of information available outside Indonesia. The government asked at the highest levels of the Indonesian government that Mr Sherman be allowed to visit Indonesia in conducting his evaluation. The Indonesian government did not agree to this request, and we cannot compel it to do so any more than it can compel the Australian government to do something which we might or might not want to do.Nevertheless, I have again written to my Indonesian counterpart, Mr Ali Alatas, asking him to pursue any further information which would throw additional light on the conclusions reached. In the letter I also ask again for any additional information the Indonesian government is able to provide us on the death of Roger East, whose killing was a concern of Mr Sherman's first report. I am happy today to table that letter along with the second report.In its approach to the second report, as with the first, the government has remained concerned for the next of kin. Officers of the Department of Foreign Affairs and Trade have provided copies of the report to the journalists' relatives and invited their questions and comments on it. The Australian government deeply regrets the deaths and remains willing to receive any credible new information about them. In this context, and as part of our transparent approach, the government would be favourably disposed to proposals for a parliamentary inquiry on this matter should the parliament wish.15:15:002843Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—I rise to speak briefly in response to the statement by the Minister for Foreign Affairs concerning the second report of Mr Tom Sherman into the circumstances of the deaths of the five Australian based journalists at Balibo, East Timor, on 16 October 1975. Unlike the minister, the opposition has not had the opportunity to conduct a detailed analysis that such a document requires. As a consequence, I do not propose to speak about the detail of Mr Sherman's inquiry and findings. Suffice to say that I note his conclusion that the evidence available to him is inconsistent but leads to conclusions broadly similar to those he reached in 1996.More than 2½ years ago, following the first Sherman report and the Indonesian government's refusal to reopen the issue, Prime Minister Howard said it was not clear what further action would be in the national interest. Although the government did not say so explicitly, the case was effectively closed. That, of course, was not the view of the relatives of the dead journalists, nor was it the view of groups such as the International Commission of Jurists, which developed a strong critique of the limitations of the Sherman inquiry, his analysis and his findings.Then last year we had the revelations published in August by Mr Hamish MacDonald of the Sydney Morning Herald and the ABC Foreign Correspondent program in October that triggered the new inquiry. When the minister announced this further inquiry, I said it was unlikely to satisfy the families of the dead journalists. I understand that Mrs Shirley Shackleton has received a copy of this report only within the last hour. I think she could have received an advance copy in a much more timely fashion. I suspect that when the families do get to read the report they will not be satisfied. Indeed, it does not appear to take us very far forward at all.I note that the Minister for Foreign Affairs has again written to his Indonesian counterpart, Foreign Minister Ali Alatas, seeking cooperation from the Indonesian government in providing further information which would shed light on the deaths of the journalists. I do not think the minister has done so with much hope of a positive reply. Minister Alatas has already said that the Indonesian government considers the case closed and that a further investigation would only open old wounds. In his letter Mr Downer expresses regret that Australia is still obliged to raise what he describes as unfortunate incidents.What he should have said is that Australia cannot consider the case closed without a full account of the events at Balibo from the Indonesian side, including the role or otherwise of the present minister for information and others in the Indonesian military chain of command. He should have told Minister Alatas that it is not a case of reopening old wounds; it is a case of dealing openly and frankly with an enduring wound in the bilateral relationship, a wound which will not heal without full openness, transparency and fundamental accountability from the Indonesian side.I also note the minister's statement that the government is giving favourable consideration to the publication of documents relating to this historical period. I have already made clear Labor's position on this matter. We support a comprehensive declassification of historical records relating to East Timor, in respect of not only the Whitlam Labor government but also the Fraser government. With regard to Balibo there should be a comprehensive release of documents which shed light on the Whitlam government's knowledge of the events prior to and after the killings and the Fraser government's subsequent investigation.We now know from the documents revealed in the Sydney Morning Herald that Australian officials were aware in October 1975 and subsequently that Indonesian troops had entered East Timor and, indeed, that the attack on Balibo was orchestrated by the Indonesian military. Yet, in spite of this, the 1976 Taylor inquiry merely reported denials of Indonesian military involvement in the attack on Balibo. Mr Taylor, and other officials—including, presumably, the then Minister for Foreign Affairs, Mr Peacock—knew that these denials were lies but they did not dispute them publicly and a seriously deficient and misleading report was tabled in this parliament.Some 23 years on, today's report has not taken us very far in understanding what happened at Balibo. We may never know the whole truth but no-one can say the case is closed. This has been a running sore in our bilateral relationship with Indonesia. Together with the broader issue of East Timor, it has been a cancer which has eaten away at the bilateral ties successive governments have worked so hard to build. It has been of enduring concern to the relatives of the deceased. A satisfactory resolution of the matter is very long overdue.Matters of Public Importance2845284510000SPEAKERMr SPEAKER— I have received a letter from the honourable member for Lilley proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the Prime Minister to take any action on the imposition of the full 10 per cent GST on Australian families and the elderly who purchase pre-paid funeral services.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—15:20:002845Swan, Wayne, MPMr SWAN2V5LilleyALP00—From the cradle to the grave, the GST will tax every Australian every day of their lives. It is not supposed to start until July 2000 but already we have evidence of its being applied. It is not yet law. It has not yet passed the Senate. It is not due in terms of legislation to take effect until July 2000, yet it is being applied to funerals in New South Wales as we speak.Make no mistake. This is a death tax—nothing more, nothing less. We have a gentleman in Newcastle who is paying for a prepaid funeral an additional $304. This is real, this is happening, but what do we get in this House today? What sort of reaction do we get to this contract and the evidence of $304 GST applied at the full 10 per cent rate? We are told by the Minister for Aged Care—the compassionate face of the Howard government—that she posted a letter to the Treasurer. But has the Treasurer taken any action? Of course not.Why has this occurred? Is it because the funeral director is unscrupulous or making profits? No, the Funeral Directors Association has been advised by the Australian Taxation Office that this can be applied. This occurred in January. They told the Funeral Directors Association that its members should charge the full 10 per cent GST.Keep that figure in mind: not the three per cent that the Prime Minister mentioned, not the four per cent that the Prime Minister mentioned—the full 10 per cent without any of those cost reductions that we hear about from the government in this House day after day. No costs were passed through when this calculation was made. This very day, when the ATO hotline was rung, what were we told? We were told that they did not know what funeral directors should be charging, so they should ask their accountant. They might as well ask their accountant because the Prime Minister cannot tell this House. The Prime Minister cannot tell this House: what are funeral directors the length and breadth of this country supposed to do?Just how arrogant and out of touch can this government become? If the Prime Minister spent some time in the real Australia—around Newcastle, for example—instead of going to Norfolk Island or living in Kirribilli, he would know that every Australian knows that the 10 per cent will be applied without many of the benefits of the pass-through that this government is talking about. The GST will be applied in full in most cases. The cost reductions will not be passed through. The inflation effect will not be 1.9 per cent. When it comes into effect funerals will go up more than the three or four per cent that the Prime Minister is talking about. The evidence that we have in this House today is the 10 per cent on the contract that I have just shown the House. That is the evidence.What does the government's own detail, which was provided to the public, say? It says that if you enter into a funeral contract after 2 December 1998 the total amount paid is subject to GST unless the funeral is before 1 July 2000. That is what the Taxation Office tells people. We know what the hotline is telling people, but we cannot get a skerrick of commonsense from the Prime Minister or from the Minister for Aged Care. AAP reported that, on 8 February, a spokesman for the Treasurer, Mr Costello, said:Anyone asked to pay the GST upfront should contact local fair-trading officials.Fair dinkum! We did not get that answer in the House today from the Prime Minister or from the Minister for Aged Care—that compassionate face of the Howard government. She posted it to the Treasurer.What are the fair trading officials doing about something that is illegal? What action is going to be taken to get this gentleman's money back and protected? Hundreds of thousands of Australians are affected by the approach of this government. Do not blame the funeral directors. Blame the government. Blame the minister. Blame the Prime Minister. It is not the fault of the Funeral Directors Association that the government are out there with their hands in their pockets every minute of the day. If the funeral directors are confused, we know why. This is the diagram and the advice that the ATO hands out—a spaghetti diagram that you need three degrees to understand. No wonder this is going on. What is happening is that Australians are being ripped off day in, day out.It is not just funerals. This government is sneaking money out of the pockets of families and the elderly in 100 different ways. They are taxing people every which way. With this tax every step you take, every breath you take, they will be taxing you: when you are born, when you have the christening, at school on the textbooks and the uniforms and, finally, not just on your groceries but when you die. We have the evidence in this contract in the House. The bill is not yet law and yet it has been applied at the full 10 per cent rate. That is the advice that the ATO gave to funeral directors. No wonder in this country there is very grave suspicion and very grave concern about the application of the GST.We have been raising many of these issues in the House, and what do we get from the other side? Arrogant sneers. When we asked a question in this House about the application of a 10 per cent GST to the fees charged by marriage celebrants, what did we get?8I4MARTINMr Martin—Arrogance!2V5Swan, Wayne, MPMr SWAN—Arrogance. They are completely arrogant and out of touch. Go and explain to the 42,500 couples each year in this country that have a civil ceremony that when they get married you are going to charge 10 per cent which you will not be charging for a church ceremony. Go and explain that to them. Go and explain how much in touch you are with the modern family. This government claims they stand for family values when in every action they take, every step they take, they rip families apart: the 10 per cent tax on food, the 10 per cent tax on clothing, the 10 per cent tax on funerals, the 10 per cent tax on everything they do.Let us look at the latest example which has been teased out of the government. The government proposes to input tax rents. That is, if you rent an apartment or a luxurious house at Kirribilli or a luxurious house or a mansion at Sanctuary Cove you are only input taxed. That is, you do not pay the tax on your rent. But if you live in a mobile home park or a long-term caravan park at Caloundra or Maitland the GST is applied to your rent. Why is it that if an executive rents a mansion in Vaucluse, Kirribilli—dare I say it?—or Sanctuary Cove, the GST does not apply to their rent, but it applies to the most vulnerable in the community living in mobile homes and caravan parks?You will rue the day that you put that through this House. Studies have shown that 43 per cent of the people living in caravan parks and in mobile homes are on incomes of less than $300 dollars a week. They are paying the GST. If you earn a couple of million a year and you are living in your company's leased mansion in Vaucluse, no GST. If you happen to live in a retirement complex and you are not in the nursing home or the hostel but you share the dining room facilities with someone who is from the hostel or the nursing home, you will pay the full GST but they will not. You will set Australian against Australian in our retirement villages, in our mobile homes and right around the country with this unfair tax.How does the government justify an average price increase of three to four per cent for funerals—the figure that was quoted today by the Prime Minister? They say that, because the price of videos, televisions and other luxurious items are going down due to the abolition of the wholesale sales tax, prices will go down, all the benefits will be passed on and we will end up with this magic pudding inflation figure of 1.9 per cent. That is an outright lie. It is simply untrue. It is not credible. Australia does not believe it. It does not take a great brain to work out that there will not be a 100 per cent pass-through of all the so-called benefits; that the 1.9 per cent inflation claim is nothing but an empty dream or, more brutal, very cruel propaganda.The savings will not be passed on in full for a whole lot of legitimate and illegitimate reasons, one of which will be profiteering. So the 100 per cent pass-through that justifies the 1.9 per cent inflation rate is nothing more than complete fantasy.So what will the government do about it? We heard the stories over Christmas. Costello was going to send in the GST police; he was going to have $10 million fines; there were going to be GST police all over the country making sure that the 100 per cent pass-through came through. Well, we have had some pretty bad news, haven't we? They are going to employ 40 extra inspectors to police the 1.4 million businesses in the country that are supposed to be passing on the benefits of reductions in the prices of items like televisions and videos. What a joke! And these people will not even start operating until 1 July. There will be 40 extra staff to cover 1.4 million businesses. For every business to be checked in a 40-hour working week, every compliance officer would have to be able to spend just 4.1 seconds policing each business.How many minutes and hours have we spent in this parliament trying to get an answer out of the government about whether a GST applies to weddings, funerals and nursing homes? And we have not got an answer. But somehow 40 extra staff will come up with an answer and make sure that we will get, in this country, 1.9 per cent inflation out of a 10 per cent GST. Anyone who goes to the supermarket knows that that is just a nonsense. People on this side of the House actually go to the supermarket, unlike those on the other side of the House, so we know that the price of groceries has been outstripping the inflation rate for years. But they have come up with 1.9 per cent.The other great fallacy concerning the Costello GST police is that they are only empowered to go and find out whether reductions from the abolition of the wholesale sales tax have been passed through. They are not allowed to go out and find where the other benefits have not been passed through. They are not allowed to go out and ask whether the benefits have been passed through as a result of a reduction in the price of diesel. The GST police will not be looking at that. They will be looking only at the pass-through following the abolition of the wholesale sales tax. They will not even be looking for anything like the most significant element of the so-called pass-through.What we do know—and organisations like St Vincent de Paul know it only too well—is that the pass-through will not be there. Low and middle income earners will be slugged. There is one thing about this government—you see it when you look at what they have done to people in mobile homes, what they are doing with weddings and funerals, what they are doing to retirement complexes—and it is very simply this: this government is very, very weak in controlling the strong and very, very strong in controlling the weak. They have produced a package which is bloodless for some but very bloody for others. All these battlers will be paying the full GST to fund the tax cuts for all the millionaires over there. Over half the tax cuts go to the top 20 per cent of income earners. Less than half are shared out amongst the bottom 80 per cent of income earners. Doesn't that just sum up so much of what this government does in so many policy areas?Of course, St Vincent de Paul have blown the whistle on them. This is what they said in their submission to the Senate inquiry:The assumption that the abolition of WST will directly benefit all Australians is false. Very little of what low income earners purchase is subject to Wholesale Sales Tax (WST). That is all the GST police will be following around—if they have any time. The submission continued:Even on products which do attract WST, there is no guarantee prices will drop.Here is the rub:Experiences in New Zealand and Canada and information supplied by the St Vincent de Paul Society in both countries confirms a failure to estimate the real impact of a GST. In both cases the actual burden has been much higher . . . The transfer of wealth from the poor to the wealthy contained in the current proposals is unjust, inequitable and un-Australian.That is why we can conclude that this government is very, very weak in controlling the strong. Look at the reluctance, as demonstrated in this package, to do anything about tax evasion! And it is very, very strong in controlling the weak. It has to be strong in controlling the weak because the whole tax package will create a slush fund for the government's rich friends. This government has only one favourite minority. It is not the unemployed, it is not people living in mobile homes and it is not the aged—it is the wealthy. There is one favoured minority—the wealthy—and you can see it written all over their tax package. St Vincent de Paul concludes their submission by saying this:. 54% of low income earners (40% of Australians) are in deficit;. low income earners spend about 27% of their income on food and a further 34% on essentials, utilities, clothing, etc.That is 61 per cent on food, clothing and the essentials of life.A further 30% is spent on housing . . . Australians spend a far greater proportion of their income on the necessities of life, and, for that reason alone, to apply a figure of 1.9 per cent to the compensation package is obscene. This is a government which will give $400 a year to a pensioner, $340 of which they would have got already. So it means the only GST compensation for a pensioner will be $60 a year. That is not even enough for a tin of pet food each week.They are basically robbing low and middle income earners to give tax cuts to their rich mates. They want to produce a package which will change this country, which will overturn long-held Australian traditions, as the St Vincent de Paul Society has said, and make us a much more unfair and unequal community. Shame on you! (Time expired)15:35:002848Bishop, Bronwyn, MPMrs BRONWYN BISHOPSE4MackellarLPAged Care10—We have heard it all again—all the ranting and the raving that went on during the campaign, all the same old arguments that were trotted out before the last election in an attempt to make Australians think there was no need for tax reform. But, of course, the good, sensible Australian people are far more sensible than the Labor Party gives them credit for. The good, sensible Australian people saw through the bombast and the rhetoric. They saw through the misleading statements you have again tried to perpetuate that there was going to be 10 per cent on everything. That, of course, is an outright lie, and the Labor Party knows it. It is the same sort of stuff they were defeated on at the last election when they thought they could just trot out the lies that they did in 1993 when there was perhaps seen to be less need for tax reform as a whole than there was in 1996. The whole point of the matter is that the Australian people saw the need for tax reform.Why did we need tax reform? We spent a long time telling the Australian people in the last election why that reform was essential. Basically, it is because there is far too great an imposition on middle Australia, ordinary mums and dads with kids who are paying an enormously high marginal rate of tax, and there is no prospect of it being lowered—only a prospect of it being increased—unless we have tax reform. Therefore, this government took the very courageous step of saying it was necessary to introduce a GST to replace the wholesale sales tax: the ramshackle tax of the Depression era, the unfair and expensive to administer sales tax—the sort of tax that puts tax on toothpaste but not on a toothbrush, that puts tax on mineral water with bubbles but not on mineral water without bubbles, and a tax that is a heavy impost on the motor vehicle industry. It is a tax that is just ramshackle and out of date. We said that we would put in place a goods and services tax which would be a tax at the rate of 10 per cent and that we would have the minimum number of exemptions because that made it simple to administer and simpler for businesspeople to administer on a three-monthly basis.One of the things that we made quite clear was that where there was an overt and necessary need to declare something GST free that would be done. The shadow minister across the table said that he had not been able to get answers on the question of how the GST would apply, or was it not to apply, to segments of the aged care section of the community. We made it quite clear right from the beginning—as clear as crystal—that indeed nursing homes and hostels would be GST free; no GST would apply. We similarly made it crystal clear that there would be no GST on health and that there would be no GST on religious services.The matter being debated today dealing with the question of funerals was originally raised by Mr Morris and I said to him to send me the documentation and I could have a look at it. If needs be I would send it to the Treasurer and the Treasurer would deal with it. Following that, precisely what happened is that I rang Mr Morris's office on a number of occasions through my staff and we did not get anything at all until we got a press release. We got a single-page example of a prepaid funeral agreement. That agreement showed that that funeral director had quite wrongly put 10 per cent on the religious service. This, of course, was totally in breach of what had been said in the GST package that religious services were to be GST free. Accordingly, I forwarded the document to the Treasurer, and it is being sent to the ACCC to be examined.There is room for transitional arrangements; of course there is. When we say we are going to introduce a new tax system to start on a particular date in the year 2000, of course there is the need for transitional arrangements, and that is precisely what we have put in place. For those people who want to enter into those prepaid agreements they may do so, and they may make reasonable provision for what the GST may be. The Prime Minister said the other day that indeed it would be less than 5 per cent. If you look at the information that was provided prior to the election, you will see that, with regard to the area of activity within the community known as personal services, which includes the funeral services industry, it was expected that tax reforms would result in a reduction in industry costs of 5.9 per cent, on average. So it is quite clear that the transitional period can make that sort of provision, but not on religious services, for the simple reason that we said that religious services would be GST free. As I said, it was referred for that specific reason.When we come to look at the total tax reform package, what the Labor Party is doing, in cahoots with the Democrats, is to deny the Australian people their $13 billion worth of tax cuts. What that tax reform package is giving to ordinary mums and dads, who make up 80 per cent of the taxpaying population, is that no taxpayer will pay more than 30 cents in the dollar as top marginal rate. That is what is being promised. That is what the Labor Party, with all the fluff and bombast and phoney fury that we just saw from the member for Lilley, is trying to deny the Australian people.There was broad based acceptance that this country needed tax reform. If you take a look at the figures, we have a current income in this country of in the vicinity of $144 billion. About half of that is raised from PAYE taxpayers, pay-as-you-earn taxpayers. We immediately transfer out of that $69 billion or $70 billion around $54 billion in transfer payments for social security and social welfare payments. If we are going to be able to go on and afford to pay for those things which we need in our community—because we believe that individuals are entitled to have a standard of living that comes with dignity and that is why we have those programs—and if we as a nation are going to be able to afford them, we need to reform our tax system so that we are no longer putting the burden on that middle income range of mums and dads with kids who are struggling to make ends meet.When we first came into power, the first thing we had to do was get rid of that hidden $10 billion black hole that had been left behind by Mr Beazley and his government of the day. We had to bring in cost-cutting measures in the most equitable way that we could so that we could put the country on a decent footing. We did it. We have brought down mortgage rates. We have put the fundamentals in this country in a sound position, and that has allowed us to be able to be a sound performing economy in a region where the economies of our neighbours have collapsed.If we had not had a change of government and if we had not taken those strong decisions, this country's plight would be like that of our neighbours. The sensible Australian people saw that Mr Keating was not the man to lead us as a nation towards the next century. The people saw that the policies that we offered were sensible. They saw the things that we offered by way of compensation to offset the effect on people who will not enjoy the full benefit of tax cuts—the four per cent increase in pensions, not after the impact of the one-off inflationary effect of 1.9 per cent has been felt but up-front so that people can be cushioned against it. At every turn care was put into ensuring that equity lay in the tax reform package.As we see in the Senate inquiries that are going on, there is an absolute attempt by the Labor Party and the Democrats to try and call witnesses which show doom and gloom and promote fear and loathing. That is the problem with an opposition that does not have any policies of its own. The only one it could offer at the last election was to increase the reach of the capital gains tax to affect those assets which have been grandfathered and were free of capital gains tax—the things that ordinary folk had inherited from their parents and the like.The good, sensible Australian people saw that the opposition had nothing to offer, that its policies were bankrupt. And nothing has changed, except that we have had Mr Tanner and also the member for Werriwa come out and say, `Here is a plan we have; here are some ideas. Let's debate them.' But they are certainly not the ideas of the members of the frontbench of the opposition where they are still looking at the trade union solutions, the trade union blight.Opposition members interjecting—SE4Bishop, Bronwyn, MPMrs BRONWYN BISHOP—I think we've seen lots of evidence.Opposition members interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—The member for Banks.SE4Bishop, Bronwyn, MPMrs BRONWYN BISHOP—The only thing that is dying around here is the trade union movement. That's dying. I guess that is why we have so many ex-trade unionists in here; they are about to lose their jobs otherwise.The long and the short of it is that we have introduced a fair tax reform package. We have introduced it right across the board. We have made provision for transitional arrangements such as the question of prepaid funerals, a difficult issue but nonetheless one that was addressed. To use scare tactics, fear and loathing—as the opposition is trying to do—to try and make older people fearful, to try and make older people think that there is something that is going to be difficult for them to handle when there isn't is, quite frankly, disgraceful. They are the sorts of tactics that they use because they have nothing to offer themselves—no policies, no imagination—except for two people on their own who are now becoming pariahs in their own party for daring to go against the sort of rhetoric and bombast that is being used by the other members of the frontbench.Mr Melham interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The member for Banks will be silent.SE4Bishop, Bronwyn, MPMrs BRONWYN BISHOP—The policies that we have put in place will allow compensation for the tax reform to take effect by way of $13 billion worth of tax cuts, by relieving the pressure on ordinary mums and dads who are now being taxed as if they were rich. That was the legacy of the Labor Party. It did not care about ordinary folk or the pressures on them and the fact that they were creeping slowly towards paying the top marginal rate.We have allowed for 80 per cent of Australian taxpayers to pay no more than 30 cents in the dollar top rate of tax. That, I have to tell you, is a tremendous accomplishment. It is a vote of confidence by the Australian people in the policies of this government and a vote of damnation for the rhetoric of the opposition, who failed to convince the Australian people with the rantings and ratings that worked for them in 1993. The simple reason is that, when we look at the balanced nature of the tax package, it does in fact remove those imposts of income tax and gives people more choice as to how they spend their money, and it replaces the ramshackle wholesale sales tax, introduced in the Depression era as a temporary tax. It had outlived its usefulness by many decades. We found, very simply, that we had a winner. The sensible Australian people voted for this government. We are determined to see that tax package put in place and to see fairness return to our tax situation.15:50:002851Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—Yesterday, in response to my question about the cost effect on funerals of the coalition's GST flat tax, the Prime Minister said two things. He said that members of the Labor Party had falsely claimed the GST would increase the price of funerals by 10 per cent, and he surprised many of us by saying that the cost of funerals would increase by less than five per cent. Today, in response to a question from the member for Lilley, the Prime Minister said his latest advice was that the increase in the cost of funerals caused by the GST would be three to four per cent. Perhaps if we keep asking questions on this matter, the funeral industry will become zero rated!As far as I am aware, this matter arose last week when the member for Newcastle took up the issue of a Newcastle funeral director charging 10 per cent GST on an existing prepaid funeral. As I understand it, the job of members of parliament is to raise issues raised by their constituents. I can quite understand why the honourable member was offended by the Prime Minister's implication that he, the member for Newcastle, had made a false claim.The member for Newcastle was simply raising the contract that one of his constitu ents had been forced to pay. The contract was charged at a full 10 per cent GST, not simply on religious services but on all the services. I urge the Minister for Aged Care, at the table, to go back and read the contract. She obviously did not understand it. Anyone who makes claims about expertise in small business, as the Prime Minister does, would understand that any theoretical advice he is getting about the reduction in the costs of funeral charges will not match up to the facts on the ground. Slippage, inadvertence or greed will mean that there are more likely to be contracts like the one cited by the member for Newcastle than the arcane modelling theories or wishful thinking being advanced by the Prime Minister's advisers.The minister's claim today that the contract that the member for Newcastle had referred to was only on religious services is simply wrong. She should go back and have a look at it. This is not a problem of one `out-of-control' funeral director, nor are Australian funeral directors in general responsible for this problem. The coalition government is responsible for this problem. I have another prepaid contract from a leading South Australian funeral director who is already advising people seeking prepaid funerals that they can charge clients GST. As the member for Newcastle explained last week, the funeral directors are basing their actions on advice from the Australian Taxation Office. The advice explaining GST transitional arrangements was issued as a result of a statement by the Treasurer on 2 December 1998 that all previous transactions would be exempt from GST, whereas transactions entered into after that date would be taxable. The advice, which extends to six pages, specifically indicates on page 5:If you enter into a contract after 2 December 1998 for a funeral, all the amount paid is subject to GST (unless the funeral is before 1 July 2000).Of course, the problem is that people pay their prepaid funeral contracts not knowing whether they will die before 1 July 2000.At the Senate GST inquiry held in Melbourne on 12 February, the funeral directors said, just as the member for Lilley stated in his remarks earlier, that they had been advised by the Tax Information Hotline that their members should include the GST component now and should be charging families 10 per cent or more. Quite understandably, the Funeral Directors Association said they were concerned that they were being asked to collect a tax that had not yet been enacted, and the association counselled its members to ignore the tax office advice. The inquiry was told that the GST would apply to funerals that occurred after 1 July 2000, including those prepaid after 2 December 1998.I have the Taxation Office's written advice here. For the coalition's information, it is Australian Taxation Office fact sheet No. TGST003. It says:If you have entered into a contract before 2 December 1998 for a funeral, then any payments you have made or will make will be GST-free until the earlier of:. an opportunity for review of the price arises before 1 July 2005, or. 1 July 2005.If you enter into a contract after 2 December 1998 for a funeral, all the amount paid is subject to GST (unless the funeral is before 1 July 2000).This is written advice, Minister, from the Australian Taxation Office—your Taxation Office, your government.People in a time of grief want nothing less than to be haggling about whether they should be paying an extra government tax. This advice may put some people in the Kafka-esque situation that, if they prepay a funeral after 2 December 1998, but die before the implementation of the goods and services tax on 1 July 2000, their families may need to enter into negotiations with the funeral directors to reimburse the GST the funeral director has put aside for the government. It may be even more complicated. The moneys are prepaid and deposited in trusts. If there is any doubt about how widespread this problem is, the minister should be aware that there is $600 million in prepaid funerals in Australia.This advice from the Australian Taxation Office is still on the Internet today—not yesterday; today. Nowhere in this advice does it say that funeral directors should reduce the cost to customers by savings or offsets to inputs. Moreover, according to the Adelaide Sunday Mail, not only is the Australian Taxation Office giving this advice but the Treasury confirmed that prepaid funerals would be back-taxed if the person died after 1 July 2000. Let me quote that article:A spokesman for the Department of Treasury in Canberra said: "If someone enters into a pre-paid funeral now, there's a good chance they'll die after July 1, 2000—Isn't that nice?and they'll be up for a GST charge".It is estimated the average family would be slugged an extra $500 on a standard funeral costing $5000. Some funeral directors had started including GST charges in prepaid funeral contracts.The retrospective tax has outraged the funeral industry, with the Australian Funeral Directors' Association slamming the move as "crazy".Crazy! There are powerful reasons, Minister, why the government should rethink this policy. They are best outlined by Mr John Ryan in his submission to the Senate GST committee. I will read a brief excerpt from his submission. It says:. . . we have requested advice if the GST is applicable to the original agreed amount ($5,000), the amount paid to the funeral director by the financial institution ($7,500) or the market value of the funeral ($8,000). We requested confirmation of a statement from a representative from Treasury, who was originally unsure of the answer but finally stated that $7,500 was the appropriate amount, and determined to be full consideration for the funeral. Does this amount include the GST component or can a funeral director pass the GST on to the estate of the family? In practice, this second round of collection from the estate may be difficult and time consuming due to finalisation of the estate. This would have an effect on the total consideration paid for the funeral and the date on which the consideration was collected.AFDA was advised by the Tax Information Hotline just as they outlined. The submission continues:It has to be emphasised that this is a problem for our members NOW as they are currently writing prepaid contracts and require clarification as to how the contracts need to be worded and costed to be fair and equitable to all parties.Our members need to be informed of the appropriate procedures NOW not in six to 18 months time. The old and unfunny joke about there being only two certainties in life, death and taxes, has now an even more painful truth to it. But what more could we expect from a government whose capacity to draft legislation is more reminiscent of Groucho Marx than of Sir Robert Garran?The Groucho Marx clause in the GST legislation will allow the government to deem the value of any good or service according to their fail-safe clause. It is like the famous scene between Groucho and Chico. The government in the form of Chico, and Groucho, in this case an unsuspecting electorate, are negotiating a contract for an opera singer. Groucho cites the first clause to Chico: `The party of the first part will remain the party of the first part.' Chico responds, `I no lika that clause', and Groucho says, `Scrap that clause', and so on all the way down the contract.SE4BISHOPMrs Bronwyn Bishop—That's not very sound, is it?WF6Danby, Michael, MPMr DANBY—Minister, why don't you have a look at section 155 of the GST bill—as Robert Macklin, one of your former advisers and a highly respected prime ministerial press secretary, explained in the Canberra Times last week? Because of the lack of time, I will be happy to table the document or I will send it over to you.I conclude by saying that the Treasurer, the Prime Minister and the Minister for Finance and Administration need to take this matter out of the hands of the Minister for Aged Care. This shemozzle with the GST and funerals will occur with other services. The whole issue should be dropped. I seek leave to table the document.Leave not granted.16:00:002853Lloyd, Jim, MPMr LLOYDIK6RobertsonLP10—It is obvious that the opposition certainly does not have any policies when they have to resort to Groucho Marx to provide their policies. The Labor Party does not understand small business. This MPI shows just how little they understand about small business and how it works. They have no policies, they have no directions, so the only thing they can resort to is scare tactics—scare the elderly, scare the vulnerable and don't worry about the facts and don't worry about what we as a government are achieving for Australia: the benefits to our economy, the benefits to small business, and the benefits from the decrease in unemployment.Who sets the prices now? When we walk around the supermarket or go to the general store, who sets the prices now? There is no big watchdog there. No-one says that that particular item will be X dollars and cents. I know, because I ran a general store and we used to look at our costs—what it cost to run that business, what it cost to get that product onto the shelf to provide for the customers. When we worked out what it cost for us to provide that good, we then set a price which we felt was competitive and fair to the consumers in our community. That is what happens now; that is what will happen after the GST is introduced. Businesses will look at the cost to them—what it costs to get that particular good onto the shelf.In many cases, those goods will be cheaper. The costs of transport, fuel, vehicles and running businesses will be less, so to get that product onto the shelf will cost less; so, in many cases, the cost to the consumer will be less. That is exactly what will happen in all industries because it is a competitive economy in which we live. If you go into one particular store and find a product that is far dearer than at another particular store, you will soon realise that that shop is not being competitive and you will go to the cheapest supplier of that good or service.I have an example of how business operates now and how it will operate after the GST is introduced. This will apply to all businesses, including funeral directors and other businesses. I have here a letter which was written to me by a constituent during the last election campaign. That was a highly emotive election campaign which was filled with mistruths and outrageous scare campaigns from the Labor opposition which were not based on facts. This constituent, who is an electrical contractor, was so concerned that he wrote me this letter. He said:Dear JimJust a short note regarding an ad being run currently on television by Kim Beazley, in short it refers in a derogatory tone that "even a visit by an electrician to repair your stove will attract a 10% GST", you may find the example below interesting, i.e. to call and replace a common electric hot plate in a domestic stove, this would be typical invoice.He then shows that, under the current system, to supply one Stokes catalogue element the cost would be so much, the mark-up would be 25 per cent, the sales tax 22 per cent, and the minimum labour charge would be $45. The subtotal would be $134.47. So the total before GST was $134.47.He then shows the costs with a GST. He sets out the price in the catalogue for the part, which would be $60.87—the same as before. The mark-up would be the same, at $15.21. There would be no sales tax at all. There would be the same minimum labour charge of $45. That would be a subtotal of $121.08. Add on the 10 per cent GST of $12.11 and the total would be $133.19. That means that it would have been over $1 cheaper with a GST to have the electrician service that part on your stove. This is the point we are trying to make. This is the point that we cannot seem to get through to the Labor Party because they see it as some cheap electoral advantage to run scare campaigns.Opposition member interjecting—IK6Lloyd, Jim, MPMr LLOYD—The member opposite interjects and says that we are talking about funeral directors. The example would be exactly the same. The funeral director has costs now that will be cheaper with a GST. The fuel costs, the vehicle costs, the costs of running his business will be cheaper. That will be reflected in the final cost of the product.Protections will be put in place against people who may try to rip off the community with the GST. The government is aware that most small businesses will do the right thing, but there are always people out there in the community—luckily, a minority—who will try to profit from change. With the transition to a new tax system, there is at the moment legitimate community concern regarding the possibility of consumer exploitation and excessive profit taking.With the measures designed to counter this, the government will legislate to provide the Australian Competition and Consumer Commission—the ACCC—with special transitional powers to formally monitor retail prices. They have allocated $27 million in the budget to provide the ACCC with the resources to monitor those prices. One of the most important things to recognise is the fact that we live in a competitive economy. Our economy is based on free trade and competition. We are all consumers. We all go into the marketplace and buy goods and services.The Australian community looks around for the best prices. We may get an electrician who says, `Fine, I can get away with adding 10 per cent GST on to my price. I can get another 10 per cent and put it in my pocket.' But there will be another 20 electricians in my community who will say, `I can now become more competitive. I can actually drop my rates and get more business because I am competitive.' That is what the whole economy is all about. But the Labor Party—full of union officials—do not understand what the economy is all about. If we drop the price of running businesses, we can make the cost of doing business cheaper and we can provide more competition for communities.This is the last major reform that this government has to put in place to continue the reforms of the Australian economy. This economy has, I believe, been described as the miracle economy of the Asia-Pacific region. It is the fastest growing economy anywhere in the world. The Labor Party do not want to know this. They do not have policies to put forward. They just run with scare campaigns.I get out in my electorate and I talk to the young people and I say, `Grab this opportunity with both hands and make the most of it.' We, as a government, have created opportunities for millions of young people in Australia that they have not seen. They suffered through 13 years of Labor, who dragged this country down. We have created the lowest interest rates in about 30 years. We have virtually no inflation and we have an economy growing at five per cent. We have small businesses where optimism is at the highest levels that we have seen in a generation.All the Labor Party want to do is try to hold this country back. They will not allow us to put our reforms in place; they will not allow us to get on with the job of making this country strong. That is what being in parliament is all about or what it should be all about. Instead of being negative and trying to block sensible reforms that the government is putting in place, they should be joining with us and supporting these reforms. A typical example is the unfair dismissal regulations that we put in place which the Senate now wants to reject. That is going to cost up to 30,000 jobs. The Labor Party want to block youth wages. They want to destroy the hopes of young people.The Labor Party do not have any direction, they do not have any policies, so they have to resort to the disgraceful scare tactics of scaring the old and the vulnerable in the community by talking about the increased cost of funerals. Why do they not base their argument on fact and not on scare campaigns and lack of policies? The government is getting on with the job of making this country strong. The tax reform package is the last great reform that the government has to put in place to keep our economy moving forward. (Time expired)10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Andrews)—Order! The discussion has concluded.Miscellaneous285510000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Andrews)—I advise the House that the Deputy Speaker has fixed Wednesday, 17 February 1999, at 10 a.m., as the time for the next meeting of the Main Committee unless an alternative day or hour is fixed.Committees28552855285510000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Andrews)—Mr. Speaker has received a message from Senate acquainting the House that Senators Forshaw and Schacht have been appointed members of the Joint Select Committee on the Retailing Sector.Miscellaneous2855Motion (by Mr Ronaldson)—by leave—agreed to:That the following bills be referred to the Main Committee for consideration: Year 2000 Information Disclosure Bill 1999 Bills2855r6252855Debate resumed from 12 November 1998, on motion by Mr Hockey:That the bill be now read a second time.16:12:002855Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I guess one would imagine that the government is hoping for third time lucky with the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 . This is indeed the third time that I have spoken in the House on this issue. While I have had cause to compliment and encourage the Minister for Financial Services and Regulation on his capacity to get a move on with some of the superannuation bills that we need through this Parliament in a timely manner, I am afraid that he has been sold the dummy in relation to this bill. Labor and many others interested in superannuation issues have demonstrated that this bill, which gives employers control over where their employees' superannuation contributions go, is a flawed bill.It lacks support from just about everybody who matters when it comes to superannuation. Let me indicate to the House at the outset that we are opposed to this bill and we will be moving substantial amendments to, at the very least, improve its operation. I ask the minister to seriously consider Labor's amendments. They are based on sound reasoning; they are based on a mountain of supporting evidence; they are based on argument from people who know superannuation and who know national savings policy.I hope the Minister for Financial Services and Regulation will treat Labor's amendments with more respect than his predecessor, the Assistant Treasurer, who tended to engage in instant dismissal of our proposals without consideration, without debate and therefore putting us in the situation that we are in where this bill comes before the House for a third time. They say you learn from experience, that you learn from your mistakes, but not this government.This bill was first introduced as schedule 5 of the Taxation Laws Amendment Bill back in December 1997. At the time, we pointed out that, because this was the biggest, the most significant and perhaps the most potentially damaging change to superannuation since the superannuation guarantee was introduced, it was worthy of its own separate bill. But the government did not listen and rammed the bill into the Senate.It then realised that it would have to excise choice of fund when it became clear that the choice provisions were of major concern to all parties in the Senate, including indeed some of the government's own members. Taxation Laws Amendment Bill (No. 7) had the government's savings rebate in it which, as honourable members might recall, was the government's preferred mechanism for delivering Labor's co-contribution policy. It was indeed the centrepiece of the 1997 budget.The savings rebate is dead. It lasted all of six weeks before this government abandoned it. So here we are again debating choice. It is worth mentioning that the background to this was Labor's superannuation co-contributions. At the time we came forward with the superannuation co-contributions policy, we had people like the Treasurer complaining bitterly that this represented abandonment of the l-a-w tax cuts. But what has this government done? First it did not deliver on Labor's co-contribution to superannuation, therefore damaging superannuation and retirement incomes. It converted them in part into the savings rebate and then abandoned the savings rebate after just six weeks. That money has now disappeared altogether into GST compensation. What a fraud that is.The second time we debated these provisions was in May of last year. Again, Labor raised concerns about prudential regulation, commission based selling, default fund arrangements, education, year 2000 compliance, third line forcing, protection of members' retirement incomes and a host of other flaws with this bill. It was not just members of the opposition who raised these concerns but also superannuation experts and people involved in the savings industry.Again, the choice bill went over to the Senate and sat there. The Assistant Treasurer could not get it on the list of bills to be debated. Probably he knew that he did not have the confidence of the Senate concerning this legislation. So here we are again. It may be third time lucky. Still the government does not get it. In its legislation it claims it delivers choice. It actually delivers potentially disastrous outcomes for retirement incomes and it does not have any support. So why does it continue with this flawed bill? Is it because it has given a promise to certain vested interests that it is going to deliver choice of fund by hook or by crook?There is a mountain of evidence condemning the government's choice bill, just as there is a mountain of evidence condemning the Prime Minister's code of conduct, the standards he has set for this parliament, his record of keeping promises, and the like. That integrity and those promises are in tatters in the eyes of the Australian public, particularly the seven million workers who have superannuation accounts; for example, the low and middle income earners who have to pay the superannuation surcharge tax because they have not given their tax file number. Even if they have given their tax file number, they have to pay the administration fees and charges as a result of the clumsy, bizarre collection mechanism which this government has implemented.The government claimed that it would not introduce any new taxes or increase any existing taxes. The Treasurer suggests that he has not increased existing taxes, yet his own officer—Mr Greg Smith—revealed before the Senate estimates committee last week that the government had increased an existing tax— the contributions tax on superannuation. So the Treasurer's promises are in the same state of repair as the Prime Minister's.One promise that the Prime Minister did not make to the electorate but has decided to implement all the same is a promise to completely undermine superannuation as a savings vehicle. This superannuation choice bill is part of that agenda. It is going to result, if passed—it will not be—in lower retirement incomes for thousands of Australian workers and consequently in lower national savings.The last time I spoke on this bill, I pointed out that in the 1998 Budget Paper No. 1 at pages 2 to 5, we had some measurements of household savings ratios as a percentage of GDP. I pointed them out to the House because they are quite alarming. They indicate that for 1996-97 the household savings ratio was 4.7 per cent. The estimate for 1997-98 was 3¼ per cent and the estimate for 1998-99 is just 2¾ per cent. So household savings as a percentage of GDP are falling, not rising.With public debt at the second lowest level in the industrialised world, just as it was when Labor left office, Australia does not have a public savings problem, but we do have, and have had for some time, a private savings problem. That private savings problem lies at the heart of our foreign debt worries, our structural problems with the current account deficit, and so on. Household savings are falling, yet the government has been making irresponsible decisions concerning superannuation, ringbarking Labor's superannuation tree and jeopardising our future retirement incomes, wealth and prosperity in the process. The single most irresponsible decision this government made was its abandonment of Labor's superannuation co-contribution scheme which would have meant we had a combination of employer, employee and government contributions growing eventually from the nine per cent which it is scheduled to be in the year 2002 to 15 per cent. That is enough, on Vince Fitzgerald's calculations, to ensure that future generations of wage and salary earners would be able to retire on an income of around 70 per cent of preretirement levels.That would have given us a world's best solution to that universal problem of providing a decent retirement income for an aging population but would also have translated, during the period to 2020, into an addition to the national savings pool of the order of $400 billion. Instead of that, we got that ill thought out, valueless, half-baked introduction of the government's savings rebate, less than half the cost of the co-contributions scheme, but still involving over $2 billion a year in government expenditure. That savings rebate, as I said earlier, lasted a mere six weeks and the government has still done nothing to promote national savings levels in Australia.The Minister for Financial Services and Regulation said last week, when we were debating the Superannuation Legislation Amendment Bill 1998 in the Main Committee, that the tax package is going to boost national savings. He would be somewhat embarrassed if he were aware that, on the same day he made that claim, Treasury officials were conceding the exact opposite. If the minister were to check the transcript of proceedings in estimates, he would be embarrassed to learn that the assumption is merely in his imagination.Treasury admitted that no modelling had been done on the impact of the GST tax package on the national savings. They said that they expected the GST tax package to have a positive influence on private savings but refused to commit to its impact on national savings. Why wouldn't they say anything about the impact of the GST on national savings? You would have thought that was a pretty important matter. They know that either the tax cut bribes which are funded from the budget surplus that are used for consumption spending detract from the national savings pool or that we are going to see the GST tax package having a negative effect on national savings, regardless of consumption expenditure.So if the government's Treasury advisers, those who were most intimately involved in the formation of the tax package, Dr Ken Henry and others, will not say what the impact of the tax package will be on national savings, then on what basis is the minister telling the parliament that a GST would boost national savings? So we want to hear from the minister whether he has any evidence at all to support that claim that the GSTtax package will boost national savings. No doubt the Treasury officials who attended estimates the other day would be interested to learn of that evidence.One policy which is certain to have a positive effect on national savings into the future—reducing government outlays and improving standards of living in retirement—is superannuation. Labor strongly favours superannuation as our preferred savings vehicle. No other area of savings policy can be harnessed to that great macroeconomic task of increased national savings facing the nation in the way that superannuation can. The point needs to be constantly made that superannuation is a good investment for working people—that is, if the government will stop undermining its value, stop dipping into the honey pot, stop coming up with harebrained schemes that undermine public confidence in superannuation, like the choice legislation before the House.Most Australians anticipate that the industrial relations retirement savings will leave them with 60 per cent of their previous earnings. But a study done by the Association of Superannuation Funds of Australia shows that, with the nine per cent phased superannuation guarantee contributions and individual contributions, the end superannuation benefit after 35 years would be about 45 per cent of a person's average weekly earnings and 50 per cent after 40 years of savings. So the ASFA says that contributions not of nine per cent but of 15 per cent of an individual's salary throughout that person's career would be required to reach the 60 per cent target, and higher contributions are needed if the individual works for less than 40 years, as indeed many people now do.ASFA's figures show that the only way to increase an adequate pool of savings for retirement, the only options you have, are through a substantial increase in the contribution of individual workers, or an increase in the federal government's nine per cent superannuation guarantee, or a reduction in super annuation taxes and/or a better interface with Social Security to encourage voluntary savings. And ASFA, in particular through its chief executive officer, Philippa Smith, makes these important points in its blueprint for a national retirement income policy.In terms of the level of the employer contributions required to generate retirement incomes of the order of these targets, ASFA considers that nine per cent of earnings will not be sufficient in most cases, that additional employer or employee contributions and/or government contributions and/or more favourable tax treatment are going to be needed if community expectations about incomes in retirement are to be met. That is the situation that confronts us as we examine this legislation.Not only have the government failed Australians by abandoning Labor's superannuation co-contribution; they have also failed Australians by introducing the superannuation surcharge, which continues to be a major debacle. We had officials in Senate estimates hearings last week confirming that some 2½ years after the government introduced this policy the Australian Taxation Office is still to send out superannuation surcharge tax assessments to over 250,000 Australian taxpayers who did not provide their tax file number. What an extraordinary thing. Two and a half years later, over 250,000 taxpayers have not received those assessments. Undoubtedly, many of them are going to turn out to be low and middle income earners who will be assessed as having a surcharge tax liability because they did not give their tax file number to a super fund.The choice legislation follows on the surcharge debacle. We have the government using public resources, creating untold uncertainty within the superannuation industry, creating uncertainty among working Australians and uncertainty among employers. Frankly, the government's treatment of superannuation makes the nursing home debacle look like a model of sound public administration.DK6HOCKEYMr Hockey—Rubbish.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—The minister interjects, but nothing I guess can make the nursing home debacle seem like a model of sound public administration.LS4FERGUSONMr Martin Ferguson—Ask Warwick Smith.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Indeed. Australia has a world-class retirement income system, notwithstanding the damage that this government has done to it. This was recognised by the World Bank. Back in 1994 it produced a report on retirement incomes policies, and it continues. The rest of the world is looking at Australia as a world's best practice model.So why does the government want to change it? Basically, the government wants to undermine industry funds. Government, with the ideological blinkers on, believes that unions benefit from superannuation at the expense of, for example, some of the government's friends who want a slice of the superannuation action. That view is quite wrong. As no less a person than the former head of the MTIA, Mr Bert Evans, has pointed out, industry superannuation funds are not union funds; they are jointly operated on behalf of members by trustees representing both employees and employers. Industry superannuation funds operate on a not-for-profit basis. They have returned market leading investment returns to members. They have the lowest fees and charges in the marketplace. They are there to look after the members and the members' interests. Compared to banks or other vested interests who are trying to reap returns for shareholders, the industry funds are only there to look after the members' superannuation for the benefit of the members.In our view, for the government to be deliberately seeking to undermine these funds is outrageous. People are sick of governments fiddling with superannuation policies. We in the opposition have learned that lesson. The government, however, has not. It has constantly changed superannuation since it came to office, to the detriment of confidence in the system. It was the former Liberal Party Federal Director, Andrew Robb, writing in the Bulletin before the last federal election, who really gave the game away for the Liberal government and what this choice of funds bill is all about.In his article, Mr Robb made all sorts of unsubstantiated assertions about union super funds—we can only assume he was referring to industry funds—and how they allegedly contribute funds to the Labor Party. Mr Robb is quite wrong, but he was not going to let the facts get in the way of a good story during the election campaign. Perhaps that is why he does not continue to be used by the Bulletin as a columnist. Whatever the reason, Mr Robb revealed the government's true agenda when it comes to choice of superannuation fund—a flawed agenda which this parliament should not support. For the sake of decent retirement living standards for working men and women in Australia, I urge the government to reconsider its choice of funds position.The assault on superannuation does not stop with choice of funds. We have seen the government endeavouring to abandon award superannuation—to take away superannuation as an allowable award matter. That would mean that workers on low incomes—below $450 a month in some cases such as hospitality workers or textiles, clothing and footwear employees—will literally lose the three per cent superannuation payments and so on that they had been previously entitled to under their awards. It also means that, instead of having monthly or three-monthly payments from awards, you will get only the yearly payment that you are entitled to from the superannuation guarantee. Workers will be worse off as a result. Over the course of a working life, that could amount to around $16,000, or a couple of years worth of pension payments. So far as we are concerned, that is a substantial issue, and we are not supporting the government's moves.Although the government is not prepared to admit it, removal of superannuation as an allowable award matter will also give the government a de facto choice of superannuation policy without any of the protections that workers currently have under the award system. As if that was not enough, the government has tried a sneaky way of getting choice of funds through, because it knows it has not got parliamentary support for its bills. The government applied to the Australian Industrial Relations Commission to vary awards by removing references to the superannuation funds. This was an attempt by the Minister for Employment, Workplace Relations and Small Business to sneak his policy in through the back door—something the parliament knows that that minister is all too prone to do, as demonstrated by his involvement in the Patrick debacle and as demonstrated by his attempts to get the unfair dismissal issue through via regulations rather than through proper legislation in the parliament.We have also seen the government endeavouring to increase the threshold for opting out of superannuation from $450 a month to $900 a month. This is a move that we also oppose. We think it will have a detrimental effect on workers with low incomes because they will have no access to superannuation in retirement. We have also seen the government endeavouring to undermine the Public Sector Superannuation scheme, closing off the scheme that Commonwealth public servants could join—to the detriment of Commonwealth public servants. That is also marketed as choice, although how the government expects to be taken seriously about choice when it closes off options available to public servants is remarkable.On the issue of choice of fund in the public sector, I wonder if the minister is aware of what the Parliamentary Secretary to the Minister for Finance and Administration said during the debate on these couple of bills as they passed through the House. These bills are scheduled to be debated in the Senate this Thursday.Mr Hockey interjecting—UK6Thomson, Kelvin, MPMr KELVIN THOMSON—The minister ought to be aware—it is worth listening to, Minister—that the Parliamentary Secretary to the Minister for Finance and Administration, Mr Peter Slipper, let the cat out of the bag by revealing that the government's Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill will force defined benefit funds to close. I refer the House, and in particular the minister at the table, to what the member for Fisher said:. . . the provision of choice does not sit well with an open defined benefit superannuation scheme. Under choice, if members could transfer in and out of a defined benefits scheme the members would be able to play arbitrage against the fund, which has the potential of significantly increasing the cost of the scheme.So what the parliamentary secretary revealed was that this government's choice of fund legislation will effectively force the closure of all the defined benefit funds.According to figures we have from the APRA, there are around 1,124 defined benefit schemes with 2.86 million fund members holding over $131 billion in assets. That is the extent of defined benefit funds in this country, and yet the parliamentary secretary said:. . . the provision of choice does not sit well with an open defined benefit superannuation scheme.That slip was one more nail in the coffin of the choice of fund bill. Already we have seen the major industry bodies calling on the government to review its choice of fund bill in favour of investment choice. Once the members of defined benefit funds realise what is in store for them, opposition to the bill will strengthen further. Let me point out to the House that the ASFA conducted a survey of fund secretaries back in November last year. It asked them about the government's proposed changes and the impact on their particular funds. The overwhelming majority of them indicated that the impact would be neutral, poor or unacceptable. Hardly any of them rated the proposal as good. When they were asked which change would most benefit fund members—choice of fund, which essentially is the government's model, or member investment choice, which essentially is the opposition's model—of the enterprise funds, 93.8 per cent preferred member investment choice. Of the public sector funds, 100 per cent preferred member investment choice. Of the industry funds, 93.8 per cent preferred member investment choice, and, of public offer funds, 100 per cent preferred member investment choice. You can see very clearly that the overwhelming majority of superannuation funds believe Labor's model to be superior.There is no doubt that this government has undermined confidence in superannuation. The government has not been able to win the argument concerning the removal of superannuation from awards, and it has not won the argument concerning choice of fund either. When it occasionally enters into the argument, it says that choice of fund is going to drive down the cost of superannuation. All the evidence suggests otherwise. A survey of 354 superannuation funds by Sedgwick Noble Lowndes reported that the government's choice of fund model would lead to increased costs for fund members. That survey stated that 87 per cent of funds believe that choice of fund will increase fund administration costs by some 10 per cent and, alarmingly, about 10 per cent of the funds surveyed thought that costs would increase by up to 50 per cent.We had the same view expressed by the witnesses to the Senate Select Committee on Superannuation at their inquiry into choice of superannuation. All the witnesses from Towers Perrin, the Australian Institute of Superannuation Trustees and C+Bus Industry Fund said that superannuation funds' costs are going to go up after the introduction of choice, particularly in the areas of marketing, administration and legal costs.It is also something that is going to disadvantage employers. They are going to score increased administrative costs. Even the government acknowledges this: when you look at the explanatory memorandum, you can see that that concession is made. That, from a government that has been promising small business a 50 per cent reduction in red tape.The opposition remains convinced that the government's model will do nothing to improve the retirement incomes of working Australians. We do not think that people are in a position to make informed choices. We think they will be forced into products that are not appropriate for them and we intend, during the consideration in detail stage of this debate, to move a range of amendments that we think offer employees real choice of superannuation fund, not forced employer choice, which is what the government is offering. Our alternative model will provide for employee choice rather than the government's employer choice. It is a phased, two-stage approach, with the first stage allowing for member investment choice within funds. So funds with more than 50 members would have to offer them a minimum choice of three investment options based on low, medium and high risk return ratios or, if you like, capital backed, balanced growth options. This already happens in many industry and public offer funds and is referred to as `member investment choice'.We are also concerned that, although the government's model talks about choice and says that employers must offer four different choices, there is no guarantee that those choices will not in practice be identical. So we want to make sure that employees get genuine choice. The second stage of our model does this: it allows employees to override award provisions that specify a superannuation fund, with the agreement of the employer. Employers and employees who negotiate a certified agreement or an Australian workplace agreement would be taken to have exercised choice, so they would not be able to opt out of those agreements. But, apart from that, we would have regulations drafted governing standard disclosure provisions applying to key feature statements offered by funds directly to employees, and we would have a simple comparison of fees, charges and fund earnings. In the event of a dispute between employer and employee, the Industrial Relations Commission would act as the independent arbitrator.We will be moving amendments to this bill that are designed to give effect to our choice of fund model. If they are not successful, we are going to seek to amend the government's bill to make it less likely to undermine retirement incomes. That is not an idle concern on our part. It is a concern based on experience in Great Britain, for example, where workers were inveigled into choosing second-rate and third-rate retirement income products and, in some cases, they lost their savings altogether. It is a concern based on experience in Chile, where unfettered choice led to workers being persuaded to change from fund to fund on a year by year basis with what amounted to bribes, gifts of various kinds—inducements—in order to change the fund to which they belonged. That is clearly to the detriment of superannuation and retirement incomes. Any way you look at it, superannuation is a form of deferred gratification. What was happening in Chile was instant gratification. We are not going to support that. (Time expired)16:42:002862Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—In supporting this Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 , without amendment, I propose to answer three questions: why it is being introduced, how the amendments are proposed to operate and when its provisions will take effect.As to why this bill is before the House, the government is committed to increasing national savings, both public and private. The need to boost national savings is inherently linked to a thorough and effective retirement income policy. Without an increase in national savings, increased investment only comes at the cost of a higher current account deficit. Higher levels of a current account deficit are of major concern. Unemployment, for example, cannot be reduced on a sustainable basis without adequate investment. Unless additional savings are available, including from the public sector, the current account deficit cannot be reduced over time. The balance between domestic saving and investment will relieve constraints on economic growth and increase the standard of living for Australians, including the growing proportion of the population in retirement.There is no doubt that Australia, like most other economically advanced countries, is about to experience significant demographic shocks. There have been many projections as to the demographic change that will take place in the first few decades of the new millennium. These projections all highlight the need to develop a retirement income policy that is sustainable. The demographic changes underscore the increasing need for Australians to make adequate provision for their own retirement. A rapidly ageing population, with the implied shortage of workers and the rapid increase in the number of retirees, can have profound implications for the private sector and the amount of economic growth that can be expected in the future.It may well be because of the age and service pensions that individuals have privately saved only modest amounts for their retirement. Even if new recipients of the age or service pensions are more likely to be just part rate, the cost to government of providing such pensions is still forecast to grow to some $18 billion in 1999-2000 as the retirement age population increases. Increases in life expectancy also threaten the retirement security of those who have saved on their own by forcing them to stretch their retirement savings over a much longer period of time and, of course, the private sector provides incentives for older workers to retire early.From one perspective, we can attribute the ageing of Australia to a triumph of affluence and major advances in medical technology that have increased life expectancies and the quality of life for the aged. I believe it was President Clinton who suggested, in his 1998 State of the Union address, that a person born in 1998 might live to see the beginning of the 22nd century, that is, to live to the age of 102. Without changes to the current United States laws, these persons, for example, would be able to retire at age 62 and receive 40 years of benefits.It is not necessary to project into the 22nd century to highlight the issue—it is an issue for us now. The question is: how does society pay for its good fortune in having a population that lives longer? This government is committed to a retirement income policy that provides encouragement for individuals to achieve a higher standard of living in retirement than would be possible from the age pension alone, but that also ensures that all Australians have security and dignity in retirement. This is being achieved in a number of ways, including by encouraging people who are able to save for their retirement to do so, particularly through superannuation.The bottom line is that if we do not increase savings—if we do not provide choice to employees to enable them to make informed decisions as to where their contributions should be directed to take account of their particular circumstances and to tailor their superannuation arrangements to suit their individual needs—in the long run the age and service benefits will fall far short of requirements. If current practices are sustained and there is no choice, efficiency or competition within the superannuation sphere, the public and private costs imposed by an ageing and longer living population will absorb a higher and higher share of our economic resources for the foreseeable future.You could argue that all you need to do is increase the rate of economic growth and so increase the supply of resources available to the retiring baby boomers. This approach would increase the supply of savings to enhance investment and productivity growth, but we must accept that private saving has been trending downwards for the past few decades and we need to address why this is happening and how to reverse it. Promoting equity and individual choice are features of the government's approach to retirement income policy. This bill implements one of the key initiatives in the 1997-98 budget and involves reform to give employees greater choice over the superannuation fund or retirement savings account to receive superannuation contributions made on their behalf by their employer.The facilitation of greater choice of funds will enhance competition between superannuation funds and retirement savings account providers. This does lead to improved returns, more efficiencies and a reduction in fund administration charges. I am yet to understand how the opposition can suggest that it is going to increase fund administration charges over the long term. Fund choice enables employees to derive the benefits from a greater level of competition and the bill is designed specifically to significantly reduce the administrative burden on the employers by allowing flexibility in how choice is offered whilst still ensuring that employees have an effective choice of funds.This bill is part of a number of changes designed to encourage private savings and improve Australia's retirement income system. Australia is not alone in facing this great challenge as it moves into the 21st century. As I said, the elderly population will live longer, on average, and the numbers of elderly will rise. We must keep in mind the share of the budget to be spent on all other societal needs. This government's proposal has as its underlying purpose the increase in competition and efficiency in the superannuation industry. This will lead to improved returns on superannuation savings and thus increase the level of private savings.I was not in this House on the previous occasions that this matter was debated, so I have no problem in turning to the question of how the bill will amend the Superannuation Guarantee (Administration) Act 1992. The purpose of the amendments is to give employees greater choice as to the superannuation fund or retirement savings account into which a superannuation contribution is made. Where an employer makes a superannuation contribution which is not in compliance with the choice of fund requirements, the employer may be subject to a higher superannuation guarantee charge and the amendments provide employers with a range of options under which they could comply with their choice of fund requirements.Choice works in the employee's favour. The opposition should give employees the credit for being able to choose from the offer of choice. Essentially, a new part 3A in the SGA Act will set up the choice of fund requirement. An employer will meet these requirements where they provide superannuation support or make contributions to funds chosen by the employee in accordance with the provisions. When there is no employee chosen fund at the time of the contribution, the employer may make a contribution to a default fund in order to satisfy the choice of fund requirement.In summary, the contributions are made in compliance with the choice of fund requirements if they are contributions to a chosen fund or a default fund, contributions to unfunded public sector arrangements, contributions made under or in accordance with an Australian workplace agreement, contributions made in respect of an employee where the contribution is made under a state industrial award, contributions made under prescribed laws made before 1 July 1999, contributions made before 1 July 2000 in respect of existing employees as at 1 July 1999 who continue to be employed—so the choice of fund requirements effectively apply to new employees from 1 July 1999 and existing employees from 1 July 2000—contributions made to the CSS or PSS before 1 July 2000, and contributions made in respect of existing employees where the employee ceases employment before 1 July 2000.So, leaving aside the above—employees who are covered by workplace agreements and employees who are members of an unfunded public sector scheme, state award contributions or contributions for the benefit of an employee to a particular fund under prescribed law, and the more general circumstances—an employer will need to make contributions on behalf of an employee to either a chosen fund or a default fund.The rules about chosen funds are as follows: only eligible choice funds may become chosen funds of an employee; a fund is a chosen fund if the employee has selected it in accordance with the choice processes which are set out in the act; a fund becomes a chosen fund two months after the employee provides the employer with written notice—or the employer may agree for the chosen fund to start earlier in time—and a fund becomes a chosen fund two months after an employer has accepted a written nomination from an employee for a particular fund to become a chosen fund. Of course, there are circumstances outlined when a fund ceases to become a chosen fund.The bill also sets out the times when there will be a need for a default fund for an employee, and essentially that is during such times as are reasonable to allow the choice process to occur and the employee to choose a fund. So that is taken into account. What is also taken into account is the situation where an employee does not have a chosen fund and does not choose one when given the opportunity to do so. So, in effect, it is a matter of last resort.The bill particularises default funds to the extent that they can either be the last fund or funds which the employer contributed in compliance with the choice of fund requirements and to which the employer is still able to contribute on behalf of the employee. This can include defined benefit schemes or any eligible choice funds selected by the employer set out in the offer of choice to the employee. The chosen fund provisions and the default fund provisions complement each other in terms of the commencement of a chosen fund or the cessation of one without there being another chosen fund. That answers the question of how.The next question is: when does an employer have to offer a choice? I have indicated to some extent when there is a chosen fund or default fund, and that effectively dictates when an employer must make an offer of choice to an employee. One of the new sections details the obligations for employers in the sense that it sets out what must be done by the employer to avoid having a period where there is neither a chosen fund nor a default fund for an employer. And, as I said, the outcome, if an employee makes a contribution during this period, is that the employer may be liable to pay extra superannuation guarantee charges.As to the offer of choice, employers may use a number of options to do this: offering the choice of four funds or RSAs, providing an unlimited choice offer or negotiating a workplace agreement which includes superannuation arrangements. If an employee proposes a fund as a chosen fund and the employer accepts that fund for the employee, there is no need for the choice of fund offer and it is up to the employer as to whether they use limited choice offer or unlimited choice offer for each employee. It is up to the employer to use one method for all employees, or one method for some and another method for others. That would depend very much upon each employee's particular circumstances. There is a separate offer and acceptance of choice of fund by the employer of each employee, and choice works in the employee's favour. Again, I beseech the opposition to give employees the credit for being able to negotiate their own arrangements—workplace and superannuation. Give them the credit for understanding the implications of a particular choice.Under the limited choice offer an employee may select a chosen fund from a choice of at least four eligible choice funds, at least one public offer superannuation fund, at least one RSA or capital guarantee fund and one of either a standard employer sponsored fund, an exempt public sector superannuation scheme and an industry based superannuation scheme. That is genuine choice. Under the unlimited choice offer, an employee may select an eligible choice fund as the chosen fund.The bill details the information which must be included in the offer and when and how an employee must respond to the offer. There are transitional laws relating to new employees and existing employees. Employers can continue to use the existing earnings base to calculate superannuation guarantee obligations even when employees choose to change funds. One other aspect of the bill which is worth noting is that it protects employers from the liability to compensate any person for loss or damage arising from anything done by the employer in compliance with the choice of fund requirements. So, if an employee selects a fund in compliance with the choice of fund requirement and the fund subsequently does not perform to expectation, the employer is not liable to compensate. But, of course, the employer is liable if they act outside compliance with the choice of fund requirements. Then there are the consequential amendments to the Retirement Savings Accounts Act 1997 and the Superannuation Industry (Supervision) Act 1993.The choice of fund arrangement is designed to give employees greater choice in and control over their superannuation savings, which is in turn designed to give them a greater sense of ownership of their savings. It allows them to choose the savings vehicle most suitable to their needs. The outcomes from implementation of this legislation—funded choice providing the competition—will ensure that superannuation arrangements are able to contribute to national saving over the longer term. As we come to terms with the dimensions of the problem of our chan ging age demographics, that is a significant matter.The opposition raised the issues that occurred in the United Kingdom and, of course, overlooked the number of significant differences between the regulatory framework in the United Kingdom and within Australia. There is a key feature statement which will be given to each prospective member of a fund under the choice of fund measure which will require full disclosure of fees and charges, including commissions, paid to a financial adviser or associates. This will allow employees to become aware of any circumstances of the adviser in terms of selling the product. As I said, employees should be given credit for being able to understand the implications of choice.For the reasons outlined, and certainly so that the superannuation arrangements are able to continue contributing towards national saving over the longer term, I commend this bill to the House.17:00:002865Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—My colleague the member for Curtin has ably outlined some of the mechanics of the superannuation choice legislation and also its rationale. I want to direct the attention of the House to some of the remarks made not by members of the government but by independent commentators and by those giving evidence to the Senate Select Committee on Superannuation on choice of fund, which reported in May of last year.Choice seems to be a concept which strikes terror into the hearts of members opposite. They tend to take an intrinsically paternalistic view of their constituency, a kind of Big Brother approach which regards the vast mass of working Australians as basically lacking the competence or the will to take responsibility for their own financial future. That is not a view which those on this side of the House share. We have a view of working Australians which is a very optimistic view; a view grounded in respect for the ordinary working man or woman; a view grounded in possibility, in hope for the future, in a belief that they in fact are the men and women who have made, and will continue to make, this country strong.On the subject of choice, I want to begin with the philosophical or intrinsic value of choice in government policy generally. I note the remarks of Leo D'Angelo Fisher in the Bulletin of 13 October 1998:For most Australians, choice, control and flexibility are not benefits normally associated with superannuation. Since the introduction of the compulsory employer-funded Superannuation Guarantee Scheme six years ago, superannuation has been about someone else's decisions. Money is invested in predetermined refunds on employees' behalf towards a vaguely understood future of a financially self-reliant retirement. But change . . . is afoot. And the change is about choice.That is a welcome change, a change that has perhaps been a long time coming but one which we in this chamber ought to encourage. On the question of choice, I note the evidence to the Senate committee provided by Mr Ken Lockery, who is the principal of consulting actuaries Towers Perrin. On the subject of choice, he said:From our perspective, employee choice of superannuation fund is the sort of individual freedom of choice that one can readily associate with a democratic society such as that that we enjoy in Australia.It may be foreign to the ALP head office in Sussex Street, which is used to dictating terms to ALP branch members, but we in the government take the view that Australians, to the greatest extent possible, ought to be able to make their own choices. Mr Lockery went on:Furthermore, individuals are more likely to value and take an interest in something where they have an element of choice or control. For those reasons alone one could justify the introduction of a system giving far greater control of the choice of superannuation fund to individual employees.That is a key element of this reform. It is not just an institutional reform; it signals a cultural change. Further evidence before the Senate select committee came from an exalted former member of this place, who stated:Having instituted a compulsory environment for the collection of superannuation, the next step in the process is to say to people, `If the government is going to require you to contribute to your retirement income, surely it is not unreasonable that you should have some say as to where those funds go.' That would not seem unreasonable to people who believe in the virtues of commonsense, but apparently that virtue does not hold universal appeal in this place. Choice is critical to individuals' taking ownership of their own future and feeling a greater sense of connection with their savings, and that has an important practical consequence.The consequence is that it causes Australians to begin to look earlier at the question of whether they have made adequate provision for their own retirement. This is a serious problem for us in this country. For too long we have taken the view that retirement is something you direct your mind to when you get to it. The problem there is that by then it is too late. I note the comments of Tony Feely, author of the BIS Shrapnel report Imminent retirees: A lifestyle study. In that report he notes that 65 per cent to 85 per cent of the population is unhappy with its preparedness for retirement and that most do not focus on the issue of financial self-reliance until four or five years out from their retirement. `From that point, they become groupies of retirement seminars, and voracious readers,' he says. But the problem is that, by then, it is too late.By requiring employers to offer choice for new employees from 1 July of this year and for existing employees from 1 July 2000—and by the corollary of requiring employees to make a choice—this bill will direct the mind of the employee to the question, `Have I made adequate provision for my own retirement?' It is this secondary consequence of the bill, the cultural change, which I regard as its most important innovation. It was here that Stephen Child, Senior Manager of Technical Services with the Commonwealth Bank, testified before the Senate committee. He said:. . . we firmly believe that, unless an environment is created where choice can be exercised, individuals will lack the motivation to understand the importance of retirement savings and how best to achieve their objectives for retirement.This bill is powerfully and practically presenting employees with the motive to take control of their own financial future. From a purely clinical public administration standpoint, that is important for exactly the kinds of reasons that the member for Curtin referred to. We simply cannot afford a mind-set in this country that says, `We work until we retire and then we take the benefit of a guaranteed pension at 25 per cent of average weekly male earnings.'That sort of entitlement simply cannot be sustained in the face of the demographic changes which previous speakers have referred to. I note, for example, that in addition to President Clinton's remarks in his last State of the Union address the demographic fact is that one girl in three born in Australia today can expect to live to the age of 100. That is a startling demographic revolution when you think that in this century we have added 20 years of life expectancy for the average Australian. It is an unbelievable achievement in the vast spread of human history that in one century we can add 20 years of life expectancy for the average Australian.The actuaries and the biologists tell us that in the next century we will add another 10 to 15 years of life expectancy. That means that average Australians can look forward to 40-plus years of retirement, and it is that fact that compels us in this place to take those forward looking steps that are necessary to ensure that the country is prepared to meet the retirement income needs of that vast group of Australians.I return to this question of how we create the sense of urgency in employees, how we help them direct their minds to this question, where clearly to date we have not been doing enough. The member for Wills correctly referred to the inadequate levels of private savings in Australia today. It was FitzGerald in his seminal inquiry into savings in 1990 who observed that we were at about 17.5 per cent of GDP as our savings ratio but that we needed to move to between 22 and 23 per cent. In the eight years since FitzGerald handed down his inquiries, we have actually only improved the savings ratio as a proportion of gross domestic product by about 1½ to two per cent. So we are still about four per cent behind, and that does not include the deficiency that has added up in the last eight years. We go then to this question of motivation and of culture. That was referred to by Rosemary Vilgan, the Federal President of the Association of Superannuation Funds of Australia, in her testimony before the Senate committee. She said that under the government's choice provisions:. . . ownership by the members of their superannuation benefit, we believe, is likely to increase. That is, their sense of belonging and their understanding of their superannuation benefit is likely to increase. We believe there will be some benefits from competition in the industry and also that there are people in funds now which are not suitable for them, and those people should be allowed to leave those funds.I will return to the second point in a moment, but I just underscore her belief, as the President of the Association of Superannuation Funds, that there is a sense of belonging and understanding of the superannuation benefit which is likely to increase. This dynamic beyond the efficiency and competition benefits was referred to in other evidence before the committee. John Maroney, who is from the Investment and Financial Services Association, said:. . . the introduction of choice could have beneficial effects beyond compulsory minimum superannuation guarantee contributions and lead to greater voluntary contributions once people have a greater understanding of how much they really need to put away to save for an adequate level of retirement income.What Mr Maroney is saying is that this bill will change the culture of Australian employees and that change of culture will have a positive impact on individual and thereby national savings. That is what we have to do. We have to get individuals thinking about it now so that they do not have the problem that BIS Shrapnel referred to, that Tony Feely referred to, of getting to the end of their working life and suddenly thinking, `What am I going to do about retirement?' This bill will cause them to start thinking about it on 1 July of this year and 1 July of next year, and that is a sort of revolution which we in this House ought to firmly get behind.The member for Wills made some allegations, some darkly muttered conspiracy theories, about this government's motive for introducing this bill. I want to turn to some of the public comment on those allegations, not from me or members on this side but in this instance from Daryl Dixon, who is one of the economics writers for the West Australian newspaper. He said on 13 May of last year that these sorts of concerns:. . . have been used more to create a climate of fear than to describe the actual consequences of the introduction of the Government's legislation.Mr Dixon said:Freedom of superannuation choice, particularly among the range of funds prescribed in the Government's legislation, is required to protect employees from their employers, particularly the big employers who believe that they know best about how their employees should be covered for superannuation.Again we see this twist of fate where Labor is, if you like, siding with the big employers against the interests of the working man and woman. Mr Dixon went on to say:A great deal of the opposition to freedom of choice has come from employers with defined benefit funds, who have a vested interest in controlling their employees' superannuation funds. As legislation, the freedom of superannuation choice as proposed by the Howard Government contains a commendable prescription of funds for employees to consider.It has been suggested by the member for Wills that this legislation is designed as an attack on industry funds. I note that industry funds constitute less than 10 per cent of the total superannuation fund pool, roughly $24 billion out of the $360 billion of available funds. I suggest that it is hardly worth the trouble of drafting a piece of legislation to target 10 per cent of those funds. I note as a commonsense response that the bill in fact compels employers to provide a choice of the industry fund if one is available. Rather than discriminating against the industry fund, the bill enshrines the principle that the industry fund must be offered as one of the four choices if such a fund is available. As Russell Mason from the William Mercer organisation says in the Business Review Weekly of 20 April 1998:If industry funds are performing reasonably well, members will stay with them. Those that adapt, those that look to the needs of their members, will grow. Others will fall by the wayside. And it is not a question of size—there is no relationship between size and performance.What you see is not a Big Brother, paternalistic, dictatorial policy on the part of this government. What we are offering employees is choice. We are saying, `Look, if your industry fund is spinning like a top, working like a dream, delivering the sorts of benefits that you expect, stay with it, and more power to you. But if in fact it is not delivering those benefits then you ought to be free to choose, you ought to be free to move, you ought to be free to put your money in a fund which is offering better performance.'I note that in the other place Senator Allison further endorsed that proposition when she said:But of course there are duds. Workers do need to be able to exit industry funds that are not performing.Further, industry funds are not sufficiently portable. There remains the problem that moving from one industry to another too often results in moving from one industry fund to another.What you see is not some sort of dark strategy of undermining one sector of the industry; what you see is a practical reform endorsed, in this instance, by Senator Allison as a need. She cites the startling statistic, in support of that proposition, that in a nation of eight million workers we have 18 million superannuation accounts.In this age of increasing mobility in the workplace—and for that we ought to give credit and praise to the minister for industrial relations for his pioneering reforms to introduce greater flexibility into the labour market—it is no longer a case of people expecting to have cradle to the grave employment with one organisation. We in this generation have the opportunity to move from one industry to another and that is an opportunity which more and more Australians are taking up. We have to be able to move the person without having to create a new superannuation account, because one of the problems that causes it is this very large number of very lowly capitalised and inefficient funds. This change will allow us to produce a much more efficient industry.In the couple of minutes remaining to me, I want to talk briefly—having touched on this question of culture, motivation and ownership—about the question of efficiency. I note that there was compelling evidence before the Senate committee on this subject. Tony Aveling, Acting Chief Executive of the Australian Bankers Association, said:Lack of member choice is an important reason why competition and efficiency in this marketplace are not as strong as they should be. Allowing member choice of fund will increase competition between funds, it should enhance efficiency, and it will put downward pressure on costs and encourage rationalisation of the industry. This is important when saving for retirement, as a reduction in cost translates into higher returns, the benefits of which should compound.So this initiative, this bill, is about higher returns to individual employees. Furthermore, on the question of efficiency you have the remarks that were offered by Mr Lockery, whom I cited earlier. He said:. . . it probably is fair to say that we have definitely seen in the marketplace a lot of people looking at how they can improve their fund with the advent of choice coming. That is the offset to that. That is the case of somebody—particularly, say, employer sponsored funds—saying, `How can we make our fund more attractive to members? What can we do better?' In that sense, the mere threat of choice, if you like, is actually having some positive benefit in the marketplace. . .This is a well considered reform. It is a reform that is timed for the moment. It is directed to the mind of the employee to give greater motivation, greater ownership, greater efficiency and higher returns to individual employees. It is an appropriate piece of legislation at the dawn of the next century, the next millennium, when, as the member for Curtin so rightly said, national savings must be at the forefront of our minds.17:18:002869Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—in reply—I would like to thank everyone for participating in this debate on the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 , including the member for Wills, who made a fairly predictable contribution to the debate.UK6THOMSONMr Kelvin Thomson—It is my third time.DK6Hockey, Joe, MPMr HOCKEY—As he points out, it is the third time that this bill has been debated before the House of Representatives. I would particularly like to thank the member for Curtin and the member for Parramatta for their contributions to this debate. A number of points that they raised focused on consumer choice. That is very much the focus of many of the things that the government is seeking to do or has done in its term in office. It is about giving consumers greater choice about where they should place their money, whether it be through investment or expenditure.It is about consumer sovereignty—giving consumers sovereignty over their money, over the way that they spend their money, over the way they invest their money and whom they invest with. The choice of super funds legislation is focused on that consumer sovereignty. That is the focus of competition policy, that is the focus of consumer affairs and that is the focus of our tax package which is now before the Senate. It is about giving Australians greater choice.The member for Wills suggested that my comments about the package before the Senate contributing to an increased level of national savings were incorrect. I challenge that. If you are providing $13 billion of tax cuts to Australian consumers—and to Australians generally, of course—you are, by that very nature, increasing national savings. If you are running surplus budgets, you are, by definition, increasing national savings because the government is no longer going out to the market, going to Australians and borrowing money from them to pay for our day-to-day debts. That is where the tax package before the Senate contributes to a higher level of national savings.The second part of the equation is competition. Competition brings out the very best in a marketplace. I think even now the Labor Party would be prepared to cast aside the old rhetoric and agree—and be mindful of the fact that the Labor Party began the whole national competition policy program with the initial review under Fred Hilmer—that competition does deliver better results for consumers. There is a range of areas that prove that. You just have to look at the level of competition in telecommunications at the moment to witness the fact that people—consumers—are the beneficiaries of greater competition. In this case, one of the most significant savings activities of individuals in the workplace is going to be their superannuation and we are saying that they, as consumers, investors and savers, should be given the choice of where their super goes.And it is self-evident that we are going to see greater competition in the superannuation industry which will deliver better results for the people who are saving the money—the employees, the workers, of Australia. They have an inalienable right to determine where their savings should go because they are the ones who are going to have to live off those savings. We are giving consumers a choice about where their savings should go. We are empowering the people who are doing the yards to save money by giving them greater choice.During this debate I have had the opportunity to consider a publication put out by Merrill Lynch, called Global Economic Trends. They point out that Japan will have the highest proportion of its population aged 65-plus by 2010. In Japan, 21.5 per cent—over one-fifth—of the population will be over 65 in 2010. In Australia, the number of people over the age of 65 is going to increase from 12.4 per cent, which it is at present, to 14.3 per cent by the year 2010—the baby boomer generation. That means that we are going to have more people over the age of 65 by 2010 than Canada, the United States, Poland, Russia, Argentina, Taiwan, Korea, Chile, Thailand, China, Turkey, Brazil, Venezuela and a number of other countries. That says that we need to start to increase our national savings.So I urge the opposition to, in the first place, support the taxation package before the Senate. That is the first step. The second step is for the opposition to support empowering consumers—support any initiative which will give greater power to consumers to determine the fate of their savings. By supporting this bill we are in fact empowering consumers—hardworking, dedicated Australians, saving their money through superannuation—by giving them the opportunity to decide where their hard-earned savings should go. That is a very crucial part of the policy platform of this government and that is why we are reintroducing this bill. We will be opposing the amendments. We have seen them before; they are no different. We will oppose them in consideration in detail. We look forward to this bill going to the Senate.Question resolved in the affirmative.Bill read a second time.2870Bill—by leave—taken as a whole.17:25:002870Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I move opposition amendment No. 1:(1) Schedule 1, page 3 (line 2) to page 39 (line 11), omit the Schedule, substitute:Schedule 1—Choice of superannuation investments and superannuation fundsPart 1—Superannuation Guarantee (Administration) Act 19921 Subsection 6(1) Insert: Commonwealth employee means an employee of the Commonwealth.2 Subsection 6(1) Insert: Commonwealth industrial award means: (a) an industrial award or determination made under a law of the Commonwealth; or (b) an industrial agreement approved or registered under such a law.3 Subsection 6(1) Insert: CSS means the scheme known as the Commonwealth Superannuation Scheme.4 Subsection 6(1) Insert: defined benefit superannuation scheme has the meaning given by section 6A.5 Subsection 6(1) Insert: defined benefit member means a member entitled on retirement to be paid a benefit defined, wholly or in part, by reference to either or both of the following: (a) the amount of the member's salary: (i) at the date of the member's retirement or an earlier date; or (ii) averaged over a period before retirement; (b) a specified amount.6 Subsection 6(1) Insert: PSS means the Public Sector Superannuation Scheme within the meaning of the Superannuation Act 1990 .7 Subsection 6(1) Insert: State industrial award means: (a) an industrial award or determination made under a law of a State; or (b) an industrial agreement approved or registered under such a law.8 Subsection 6(1) Insert: Territory industrial award means: (a) an industrial award or determination made under a law of a Territory; or (b) an industrial agreement approved or registered under such a law.9 Subsection 6(1) Insert: unfunded public sector scheme means a public sector scheme that is a defined benefit superannuation scheme: (a) in respect of which no fund is established for the purposes of the scheme; or (b) under which all or some of the amounts that will be required for the payment of benefits are not paid into the fund established for the purposes of the scheme or are not paid until the members become entitled to receive the benefits.10 Subsection 19(2) Omit "subsection (4)", substitute "subsections (2A) and (4)".11 After subsection 19(2) Insert: (2A) If an employer makes one or more contributions (the no choice contributions ) to a fund other than a defined benefit superannuation scheme, or an RSA, on behalf of an employee during a quarter and the contributions are not made in compliance with the choice of fund requirements, the quarterly short fall for the employer in respect of the employee is increased by the amount worked out with the formula: where: notional quarterly shortfall is the amount that would have been worked out under subsection (2) if the no choice contributions had not been made. Note: Part 3B sets out the choice of fund requirements. (2B) If: (a) a reduction of the charge percentage for an employee for a quarter is made under subsection 22(2) in respect of a defined benefit superannuation scheme; and (b) there is at least one relevant day in the quarter where, if contributions (the notional contributions ) had been made to the scheme by the employer for the benefit of the employee on the day, the notional contributions would have been made not in compliance with the choice of fund requirements; and (c) section 19A (which deals with certain cases where no contributions are required) does not apply to the employer in respect of the employee in respect of the scheme for the quarter; the quarterly shortfall for the employer in respect of the employee is increased by the amount worked out with the formula: where: notional quarterly shortfall is the amount that would have been worked out under subsection (2) if no reduction were made under subsection 22(2) in respect of the scheme. number of breach of conditions days is the number of relevant days in the quarter on which, if a contribution had been made to the scheme by the employer for the benefit of the employee, those contributions would have been made not in compliance with the choice of fund requirements. Note: Part 3B sets out the choice of fund requirements. (2C) The following days in a quarter are relevant days for the purposes of subsection (2B): (a) if the value of B in the formula in subsection 22(2) for the quarter is 1—every day in the quarter; or (b) in any other case—every day in the quarter that is in the shorter of the scheme membership period or the certificate period referred to in subsection 22(2). (2D) A reference in subsections (2A) and (2B) to the quarterly shortfall being increased includes a reference to the shortfall being increased from nil.12 After Part 3 Insert:Part 3A—Choice of superannuation investment requirementsDivision 1—Overview of Part32A Purpose of Part This Part sets out the requirement for certain superannuation funds to offer members a choice of investments within the fund.32B Meaning of funds —includes RSAs and schemes (1) In this Part: fund means: (a) a superannuation fund; and (b) a superannuation scheme; and (c) an RSA; but does not include a defined benefit superannuation scheme or a fund of which a member is a defined benefit member. (2) For the purposes of this Part, the holder of an RSA is taken to be a member.Division 2—Which contributions satisfy the choice of superannuation investment requirements?32C Contributions that satisfy the choice of superannuation investment requirements Contributions to certain funds (1) A contribution to a fund by an employer for the benefit of an employee is made in compliance with the choice of superannuation investment requirements if the contribution is made to a fund, that, at the time that the contribution is made: (a) satisfies the requirements of section 32D; and (b) is a fund in which an employee has chosen an investment strategy in accordance with Division 4; or (c) is a complying fund which offers member investment choice with a minimum of 3 investment options; or, if the employee is not a Commonwealth employee who is a member of the CSS or the PSS, is an unfunded public sector scheme. Small funds (2) A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of superannuation investment requirements if the contribution is made to a fund with fewer than 50 members. Contributions before certain date (3) A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of superannuation investment requirements if the contribution is made before 1 July 2000.Division 3—What are the choice of superannuation investment requirements?32D The choice of superannuation investment requirements A fund satisfies the choice of superannuation investment requirements if it offers members: (a) a choice of 3 or more investment strategies including low, medium and higher risk strategies; and (b) a description of the investment objectives of each of the strategies mentioned in paragraph (a); and (c) information to assist the member or prospective member to understand the effect of, and the risks associated with, each of the strategies offered.Division 4—Choosing an investment strategy within a superannuation fund32E Notification by employer An employer must notify each employee of his or her right to choose an investment strategy within a superannuation fund.32F What happens if an employee does not choose an investment strategy? If an employee does not make a nomination within 28 days after receiving a notification under section 32E, the employee's contributions are to be invested at the discretion of the fund trustees, provided that the fund trustees take all reasonable steps to maximise the retirement income return to the employee, taking into account the employee's age and pattern of employment.Part 3B—Choice of fund requirementsDivision 1—Overview of Part32G Purpose of Part This Part sets out the circumstances in which contributions are made in compliance with the choice of fund requirements.32H Meaning of funds —includes RSAs and schemes (1) In this Part fund has the same meaning as in Part 3A. (2) For the purposes of this Part, the holder of an RSA is taken to be a member.Division 2—Which contributions satisfy the choice of fund requirements?32J Contributions that satisfy the choice of fund requirements Contributions to certain funds (1) A contribution to a fund by an employer for the benefit of an employee is made in compliance with the choice of superannuation investment requirements if the contribution is made to a fund, that, at the time that the contribution is made, is: (a) a chosen fund for the employee (see Division 3); or (b) a default fund for the employee (see Division 4); or; (c) if the employee is not a Commonwealth employee who is a member of the CSS or the PSS—an unfunded public sector scheme. Contributions under AWAs or certified agreements (2) A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made under, or in accordance with, an AWA or a certified agreement under the Workplace Relations Act 1996 or a certified agreement under the Industrial Relations Act 1988 . Contributions under certain Victorian agreements (3) A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made under, or in accordance with, an employee agreement that was in force under the Employee Relations Act 1992 of Victoria and which continues to be in operation by virtue of section 515 of the Workplace Relations Act 1996 . Contributions before certain date (4) A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made before 1 July 2002. Contributions made after employees cease employment (5) If: (a) an employee ceases to be employed by an employer; and (b) after the employment ceases, the employer makes a contribution to a fund for the benefit of the employee and in respect of the employment; then, for the purposes of this section, the contribution is taken to have been made immediately before the employment ceases. Note: This section is used in determining if a quarterly shortfall for an employer is increased under subsection 19(2A) or 19(2B). Where subsection 19(2B) is relevant, the contributions referred to in this section are the notional contributions referred to in paragraph 19(2B)(b).Division 3—What is a chosen fund?32K What is a chosen fund? A fund is a chosen fund for an employee if it is a fund nominated for the time being by the employee and approved by the employer.32L Choosing a fund (1) This section sets out the procedures that an employer must go through before an employer makes a contribution to a fund for the benefit of an employee. (2) The employer must: (a) notify the employee of his or her right to choose a fund; and (b) invite the employee to make a choice of fund within 28 days after being notified under paragraph (a). (3) An employee may nominate a fund to his or her employer. (4) A nomination under subsection (3) must be in writing and agreed by the employee. (5) The employer must give the employee a copy of the nomination and of the employer's approval of the nomination. (6) The employer must retain a copy of the nomination. (7) An employer who intentionally or recklessly contravenes subsection (2) is guilty of an offence punishable on conviction by a fine not exceeding 10 penalty units.32M When must a choice be offered? An employer must offer a choice of funds: (a) to any new employee; and (b) to any existing employee who makes a written request to the employer to do so; and (c) when the employer becomes aware that there ceased to be any chosen or default fund for an employee. 32N Contributions satisfy Commonwealth, State or Territory industrial award requirements A requirement in a Commonwealth industrial award or a State industrial award or a Territory industrial award that an employer make contributions to a superannuation fund on behalf of an employee is not enforceable to the extent that the employer instead makes the contributions on behalf of the employee, in compliance with this Part, to another superannuation fund that is a chosen fund or a default fund.32O Information to be provided by funds to enable employee choiceInformation provided by funds to employees to enable employees to choose an appropriate fund must be in a prescribed form.Division 4—Default funds32P When is there a default fund? There is a default fund for an employee at any time when there is no chosen fund for that employee.32Q What fund is a default fund? (1) If: (a) an employee has been offered a choice of funds under section 32L but has not nominated a fund within the time provided; and (b) the employee is covered by a Commonwealth, State or Territory industrial award; the default fund is the fund specified in the industrial award. If there is more than one fund specified in the award, the default fund is the one chosen by the employer for that purpose. (2) If: (a) an employee has been offered a choice of funds under section 32L but has not nominated a fund within the time provided; and (b) the employee is not covered by a Commonwealth, State or Territory industrial award; the default fund is the fund to which a majority of employees at that employee's workplace belong. (3) If: (a) an employee has been offered a choice of funds under section 32L but has not nominated a fund within the time provided; and (b) the employee is employed by a new business which is not covered by a Commonwealth, State or Territory industrial award; the default fund is the fund specified in the relevant industrial award.Part 2—Retirement Savings Accounts Act 199713 Section 52 Repeal the section.14 Subsection53(3) Repeal the subsection.15 Subsection 56(1) Omit "52,".16 Subsection 62(1) After "employee", insert "unless the RSA is a chosen fund for the employee under Part 3B of the Superannuation Guarantee (Administration) Act 1992 .Part 3—Superannuation Industry (Supervision) Act 199317 Subsection 143(1) Repeal the subsection, substitute: (1) The object of this Part is to prohibit false and misleading conduct and other forms of improper conduct in relation to superannuation interests and regulated documents.18 After paragraph 143(2)(e) Insert: (ea) other forms of improper conduct (sections 148CA);19 After section 148C Insert:148CA Improper conduct (1) The trustee of a superannuation entity, or an associate of such a trustee, must not: (a) supply, or offer to supply, goods or services to a person; or (b) supply, or offer to supply, goods or services to a person at a particular price; or (c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person; on the condition that one or more of the employees of the person will hold, or has applied or agreed to hold, a superannuation interest provided by the trustee or the associate of the trustee. (2) A trustee of a superannuation entity, or an associate of such a trustee, must not refuse: (a) to supply, or offer to supply, goods or services to a person; or (b) to supply, or offer to supply, goods or services to a person at a particular price; or (c) to give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person; for the reason that one or more of the employees of the person does not hold, or has not applied or agreed to hold, a superannuation interest provided by the trustee or the associate of the trustee. (3) If: (a) the trustee of a superannuation entity, or an associate of such a trustee, contravenes subsection (1) or (2); and (b) a person suffers loss or damage because of the contravention; the person may recover the amount of the loss or damage by action against the trustee or the associate of the trustee, as the case may be. (4) The action must be begun within 6 years after the day on which the cause of action arise. (5) This section does not affect any liability under any other provision of this Act or under any other law.Amendment No. 1 essentially sets out the opposition's alternative choice model. I want to make a few remarks about it shortly, but before I do that I would like to pursue some issues and raise some questions with the Minister for Financial Services and Regulation that arise from his second reading speech. Firstly, Minister, in your second reading speech you said:The government is continuing to work with industry on the design details of the proposed key features statements. Draft key features statements were prepared in consultation with industry and have been market tested . . .Is it possible for the opposition to get a copy of the proposed draft key features statements and will the government also release the results of the market testing of the key features statements? I make those requests because the information would be helpful in assisting the opposition to further refine its own choice of funds model, and if the results of the market testing are in fact positive I would have thought that the government would be happy to release the information. That is the first query.In your second reading speech you said that the government was not prepared to compromise on the fundamentals of its choice of funds model and that one of those fundamentals was to ensure that employees get a genuine choice as to which fund their superannuation is paid to. Labor is not opposed to that choice fundamental—about employees getting a genuine choice as to where their superannuation money goes. That is precisely why we have proposed our model and are opposing yours, which gives employers the choice of fund rather than employees. My query is: under the government's model does an employer have the right to not accept an employee's nominated superannuation fund? I am interested in your response to that.The third thing I wanted to take up with you is whether an employee who is nominated or who is employed by more than one employer has the right to ask a second employer to pay their superannuation contributions into the fund chosen by the employee as their preferred superannuation fund. If that is the case, does the second employer have the right under the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 —under the government's model—to refuse to pay the employee's superannuation contributions into the superannuation fund that the employee has with the first employer? I seek some responses to those questions.While you are thinking about those questions, I would like to follow up a couple of observations made by speakers in the debate on the second reading—the member for Curtin and the member for Parramatta. The member for Curtin said that she could not understand how Labor thought that costs would go up pursuant to the government's choice model. I would direct her to the explanatory memorandum of the bill at page 48 which states that funds will have, from the point of view of employers, initial costs of the order of $21 million and recurrent costs of the order of $15 million and that the funds themselves would have initial costs of the order of $5 million and recurrent costs of the order of $2 million. Given that the government's own explanatory memorandum says that costs will go up, that seems to us to inevitably lead to lower retirement incomes. The explanatory memorandum certainly does not say that costs will come down.The member for Parramatta made a couple of references to Mr Ken Lockery, the principal of Towers Perrin, concerning the issue of choice. I point out to the member for Parramatta that the Senate Select Committee on Superannuation heard from Ken Lockery and before the Senate committee he noted that the majority of employees in large employer based or industry funds would not receive any benefit and might instead suffer an economic loss. He pointed out that the government was ignoring the fact that competitive choice already exists in the superannuation industry at the wholesale market level. He said:The key issue that the government has failed to recognise is the efficiency of our present trustee based system in producing intense competition at the wholesale level between investment managers and between fund administrators. It is clear that many other industry participants support our views.Clearly, the evidence that Mr Lockery put to that Senate committee very much endorses the concerns that the opposition has expressed. (Time expired)17:31:002876Hawker, David, MPMr HAWKER8H4WannonLP10—I join in this debate because I would like to support the words of the Minister for Financial Services and Regulation. I have some concerns with the amendment that has been put forward by the opposition. As I see it, it is one of those amendments that is often put forward, probably with good intentions, but which we have to look closely at to see what the effects could be. As I understand the amendment, they are trying to argue about choice versus investment, versus the choice of fund. Clearly, in offering this move to choice—and it is long overdue—the government is already taking a very big step forward in giving employees, through their workplace, the opportunity to have that choice.The member for Wills overlooks a very simple point when he raises the question of additional costs. While they certainly sound like large sums in themselves, in terms of the amount of money that is being invested in superannuation funds, proportionately they are not large sums. However, the most important thing is not the question of the additional cost but the question of whether it will lead to better returns. One of the points that the minister has already made—and one of the points that has to be made again and again—is that the introduction of competition, whether it be in superannuation or in other areas, is the best guarantee we can offer for people to get better returns.We should not be focusing on the question of cost. We should be focusing on the question of whether or not people are going to get a better return for their superannuation. This is a very important point and one that I would ask the opposition, through the member for Wills, to consider very carefully because that focus is one that they would see much better results from.The amendment is also in some ways splitting hairs because this choice is already being offered. The question of the employee being able to exercise choice through the way the employer offers it offers sufficient choice and, by going down this path, the employee would see that opportunity to exercise that choice much sooner than following the opposition's role. I believe that the amendments put forward by the opposition should be rejected. They should be rejected on the very sound grounds that they are unnecessary and could be counterproductive. What the government is proposing offers not only reasonable choice but, more importantly, the opportunity for employees to get a better rate of return and to have the opportunity to get a better superannuation payout when it is due.We are very conscious of that need given the figures that the minister has already put forward about maximising that return. Clearly, the need to increase savings and to increase opportunities through superannuation for people to be self-sufficient when they retire is of paramount importance. It is something that the community is trying to come to grips with now. It is something that, through this bill, the government is making a very substantial step towards helping. I therefore believe that the bill should be passed as it is proposed by the government.17:34:002877Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—In moving the amendment to the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 , I want to point out that it is extremely doubtful that the government's model will achieve the aims that it claims it will, particularly lower fees and charges and better retirement incomes. The opposite is more likely to occur, whereby the retirement incomes of thousands of Australians will be diminished as a result of the government's choice model.The government's model gives enormous power to employers, who can either choose the range of funds employees will have on offer or veto the choice the employee makes without recourse to an independent arbiter—for example, the Industrial Relations Commission. It is essentially deregulation of the retail superannuation market. It also requires use of a default fund arrangement. Where an employee does not exercise a choice after 28 days, the employer can pay superannuation contributions to any fund of the employer's choosing, regardless of the merits of that fund in meeting an employee's retirement income needs.For example, a young worker could end up in a low return retirement savings account—an RSA—which is generally considered quite inappropriate for younger workers. The government's legislation contains a specific clause which overrides industrial award provisions that specify a superannuation fund. That means that from the start date an employer cannot continue to pay superannuation to his or her employees in accordance with the award or they will be in breach of the act.The Senate Select Committee on Superannuation examined choice and found a number of problems with the government's model. They said that there is a need for a comprehensive education campaign before choice is introduced. They said that there would be increased costs to funds in administration and marketing, resulting in lower retirement incomes for fund members. They found increased costs to employers in administration and compliance. They also raised the issue of insurance gaps created by the default fund arrangement.In the last day or two I have seen, in the latest issue of Super Review of February this year, an article by Sandy Grant, the general manager of the industry funds services, pointing out this very issue of insurance arrangements and the risk of newly appointed employees being left without insurance. If we are going to have a default fund arrangement where the default funds are expected to pick up the insurance for this 28-day period—or, indeed, up to 58 days—before the new employee nominates the fund of choice, that would be a most unsatisfactory arrangement for those default funds where they are carrying the insurance burden but they are not going to get the premiums for both the period before and after the choice goes to the chosen funds. This will make it very difficult for default funds to maintain high-quality insurance benefits in this sort of marketplace.As Sandy Grant points out, the provision of cover for all employees from the date of joining will be a benefit which is lost to employees under this arrangement. He further points out that, with an estimated one in five Australian workers changing jobs each year, the extent of the potential problem is quite substantial. That area of insurance gaps is one that the Senate pointed out and they were quite right to do so. They also pointed out the difficulty in presenting consistent disclosure information which is easily understood.In the light of that overwhelming evidence against the government's choice model, Labor is seeking the support of the House for an alternative choice of fund model, which provides for employee choice rather than employer choice. We are proposing a two-stage approach. From 1 July 2000 we will have a proposed member investment choice within funds, requiring funds with more than 50 members to offer members a minimum choice of three investment options based on low, medium and high risk return ratios. For example, one investment choice option could be predominantly capital backed, one could be balanced and the third option could be a growth or equities fund. This already happens in many industry and public offer funds, and is widely known as `member investment choice'. Defined benefit schemes, due to the nature of the benefit accrued, will not have to meet the member investment choice requirement. In any case, there is a general trend in the superannuation industry towards accumulation type schemes. Contributions to funds which already satisfy member investment choice will be taken to be contributions which meet the member investment choice model. That means that, where funds already offer member investment choice, employers who contribute to those funds will be able to contribute, as they already are contributing, for both new and existing employees. That is a big difference from the government's model, which requires employers to do all sorts of twists and turns to comply with the complicated choice model that is proposed. (Time expired)17:40:002878Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—I oppose the amendment. The member for Wills referred to the explanatory memoranda and the question of costs. The policy objective of the government in its choice of superannuation funds bill is to provide employees with greater choice as to which complying superannuation fund or retirement savings account will receive the superannuation contributions made on their behalf.The whole point is that greater competition and better returns will benefit all persons with superannuation and will reduce, over time, pressure on the age pension system. The measure is designed specifically to increase competition, efficiency and performance within the superannuation environment and result in a reduction of fees and charges for persons with superannuation. The objective is to reduce, in time, fees and charges for people with super so that people get a better return on their superannuation.The explanatory memoranda go through the options, when looking at the offers of choice of funds, and the analysis of the costs of the implementation of each option. Some of them are minimal. For example, in negotiating a workplace agreement that has in it a compo nent providing for a choice of superannuation fund as part of the general workplace agreement, there may be some costs incurred but these will be minimal.There are other choices. The second option has some initial costs with familiarisation and the like and then recurrent costs which employees may incur when choosing a fund. But surely, once this is implemented and once employees understand what it is they are required to do, the recurrent costs will fall away. The overall aim is to ensure that, over time, there will be a downward trend in the costs incurred in offering choice.The other point that was raised in relation to the proposed opposition model—namely, offering investment choice within superannuation funds—ignores the fact that investment choice has, in recent years, been a feature of the Australian superannuation environment. If one looks at its impact, investment choice has not brought about any real change in providing employees with greater choice. It has not brought about any change in the concerns that I addressed earlier, which were to ensure that, through superannuation, there is an increase in private savings. Trying to delay fund choice in favour of investment choice will merely delay the benefits that employees will derive under fund choice. This is because investment choice does not provide the level of competition that fund choice would.For those reasons, the opposition's proposed model, involving investment choice within superannuation funds, does not address the concerns to which we have been referring during this debate over some time, because investment choice does not provide the level of competition that fund choice would.17:44:002878Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The member for Curtin rather confirmed what we had been saying about additional costs. But I was talking about the impact on employers of the government's model. For example, we had discussions with the Coca-Cola Amatil superannuation fund. Coca-Cola Amatil already offer extensive choice within that superannuation fund whereas, under the government's model, as an employer, they would also be required to offer fund choice which, from their point of view, is a pretty unsatisfactory state of affairs.Under Labor's model, employers will be required to notify employees of their right to choose an investment strategy within a superannuation fund at the same time as they notify the employee of the superannuation entitlements. That will not significantly increase employer compliance costs or burden them, as employers already notify employees what their superannuation entitlements are and what fund options are available. It is a simple matter for employers to notify employees of their right to choose an investment strategy. They would not be involved in offering investment advice.Complying superannuation funds will be required to provide their fund members with information about member investment choice and their options. That information will be designed to assist the member to understand the effect of and the risks associated with each of the investment strategies offered and to make an informed choice. That is something which the government's model has ignored. Where a fund member does not make a choice of investment strategy, the fund trustee will have the discretion—as they currently do—to invest the member's contributions with the intention of maximising the member's retirement income. The trustee will be required to take age and pattern of employment into consideration, although they are not the only things that trustees consider.The second phase under our model is genuine employee choice. From 1 July 2002, if employees so desire, they will be able to override the superannuation fund which is prescribed in their industrial award and, with the agreement of the employer, have their superannuation contributions paid into a fund of the employee's choice. This is a genuine employee choice model. Employers and employees who have negotiated a certified agreement or an Australian workplace agreement will be taken to have exercised choice. We would be developing appropriate regulations to govern standard disclosure provisions and get that simple comparison of fees, charges, fund earnings and so on.The government is apparently already drafting these regulations and ought to release this crucial information. It is difficult to consider such a critical bill, which has the potential to impact on the retirement incomes of all Australians, without crucial disclosure and key feature statement regulations out in the open. If we had disputes between employers and employees, we would have the Industrial Relations Commission acting as the independent arbitrator. We would have a default fund arrangement automatically occurring, being the fund nominated in the industrial award covering that worker.The sanctions for not complying with Labor's model would be the same as those applying with the government's model, but the important thing to recognise in Labor's model is that employers can continue to contribute under current superannuation arrangements without having to do the backflips and somersaults that they would have to execute in order to meet the government's requirements. We want choice which is driven by employees, genuine choice, choice which would be welcomed by employers for its simplicity and flexibility.Small businesses in particular would welcome Labor's simple, worker driven model. It is bizarre that a government which promised to cut small business red tape is contemplating introducing the model that they have put forward to the parliament.We have talked about the need for an education campaign to give employees the capacity to make an informed choice. We have proposed third line forcing provisions that place significant financial penalties on any employers who enrol employees into a fund from which they, the employers, receive a financial benefit. These are substantial protections. Combined with the fact that Labor's model is employee driven, we believe that consumers would be appropriately and adequately protected. I commend Labor's model and amendment No. 1 to the House.17:48:002879Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—The member for Wills asked me a number of questions earlier in this debate. I have some answers here. As to the first question of the proposed draft key features statement, I am advised that there should be no problems providing a copy of that to the member for Wills. In fact, I was advised that there have been extensive consultations with all political parties represented in this House and in the Senate in relation to this matter. I was asked: will the government also release results of the market testing of the key feature statements? Again, I am advised there has already been extensive consultation there.On that first matter as well, I undertake that the government will continue to consult with consumers and various interested parties, as they have in the past. They will continue to consult about issues relating to the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 into the future. I am sure that my colleague the Assistant Treasurer, Senator Rod Kemp, who essentially has had carriage of this bill within the executive, will continue with this consultation process.The second question was: under the government's model, does an employer have a right of veto? I am advised that the answer is no, once an employer offers limited or unlimited choice, under an informal agreement, both the employer and the employee must agree. That deals with the second question.The third question was: does an employee who is employed by more than one employer have the right to ask a second employer to pay their superannuation contributions into the fund chosen by the employee as their preferred superannuation fund? I am advised that if the second employer offers unlimited choice then the answer is no; if the second employer offers a limited choice, then it will depend on whether one of the funds offered is that into which contributions from the first employer are paid. But an employee always has the right to ask for contributions to be paid into a particular fund. And it is worth adding that we expect many if not most employers will offer unlimited choice. On that basis, we will be opposing the first of the amendments proposed by the member for Wills.17:51:002880Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I have noted the answers given by the Minister for Financial Services and Regulation to questions 1 and 3. I do want to follow up the second question. Essentially, he said that the answer was no in terms of the employer's veto. My further query then is: how do you explain the operation of clause 32G of the choice bill, which, as it is explained in the explanatory memorandum of the bill, says that the employer may accept a chosen fund nomination from the employee? Does that mean that the employer has the power to not accept an employee's chosen fund provided that fund meets the minimum SIS standards for superannuation funds? There does seem to me to be a conflict between what the minister is saying here and the way in which the explanatory memorandum covers clause 32G.17:52:002880Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—I will have to take that question on notice. I undertake to the member for Wills that I will get him a response.Question put:That the amendment (Mr Kelvin Thomson's ) be agreed to.The House divided. [5.57 p.m.](Mr Deputy Speaker—Mr C. Hollis) Ayes . . . . . . . . . . . . . . . . 63 Noes . . . . . . . . . . . . . . . . 76 —— Majority . . . . . . . . . . . . 13 ——Question so resolved in the negative.Voting lists are recorded in the Votes and Proceedings.18:02:002880Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—by leave—I move opposition amendments Nos 2 to 15:(2) Clause 2, page 2 (line 2), omit "1 July 1999", substitute "1 July 2000"(3) Schedule 1, item 15, page 7 (lines 1 to 14), omit the item, substitute:15 Subsection 6(1) Insert: industry-based superannuation fund means a complying fund or complying superannuation scheme that: (a) has 2 or more employer-sponsors; and (b) is a fund which operates on a not-for-profit basis; and (c) complies with section 89(1) of the Superannuation Industry (Supervision) Act 1993 (basic equal representation rules). A fund is also an industry-based superannuation fund if it meets the above requirements and is nominated in a Commonwealth award, a State award or a Territory award immediately before the commencement.(4) Schedule 1, item 25, page 11 (line 4), omit "1999", substitute "2000".(5) Schedule 1, item 32, page 14 (lines 14 to 20), omit subsection (2), substitute: Contributions under AWAs, Certified Agreements or Federal or Territory Awards (2) A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made under or in accordance with, an AWA, a certified agreement under the Workplace Relations Act 1996 , a certified agreement under the Industrial Relations Act 1988 , a Commonwealth industrial award, or a Territory industrial award.(6) Schedule 1, item 32, page 15 (lines 21 to 26), omit paragraphs (a) to (c), substitute "before 1 July 2000".(7) Schedule 1, item 32, page 19 (line 31) to page 20 (line 17), omit subsections (1) and (2), substitute: (1) Subject to this section, if before the commencement of this section (a) an employer has contributed to a complying superannuation fund, a complying superannuation scheme or an RSA for the benefit of an employee and that contribution would have been in compliance with the choice of fund requirements; and (b) it is possible for the employer to contribute to the fund on behalf of the employee; and (c) since the employer last contributed to that fund for the benefit of the employee, the employer has not contributed to any other fund that, at the time the employer contributed to it, was a chosen fund for the employee; the fund is a default fund for the employee. Note: All such contributions made before 1 July 2000 are in compliance with the choice of fund requirements: see subsection 32C(4). (2) If there is not a default fund for the employee under subsection (1), the employer may select as a default fund for the employee: (a) any complying defined benefit scheme; or (b) any complying superannuation fund or complying superannuation scheme which: (i) provides a choice of investment options; or (ii) where the employee does not select an investment option within 28 days of being invited to, places the employee's contributions in a fund to be invested at the discretion of the fund trustees, provided that the fund trustees take all reasonable steps to maximise the retirement income return to the employee, taking into account the employee's age and pattern of employment; or (iii) unless the employee otherwise chooses, provides insurance in respect of the death or permanent disability of the employee; and (iv) complies with such other standards as may be prescribed. (2A) A fund is not a default fund for the purposes of this section if a commission is payable to any person in respect of the addition of employees to the fund, scheme or RSA or in respect of the payment of contributions to the fund, scheme or RSA.(8) Schedule 2, item 32, page 23 (lines 5 to 9), omit subsection 32Q(1), substitute:(1) For a limited choice offer to be valid, the offer must give the employee at least 4 choices from which to choose. Each choice must be a complying superannuation fund, a complying superannuation scheme or an RSA. No commission must be payable to any person in respect of the addition of employees to the fund, scheme or RSA or in respect of the payment of contributions to the fund, scheme or RSA.(9) Schedule 1, item 32, page 24 (line 2), at the end of paragraph (1)(a), add: provided that the fund, scheme or RSA must not be one in respect of which commission is payable to any person in respect of the addition of employees to the fund, scheme or RSA or in respect of the payment of contributions to the fund, scheme or RSA. (10) Schedule 1, item 32, page 26 (lines 25 to 32), omit proposed section 32X.(11) Schedule 1, page 29 (after line 13), after item 40, insert:40A At the end of section 40 Add: (5) The Commissioner must not give a notice under this section, stating that an entity is a complying superannuation fund, complying approved deposit fund or pooled superannuation trust unless the Commissioner is satisfied that any computer system used by the entity in the administration of its members' benefits is year 2000 compliant. (6) In this section, year 2000 compliant means that the performance and functionality of a computer system will not be adversely affected by the change in date from 31 December 1999 to 1 January 2000.40B At the end of section 46 Add ", provided that the fund has provided evidence to the Commissioner that any computer system used by the fund for the administration of its members' benefits is year 2000 compliant within the meaning of subsection 40(6).(12) Schedule 1, item 45, page 33 (lines 25 and 26), omit the item, substitute:45 Subsection 143(1) Repeal the subsection, substitute: (1) The object of this Part is to prohibit false and misleading conduct and other forms of improper conduct in relation to superannuation interests and regulated documents.(13) Schedule 1, item 46, page 34 (line 8), after paragraph (e), insert: (ea) other forms of improper conduct (sections 148CA); and(14) Schedule 1, item 50, page 36 (after line 10), after section 148C, insert:148CA Improper conduct (1) The trustee of a superannuation entity, or an associate of such a trustee, must not: (a) supply, or offer to supply, goods or services to a person; or (b) supply, or offer to supply, goods or services to a person at a particular price; or (c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the pro posed supply, of goods or services to a person; on the condition that one or more of the employees of the person will hold, or has applied or agreed to hold, a superannuation interest provided by the trustee or the associate of the trustee. (2) A trustee of a superannuation entity, or an associate of such a trustee, must not refuse: (a) to supply, or offer to supply, goods or services to a person; or (b) to supply, or offer to supply, goods or services to a person at a particular price; or (c) to give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person; for the reason that one or more of the employees of the person does not hold, or has not applied or agreed to hold, a superannuation interest provided by the trustee or the associate of the trustee. (3) If: (a) the trustee of a superannuation entity, or an associate of such a trustee, contravenes subsection (1) or (2); and (b) a person suffers loss or damage because of the contravention; the person may recover the amount of the loss or damage by action against the trustee or the associate of the trustee, as the case may be. (4) The action must be begun within 6 years after the day on which the cause of action arise. (5) This section does not affect any liability under any other provision of this Act or under any other law.(15) Schedule 1, item 67, page 39 (line 9), omit "1999", substitute "2000".I will speak briefly in support of the amendments. Included within these amendments are amendments that would extend the start date of choice to 1 July 2000 for both new and existing employees. This amendment is widely supported by both people in the superannuation industry and employers, who are dreading the government's policy of having two separate classes of employees. Having two distinct classes of employees—those employed before 1 July 1999 and those employed after—is entirely inconsistent with the government's argument for wanting to do away with award based superannuation. As we have seen so many times before, the government has an inconsistent position and argument on superannuation.We want to do a favour for the government, employees, employers and superannuation funds by moving amendments which will align the start date for the government's so-called superannuation choice for new and existing employees. We think that the start date ought to be the same, and it ought to be 1 July 2000. The whole superannuation industry has called for this extension of time, including the peak superannuation body, the Association of Superannuation Funds of Australia.We also have amendments which revise the definition of `industry based fund'. This amendment replaces the government's definition of industry based fund with a definition which more accurately reflects what a true industry based fund is. This amendment will apply only in the case where, under the government's model, an employer chooses to offer his or her employees the four choice of funds offer—where an employee will have to choose one of four funds. It does that by requiring a fund which seeks to qualify under this definition of an industry based fund to be a not-for-profit fund which operates purely in the best interests of the members of that fund.Amendments in this package relate to the removal of clause 32X, which overrides federal awards. These amendments go to the heart of the entire choice of superannuation debate. The overriding of award based superannuation entitlements, which is what the government is proposing here and in legislation we debated yesterday, is really what the government is all about. The effect of Labor's amendment is to remove 32X from the government's bill, which would otherwise override federal awards.This is hypocritical. Clause 32W says that awards will not be overridden for the purposes of determining notional earnings bases on which to base an employee's superannuation contributions. The reason for this is that, if the award provisions are overridden, em ployers will lose the basis on which to determine an employee's salary for superannuation purposes because that is contained in awards. That means that some employees could choose a fund that would require greater contributions than they are presently receiving. That, in turn, would cost employers more.Surprise, surprise! The government has decided that it wants to do something about this, presumably following lobbying from employer representatives. They say, `We're going to insert a clause which says, "Well, even though the award no longer applies for superannuation purposes, we'll pretend that it still does just so employers won't be liable to pay any more than they currently are liable to pay."'We are also moving amendments relating to the default fund option. Because of the complexity of the government's choice of fund model the default fund arrangements are crucial, so we are moving amendments in that area. We are also moving amendments concerning the avoidance of commission based sales under the choice regime. We do not want to see the sorts of things that occurred in places like Chile and, indeed, in the UK. These amendments are designed to try to ensure that that does not happen.We are moving amendments that concern the need for superannuation funds to be year 2000 compliant and, finally, we have an amendment concerning third line forcing provisions—once again, a very important one. If employers are not discouraged from entering into third line forcing arrangements with other parties, the retirement incomes of many Australians will suffer. Having said that in support of the amendments, I hope the House will support them for the benefit of the retirement incomes of thousands of Australian working men and women.18:07:002883Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—I would like to refer to an earlier question about section 32G that the member for Wills raised. I have undertaken to give him a more detailed response, but I can say at this stage that 32G is about informal agreements, not limited or unlimited choice. Therefore, his concerns are unnecessary.In dealing with the amendments currently being moved, I would like to point out to the House that they are basically a denial of choice. I am sure that all members on this side of the House would be pro-choice; they would be supporting choice of superannuation fund. What that does is empower consumers. The opposition wish to deny workers under awards a choice of fund under amendment No. 5. Amendment No. 8, which relates to commission based selling, is covered within the existing bill. Therefore, the government will not be supporting these amendments and will continue to oppose them in the Senate.Question put:That the amendments (Mr Kelvin Thomson's ) be agreed to.The House divided. [6.13 p.m.](Mr Deputy Speaker—Mr C. Hollis) Ayes . . . . . . . . . . . . . . . . 62 Noes . . . . . . . . . . . . . . . . 76 —— Majority . . . . . . . . . . . . 14 ——Question so resolved in the negative.Voting lists are recorded in the Votes and Proceedings.Bill agreed to.2884Bill (on motion by Mr Hockey)—by leave—read a third time.Committees2884288428842884Nehl, Garry, MPMr NEHLAE4CowperNP10—I present the report of the Selection Committee relating to the consideration of committee and delegation reports and private members business on Monday, 8 March 1999. The report will be printed in today's Hansard and the items accorded priority for debate will be published in the Notice Paper for the next sitting.The report read as follows—Report relating to the consideration of committee and delegation reports and private Members' business on Monday, 8 March 1999 Pursuant to standing order 331, the Selection Committee has determined the order of precedence and times to be allotted for consideration of committee and delegation reports and private Members' business on Monday, 8 March 1999. The order of precedence and the allotments of time determined by the Committee are shown in the list.COMMITTEE AND DELEGATION REPORTSPresentation and statements1 TREATIES—JOINT STANDING COMMITTEE: Final report on Multilateral Agreement on Investment.The Committee determined that statements on the report may be made—all statements to be made within a total time of 20 minutes.Speech time limits—First Member speaking—10 minutes.Other Members—5 minutes each.2 ECONOMICS, FINANCE AND PUBLIC ADMINISTRATION—STANDING COMMITTEE: Interim report on Reserve Bank of Australia's annual report for 1997-98.The Committee determined that statements on the report may be made—all statements to be made within the time remaining for committee and delegation reports.Speech time limits—First Member speaking—10 minutes.Other Members—5 minutes each.PRIVATE MEMBERS' BUSINESSOrder of precedenceNotices1Mrs Crosio to present a bill for an act to provide for the establishment and administration of a scheme to guarantee the payment of wages and certain other liabilities owed to employees in the event of employer insolvency and for related purposes.2Mrs Hull to move:That this House calls on the Government to make provision for recurrent funding for student hostels servicing the school access needs of students in remote areas of Australia.Time allotted—remaining private Members' business time prior to 1.45 p.m.Speech time limits—Each Member—5 minutes.The Committee determined that consideration of this matter should continue on a future day.3Mr Cadman to move:That the House: (1) notes with deep concern the high level of suicide in Australia;(2) expresses its dismay that young males, drug takers and residents of rural areas are particularly prone to take their lives;(3) conveys its sympathy to the families and friends who have been touched by the tragedy of suicide; and(4) commits itself as individuals and as a representative group of Australians to do everything possible to reduce the high level of suicide.Time allotted—30 minutes.Speech time limits—Each Member—5 minutes.The Committee determined that consideration of this matter should continue on a future day.4Mr Martin Ferguson to move:That this House:(1) celebrates the 50th anniversary of Australian Citizenship;(2) acknowledges the success of the postwar immigration policy and the massive contribution these new settlers have made to Australia;(3) recognises the desirability of living in one of the world's most harmonious multicultural societies and applauds the diversity of our cultural mix;(4) applauds those beneficiaries of our immigration program who have become citizens of this country; and(5) encourages permanent residents to consider their commitments to this country and apply to take out citizenship in this, the celebratory year of the 50th anniversary of Australian Citizenship.Time allotted—remaining private Members' business time.Speech time limits—Each Member—5 minutes.The Committee determined that consideration of this matter should continue on a future day.Bills2885r6012885Debate resumed from 3 December 1998, on motion by Mr Hockey:That the bill be now read a second time.18:20:002885Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Sales Tax Legislation Amendment Bill (No. 1) 1998 is an omnibus sales tax bill which deals with a number of separate areas relating to implementing announced exemptions for space launch vehicles, payloads and other goods intended for launch into outer space, or to be brought back from outer space. It deals with remedying weaknesses in the provisions to prevent evasion of sales tax in the computer industry. It deals with Olympics related exemptions and seeks to close a loophole in the temporary importation provisions.I will speak to each of those matters in turn. The first one is the space industry exemptions. In order to encourage the development of the Australian space industry, Ministers Costello and Moore, the Treasurer and the Minister representing the Minister for Industry, Science and Resources, on 23 June last year jointly announced sales tax exemptions. In the course of the 1998 election campaign Labor pledged to honour those arrangements.The following types of space equipment will be exempt from sales tax: space launch vehicles which can or are intended to be able to carry a payload into or back from outer space, payloads or other goods that a launch vehicle is to carry into or back from outer space, goods marketed as or for use as parts for any of the goods above and goods for use exclusively as raw materials in constructing or repairing space launch vehicles, payloads or other goods to be carried into or back from outer space.I understand that these measures are necessary, as importation of the relevant equipment would otherwise attract sales tax liability, thereby threatening the viability of the proposed commercial activity. The cost to revenue is not quantifiable. However, it is argued that there is, in fact, no practical revenue cost associated with the measure as the activity would probably not take place without the exemption. This measure, we believe, will assist industrial development and, as such, we support it.The second area is computer industry arrangements. To counter significant sales tax evasion, specific arrangements have been introduced for computer and related equipment. The Taxation Office advises that these are generally working well, however there have been some deficiencies identified which this bill seeks to remedy.The amendments cover three specific areas. First, aligning the description of goods with the revised customs tariff clarifications, which are technical amendments only. Secondly, increasing the maximum penalty for false declarations thereby increasing the disincentive to make such false declarations. That is an increase from $2,000 to $5,000. Thirdly, closing a loophole where goods falsely claimed to be exported—hence tax free—which are really sold for domestic use are covered by the arrangements. These proposals improve existing anti-avoidance arrangements and should be supported.The third area is Olympics related exemptions. The amendments will provide an exemption from sales tax for accompanied baggage and personal effects and unaccompanied baggage and cargo imported by or on behalf of non-Australian Sydney 2000 Olympic and Paralympic family members and delegations and participants in the Sydney 2000 Olympics, Paralympics and associated events. The exemption is not extended to goods for sale, alcohol or tobacco products, items of equipment which are more appropriately handled under the temporary importation provision including, in particular, high revenue potential items such as vehicles and digital communications equipment.This proposal is similar to the exemption arrangements applying to official visiting international persons, for example, foreign military personnel. The tax office advises that the enactment of a separate regime for Olympics related imports is supported on administrative simplicity grounds; that there will be so many people involved that use of the temporary importation provisions would be too cumbersome. The measure is supported by the relevant ministerial council. It has the support of the New South Wales government. It is worth saying that the issue of special entitlements for Olympic officials is, in the present climate, a sensitive one, but these are not measures which would allow rorting of the Australian tax system and the measure is supported.The fourth area is the temporary importation provisions. The 1997 budget contained an announcement to clamp down on exploitation of a defect in the temporary importation provisions. These provisions allow tax-free import of goods if they are to be subsequently exported within 12 months. However, a deficiency exists where the goods are subsequently reimported into Australia. The bill proposes to enact the 1997 budget measure to close this loophole. The proposed date of effect is from the time of the announcement, that is, 13 May 1997. While this policy ought to be supported, we are not comfortable with supporting legislation which is retrospective by almost two years. The tax office admitted at a briefing that the revenue effects of not making the provision retrospective would be negligible. I think the only example that they came up with relating to this provision was the importation of sailing vessels. So, while supporting the measure in principle as it is an anti-avoidance measure, Labor will propose that this provision be prospective in operation, that is to say from the date of the introduction of the bill. Accordingly, we will be moving an amendment which will change the commencement date of the provisions regarding temporary importation from 13 May 1997 to 10 December 1998.This legislation refers to the sales tax regime and makes changes to the sales tax regime. The government has before the parliament proposals which would do much more than make these sales tax regime changes at the edges that are referred to specifically here. What it is, in fact, proposing to do is replace the wholesale sales tax regime in its entirety with the goods and services tax. It is my view and the view of other Labor representatives that this change will have very adverse effects on the Australian community.The subject of the matter of public importance debate this afternoon was the effects of a GST on prepaid funerals. The effects on prepaid funerals as outlined in the matter of public importance debate are so dramatic I was reminded of the novel Catch-22 and the character Yossarian who decided that he was going to live forever or die in the attempt. I was encouraged to remember that by listening to what is happening to prepaid funerals even before the GST legislation makes its way through the parliament.I want to spend a little while discussing the issue of the GST's impact on charities. This is something that has been brought to my attention by a number of charities in my own electorate. The concerns that they have expressed are, I think, pretty substantial indeed. I want to draw to the attention of the House the concerns of Yooralla which operates, amongst other things, a special school for the disabled in Glenroy in my electorate. They have written to all Victorian MPs concerning the proposal of the federal government to change the wholesale sales tax regime and replace it with a GST. The letter talks about its impact on people with disabilities, the charitable sector and particularly the Yooralla society.I point out that Yooralla is one of Victoria's largest disability support service providers and it touches the lives of up to 30,000 Victorians a year. It runs, as its letter sets out, a lean operation, and yet it provides services of unquestionable quality. Consequently, it is much valued by those whom it supports in its network. The costs of its programs are hugely more than its government funding revenues and the fragility this creates means that it is in no position to absorb the consequences of poor policy making at this time. Unfortunately, Yooralla goes on to say that replies to its past correspondence to government largely have been noncommittal or tend to restate the federal government's policy position asserting that, as a charity, Yooralla will be better off with a goods and services tax in place.8H4HAWKERMr Hawker—I do not want to interrupt the member for Wills and I am sure we all have a great admiration for Yooralla, but this is a fairly specific piece of legislation and I am not quite sure of the relevance of what he is saying.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—Yes, although the title of the bill is fairly wide-ranging, I do think that the honourable member for Wannon has a point. Perhaps the honourable member for Wills could relate his comments more to the Sales Tax Legislation Amendment Bill (No. 1) 1998 .Sitting suspended from 6.30 p.m. to 8.00 p.m.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—As I was saying before the dinner break, the correspondence from Yooralla points out a number of issues. They say that the government has insufficiently considered the cost to an individual of having a disability and consequently has designed an inadequate compensation approach. They say that the government's intention to create competitive neutrality between the charitable and private sectors is based on flawed thinking and mistaken ideologies. They also say that capping the present fringe benefits tax concession will create a new cost burden on Yooralla that will jeopardise current levels of service.8H4HAWKERMr Hawker—Mr Deputy Speaker, I am reluctant to take a point of order but I take the same one that I took just prior to the break and that is the question of relevance. These are fairly specific bills and I do not think, much as we all admire the work of Yooralla, it has any relevance to these bills.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—I must say that I did not quite hear what the member for Wills said in his opening statement but this is the Sales Tax Legislation Amendment Bill (No. 1) and, although that is fairly wide, I think the honourable member for Wills should keep his comments more specific to the bill under discussion.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Thank you, Mr Deputy Speaker, for your guidance. I must say it is pretty distressing that a government that is prepared to spend $19 million of taxpayers money to present its view, at taxpayers expense, of the GST wants to come into this parliament and prevent the views of charitable organisations such as Yooralla, the Helping Hand Association, St Vincent de Paul and Anglicare being put in this place. I think that is pretty poor form on the part of the government to take points of order of that type.The point I made by way of introduction to the correspondence from Yooralla was that this legislation is making changes to the sales tax legislation. In fact, as people in the House will be aware, the government has a broader agenda which involves dispatching the sales tax legislation full stop and replacing it with a GST. It is against that background that I want to plead the case for the sales tax legislation, based on the impact that the changes will have on a number of organisations which operate in the charitable area, and which do very good work in that area and which are very concerned. They have gone to a lot of trouble to put their concerns to me and I dare say to many other members.I have a specific interest in their concerns because of the fact that Yooralla is based in Glenroy in my electorate and the Helping Hand Association is based in Coburg in my electorate. St Vincent de Paul also has operations in Coburg in my electorate. So on that basis I have been concerned about some of the issues that they have raised. Yooralla indicates that administration of a GST will create additional costs for them which, again, will place current levels of service in jeopardy. They also say that to apply a GST to—8H4HAWKERMr Hawker—Mr Deputy Speaker, I take the same point of order again. We are talking about sales tax and the honourable member for Wills is going straight back onto GST, which has nothing to do with this bill.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—Yes. I do think there will be time in other bills that are coming up this evening for the honourable member for Wills to debate this. As I understand it, having looked at the bill, this is quite a narrow bill dealing with exemptions to do with the Sydney 2000 Olympics, the computing industry and the commercial space launch industry. I have to agree with the honourable member for Wannon that we are going fairly wide if we are going to have talk about the GST. There may well be opportunities on some of the other bills that are coming up this evening for the honourable member for Wills to elaborate on the area that he is now discussing. I ask him to come back to the fairly narrow confines of this bill.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Thank you, Mr Deputy Speaker, for your ruling. I do reiterate my concern that, effectively, the government is seeking to gag debate on the very important concerns being expressed by charities concerning these provisions.As I indicated to the House by way of introduction, the four measures which the government is proposing in this bill are supported by us. But we have expressed the concern in relation to the temporary importation provisions that the government, having announced back on 13 May 1997 that they were proposing to close the loophole, took until December 1998 to introduce the legislation. We think this raises problems of legislation by press release, and we do not think it is good enough for the government to say back in May 1997 that they are going to do something and to then take until December 1998 to act on that. That is far too tardy in our view.Given the advice that we have had that the amount of revenue which is at stake here is negligible, so that there is not really a question of cost to taxpayers involved, we think it is appropriate that there ought to be an amendment to make the date of operation of this legislation 10 December 1998 rather than 13 May. I will be moving that way when the bill comes into the consideration in detail stage.20:07:002888Hawker, David, MPMr HAWKER8H4WannonLP10—I rise to support the Sales Tax Legislation Amendment Bill (No. 1) 1998 . I note that the opposition, through their spokesman, the honourable member for Wills, also support the bill. I must admit that I am somewhat confused as to why he wants to move this amendment, because it is quite common practice of governments of both sides of the parliament to announce sales tax changes, and tax changes, et cetera, from the date of announcement. To suggest that, by amendment, he wants to somehow change that date by something like two years does leave me somewhat confused when it is totally contrary to the practice that the previous government had and to practices that this government has had. It is a long-established practice. I ask that the member might reconsider that amendment because I do not think it does anything to help this debate. To me, he is going to prolong the debate.As you rightly pointed out, Mr Deputy Speaker, this is a narrow bill with some amendments. It does cover in the main part exemption for space objects and exemption for goods imported by those associated with the Sydney 2000 Olympic Games. It has two other minor amendments in it as well. The significance of the measure to exempt from sales tax space launch vehicles, payloads and other goods which are or are intended to be launched into or brought back from outer space follows from the government's announcement on 23 June 1998 that satellites, space launch vehicles and associated equipment will not bear sales tax. It is very clear that the objective of this policy of bringing in sales tax exemption for space launch vehicles and so on is to facilitate the establishment of a viable commercial space industry in Australia and, of course, to establish access to the expanding world demands for satellite launches and satellite launch facilities.Clearly these are the sorts of areas that we in Australia should be encouraging development of. I believe that Australia has a very good record that goes back many years of involvement in the space industry, and I think it is long overdue that we encourage further development of that space industry. We have a very well-developed infrastructure and we have a very technically proficient work force. That, coupled with our ideal geographical location, makes us a perfect place for further investment in the space industry. I believe that by having this sales tax exemption we give a very clear signal to that industry that Australia is open for business and we want to encourage people to further develop in that area.We talk about the technological benefits but there will also be employment benefits with the construction and operation of space launch facilities. There will be employment opportunities, and those employment opportunities are likely to be in regional areas, again adding to growth in the area. There is, for example, one project that we hope will really get off, and that is the Kistler aerospace project, which will be at Woomera in South Australia. We believe that this sales tax exemption will allow that aerospace project to take the first step in preparing infrastructure for launch operations in Australia. It is worth noting that the Kistler facility will be the first major space launch facility to be built in Woomera since its heyday as a space test facility in the 1950s and 1960s, when we had many UK rockets like the Blue Streak that were launched from Woomera. That put Australia on the map in many ways. We would hope that with this development we can re-establish what should be a very significant and leading technology industry in Australia. Clearly it will also have a medium- to long-term benefit, and for that reason we believe it is also very important that we do support the development.It is interesting to note that this project is focusing international attention on Australia as a world player in terms of cutting edge technology and the future of global communications. Obviously the space program will have a very significant role in the whole area of global communications. I think the government deserves support and commendation for attracting this investment. It is a substantial investment. We believe that it is in part the exemption of space launch vehicles and satellites from sales tax that will enable the project to proceed. I believe it is progressing very well.At the heart of Kistler's Woomera operations will be the United States built K-1 launch vehicle. After a series of test flights, Kistler plans to launch its first commercial payload later this year. The K-1 is planned to be the world's first fully reusable commercial launch vehicle and represents leading edge, cost-effective satellite launch technology. In other words, this is a very exciting development for Australia and I think it is something that all Australians should be very proud of.After the launch, both stages of the K-1 return to Woomera, landing safely with the assistance of parachutes and airbags. The vehicle is then reconditioned for reuse up to 100 times—it really does have quite a long life and will carry a lot of payloads. It obviously represents major cost advantages over expendable launch vehicles. A key component of Kistler's ongoing launch program will be the rapidly expanding market in low earth orbit communications satellites. I might add, Mr Deputy Speaker Hollis, that people like you and I who repre sent regional areas well know the importance of improving communications for people in regional and country areas and the important role that low earth orbiting satellites are going to play in that. With the growing number of satellites which are planned to be launched from Woomera, I believe that there could be further review of the legislation to take into account the fact that it does restrict the sales tax exemption to vehicles that are being launched into outer space.It is also important to realise that the launch of these satellites will play a very significant role in improving communication links for the global information superhighway. It is absolutely critical that Australia is at the forefront of these developments, because it is clear that in the next century those who are involved in the information superhighway are going to be very much at the forefront of economic development in the world. So it is very important that the space activities are based here in Australia, both in terms of their financial value and their utility value. Already Australia spends about $600 million annually on satellite systems, but mostly this is spent overseas and we do not have the guarantee that the local industry will derive benefit from and involvement in such programs that it should be able to.Australia is a big user of satellites, having made large overseas expenditures on Aussat satellite procurement and Intelsat and Inmarsat access. We have long purchased Intelsat and Inmarsat satellite system access, but our industry has not participated in their spacecraft or component assembly contracts. Other nations provide us with meteorological and remote sensing imagery and navigational satellite services, but there are no certainties over the continuation of service or the future costs, so this program is extremely important to Australia.It is clear that the government space programs in many Asian countries have enabled regional industry to become not just users of commercial satellite systems but suppliers too. While China and Russia remain the only current commercial launch service providers in the region, with Japan and India not far behind, other interests propose rocket flights from Australia. So it is not just for local benefit; it is going to have benefits for neighbouring countries and obviously will be a major export industry in that respect.A recent estimate of the potential investment in Australia from competing proposals for rocket launchers is in the region of $1.85 billion. In other words, we are talking big dollars here. Not only in terms of dollars, as I have just mentioned, but in terms of the technology and putting Australia at the cutting edge, this is a very important program. With the opposition supporting this, we are likely to see this continue to grow. That is why this bill is important in getting the incentives for it to grow.It is also important that, with the anticipation of the sales tax exemption of space launch equipment, this will remove a significant financial barrier to the development of a commercial space industry in Australia and it will encourage further investment in the space industry. So we are not just talking about the immediate developments, such as the Kistler project at Woomera, but talking about the expansion that this is likely to bring as Australia starts to develop not only the infrastructure but also the expertise in this space industry.It is also important to note that space capability is a potential catalyst for creating new and valuable spin-off technologies. These include bio-engineering, robotics, optics, materials, software, electronics, power cells, ground control systems, data processing and advanced manufacturing technologies. In other words, we are now entering the era of global voice communications via handheld phones using satellites. With that, Australia really does have a need to be a player in all aspects in that program.As well as that, of course, with the Australian terrain, it is very important to note that the improvement in communications will help rural areas. Also, with the remote sensing industry in transition from being dependent on government funded programs to being privately owned, we believe that the first privately owned satellite, Orbital Imaging's Orbview-2, being launched in August 1998, in turn will lead to further developments and further expansions of this satellite industry.At the beginning of 1998, all but two of the satellites providing earth observation data to non-military customers were government owned, but more than half of the 30 new satellites to be launched in the next four years are going to be privately owned. Again that shows the importance of this legislation in encouraging that development. It is also important to note that one such venture in this area is the Australian Resource Information and Environment Satellite Program, which is to fly a hyperspectral imager for mineral exploitation, resource mapping and environmental monitoring. Clearly, the sales tax exemption from this bill is going to help clear the way to raise the money for these developments.This has tremendous importance not only for our space development but also for our environment and our land rehabilitation. Right now, with some Commonwealth support, some important salt mapping is being done in my electorate, which I think is going to attract national significance as the results become available and show that these developments are indeed going to have tremendous benefit for our environment as well as for other areas. I want to confine my words to that particular aspect of this bill. I think it is very important and I welcome the support of the opposition, albeit with one qualification. I believe that this bill is important and should be passed.20:19:002891Emerson, Craig, MPMr EMERSON83VRankinALP00—The Sales Tax Legislation Amendment Bill (No. 1) 1998 , which is before us tonight, shows that the existing sales tax system is really quite adaptable, that it can be adapted to changing circumstances and to new circumstances as they arise. It is an omnibus sales tax bill that deals with a number of areas: (1) implementing the announced exemptions for space launch vehicles, payloads and other goods intended for launch into outer space or to be brought back from outer space; (2) remedying weaknesses in the provisions to prevent evasion of sales tax in the computer industry; (3) Olympics related exemptions; and (4) closing the loophole in the temporary importation provisions.We are debating tonight the merits of an amended sales tax system, which is supposedly an inefficient system, compared with, ultimately, the alternative of a goods and services tax. I want to speak briefly on the efficiency implications of what we are debating. The sales tax system is regarded by those opposite as an inefficient system. The one that they want to replace it with, from 1 July next year, is regarded as efficient, but we have in fact heard expert evidence from Professor Peter Dixon of Monash University, who said in his report to the Senate GST inquiry:The long-run resource allocation gains flowing from the proposed tax changes will be negligible.That was on page 2 of his report. The proposed system will in fact cause Australia to go back to capital intensive mining industries and other industries whose long-term prices are declining and to switch away from labour intensive industries, such as tourism and education exports, whose long-term prices are rising. That is why we actually get a decline in efficiency and living standards from those proposals.On the question of efficiency, there is a matter of simplicity. We have heard a lot of criticism of the existing sales tax system that we are debating tonight on the basis that it is complex, but I draw your attention to something that was raised earlier today by the member for Melbourne Ports. He sought to table this provision from the new legislation. For the benefit of honourable members I would like to read this. It is section 165-55 and it says:For the purposes of making a declaration under this Subdivision, the Commissioner may:(a) treat a particular event that actually happened as not having happened; and(b) treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as:(i) having happened at a particular time; and(ii) having involved particular action by a particular entity; and(c) treat a particular event that actually happened as:(i) having happened at a time different from the time it actually happened; or (ii) having involved particular action by a particular entity (whether or not the event actually involved any action by that entity).That is the proposed legislation—the GST legislation. It would be very difficult to justify a claim that that is less complex than the existing legislation.We have heard from the Prime Minister's preferred modeller on this efficiency issue as it relates to the sales tax system that we are debating tonight. When he had a look at the efficiency of the proposed replacement for that system, the GST package, he downgraded his estimates of the benefits of that package by 40 per cent to a tiny 65c per person per week. There was a debate on the 7.30 Report about the question of whether 65c a week represented big beer or small beer. Professor Dixon said it represented small beer; Mr Murphy said that it was not really small beer but it was not really big beer either. I would have to say that 65c a week is not even one beer.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—I must interrupt the honourable member there. As was pointed out before, big or small beer, this is a very narrow piece of legislation dealing with sales tax, the Sydney 2000 Olympics and the commercial space industry. I have let the honourable member range fairly widely for some time, but I really do feel now that I must bring you back down to the very narrow confines of this bill. As I understand it, there will, perhaps, be opportunities in the debate on the other bills that we will be dealing with later this evening to range a little more widely. As I brought an earlier speaker back, in fairness I must bring you back to the narrow confines of this bill.83VEmerson, Craig, MPMr EMERSON—The reason that I am talking about these criteria of efficiency, revenue raising ability, simplicity—which is related to compliance costs—and equity is that they helped form my views as a parliamentarian on the merits of the legislation before us tonight. If this legislation goes through, we will have amended legislation which is amended sales tax legislation. In making my own judgments as a parliamentarian about that I have to consider these criteria and how the amended legislation looks com pared with possible alternatives. That will influence the way I will be voting on this issue, and may well influence the way that other parliamentarians vote on this issue.On the question of efficiency, I see no evidence before us that this amended legislation would be less efficient than the proposed legislation on the goods and services tax. We have, amongst the criteria that I have been talking about, the revenue raising ability of the amended legislation. On that very issue there has been considerable debate. We are being told that the amended legislation is incapable of meeting Australia's future revenue needs. That proposition has been tested objectively again by independent experts and I seek leave to have the graphs portraying that evidence incorporated in the Hansard. The graphs show the revenue raising capacity of this amended legislation compared with the alternative that the government has been considering. I seek leave to have those graphs incorporated.DK6HOCKEYMr Hockey—Is that the table you showed me?83VEmerson, Craig, MPMr EMERSON—Yes. I showed the minister those graphs beforehand and I do not see what he would have to hide or what difficulty he would have in having these graphs incorporated in the Hansard . They are relevant to the legislation because we need to make a decision on whether this legislation as amended is capable of generating Australia's future revenue requirements.Leave not granted.DK6HOCKEYMr Hockey—Mr Deputy Speaker, normally a fair licence is given in speeches in the second reading debate, but as you pointed out earlier, Mr Deputy Speaker, on this occasion the honourable member was not addressing the issues relating to the bill. It would be inappropriate for me to give leave when the proposal that he is putting forward is a diagram relating to GST revenue and not to the specifics of the bill. So even though I previously agreed to give leave it would now be inappropriate following your earlier statements.83VEmerson, Craig, MPMr EMERSON—Obviously the minister and the rest of the government are showing a great deal of nervousness about this. I would like to explain the reason I sought leave. I understand and accept the ruling. The graphs show the revenue raising capacity of the sales tax legislation as amended by this legislation. That is highly relevant and it is obviously something that is very much worrying members opposite and the Treasurer because the Treasurer, having been asked to produce these very same projections, has refused point blank. He has refused to show and tell the Australian people why the sales tax system is not capable of generating Australia's future revenue needs. This graph demonstrates that very neatly. As a result of the unfortunate objections of the minister I will be making these graphs widely available to the public. It is a pity that we are unable to do that through the people's parliament.I now go to the same problem that we are encountering in making decisions on legislation such as this. We have found that, when we have asked the Treasury for basic information on the sales tax system compared with alternatives, it is not making it available. I would like to refer to a number of documents that the Treasury has which it has refused to release—certainly the Treasurer has refused to release them. They are: `Draft on economic impacts of tax package', `Draft briefing on employment', `Confidential tax reform briefing for the Prime Minister and Treasurer: "How will the new tax system help employment?"'On each occasion, the Treasurer has refused to release these documents to the public on the basis `that the disclosure of this document would inhibit the candour of policy advice'. Policy advice is obviously going forward to the government on this sort of legislation and on alternatives which the government is not prepared to make public to the Australian people. What has it got to hide? If the government is adopting this secretive attitude towards tax legislation, then I think Australians should be very concerned.I urge the minister to talk to the Treasurer to get his approval to release these secret documents. Australians need to know the robustness of the existing sales tax system—which is what we are debating here—and its capacity to provide economic efficiency compared with the alternative, and its capacity to provide revenue into Australia's future. On each of these issues, the government is silent.It is astonishing that the government has not asked Treasury to do, and nor has Treasury done, any modelling of the employment impacts of the tax package, of the impacts of the tax package on living standards or on gross domestic product, or any longer term impacts of the tax package on revenue. How can we have a proper debate on this legislation and on the new proposed alternative tax system if the requests have not been made to Treasury to provide this information? I suspect that the reason for that is that Treasury has said to the government, `Please don't ask us those questions because you will not like the answers, and if we have to give you the answers they may be subject to FOI'—as these documents were, and the government has refused to provide that information.I think this is basically a betrayal of the trust of the Australian people on the part of the government. It has said that this legislation we are debating tonight, legislation that would be amended by the amending bill, which it is proposing to throw out completely—the government wants to amend it today and repeal it in its entirety on 1 July 2000—is no good. We asked, `Where is the evidence that it is no good? Where is the evidence that it is incapable of collecting Australia's future revenue needs?' The government said, `There is none—we do not have the evidence, just take us on trust.' That is what it said to the Australian people before the election—`Take us on trust.' The government showed us all these cameos about how everyone is going to be a winner from the GST package, but when we have asked for the basis of that information we have found from the Treasurer and from Treasury that they have modelled none of this. Their argument is: just take us on trust.This a very big decision that the parliament has to make. In making that decision, as I said, it is important for us to test how robust and how good the existing tax system is. Instead, we get arguments about the government's amending legislation, saying that the legislation is ramshackle, falling apart and is 1930s legislation, but the government will not and cannot provide the evidence for that. It is very unfortunate that tonight we have been refused leave to get that information tabled by default, because Treasury refuses to do the work.DK6HOCKEYMr Hockey—Mr Deputy Speaker, on a point of order: I am loath to step into this debate on this occasion, but the member is clearly talking outside the scope of the bill before the House. Clearly, he is talking about the debate in relation to the tax package in the Senate, and submissions and modelling done in relation to that package. This is a very specific bill. You said it yourself, Mr Deputy Speaker, and I urge you to pull him back to the bill being debated in the House.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—But you will also note, Minister, that the member, as I understand it, is making a contrast between the bill which is before the House and other legislation dealing with taxation. As long as he continues to make a contrast between those two—this legislation that we are dealing with and other legislation—he is in order, but he must continue to make that contrast between the two. While he is doing that, he is in order.DK6HOCKEYMr Hockey—Mr Deputy Speaker, on another point of order: I am sorry, but we are talking about the commercial space launch industry in Australia and the Olympic and Paralympic family members and delegations, and certain goods relating to that. I fail to draw any relationship between what the member is talking about and space objects and the Olympics.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—As I said before, I stand by the decision I made before. I made a point of very carefully listening to what the member has been saying and, although he has been touching on other issues, he keeps bringing it back to this legislation. He is making a contrast between the legislation that we are debating—the legislation that is being proposed—and other forms of taxation. He is in order doing that. Before, when he was not talking about that, he was out of order and he came back to the point, and he is now making a contrast. That is my ruling.83VEmerson, Craig, MPMr EMERSON—Thank you, Mr Deputy Speaker, for that ruling. Continuing the comparisons, the compliance cost of this amended legislation is one of the criteria by which we will make our decisions on how we vote on this issue. When this legislation is amended, there will still be 75,000 businesses in Australia paying sales tax. When this legislation is repealed, effective from 1 July 2000, there will be 1,500,000 businesses paying goods and services tax and caught in the GST net. I am told that it is very good that we have these 1.4 million extra businesses caught in the GST net. The Prime Minister's preferred modeller, Mr Chris Murphy, in his very recent submission to the GST inquiry, said:For businesses with computerised accounts, the effect on compliance costs of the changes to indirect taxes . . . should be minimal. For other businesses, ANTS can be expected to speed the shift towards computerised accounts that is already occurring in the absence of ANTS.He is saying that it is a really good thing that 1.4 million new businesses would be doing tax paperwork, because it will speed up their computerisation. I think that is scandalous, but of course that is the sort of thing that we can expect from the Prime Minister's preferred modeller.The final criterion by which I will be making my decision on this legislation is the criterion of fairness. The sales tax legislation, as amended, will still have different rates of tax for different commodities; and the general principle is that the higher rates of tax apply to non-essential items. The sales tax system that will be amended as a result of this legislation exempts fresh fruit and vegetables, meat, butter, milk, bread, services like haircuts, electricity, public transport, funerals and so on. If the GST is fair, why do we need a compensation package? What is fair about the top 20 per cent of income earners getting more than 50 per cent of the tax cuts? (Time expired)20:39:002894Thomson, Andrew, MPMr ANDREW THOMSONFB6WentworthLP10—The Sales Tax Legislation Amendment Bill (No. 1) 1998 deals, as the Minister for Financial Services and Regulation has said, with two relatively specific things, the exception from sales tax of two areas. One is the equipment that is required to be brought into Australia by the so-called Olympic family in order for them to participate in the Sydney games and, thereafter, to be re-exported—hence the exemption from sales tax. The other area is certain equipment required for what is broadly called the space industry—in particular, space launch vehicles, payloads and other associated equipment. On the first area I mentioned, the Olympic exemption, I note from the explanatory memorandum that the details of precisely what is to be exempt will be later decided, or the parameters will be drawn, by regulation. Is that not so, Minister?DK6HOCKEYMr Hockey—Yes.FB6Thomson, Andrew, MPMr ANDREW THOMSON—Thank you. With regard to drawing up those parameters, I would simply urge the government to do all it can to confine the exemption to athletes, officials, and the teams themselves. Please, for everyone's sake, do not allow any of those abominable people that style themselves as members of the IOC to sneak in any of their cutlery or crockery—their Wedgwood, Royal Doulton and so forth—that they will have to bring with them to serve their needs. Or perhaps, I suppose, that is for us, the taxpayers of New South Wales, to provide for them. I hope not.On a more serious note, the exemption granted for equipment associated with the space industry is of more interest to me, because I think back to when I was a child of approximately the same age, perhaps, as the minister and the shadow minister at the table. When we were children, the idea of space travel was very much in the realm of fantasy. It was the Space Family Robinson, Lost in Space—the idea of exploring unknown areas, flying through the galaxies—Star Wars, Star Trek, Mr Spock and all that.These days it is different. These days it is about practical applications, and is pretty much about science and, more importantly, about the diffusion of knowledge that is gained from exploring space, especially scientific knowledge in areas such as bio-engineering, robotics, optics, materials science and advanced forms of manufacturing. It is interesting that only seven or eight months ago Senator John Glenn went back into space again, the oldest human being to do so—not so much as an act of sentimental grace accorded to him as for him to participate in medical experiments.The important thing for us, in granting this exemption and hoping to encourage more such space exploration from Australia, is that we—the citizens, the corporations, the academics and whatnot in Australia—get whatever access we possibly can to that knowledge. For us, there are particular areas that are very important to our national interest: things like the remote-sensing of earth, which is very important, given our large landmass and the need we have to exploit our natural resources. Of course, communications technology—for a country whose population is as widely dispersed as ours is—is more than simply a matter of commercial advantage perhaps; it is often a matter of life or death for people living in remote parts of Australia.I very much support the notion of granting an exemption in order to encourage this industry. Normally I would be the last person to advocate picking winners in this sense, but there is commonsense behind this because, if you bring this equipment into Australia physically, and you launch it into the stratosphere or further, plainly in anyone's words that is an export, and so of course it ought to be exempt.Another notion behind it, too, is that we are asking people to forgo revenue. In that sense, you might compare it—as the previous speaker did, with great latitude—to other notions of forgoing revenue. If you want to encourage the development of an industry like the space industry, particularly one so capital intensive, then clearly the next logical step in the chain of reform is the abolition of Australia's capital gains tax regime.In an environment where the world is now in a cycle of deflation, where global pressures are driving tax rates down and making the competition for capital all the more ferocious, a country that taxes capital gains at 47 per cent for anything over $50,000—or $70,000, if that is to be the case after the taxation reform—is plainly not seriously interested in attracting capital. When you look around the global economy at the moment and acknowledge the presence of this deflation you can attribute it to various causes. Some people attribute it to a technological advance. I think of it more as the confluence of two forces: the death of ideology and the releasing into the capitalistic economy of many millions of people who earn their incomes certainly in jurisdictions with very low valued currencies, but beyond that it is also a question of allowing them access to more and more technology.In effect, there are hundreds of millions more productive people now participating in the global economy and many of them have access to personal computers, for example. That sort of technology, which renders them all the more efficient and all the more competitive with us, creates what you might call an infinite elasticity of supply. Where you have that sudden rush of new supply, it leads naturally to price destruction or deflationary forces. I saw it myself in Japan where, with a very heavily regulated distribution system and, indeed, high barriers to imports, as the deregulation of those barriers took place and products flooded in, there was price destruction in particular sectors—textiles, clothing and footwear and other things like that.At the moment where you can take a particular service or a good and say that in 12 months time it is more than likely this will cost less than it does now, then plainly you will delay your consumption of that good. The same goes for investment. It was not so long ago that Siemens spent $US100 million building a semiconductor plant in the North of England at a time when the price of the DRAM chips that it was supposed to manufacture was between $15 and $20. Soon thereafter—12 months or so later—the price fell to beneath $10 and that plant was shut, mothballed.You can see the same sort of thing happening with both consumption and investment. There is a classical theory of economics which says that there should be a fair value profit for a firm. If the profit is too high, if it is above normal profit, then other firms will enter that industry and the profit will come down to something like equilibrium. Vice versa, if the profit goes too low, firms will leave that industry, competition will decrease and the price will come back up.At the moment, and I think for the foreseeable future, especially with the diffusion of Internet commerce, barriers to entry are falling as fast as we have ever seen them. So normal profit is tending towards zero; that is to say, profit which firms used to be able to capture by virtue of the barriers to entry in their industry are now being delivered to consumers. Profits are being handed back to consumers in the form of lower prices. So firms such as Amazon.com and other large online sellers are not actually making an operating profit because they are handing it back to the consumer. They are using their presence to deliver other sorts of services. Hopefully in the future, although they are on a very high price earnings ratio now, they will one day be in the black.Where you have an enormous increase in the supply, you thereby make people distrust prices. Whether it be the price of an investment or the price of something they want to consume, it becomes all the more difficult to attract investment. Given Australia's relative physical advantages for the space industry, by virtue of our relatively small population and small amount of accumulated capital we ought to be all the more competitive in trying to attract capital from offshore to fund enterprises in the space sector. So, while I welcome the exemption granted in this bill to the space industry, I think we have to go a lot further. In particular, we have to deal very bluntly with our capital gains tax regime, which is surely working to deter a lot of investment in industries such as the space industry with which this bill deals.Lastly, I do not think I can find another adjective to describe what I think of the IOC, so I will say no more about it. I welcome the exemption granted for kayaks, paddles, yachts and all sorts of racquets, for the shotguns which the clay target shooters will bring and for the bows and the arrows which the archers will bring. But really, for heaven's sake, if the government can do what it possibly can to confine the exemption to the true Olympians, the participants in the sporting competition, then I think the taxpayers who are forgoing the revenue will be very well served.20:50:002897Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—in reply—I thank the members for Wills, Wannon, Rankin and Wentworth for their contributions to this debate. The Sales Tax Legislation Amendment Bill (No. 1) 1998 contains four changes to the sales tax law, of which two are anti-avoidance measures. One of the proposed changes will encourage the development, as the member for Wentworth eloquently pointed out, of the commercial space launch industry in Australia by exempting from sales tax space launch vehicles, payloads and other goods intended to be launched into outer space or to be brought back from space.A second measure will ensure that sales tax does not apply to certain goods brought into Australia by non-Australian Olympic and Paralympic family members and delegations and participants in Olympic, Paralympic and associated events in 2000. Last year, the government introduced amendments to the sales tax law to prevent sales tax fraud in the computer industry. This bill will strengthen those changes and the sales tax law relating to the temporary importation of goods will also be amended to close a loophole. I commend the bill to the House.Question resolved in the affirmative.Bill read a second time.2897Bill—by leave—taken as a whole.20:52:002897Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I move:(1) Schedule 3, item 4, page 12 (lines 12 to 14) omit the item, substitute:4 Application The amendments made by this Schedule apply to dealings on or after the day on the Bill that became the Sales Tax Legislation Amendment Act (No.1) 1998 was introduced into the House of Representatives.I simply repeat what I said earlier, which is that in relation to part IV of the bill this effectively was an announcement made by the government back in May of 1997 for which legislation was introduced in December of 1998. I—and the opposition generally—do not have any problem with the notion of the government backdating legislation to give effect to announcements made on taxation issues in order to prevent people taking advantage of the period that passes between the making of the announcement and the introduction of the bill. However, I think that the expectation that the community would have of the government is that it should act much more quickly than it has done. A period of 18 months strikes us as excessive, and in a circumstance where we understand that very little revenue is actually at stake here we want to demonstrate to the government our view that it needs to work more promptly on these matters, and to indicate that as a parliament we want to set a higher standard than that in terms of introducing bills to give effect to these kinds of announcements. On that basis, we are moving this amendment. We do not intend to pursue the issue through to a division in this House.20:54:002897Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—The government does not support the amendment. The honourable member for Wills argues that the measure is retrospective. I am advised that the measure is an anti-avoidance provision to close a loophole in the sales tax law which allows goods to be imported into Australia without paying sales tax and therefore tax free.The goods are initially brought into the country under the temporary importation exemption, used in Australia and then exported. If the goods are brought back into the country later, they are again exempt from sales tax, because they are second-hand goods and not subject to sales tax. A good example is where a yacht is imported under the temporary exemption, sailed up and down the Australian coast, sailed out of Australia and reimported at a later date.We use this example of a yacht, because the loophole is only worth exploiting for high value goods. Other goods that could use this loophole are racing cars and racing motorcycles. Importantly, this measure was introduced into parliament in Taxation Laws Amendment Bill (No. 6) 1997 on 29 October 1997 and lapsed when the election was called. So it has been previously introduced. It was first announced on 13 May 1997. As I said earlier, it is an anti-avoidance measure and is intended to apply from the date of the announcement, which is consistent with most anti-avoidance measures.If the amendment moved by the member for Wills is accepted, it means that anyone who reimported goods after 13 May 1997 and before 10 December 1998 will be exempt from sales tax. This would be unfair, as taxpayers who imported similar goods without going through the temporary importation process would have paid sales tax on their first importation. Therefore, we will not be accepting the amendment.Amendment negatived.Bill agreed to.2898Bill (on motion by Mr Hockey)—by leave—read a third time.Bills2898r712Billsr710Bills2898Debate resumed from 10 December 1998, on motion by Mr Hockey:That the bill be now read a second time.20:57:002898Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—This is the fifth omnibus taxation bill for 1998. It covers four separate areas relating to reforming the tax penalty arrangements, alteration of aligned remittance dates, introduction of running balance accounts, and tax avoidance in relation to foreign tax credit schemes. These initiatives are being undertaken in preparation for the introduction of a goods and services tax. It is the view of the opposition that a goods and services tax is neither necessary nor appropriate. And the sorts of measures that are included in this bill can stand independently of a goods and services tax, even though the government, as I say, is introducing them in preparation for the introduction of a GST.Other members of parliament and I have received many representations about the damage which a GST will cause. For example, I have had representations from Yooralla and a number of other charitable organisations working with people with disabilities in my electorate. Yooralla indeed has an office in Glenroy operating a special school for disabled people. Their correspondence to me has stated that if the government proceeds with its tax reform agenda it will have a very adverse effect on people with disability, people in the charitable sector, and particularly the Yooralla Society. They point out that Yooralla touches the lives of up to 30,000 Victorians each year, runs a lean operation, yet provides a service of unquestionable quality—consequently it is very much valued by those whom it supports and their networks. They also point out that the costs of their programs are much more than their government funding revenues and that the fragility that this creates means that they are in no position to absorb the consequences of poor policy making.They say that the government has told them that people with a disability will be in front if the system is amended as the government is proposing. However, they have written taking issue with that and indicating their view that, firstly, the government has insufficiently considered the cost to an individual of having a disability and consequently has designed an inadequate compensation approach; secondly, that the government's intention to create competitive neutrality between the charitable and private sectors is based on flawed thinking and mistaken ideologies; thirdly, that capping the present fringe benefits tax concession will create a new cost burden for Yooralla that will jeopardise current levels of service; fourthly, that administration of a GST will create additional costs for Yooralla, which again will place current levels of service in jeopardy; and, fifthly, to apply a GST to fundraising is to place these programs at risk for a miserly gain. To apply a GST on Yooralla's membership dues, they say, is perverse, illogical and of highly dubious benefit to the state.They go on to say that there can be no dispute that people with disabilities have to spend more on a daily basis to get themselves up to life's starting line on the same terms as everybody else. This has nothing to do with expenditure on food or clothing but is a recognition that many people with disabilities do not have the same luxury of choice that most citizens take for granted. They give a number of everyday examples:. The tram that some take to get to work might have to be taxi for a person with a disability, at ten, fifteen or twenty times the expense.In recognition of the extra costs involved, most of us use a milk bar only for casual or emergency purchases. For a person with disability, the store around the corner could be the only option.. A person with disability wanting a holiday may need to take an attendant carer along. If this is the case, it would be at his or her own expense.. Going to the January or June sales is a great way for the average householder to save money on larger budget items, but the thought of a wheelchair negotiating Myers on Boxing Day simply beggars the imagination.The point they make is that:. . . the higher cost of living borne by people with disability means that any consumption tax is, for them, regressive, becoming more so according to the severity of their disability.They say that:Notwithstanding the various exemptions from GST that the Government is proposing for people with disability, there can be little doubt that they will be more heavily taxed than the average citizen, because of their peculiar and unavoidable consumption patterns.They also express concern about the issue of competitive neutrality—that ideology which demands that charities and commercial ventures operate on a level playing field. As they point out:Charities use surpluses for the public benefit. To restrict the opportunity to create those surpluses is to reduce the potential extent to which the communities' needs can be met.As ACROD (the National Industry Association for Disability Services) has stated in its submission to the Senate Committee considering GST and Tax Reform: "charities are not essentially in competition with business, but, in a broader sense, in competition with Governments in serving public needs. What is required is not tax neutrality with business but overall neutrality between charitable and Government provision of public needs."So the natural competitors, in a sense, of charities are governments rather than commercial enterprises, but governments do not bear the cost of the tax. In this circumstance, if you are going to make it harder for charities to operate, the only loser will be the community.Charities, unlike governments or businesses, have nobody on to whom they can pass their additional costs. Therefore, they have to reduce services. It is people with disabilities who benefit from those services, and therefore we indirectly penalise them through the new tax charge. By taxing charities such as through capped fringe benefits tax and in various other ways, we have further tilted the playing field against them rather than in any way levelling it for others.Those very serious concerns that Yooralla have expressed have also been expressed by other organisations in my electorate. I received a copy of correspondence of 10 February from the Helping Hand Association for the Intellectually Disabled of Coburg and Districts to the Prime Minister. Firstly, they expressed concern that they have written to the Treasurer previously some months ago but have not received a response from the Treasurer to their concerns. They go on to say:. . . it is also hurtful to hear and read comments by Government members that the tax proposals will have a favourable impact on people with disabilities and on service organisations.This is not true, and they urge the Prime Minister to study the ACROD submission to the Senate inquiry, which clearly puts the case for such organisations. They highlight some of the major points from the submission:. Contrary to assertions from the Treasurer, the tax reform package as it stands does not make charitable organisations better off, it makes them worse off.. ACROD does not . . . support the current proposals . . . because of their adverse impact on people with disabilities, their families and the organisations that serve them.. The fringe benefits tax exemption should remain, but with a cap of 30% together with a requirement that all benefits go to the organisations. . Unconditional GST-free status for charities should be implemented by a GST-free certificate system similar to the existing sales tax exemption certificate system.. The need for retention of tax concessions for the sector needs to be viewed in the context of known figures for unmet need.. The Government's emphasis on competitive neutrality between charities and business is misconceived, as charities, like Government, serve the public good. Governments are free from tax, so also should charities be.That is the view being put by the Helping Hand Association for the Intellectually Disabled of Coburg. Having visited their premises on a number of occasions, I am aware of the quality of the work that they do in providing the best possible opportunities for some of our most disadvantaged citizens.Similar concerns have also been expressed by St Vincent de Paul. They advised the Senate inquiry that the GST will have a disastrous effect on low income earners. St Vincent de Paul is a dedicated and caring provider of support for hundreds, indeed thousands, of low income people in Australia. Terry McCarthy from St Vincent de Paul told the Senate inquiry:The expenditure pattern of low income earners is vastly different from that of the wealthy. Low-income people spend all their money on essentials. The poor have no discretionary income.The GST will also directly affect St Vincent de Paul's charitable works. The society distributes some $6 million a year worth of food vouchers, which will automatically be worth some 10 per cent less. The submission also highlighted St Vincent de Paul's belief that the GST would place many of their services, such as refuge accommodation, care and support services, food banks and the like at risk.It is increasingly clear that the inflationary impact of the GST will be very much higher than the 1.9 per cent figure extensively advertised by the government prior to the election. Indeed, St Vincent de Paul believes that the inflationary impact on low income earners, because of the proportion of their income spent on goods and services, will be in the order of 10 to 11 per cent. That would result in sole parents with one child being $11.72 a week worse off and self-funded retirees being $13.16 a week worse off under a GST. Once again, this is an organisation that is doing essential work amongst the less well-off in our community, and I think their views need to be given a great deal more weight than they have been so far.Finally on this aspect, I draw the attention of the House to correspondence we have received from Anglicare Australia. They indicate their concern that:. . . the imposition of the GST on food will represent a harsh new tax on the poor and people on low incomes.They go on to say:Anglicare also believes that fund raising should not be taxed as it is effectively a tax on people's generosity and volunteer effort. Anglicare agencies and local parishes benefit greatly from the fund raising efforts of individual Australians yet their efforts in fundraising will be liable for the GST. While donations are GST free, the time and effort people put into fundraising, such as a cake stall, will be taxed. Cakes are sold at or even above market prices and so will be GST liable. Yet cake stalls are an important source of funds for Anglican welfare agencies.Let me say that that is the case for many other charitable and sporting community groups as well. The correspondence goes on:Just three of our Anglicare agencies for which figures are available estimate they will lose $55,000 a year to the government through the tax on fundraising.Anglicare Australia has also identified substantial GST compliance costs for its agencies as well as steep increases in their salary bills if the new FBT exemption arrangements are introduced unchanged. One larger Anglican aged care provider with 700 beds in 26 facilities estimates the increase in costs will result in the loss of 8.73 beds or 6.82 full-time jobs as a result of the FBT changes alone. Anglicare supports the inclusion of salary packaging benefits on Group Certificates and agrees there should be a cap but believes the cap should be 30% of the gross remuneration package.They conclude by expressing concern that:. . . the tax reform package penalises Church and charitable organisations while giving windfall gains to profit making concerns.They express those concerns and seek changes to the legislation accordingly. The first three proposals in the two bills before the House are related because they allow significant streamlining and simplification of the administration of, and compliance with, taxpayer obligations under taxation law, particularly for employers.The Taxation Office is likely to become more efficient and effective in collecting outstanding tax debts, and this ought to make tax compliance simpler for employers. As I indicated at the outset, these initiatives are being undertaken in preparation for the introduction of the goods and services tax, but they are significant and worthy initiatives in their own right. I think they demonstrate Labor's election position: that significant administrative and compliance simplification is possible without a GST. So, if we look at them, the first item is changing the tax penalty arrangement. At the moment we have myriad different penalties involving late payment for various types of taxation. Those penalties are necessary to ensure that taxpayers do not have a financial incentive to fail to pay their tax when the debt becomes due.What the bill is doing is replacing the existing late payment penalty provisions with a tax deductible general interest charge, or GIC, on outstanding tax debts. That GIC will enable a common single rate of interest for all tax types where a correct payment is not received by the due date. It will enable the abolition of complex and punitive culpability elements that apply for the late payment of some taxes. It will enable simpler tax accounting and collection arrangements that should position the Australian Taxation Office to better assist taxpayers to minimise any escalation of amounts outstanding. I also note that, because the GIC is technically a tax, and hence under section 55 of the constitution a separate imposition bill is necessary, there is a separate imposition bill before the House.The bill will introduce a penalty for failing to notify the commissioner of an obligation to remit a source deduction or sales tax. It will introduce a penalty for failing to give the commissioner an annual reconciliation statement of source deductions made, and it will make a number of consequential amendments. The new GIC, together with the failure to notify on the reconciliation statement penalties, will generally apply from 1 July this year. The interest charge for unpaid sales tax and source deductions will apply to amounts payable before that date. However, this will not disadvantage taxpayers as the interest charge being proposed is lower than the current rate that would otherwise apply.The revenue impact of the changes cannot be quantified. With greater automation of the penalty systems, the incidence of the imposition of late payment penalties is expected to increase; however, the penalties generally would be levied at a lower rate.The policy objective of this measure is to replace the existing late payment penalty provisions in various acts for which the Commissioner of Taxation has general administration with a single tax deductible general interest charge on outstanding amounts. Such a regime ought to be transparent and easy to administer. A further objective is to encourage withholders who cannot remit deductions by the due dates to notify the commissioner of the existence of liabilities and to make sure withholders send in their annual reconciliation statements of deductions.The proposals are designed to address problems with the current penalty regimes which were identified by the Small Business Deregulation Task Force and as such Labor is supporting them. Many of us, as local representatives, would know examples of taxpayers who have incurred debts and then got into the situation of penalty interest and those debts accumulating and, in the case of some small businesses, really making it difficult, if not impossible, for the business to continue. The step that is being taken here ought to be supported.There is also the alteration of remittance dates. Currently, medium and small business are required, for example for PAYE, PPS and RPS, to pay taxes deducted on a monthly and quarterly basis respectively. The deductions made during a month or quarter are required to be paid not later than the seventh day after the end of that month or quarter. Sales tax is payable 21 days after the end of the period. The new arrangements proposed in the bill align most remittances with the current sales tax obligations and are designed to integrate with the proposed new quarterly GST, which Labor obviously opposes, and pay as you go, which we have indicated support for. For those payment dates they are proposing 21 October, 21 January, 21 April and 21 July.Alignment to the 21st of the month for monthly and quarterly PAYE, PPS and RPS remitters is in anticipation of the government's tax package arrangements which it says will apply from 1 July 2000. Under those arrangements, most businesses will complete a single compliance statement once a quarter and make one quarterly payment. A couple of things ought to be said about this. First, when the government announced it as part of its tax package it was greeted with considerable fanfare—an end to provisional tax; a wonderful thing. Based on what has been said for it, Labor has indicated support. I have, however, heard some expressions of concern in the small business area and I have spoken to the honourable member for Canning, who has small business experience and who will participate in this debate. This is an area where small businesses may want to express a view about how it will impact upon them.The second point that ought to be made here is that a movement to pay as you go tax is completely independent of GST. It can be done through legislation such as this without any need for a GST. I think that bears out the position we took during the course of the 1998 election campaign.The third measure referred to in the legislation is the introduction of running balance accounts. The bill will be introducing a system of running balance style accounts to account for and administer debts under the sales tax, PAYE, PPS and RPS arrangements for the year commencing 1 July 1999. Those reserve balance accounts amendments will enable four separate RBAs to be established for a taxpayer's sales tax and other debts. It will allow those debts to be aggregated into one outstanding balance for each of the tax types. It will enable the commissioner to recover the RBA deficit as a tax debt and will provide the commissioner with a discretion on the application of tax debts to a running balance account and the application of payments and credits against tax debts.These amendments are the first phase in a program to establish running balance accounts to account for and monitor the majority of a taxpayer's outstanding debts after 1 July 2000. Currently these are all administered separately. There is no system or legislative ability to aggregate all tax debts. The objective of the running balance account measure is to provide the legislative framework for a taxpayer accounting system to monitor a taxpayer's different tax liabilities and apply a daily interest charge to a running balance account deficit.This should give us a simpler tax accounting and collection arrangement, assist the ATO and enable it to better assist taxpayers to minimise any escalation of amounts of outstanding tax debts, enable the ATO to provide a comprehensive statement of a taxpayer's outstanding tax debts at a particular time and give an automatic calculation of the general interest charge on the running balance account deficit. This ought to be a more efficient process and, as a first step towards this, we are going to get four separate running balance accounts in relation to sales tax, PAYE, PPS and RPS. This gives us better integration of the existing tax system. Again, there is no need for a goods and services tax to achieve these reforms; and Labor will support this proposal.The final measure in the bill refers to tax avoidance concerning foreign tax credit schemes. Schedule 2 of the bill amends the anti-avoidance provisions contained in Part IVA of the Income Tax Assessment Act to enable these provisions to apply to schemes designed to acquire or generate foreign tax credits. The tax office has advised us in briefing that these schemes are beginning to be detected and, hence, is advising that legislation is necessary to protect the existing tax base. The schemes are essentially the same in nature as those involving franking credit trading, which is dealt with in Taxation Laws Amendment Bill (No. 4). I am not quite sure why Taxation Laws Amendment Bill (No. 5) has come in ahead of Taxation Laws Amendment Bill (No. 4), but Taxation Laws Amendment Bill (No. 4) deals with problems involving franking and credit trading. What you have is taxpayers entering into arrangements which generate little or no taxable income and certainly no economic loss, but significant foreign tax credits which can be used to offset tax otherwise payable on foreign source income. Once again, Labor supports this proposal.The issue of tax avoidance comes before the House on a regular basis. As I say, there are tax avoidance measures in Taxation Laws Amendment Bill (No. 4) 1998 , as there are in this bill, Taxation Laws Amendment Bill (No. 5) 1998.It is interesting to read in the Australian reports about the tax office's ongoing concerns with tax avoidance. Just a couple of weeks ago there was a disclosure of a confidential Australian Taxation Office report warning:. . . leading corporations and their network of financiers and advisers had "snatched" control of the tax system from the Government and the ATO. "That is the real world of today's self assessment [system for lodging tax returns], where the power is with the corporates and the external network, not the statute [the Government] or its administration [the ATO]—a situation that needs to be reviewed, if not reversed."That document was still being considered by the tax office more than a year after it was first discussed. I think it gives quite a lot of insight into the concerns being expressed within the Taxation Office about their capacity to effectively deal with tax avoidance.The first question it raises is the practical question of whether the large companies really are running the show. The second question is, of course, whether this Prime Minister and this Treasurer really ought to have been doing more in their tax package and in their treatment of taxation issues generally to tackle tax minimisation schemes being used by the government's own supporters in business and in the legal and accounting professions.It is also clear that the tax office is experiencing some difficulties in simply getting hold of the facts of various taxpayer situations, and there is an ongoing problem with the taxpayer practice of using lawyers to hide or delay access to business information. The tax office wants to see the material to decide if the correct tax is being paid. Companies and high income earners are replying, `No, this is commercial-in-confidence. It's covered by legal professional privilege.' They are refusing to disclose that sort of information to the tax office. From my point of view, that simply is not good enough. I think that all Australian taxpayers are entitled to an assurance that each taxpayer is being dealt with on the same basis; that the tax office knows exactly what their financial affairs are. They should not be able to say, `Well, these aspects are my financial affairs. They're the subject of legal professional privilege and I don't have to tell you, the tax office, what my taxation arrangements are.' I think that is a most unsatisfactory situation, and I hope that the government is supportive of the tax office concerning this matter.These bills indicate, as other pieces of legislation before the House indicate, that a GST is not necessary to solve our taxation issues. They indicate that the government is able to deal with them if it has the will. If it is prepared to deal with them, it can do so. By way of contrast, a Senate inquiry into the GST has proved—I think beyond any doubt—that the GST is bad for the economy, bad for jobs and unfair to families and communities. So, despite the Treasury's claim, `We've done a lot of modelling,' before the Senate committee, they have confirmed that we have had no modelling of the macro-economic impact of the tax package, no modelling of employment, no modelling of wage effects and no modelling of GDP.We have seen a hole blasted in their proposal that inflation will rise by a mere 1.9 per cent. The Treasury admitted to the Senate committee that the impact will be at least 3.1 per cent, and even then they are not taking into account compliance costs which will be faced by business inevitably being passed on to consumers and transitional provisions which deny tax relief for motor vehicles. In addition, Treasury are not taking into account the fact that benefits as a result of the abolition of indirect taxes will not fully be passed on to consumers.We also saw plenty of evidence before the Senate committee that a GST will be bad for jobs. We also saw evidence before that committee that it will be unfair to families and to communities in ways that I indicated earlier in my remarks. In particular, it will have an impact on charities which do such important work in our communities. Having said that, the opposition will be supporting the legislation before the House.21:27:002904Prosser, Geoff, MPMr PROSSERRI4ForrestLP10—Taxation Laws Amendment Bill (No. 5) 1998 has four main objectives. Firstly, the bill simplifies the current remittance obligations for most Australian business by aligning the remittance dates for medium and small PAYE, PPS and RPS taxpayers from the seventh to the 21st of the month. Secondly, the bill replaces the current late payment penalty arrangements with a consistent and commercially realistic general interest charge on outstanding amounts of tax. These new penalty arrangements incorporate new failure to notify and late reconciliation statement penalties. Thirdly, this bill introduces a system of running balance accounts to account for sales tax, PAYE, PPS and RPS debts for the year ending 30 June 2000. Finally, the bill introduces measures to deal with the abuse of foreign tax credits.The measures contained within this bill herald important reforms to Australia's taxation system, simplifying the remittance obligations and reducing compliance costs for most Australian businesses. These measures build on the government's commitment to taxation reforms—reforms we were re-elected to implement.In relation to the alignment of payment dates, under the current arrangements, medium and small remitters are required to pay deductions on a monthly and quarterly basis respectively. Deductions made during a month or quarter are required to be paid no later than the seventh day after the end of that month or quarter.Under the new arrangements outlined in this bill, the payment dates for most remitters will be aligned with the new quarterly GST and pay-as-you-go payment dates of 21 October, 21 January, 21 April and 21 July. Aligning the payment dates for monthly and quarterly PAYE, PPS and RPS remitters to the 21st of the month will harmonise all taxation pay ment dates for the new tax system due to come into effect on 1 July 2000.These reforms will substantially reduce compliance costs for small businesses because most small business will only have to remit tax every quarter, rather than every month. These changes have arisen as a result of the recommendations of the Small Business Deregulation Task Force and they are designed to alleviate the paperwork and compliance burden imposed on Australian business. That is something that I had a hand in implementing. I am delighted that many of the recommendations of the task force have been picked up in this legislation. I am also impressed that the member for Wills has given the government credit for picking up those important elements for small business. That is something that Labor failed to do in their 13 years in office.Talking about interest charges, I can well remember that in the late 1980s and early 1990s, when small businesses ran into terrible problems with their tax obligations, the penalties and interest charges that were imposed on many of them really hit them for six and many never recovered. They did not know where they were. Not only that, they did not know what their liabilities were so they could try to recover from those debts. This legislation will give far greater certainty to those businesses.The bill replaces the late payment penalty provisions with a tax deductible, general interest charge on outstanding tax debts. This measure realigns the Australian Taxation Office's business system to reflect the account management practices of major financial institutions. An important shortcoming of the current system is that penalty calculations are not well understood by taxpayers. This problem is further compounded by the inconsistent penalty rates and calculations that exist across the different taxes and between classes of taxpayers. These amendments will rationalise, simplify and align late payment penalties with market interest rates, and this will assist taxpayers to better manage their taxation liabilities under various laws.The current late penalty rates do not reflect market interest rates, and the lack of commer cial reality in the penalty rules prevents the ATO from assisting taxpayers to minimise any escalation of outstanding debt to the Australian tax office. The general interest charge will establish a common single rate of interest for all tax types where a payment is not received by the due date. In so doing, the bill abolishes the complex and punitive culpability elements that apply for the late payment of some taxes. More importantly, the bill allows these debts to be aggregated into one outstanding balance for each of those tax types.Under the existing system, when a business incurs a penalty, it is difficult to sort out the amount owed if the late payment has occurred across a range of tax areas. It is currently difficult for a business to determine the penalty, the interest charged on the outstanding debt and the rate of interest charged. For example, currently there are about a dozen different rates of interest that apply to penalties and late payments and they range between 16 and 20 per cent.The changes contained within this bill rectify these problems by ensuring that taxpayers receive regular statements from the ATO to provide a comprehensive statement of their outstanding liability at a particular point in time, showing the details of their outstanding tax debts and penalties. The bill also enables an automatic calculation of the general interest charge on this outstanding liability. This will enable businesses that incur penalties to evaluate their position and manage their debt more effectively. In almost all cases where the general interest charge is imposed, there will be a reduction of between three and 23 percentage points in the existing penalty rates.In cases where businesses do run into trouble, for whatever reason, the running balance account amendments introduced by this bill apply a consistent general interest charge to any outstanding tax debts. This tax deductible general interest charge will initially be administered through four separate running balance accounts to be established for a taxpayer's sales tax, PAYE, PPS and RPS debts. This is an important step towards the creation of a single running balance account for all tax debts when the new tax system comes into effect on 1 July 2000.This is a sensible reform because the present taxation laws cover up to 14 different tax areas, each of which can give rise to separate tax debts. These tax areas are currently managed through several different computer systems, and that is not including the calculation of superannuation liabilities. Under the existing system, where a business falls behind in their monthly obligation to pay sales tax and remit PAYE, PPS and RPS deductions over a year, it could involve something like 48 separate primary debts. When those debts are overdue, they are currently recovered as separate debts, each with its own late payment penalty.Under the running balance account amendments in this bill, those 48 primary debts referred to above will be aggregated within the four running balance accounts and be represented as four separate recoverable debts. These will ultimately be represented as one recoverable debt from 1 July 2000. So if a business runs into trouble, their tax statement will enable them to understand the penalties and late payments involved.The introduction of a running balance account will also enable simpler tax accounting and collection arrangements that will position the ATO to better assist taxpayers to minimise any escalation of the amounts outstanding. This represents a more streamlined process than individually calculating the general interest charge for each primary component of debt which contributed to the running balance account balance. This bill also introduces a penalty for failing to notify the commissioner of an obligation to remit a source deduction or sales tax and failing to give the commissioner an annual reconciliation statement of source deductions made.In relation to foreign tax credits, this bill closes a tax loophole that has enabled taxpayers to avoid tax through the acquisition of foreign tax credits through schemes that have been designed with the sole purpose of obtaining a tax benefit.In conclusion, the changes brought about by this bill will be transparent, commercially based and easy to administer. They will encourage withholders who cannot remit deductions by the due date to notify the commissioner of the existence of liabilities to ensure withholders send in their annual reconciliation statements of deductions. The creation of running balance accounts will streamline Australia's taxation system and the general interest charge will replace the cumbersome late payment penalty arrangements with a simpler `interest on outstanding balance' system. Finally, the tightening of the tax law will combat the abuse currently encountered with foreign tax credits.21:38:002906Gerick, Jane, MPMs GERICK83WCanningALP00—As a former small business person, I am pleased to support the changes to the payment dates for taxes from monthly to quarterly, which will lessen the burden of paperwork and red tape for small businesses to deal with. For the past nine years the business I have owned needed to complete paperwork only for PAYE employees. The paperwork needed to do this is not much, and the need has reduced dramatically over the years with the use of computers.In the early days of the business, our group tax bill was payable quarterly. A few years later it changed to a monthly expense. This was a change we welcomed, as it certainly helped with the cash flow of our small and beginning business. Cash flow is a problem for most small businesses, and this change may well have a negative impact on a number of small businesses. While there is logic to the argument that the same amount has to be paid and the money can be put aside monthly, the small business people I speak to say that this is more a dream than a reality.Could the minister confirm that there has been extensive consultation with small business groups as to the impact of this change of payment date? A number of small business owners I know and have contacted have not joined the local chamber of commerce groups because of the cost involved and instead belong to smaller community groups. Have these small community groups had a chance to comment on the proposed changes? I have today spoken to a number of small business owners who were unaware of these proposed amendments and there was concern that the government had not informed them or consulted with them. A number were very concerned at the effect the changes would have on their cash flow and expressed the hope that there would be an option given to them as to which payment method was chosen. A number of small businesses only need to pay PAYE tax and their normal income tax at the end of the financial year. This proposed alteration means that all small businesses will need to change their method of PAYE tax payment, even though they only have to make this one payment. Will there be an opportunity for small businesses to elect which payment method best suits their business?Small business is the biggest employer in Australia and it is important that the changes being implemented are going to benefit rather than hinder. The amount of paperwork required to make the current payments will blur into insignificance when compared to the demands that compliance with a GST will make on the average small business. Retailers form part of the small business group which will most benefit from these changes. As they need to fill in a multitude of forms and quite often need to use an accountant to ensure that they comply, their costs will be reduced significantly. The West Australian Retailers Association has welcomed the changes for its members. From experience, I would much rather have to prepare the current paperwork without having to spend up to $5,000 to get ready to comply with a GST and then know that I would be spending many extra hours doing the paperwork required with the GST.While big business groups are supportive of a GST, the small business people who are not currently responsible for collecting a sales tax will find the new impositions costly both in money and in working hours. Small businesses are going to face a huge burden as the unpaid tax collectors for Treasury if the GST is implemented. The alignment of payment dates will make it somewhat easier for small businesses to complete the required paperwork. However, it is only a drop in the ocean when compared to the additional responsibilities and requirements they will face as a GST tax collector.The most important lesson from this is that the alignment of payment dates does demonstrate that it is possible to lessen the load of paperwork on small business people and to make improvements to the taxation system without needing to impose an unfair tax on the whole country—a tax which will not help all small businesses and certainly will be most unfair on those who can least afford it. I am pleased to see that attempts are being made to lessen the demands of paperwork being made on small businesses in Australia.21:43:002907Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—in reply—I would like to thank the member for Canning, who is obviously the self-appointed spokesperson for small business on the other side of House, primarily because she is the only person who has ever had any experience in small business on the Labor Party side of the House. I congratulate her for speaking on the Taxation Laws Amendment Bill (No. 5) 1998 , and I wish that a few of her colleagues had joined her in speaking on this legislation. When there is one voice, one lonely sole voice, in caucus defending the interests of small business, we know it will be the member for Canning, because no-one else has any experience in small business. I would also like to thank the member for Forrest for his contribution. As a former minister for small business, he has an intimate understanding of the importance of small business for the Australian economy. I would like to thank the member for Wills for his support for this bill.In conclusion, I would like to summarise the merits of the changes made by this bill. This bill introduces new charges and penalty arrangements for outstanding amounts of tax accompanied by a system of running account balances. The tax penalty arrangements provide a uniform, tax deductible, general interest charge and replace a number of existing penalty arrangements. The new running account balance system will eventually allow the ATO to maintain all of a business's tax liabilities in a single account. Small and medium businesses will benefit from the alignment of remittance dates to the 21st of the month. This gives them an extra 14 days to remit withheld amounts to the tax office.This bill includes an anti-avoidance measure targeted at foreign tax credit schemes and is consistent with an international crackdown on such arrangements. The anti-avoidance provisions of part 4A of the tax law will be amended to render some foreign tax schemes ineffective. I commend the bill to the House.Question resolved in the affirmative.Bill read a second time.2907Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Hockey) read a third time.Bills2907r7102907Consideration resumed from 10 December 1998, on motion by Mr Hockey:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.2907Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Hockey) read a third time.Business2907Motion (by Mr Truss) agreed to:That the Privacy Amendment (Office of the Privacy Commissioner) Bill 1998 be postponed until the next sitting.Bills2907r704Billsr705Billsr706BillsBills2907Debate resumed from 15 February, on motion by Mr Fahey:That the bill be now read a second time. 21:49:002908Morris, Allan, MPMr ALLAN MORRISFI4NewcastleALP00—This is in fact the first opportunity I have had to address the House in the 39th Parliament and I would therefore like to express my appreciation to the people of Newcastle for their confidence in my continuing representation of them in this place.Honourable members will recall that the election of October 1998 had a slight hiccup in our part of the world. In fact, it was a rather tragic fact that one of the candidates died a day before the ballot, which required the election to be postponed. At some stage I will refer this matter to the parliamentary committee that considers elections because I think the processes set in train by that event were extremely difficult for the whole community. Given the fact that people had voted in the October election, there was a fair amount of confusion as to what their status was in the subsequent election held on 23 November. There was also confusion as to what things were set in train as to who would call the election and how that was to progress. There was therefore a period of uncertainty and, certainly, delays.It would seem to me that in such circumstances there should perhaps be a capacity in the legislation for the Electoral Commission to reissue the writs, rather than having to wait for the ministerial council, the Governor-General or somebody else, or some other machinery, to act. In some countries, of course, people do go ahead with elections and I think that is rather macabre.I pay my respects to Mrs Westbury and her family in terms of the unfortunate circumstances they were placed in and, of course, the Democrat party was quite devastated by the loss of its candidate. But the fact is that there was an extensive cost involved and that a great deal of planning goes into elections by the commission and by all those who participate. I suggest that the parliamentary committee should consider whether or not what is currently in place is appropriate. Perhaps it should be reviewed and it might, I would suggest, call for submissions from the public at large.It happened once before in recent times: in the electorate of Dickson in 1993. It happened fairly early in the campaign, so the election was set down well in advance—I think a fortnight later—whereas in the case of Newcastle it was some seven or eight weeks later, which meant all the cycles and all the confusion. In Dickson people had time to be warned. In the first election in Newcastle last year, many Novocastrians voted twice: they voted in both the lower house and the upper house either by postal vote or by prepoll or on the day itself because they were voting absent somewhere else. The returning officer at the polling both where they were voting did not know about the cancellation. So they voted in the House of Representatives in the first election, which had already been cancelled. So that sense that they had voted already was very strong. It partly accounts for the fact that eight per cent of the people who voted in the first election did not vote the second time. That does give an indication of the dimensions of the problem, despite quite an extensive campaign by the commission to make people aware of that. Once they had voted they thought that was the end of it and put it out of their minds and got on with their lives.You will recall that that election was nine months coming. It was signalled in January when we were warned about a double dissolution on Wik. We were signalled every second week that there was going to be an election soon—it was going to be in May, then June, then July, then before the Queensland election, then after the Queensland election. We had election fever for eight or nine months. It is understandable that people wanted to put it behind them, given that they had had nine months of titillation by the Prime Minister as to what to expect.4T4MELHAMMr Melham—I wouldn't call it that.FI4Morris, Allan, MPMr ALLAN MORRIS—I accept the comment from the member for Banks. Perhaps it is not the appropriate word, but certainly people having voted in October felt that that was the end of it. The machinery that we have does need to be reconsidered and renewed.This is a new parliament; there are many new faces. I do regret I missed those early weeks because that is the time when one first becomes familiar with who else is here. Even though I came down for some of the sitting days and to the opening, it was not the same as being in the chamber and hearing a lot of those first speeches. It has also been fascinating to watch the new ministers and ex-ministers. So I am still catching up on what has happened to whom and how and where.We still have some fascinating topics running. I see that GST is still on the agenda. And we are still talking about mandates. The government suggests that winning a minority of the vote enables them to claim that they have the support of the majority of Australians. I have not quite worked that out yet. Perhaps I am still recovering from the election. I have not quite worked out the mathematics or the logic of that.I note also that the more things change the more they stay the same. The cuts to Centrelink are biting deeper and harder. The Centrelink staff in the area of Newcastle are being torn between their loyalty to their political masters, the government—because they are servants of the government of the day—and their sense of duty towards their clientele, a duty which they are not able to fulfil because there are not enough of them. They are insufficiently resourced and certainly overworked. They also know that much of what they are required to do is grossly unfair.Some things have not changed since October. Since I last spoke in this place back in July from recollection, a new year has started and a new round of people are looking to better educate themselves and finding that the changes to Austudy brought in over recent years have made that much more difficult. They are finding also that Austudy overpayments from three and four and five years ago are suddenly resurfacing and they are being told that what was agreed to two or three or four years ago is no longer the case.We are seeing the very familiar face of the government's immigration policy. I had a recent case which was quite heart wrenching. A man who had been here for 31 years developed cancer late last year and sought to have his children whom he had not seen for 31 years come to see him before he died. They were not able to do so and he died very quickly. Their applications were refused. His friends and workmates promised him that they would get his children here for his funeral. They could not. They were refused. I think the reason from the embassy in Belgrade was that the son, who was from Bosnia, was unable to prove `sufficient incentive to return to Bosnia'. I cannot for the life of me fathom why he would want to stay here, with no money, no language, no job, no friends, no family and a government acting in that kind of way. Why on earth would anybody want to stay here? But because he could not prove enough incentive to return to Bosnia his father's funeral went ahead—much delayed while this went on for weeks and weeks—without him. So this man's workmates, who had worked with him for many years and who had promised him on his deathbed that they would have his children to his funeral, feel an intense sense of failure because they were unable to fulfil their promise. And they thought they lived in a country that talked about a fair go, family values and decency.So the more things change the more they stay the same. Over the last few years we have become used to this harsh face of Australian governments—the demonising of victims and the blaming of those who are in need of support for their problems. Those amongst us who are most in need of us all caring for them are being seen as not worthy of care—whether they are the young with Youth Allowance and Austudy, the old with nursing homes and the aged care system or simply families under stress.I raised in this place last week a matter which was further canvassed earlier today. I wish to come to that in a moment because it does indicate that this parliament will not be that dissimilar to the last one in one sense. This government has talked now extensively and expensively with taxpayers' funds about the thing they call tax reform. We understand now that we are going to have this tax reform, as it is called. Of all the misnomers that one sees, this is perhaps the greatest. We are going to have a new tax system and a new tax itself—this so-called GST.On 29 January, a constituent of mine from Mayfield was the first—but perhaps others have paid it—to pay the new tax when he paid for his funeral and that of his wife. People who pay for funerals in advance do so very carefully. They are very conscious that when they depart this life they want to make sure that their affairs are in order. They do not want to leave behind debt or uncertainty. They want to know that their departure arrangements are the ones they chose themselves, are appropriate and will be completed. Whether you choose to have a church service or a crematorium service, or whether you choose to be buried or cremated, many people like to make those decisions themselves and put the procedures in place to allow that to happen.This gentleman did this. At the time, he was advised that the GST was coming and that he could pay it. He was told that if the tax did not come in, the money would probably be refunded. He went ahead and paid it. On becoming aware of this some weeks ago, I started to make investigations. I came across what will become the norm—the ATOassist information service. It provides details of the new tax system. The TGST003 document, which is in the ATOassist site on the Internet, points out that, for prepaid funerals:If you enter into a contract after 2 December 1998 for a funeral, all of the amount paid is subject to GST (unless the funeral is before 1 July 2000).That advice is accurate as at 2 December 1998, so it is current. It was there a fortnight ago and the same advice is still there today. It does not say `discount the honorarium for the clergyman'. It does not say that the doctor's cremation certificate—which sounds to me like a medical exercise—is exempt, but we do not know whether or not it is.Anybody who is making those arrangements—a funeral director, a building society which holds the money, or a consumer who is looking at making those plans—on reading that advice would be led to believe that the tax is applicable on the full amount. It actually says that all of the amount is subject to GST. It does not say `part of the amount'. It does not even mention hidden taxes, let alone the honorariums for clergymen or the doctors' cremation certificates. Are they taxable under the GST? Who knows?I suspect that in the months ahead we are going to see literally hundreds and thousands of cases just like this, whether it be prepaying for a wedding or an airline ticket which you exercise after the event. How does the airline work out what the price will be six months later? How does the funeral director work out what the GST should be paid on? What happens if the person dies before July? What happens if there is no money in the estate for the extra taxation? Would the person be buried? No, of course they would not because the contract has been breached. So those who seek certainty in their departure arrangements can no longer find it.Whether it is a wedding, a funeral, a holiday or an airline ticket, literally thousands of transactions are going to be caught up in this. If, with the example we have so far—and this is the first example we have—the quality of the advice in the ATOassist web site is indicative of how the government is going to implement this new tax system, we had better start saying a few prayers right now because we are going to need an awful lot. If the alacrity with which they respond is similar, then it is going to be even worse. The Taxation Office was first made aware of this three weeks ago. The media in Newcastle started asking questions about this three weeks ago—a week before parliament resumed. Yet today, if you look up that document on the ATOassist web site, you will find that the advice is unchanged.To all the people who were told that we were going to have a new simple system I say, `I am sorry, but you were conned—you ain't. You are getting a very complicated system that even the government does not understand.' The answers we have had in this place and which have been given to the media for weeks have been confusing. You could have a bash at the funeral director and blame him for it, but it is not his fault. Is it the tax office's fault? No-one knows. What is the correct information? No-one knows. The Prime Minister said today that it might only be three per cent, but how does anybody know? If this is the quality of the tax advice we are going to have, then every day in this place for the next year and a half there will be confusion, chaos and contradiction.As I said at the start, this is my first speech in the 39th Parliament. I opened it by thanking the people of Newcastle for their continuing confidence in me. I would like to extend that appreciation to my workers and supporters who worked for two elections—and that is no mean task—and who worked enormously hard. It was a fairly gruelling experience for all of us, as it was for the community with the uncertainty of it all. The electoral officer and his staff in Newcastle did a sterling job in conducting two elections extremely well. Mr Jones's professional standards are absolutely impeccable and ones which the Electoral Commission should be proud of. I would also like to extend my appreciation to my family—particularly to my wife and children—for their support and assistance during that time.Some things change but still stay the same. I find down here that there have been a few changes. We have some new rules, apparently. Certainly, on my side of politics, it has now become common, it seems, for people to make public critiques of each other's speeches. I look forward to a critique of mine sometime; I look forward to having my colleagues offer some public advice as to my confusion or intellect or otherwise. I look forward to enjoying that.I think it is important to reassure our supporters that the ego dimensions of colleagues on both sides of the House appear not to have changed. Ministers' egos seem to have inflated slightly more. It is also important to reassure my dear friend the member for Watson that he is not forgotten out there. The people of Newcastle still remember him and they reminded me quite regularly during both of my campaigns of his success in negotiating compensation benefits. It is reassuring to know that, even though some issues are very old, people still seem to have very long memories.It is with some trepidation and some apprehension that I approach this 39th Parliament. It will be a parliament of change. But I also have this strange idea that it will be remarkably similar to the previous parliament. From my point of view, from my community's point of view and from the country's point of view, quite frankly, we cannot afford more of the same.22:09:002911Wakelin, Barry, MPMr WAKELINHV5GreyLP10—I rise to speak on Appropriation Bill (No. 3) 1998-99 , Appropriation Bill (No. 4) 1998-99 and Appropriation (Parliamentary Departments) Bill (No. 2) 1998-99 . As the member for Newcastle has alluded to, the appropriation bills certainly do come around every year. It is interesting to note that this apparently is an historic occasion for the parliament as it will be the last time that the appropriation bills will be prepared on a cash based annual appropriation. When the budget is brought down in May 1999, it will be prepared on an accrual basis consistent with the recommendations of the National Commission of Audit. It is good to see that the government is moving forward and picking up new practices with a stronger focus on what is known as current input focus and funding for the full price for agency outputs for expenses estimated rather than merely estimating cash payments to be made.I listened carefully to the member for Newcastle in his contribution and I will just make a few observations. The issue of mandate apparently is troubling him. I suppose that always troubles the opposition when they are not sitting on the treasury bench. They somehow try to convince us that they have the mandate. If we intend having responsible democratic government but the government cannot be formed in the lower house, I do not know on what other basis you can have a mandate. Clearly, the Howard-Fischer government has a mandate. It fought a very determined campaign on tax reform, along with other issues. I am at a total loss to see the justification for this diatribe that there is no mandate.I am always puzzled, and I always find it quite remarkable, particularly when listening to financial discussions in this place, that the Labor Party always manage to put a negative spin on just about everything that the government attempts to do. They always seem to focus on the concept that there is a bottomless pit of money, that somehow you can focus on, say, a three per cent increase for a funeral under a new tax system. They never quite get around to having properly balanced debate, from tax cuts to a stronger economy. You do need employers, you do need small business, you do need a business structure and you do need a public sector which is efficient. I would like to hear much more from the Labor Party, in a much more measured and widespread discussion—I know the member for Werriwa and the member for Melbourne are engaging in this debate—about how they intend to move this country forward.The great achievements of the government are of course fairly well documented. In question time each day it is with some pleasure that I am reminded of the progress of the government. It does not seem that long ago that we dealt a fairly major blow to our deficit. We have seen significant drops in our interest rate and we are seeing significant confidence in this country, which is in contrast to other regions in the world.We have seen in the Morgan and Banks survey, where about 3,500 employers were surveyed, that Australian employers are very optimistic. More than one-third expect to put on people in the next three months. It is the highest level of business confidence recorded since the survey commenced. In December 1998 alone, there were 54,000 new jobs. They are pretty impressive figures, with an unemployment rate sitting at 7.5 per cent.In South Australia, it is interesting to note that the number of overseas migrants choosing South Australia expanded by 40 per cent last year. Business investment grew by 24 per cent and business confidence was up by 14 points compared with a national increase of nine points. That is, as I understand it, from the National Australia Bank survey.The South Australian economy is growing at the fastest rate in the country. It is estimated at 4.5 per cent in 1998-99. Retail sales for the last quarter of 1998 were almost double the national average. South Australian exports have already risen by 5.1 per cent in the first five months of 1998-99. So there are some very positive indicators in our national economic performance.In terms of the path ahead for the government, we have the Senate committees looking at the government's tax proposals. The Treasurer, the Prime Minister, the executive and senior ministers have exposed very well the weaknesses particularly in the Democrats' position. Today we had the leader of the Democrats in the Senate suggesting that they would not be ready to vote after what would be, at the end of June 1999, a record allowance of hours for debate, a record time for Senate committees ever in the parliament of Australia over 100 years. We have the farcical situation where the Democrats are suggesting that that is not enough time. As far as the Labor Party goes, as the Treasurer reminded us today, why would they even bother with a Senate inquiry? They are going to vote against it anyway.As to the ALP's interest in employment—employment has been the issue very much of the 1990s—it is interesting to observe the Labor Party as they try to justify their disallowance of the unfair dismissal laws. They know and this side of the parliament knows that employers are concerned about that. Employers need the confidence to employ, and to deny 50,000 people an opportunity to work because of this legislation which they intend to disallow in the Senate is just beyond belief. The youth wages issue has been well canvassed. I will not proceed any further on that because it had very broad ranging debate in this place last week.Can I just look back over the last decade in my part of the world, that is in the electorate of Grey, which is 92 per cent of South Australia. I understand that with the redistribution I will end up being responsible for even more of that part of the world—that is for the commissioners over the next few weeks. If we go back a decade or so, we are reminded of the 20 per cent-plus interest rates. At the same time as we were suffering one of the worst drought periods on record, the Labor Party withdrew drought assistance. At a time when we had record low commodity prices, led by then Premier Bannon and the federal minister of the day, the Labor Party removed what is now known as the farm management deposits—then known as the income equalisa tion deposits. That is well documented. Anyone can check the record.What really strikes me, looking back over that period, is that at the same time that that was happening and the economic management was such that it was just putting more and more pressure onto the regions—I will not talk about the increase in fuel taxes and other issues—we had then Premier Bannon asleep at the helm with totally insufficient oversight which saw in a very few months, a year or two after that very tight period in my part of the world, the greatest financial disaster that my state has ever seen. The State Bank lost something like $4 billion which, I think, is of world record proportions on a per capita basis. It is little wonder that people of South Australia still worry very much about the Labor Party.The other thing which the Labor Party was doing at the same time was vigorously opposing the great new mine at Olympic Dam, which now, 10 to 12 years on, has seen an investment coming to $4 billion. So on the one hand we have this totally incompetent economic management, we have the greatest financial disaster and we have denial of wanting to see the greatest single investment in South Australia in the last 50 years. I take this opportunity to challenge the Labor Party to look to Australia's future, to come up with the policies—we do not mind our policies being exposed to the most rigorous debate—which will be able to deliver what we have delivered in the last three years: balanced budgets, low interest rates, low inflation and growing employment opportunities.We have well mapped out our future agenda into the next century. I can do no more than appeal to the Democrats, to the Independents and to the Labor Party: stop this humbug of blocking our tax reform package. As the Asian crisis has shown us, this is a time of great difficulty in many parts of the world. Yet through our philosophy and through our policies, we have been able to deliver the best opportunities that Australia has seen, I would suggest, for at least 25 years.22:21:002913O'Byrne, MichelleMs O'BYRNE84SBassALP00—The appropriation bills, as we know, deal with the way in which governments allocate funding resources. A government's attitude to the community is clearly identifiable when you look at the manner in which it approaches budget time. Unfortunately, what we have seen with this government is policies and decisions that have dramatically reduced choices and services for ordinary Australians. The government should not feel any pride in the manner in which it has treated particularly regional Australia.We have seen attacks on child care, health, young people, unemployed people, education, research, development and our regional areas. It seems that no-one in our community has been spared the savage cuts of the Howard government. I would like to be able to say that the government has been unaware of the consequences of its budget cuts, but I am afraid that is just not the case. This government has embarked willingly and some might even say gleefully on a campaign that it terms `reform' but that most Australians realise is vicious attacks on the basic elements of their community and vital services.The Launceston General Hospital is the major hospital within the electorate of Bass, and I am continually disappointed by the number of people who, through no fault of their own, are on long waiting lists for treatment. The medical and support staff at the hospital provide caring and professional services to the community. It is just a shame that the federal government will not fund this excellent hospital as it should.The impact of cuts to the health budget are felt, often painfully, by the community. And when funding shortfalls occur it is people that suffer. The previous state Liberal government in Tasmania claimed that the Howard government had reduced state health funding by $15 million. Nationally, over $1½ billion has been ripped out of hospitals and Medicare since 1996. This funding reduction has had the recent impact of increasing the waiting lists for category 3 elective surgery at the Launceston General Hospital. When category 3 elective surgery is delayed, the underlying medical conditions often worsen and become hugely expensive and more painful to treat. A decrease in early elective surgery will always result—as I am told by professionals—in an increase in expensive emergency surgery.With waiting lists rising and beds closing, it is a disgrace that the federal government has not signed a Medicare agreement with Tasmania. It is even more appalling when you consider that the federal government made an offer to the previous state Liberal government but that this same offer has not been made to the present Labor state government. The failure to provide security and funding to Tasmanian hospitals is a disgrace. By the government not extending this offer to the present state government, the hospitals in Tasmania are being denied almost $15 million, and that money is sorely needed.By not honouring its offer, the government has forced the Australian Medical Association into suggesting that nursing home and hostel admissions be `freed up' so that the elderly who are treated in public hospitals can be moved out after only 48 hours. The stress that this would cause elderly and infirm people is something that all of us should endeavour to stop.We are also under a real threat that we may lose our medical school status. The Prime Minister needs to be made aware that the continual playing of petty political games with the health needs of the Tasmanian community will not be tolerated by the public. It would take more time than I have allocated to health in this speech to fully explore the impact of health cuts in Tasmania. But members opposite can be assured that at least in the electorate of Bass the community is well aware of the responsibility of the Howard government for health funding shortfalls.One of the primary roles we have as a society is the care of our children. Yet this government has walked away from the provision of a high quality, affordable and accessible child-care service. In Tasmania we have a disproportionately high number of community based centres. In fact, about 70 per cent of our centres are community based child-care centres. The community based child-care centres in Tasmania say that they have lost an amount of around $1.4 million in funding. Tasmanian centres who responded to a survey conducted last year identified that 55 per cent of those centres had reduced staff because their numbers were falling. Increased fees are the direct cause of reduction in the numbers of children in care. Fees have increased dramatically, in one case by as much as $40, and this increase is being borne by families, most of whom can ill afford it. The National Association of Community Based Children's Services survey said:Centres have had no choice but to increase fees and cut staff. Staff cuts have seriously undermined the quality of care.For low income families, child care has become a luxury. The government's alleged savings from the child-care funding are in fact hurting the people of Bass, especially women, because it is women who in the majority of cases are still on the lower wage and who make the decision to leave the work force in order to care for children. Instead of being confident that if they go to work they will be able to afford child care, many women are now needing to assess whether they can economically survive in the work force. The government should be committed to equal participation in the work force.There are some simple changes that the government has claimed as savings, such as paying child-care assistance as a rebate instead of in advance, that have created additional burdens on low income people. Areas such as George Town, which is within my electorate, are doubly disadvantaged through limited access to Medicare offices. The nearest Medicare office to George Town is in Launceston and for working parents to find the time during the week to claim the rebate for their child care must be almost impossible.Last week a gentleman from George Town contacted my office, because he had a minor administrative problem with his child care rebate. By `minor administrative problem' I mean that his address was wrong. It took him five hours on the telephone to resolve this issue. If it takes that much time to fix something as simple as a change of address, how do people go about fixing larger problems or querying the methods and processes utilised? Not only are these low income people forced to make an outlay before receiving any government assistance but they are further disadvantaged by the process for claiming the child-care allowance. I would like to believe that the government is unaware of these realities, but it appears that it just does not care about the impact of its policies on ordinary Australian families.But the attacks on the basic components of life do not end here. As Australians one thing that we believe we should be able to rely on is effective job assistance. Last year we saw the end of a 50-year institution in the demise of the Commonwealth Employment Service. We saw the demise of our obligation as a nation to provide free employment assistance to all of our unemployed people. We saw a callous and malicious process of moving people off the unemployment lists—not into jobs but into some kind of limbo, a place where this government can tidily wash its hands and say it has done something about unemployment. Well, it has. It has hidden the true nature of the crisis. It has taken away a valuable service to the community and left us with an organisation which is neither properly funded nor properly respected.In May of 1996 in the CES office in my electorate there were 63 staff. There are now 11 people trying to deal with the unemployment needs of that region. We lost eight CES offices in Tasmania. Despite the claims of the government, services to unemployed people have not got better. We heard yesterday that 81.5 per cent of callers to Centrelink cannot get through. That is not just unemployed people, that is families who are being penalised. Not being able to talk to a Centrelink worker has caused anxiety and stress. The problem is exacerbated in those regional areas that have no Centrelink office, such as George Town where the unemployment level as of September 1998 was 15.9 per cent. Centrelink staff are already overworked. Yet they are expected to soon adopt a personalised client service, whereby they will see a particular client for the life of their involvement with the agency. There is a very real concern that this will lead to the personalisation of government policy and add to the stress already experienced by staff.The government have also recently announced their intention to increase the workload of Centrelink offices throughout this country through incorporating an assessment of the literacy of clients. This is yet another burden on staff struggling to meet the existing client needs in a professional and caring manner. Staff working for the agency are struggling to deliver the quality of service they are committed to providing within existing resource structures.Another Howard government initiated attack on meaningful employment has recently been brought to my attention. This involves the Howard government's last minute changes to traineeship and apprenticeship guidelines. Having advertised the programs to be offered for the upcoming year to potential trainees, apprentices and potential employers, the guideposts changed at the last minute. This has resulted in many previously eligible persons being ruled out of consideration, because if you already have a qualification, regardless of the nature of that qualification, you are no longer eligible for training assistance.Debate interrupted.Adjournment291510000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! It being 10.30 p.m., I propose the question:That the House do now adjourn.291522:30:002915Andren, Peter, MPMr ANDRENKL6CalareIND00—On the day Bishop Carlos Belo was in Melbourne—on the day Tom Sherman released his second report on the deaths of the Balibo 5—if ever there was a matter of public importance relevant to today and the Australian public, it is East Timor. Tonight Bishop Belo told the ABC's 7.30 Report of a woman in one of the traumatised villages, who told him they wanted one thing—peace.Bishop Belo advises a long and cautious transition with international supervision and assistance. Yesterday a group of parliamentarians were told by Fretilin foreign affairs spokesman Mari Alkatiri that the major need is now. Trauma and post-torture counselling is urgently required. So too, according to Mr Alkatiri, are doctors and medical supplies. Obviously these cannot be safely delivered until there is stability and peace in the province.The Minister for Foreign Affairs meets President Habibie next week. We must not enter those talks with dollar signs haunting our judgment. We are an independent and powerful nation in the region, and it is time we started acting in a manner befitting our status. Most Australians, I am sure, would be ashamed at the way successive governments in this country have placed appeasement ahead of justice and freedom for the East Timorese. For heaven's sake, let us consider their cost in non-dollar terms over the last quarter of a century—over 200,000 dead, and tens of thousands more physically and emotionally scarred for life.Bishop Belo said tonight that there was scarcely a family that had not lost one of its members. It is vital that the armed factions are disarmed as soon as possible. To wait is to court more bloodshed, especially now Indonesia's leaders talk of independence by the end of the year. A vacuum could be disastrous and our vacillation would be rightly condemned. It is not up to me or the Parliamentarians for East Timor or anyone else to tell this government what it should do. That message is coming clearly from those most affected—the East Timorese.Tonight on SBS News the Minister for Foreign Affairs is reported to be expecting to attend independence celebrations in East Timor by mid-next year. His office is reported as saying, `Anything could happen.' Does that mean that we are going to wait until `anything' happens, or will we ensure we play a leading role in controlling what happens? There may be differences in emphasis about the time line for independence. Bishop Belo talks of 10 to 15 years before full independence, with international help in the interim. Jose Ramos Horta speaks of five years. Xanana Gusmao spoke of 10 years—or he did when autonomy was an option. His Fretilin colleagues said yesterday that Indonesia's recent statements suggest autonomy prior to independence is no longer an option.Whatever the time line to independence, the work starts now. The need to disarm is now. The need for assistance is immediate, and the major responsibility, I would suggest, is ours. The leadership should be ours. Of course we should make Portugal and Indonesia stand to account. Of course they and the European Union, the Americans and the UN should help, but condemnation will not deliver peace. The Minister for Foreign Affairs has stated in his letter to Ali Alatas on the deaths of the five Australian newsmen that it is Australia's duty to request the Indonesian government make inquiries to establish the facts regarding the killings and to bring to justice any responsible party.Unfortunately, justice has never been a partner in any of Indonesia's actions in East Timor. But the deaths of the Balibo 5 will not have been in vain because they have helped enormously to focus the Australian conscience even more on East Timor over these past 24 years and helped drive home to Indonesia the futility of its repressive colonialism. But the deaths that have been in vain are the 200,000 plus East Timorese who have been slaughtered these past 24 years. Anyone seeing the photographs of atrocities against East Timorese displayed in this House last year could no longer doubt the brutal tactics employed by Indonesia in its futile attempt to crush the spirit of this tiny country.This was the spirit that fought another invasion more than 50 years ago and helped save the lives of many Australian diggers. We have a well trained army, navy and air force. Let us use them in a benevolent way to help deliver peace. Let this government, as a first step, announce as soon as possible our intention to commit our armed forces again to East Timor as part of a peacekeeping force. Let that commitment be the first necessary signal to the people of East Timor that there is help at hand to deliver what that old lady in the village told Bishop Belo, `We don't care if we're poor, we just want peace.'291622:35:002916Hull, Kay, MPMrs HULL83ORiverinaNP10—I rise tonight to voice my concerns in the hope that there will be a recognition of the aged care crisis that is currently in rural and regional areas. I give notice that the problem I speak of this evening will only get worse, as it has in Riverina.The problem has been raised by the Forrest Centre in their issues outline paper `Changes to Aged Care Services in Wagga Wagga by Greater Murray Area Health Service', in which they said:Greater Murray Area Health Service—and the New South Wales Labor government—proposes to abolish the `slow stream' Assessment and Rehabilitation beds in Wagga Wagga. This will see a significant reduction in services specifically tailored to older people. This will happen at a time when the number of aged in the community will increase.. . . . . . . . .The integrated model of providing care to older people which has worked effectively in Wagga Wagga for fourteen years will be lost to the community.. . . . . . . . .`Slow stream' rehabilitation is a method whereby an older person who has suffered a significant health event (such as a heart attack, stroke, fractured femur, hip replacement or amputation), are located in a nursing environment where both assessment and rehabilitation processes such as physiotherapy or speech therapy can be undertaken while the patient receives nursing care.. . . . . . . . .The service is designated `slow stream' and is targeted at those whose chance of returning to their homes to live more independently are less optimistic than those who receive services from the Wagga Wagga Base Hospital 18 bed Rehabilitation Unit. This unit is considered more `fast stream'. The average length of stay in The Forrest Centre Assessment and Rehabilitation Unit last year was 52 days. 94% of the clients were aged over 65.It is significant that last year, approximately, 36% of the frail older persons admitted to the Assessment and Rehabilitation beds return to live in their own home.However, for those whose condition is shown after the longer assessment and rehabilitation period to need care in a hostel or nursing home, they have already undergone a transitional stage which allows them to better accept their need for specialist care.This destruction of a targeted service will occur at a time when the aged population of Wagga Wagga area will increase. By 2001 there will be an 11% increase (from the 1996 census) in the population aged 65 and greater and by 2006 this is estimated to increase by a further 8%.. . . . . . . . .The intention of daycare is to provide care and support for frail older people with high care needs who are at risk of entry to residential facilities and so help maintain the industrial relations living in the community and prevent or delay—entry into an institution. The paper continues:A primary function is therefore to provide respite for carers.Greater Murray Area Health Service—and the New South Wales Labor government—proposes to relocate the Day Care Centre from its current location at The Forrest Centre and integrate it into a multi-purpose centre along with other community health activities and downgrade its role and function.In the past the Ethel Forrest Day Care Centre provided services for up to 30 clients per day who were bused to the Centre, provided with activities and therapies; a hot meal and at the end of the day transported back to their homes. It is likely under the new proposals it will be possible to accommodate only 15 clients per day, a significant reduction in services.. . . . . . . . .The Forrest Centre in addition to operating long-stay nursing homes beds, also operates five short stay "respite beds". The respite care beds are designed to provide carers of the aged and people with a disability with a break from the often arduous task of caring for a spouse, relative or friend. It is possible for the client to be admitted for up to sixty-two days per annum and this allows the carer to have a holiday or, as often happens, medical care for themselves.The removal of the "slow stream" rehabilitation beds from Wagga Wagga; the downgrading of the daycare service and the relocation of staff will see the destruction of an integrated service for providing care to older people which has worked effectively for the people of Wagga Wagga for fourteen years.Wagga Wagga currently has one geriatrician to service the region. Should the eight slow-stream beds be lost from Wagga Wagga, you can be sure we will lose this geriatrician. The flow-on effect will be an enormous loss of referral advice and specialist care for our aged. I ask: who is looking after our elderly?291822:39:002918Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—Before I focus on the excellent work of the ALSO Foundation, can I thank my colleague the member for Rankin for reading into the record that section of the GST bill that earlier today I called the `Groucho Marx clause', and which the Minister for Aged Care refused to let me table at the conclusion of this afternoon's debate. The issue of GST charges on prepaid funerals will continue to run while this minister takes such a frivolous attitude to a $600 million industry.I wish to draw the attention of this House to Victoria's largest gay and lesbian community organisation, the Alternative Life Style Organisation, better known to Victorians as the ALSO Foundation. ALSO was established in 1980 when gay men and lesbians joined together to organise the celebration of the then Victorian government's gay and lesbian decriminalisation reforms.For 19 years it has committed itself to advancing the wellbeing of gay, lesbian and associated communities. ALSO has pursued the aims of making philanthropic grants available, of addressing the health, welfare and social needs of the community it serves, and of promoting community development projects. The ALSO Foundation raises the finance required to fund community groups and projects and initiatives, whilst the ALSO Care and Benevolent Society Inc. is a registered charity that allocates the funds.ALSO is a model for voluntary organisations. It receives no government financial assistance; instead, funds are raised through private sources through events such as their three important dance parties: `New Years Eve', `Red Raw' and `Winterdaze'. Each is held in shed 14 at the Melbourne docks. These dance parties are the highlight of the social calendar for many thousands of gay, lesbian, transgender, bisexual and, indeed, straight Victorians. It is a tribute to ALSO that those thousands of people gather for what is an exhausting but exhilarating night of dancing. These parties are entirely peaceful and entirely fun.ALSO raises funds in a number of ways, including concerts such as the one I recently attended featuring major international performers like Grace Jones, through donations and bequests, and through membership subscriptions—approximately 1,000 supporters pay $25 per year. Significant funding is also achieved through the publication of the ALSO directory. This is literally a `pink pages' to gay and lesbian businesses and community organisations in Victoria.As a result of its extraordinarily successful fundraising activities, ALSO is able to provide the community with a community resource centre, which is currently utilised by approximately 50 community organisations for administrative and support facilities, the ALSO directory that I have described, a rural outreach program and a student resource and coming-out guide. ALSO is, and remains, at the forefront of same sex anti-HIV/AIDS campaigns.ALSO provides the gay and lesbian and associated communities with an advocacy organisation that initiates and supports developments in those communities. There are still significant inequalities in our society. Gay men and lesbian women still suffer discrimination. There is still much to be done. The member for Grayndler has a bill languishing on the Notice Paper which addresses one such inequality. His proposition to end discrimination against same sex couples in superannuation arrangements illustrates most forcefully the need for organisations such as ALSO to continue the fight. Much has been achieved, but much more needs to be done.A number of significant Victorian organisations have been the beneficiaries of ALSO's largesse over the years. They include the Gay and Lesbian Switchboard, JOY Melbourne radio, the Victorian AIDS Council, the Melbourne Quilt Project and Parents and Friends of Lesbians and Gays. Each organisation has been able to use grants to achieve a more professional approach within and outside the gay and lesbian community. ALSO is one of those wonderful organisations that makes up the rich tapestry of Australian life. We all admire voluntary organisations like ALSO that express the spirit of volunteerism that makes for a civic and, indeed, civilised society. Led by president Adam Pickvance, vice president David McCarthy and administrative manager Mark Yeo, ALSO is one of those organisations that deserves just recognition.291922:44:002919Bailey, Fran, MPMs BAILEYJT4McEwanLP10—In speaking in this place on many other occasions, I have detailed the benefit of the scientifically based assessments of the regional forest agreements. I have highlighted the benefits of providing for the first time security of resource that in turn provides certainty of investment for the next 20 years. That of course is vitally important in maintaining and providing more employment in our regional areas.In the Central Highlands region of my electorate, there are already 4,000 people involved in employment in the timber industry. I hasten to add that, with the signing of the Central Highlands Regional Forest Agreement last year and with the legislation that has passed through this chamber, the levels of employment are going to be far greater in the future.Tonight I want to talk about another aspect of the timber industry. As well as providing timber for the domestic and export markets, the Central Highlands have some of the most magnificent stands of mountain ash—absolutely majestic trees—some of which are many hundreds of years old. I would say, without any bias on my part, they certainly rival the Western Australian karri and the Californian redwood.This evening I want to particularly highlight these magnificent tall timbers and how they will very soon, many of us believe and hope, earn important revenue for the region and provide further employment. The Shire of Murrindindi has a concept to develop the Tall Timbers Touring Route and Trails throughout the Yarra Ranges National Park. Just imagine, only an hour from Melbourne, being able to leave behind the frenetic pace and sounds of city life and enjoy cool, green fern gullies, tall timber forests and small towns that have retained both the character and ambience of a past history. The concept covers both a drive and a walk throughout the region, as well as a spectacular elevated forest walkway where visitors will be able to enjoy and learn more about the natural environment high among the treetops.The drive is envisaged to link the visitors centres at Warburton and Marysville and wind through the Yarra Ranges National Park and Lake Mountain. Along the route, tourists will be able to experience a mountain ash forest with its numerous waterfalls and fascinating understorey of flora and fauna. Some of the highlights will include the area around the Camberville Mill where they will learn the history and importance of timber production in the area, as well as hear about the tall tales associated with gold mining in the Cumberland district. They will hear about towns like Ten Mile Creek, which of course these days lies well beneath the waters of Lake Eildon. A visit to the Jamieson Museum is an absolute must.The walk will involve a track between Lake Mountain and Rubicon where people will be able to enjoy summer walking and winter cross-country skiing, Lake Mountain being Melbourne's closest alpine area. As well as experiencing the tall timbers and unique examples of alpine flora and fauna, people will be able to learn the history of hydro power and experience the tramway museum at Alexandra which houses the best examples of machinery used in the area's early history. There is also a wonderful opportunity for private investment to become involved in providing accommodation to enable tourists to stay longer and enjoy these experiences.In just a few minutes it has been almost impossible to adequately paint a picture of the scale of magnificence of the natural environment of the Yarra Ranges National Park, and in particular the hidden treasures of the towering mountain ash tall timbers. However, I hope that I have at least whetted the interest of those listening so they will explore the mystic mountains.292022:49:002920Murphy, John, MPMr MURPHY83DLoweALP00—I rise to speak on the issue of Sydney airport and in particular the recent revelations that the federal government has approved expenditure on a controversial new radar system at Sydney airport called the precision radar monitor system, or PRM. Under the PRM system it is estimated that aircraft may fly over Sydney approximately 1,000 feet lower than their present altitudes. Further, I am informed that under the PRM system, aircraft will descend in spiral order. This system may require aircraft to pass over Sydney suburbs up to three times prior to descent to Sydney airport compared with generally one pass at present. This means louder aircraft because of flights being lower by 1,000 feet, longer noise events, fewer short periods of respite and, most alarmingly, the real prospect of a greatly increased number of flights.Why is the PRM system being introduced? We know it has nothing to do with fair aircraft noise sharing over Sydney. I will tell you: it has been introduced so that we can return to parallel runway operations at Sydney airport. The PRM system is a parallel approach system only and thus the PRM system will increase the number of take-offs over the north-west area of Sydney, including in my constituency of Lowe. At present, Sydney airport is functionally limited to approximately 60 movements per hour whenever lack of visibility requires instrument landing. This occurs on average two days per week. By comparison, Sydney airport can currently manage about 76 movements an hour. When fully operational, the PRM system will ensure the full capacity of Sydney's airport parallel runways in almost any weather conditions. Therefore, the PRM system will enable airlines to schedule for growing traffic on the assumption that Sydney airport can accommodate 80 movements per hour, which is its current capped limit.If introduced, the PRM system will cause aircraft landing from the north to be concentrated all the way from Hornsby, through the heart of the inner west, with filthy, noisy and dangerously low flying aircraft. The PRM system has been approved for purchase by the government under conditions of secrecy: underhanded, no fanfare and no public announcement. I put to this House that the PRM system is nothing more than a further shameless expansion of Sydney's airport flight capacity at the horrendous environmental expense of the residents of Sydney, and in particular my constituents in Lowe.Let there be no illusion about the dire consequences of the PRM system for the people of Sydney. Aircraft, whether departing from or arriving at Sydney airport, will be flying lower, will be flying in double and even triple circuits over the homes, schools and hospitals of Sydney's most densely populated residential areas, especially over the constituents in Lowe. As the PRM system is a parallel runway system, this makes a mockery of the government's rhetoric to deliver a fair and equitable share of the noise. The PRM system also has a sinister impact that has not been made clear to either constituents or this House, and that is the PRM system effectively eliminates the implementation of the long-term operating plan.The Minister for Transport and Regional Services, Mr Anderson, responded to my question on notice No. 295, put to him on 3 December 1998, by making it clear that the LTOP is the instrument which regulates the environmental impacts of aircraft movements.The Howard government has put everything into convincing the people affected by aircraft noise that their hope of environmental salvation rests on two events taking place. One, full implementation and operation of the long-term operating plan and, two, a second airport for Sydney. However, the facts are that the LTOP has not been fully implemented. That is, critical modes of aircraft movements have not been implemented, principally for political reasons. The PRM system is all about the expansion of Sydney airport and the Howard government's pandering to the tourism industry, the hospitality industry, the aviation fuel industry, the hotel industry, the airport shopkeepers and the operators of the airport's car park. It is a truism that, as an airport, Sydney operates very well as a shopping centre and a car park—all at the environmental expense of the residents of Sydney.Clearly, the government is set on a program of continued expansion of Sydney airport irrespective of the need for a second airport for Sydney. All this is designed to increase profits in anticipation of the privatisation and sell-off of Sydney airport. In other words, the Howard government is fattening the lamb before the kill. The implementation of the PRM system will almost certainly mean a return to the parallel runway system of old. Aircraft movements will return to a parallel system to enable an increase in movement capacity for Sydney airport.The residents of Sydney are not fools. They have been misled and fed disinformation on the airport expansion for too long. I am hard pressed to find anyone in the greater Sydney community who believes that noise will be shared equitably or that the long-term operating plan will be properly implemented. The people in my electorate of Lowe have come to know that this government has abandoned its policy of environmental equity, noise sharing and the long-term operating plan, and this realisation will not go unpunished. (Time expired)292123:54:002921Nelson, Dr Brendan, MPDr NELSONRW5BradfieldLP10—I was rising tonight in my capacity as the president of the Parliamentary Association for UNICEF to draw the attention of the House to the World Children's Report 1999 , the state of the education of young women in particular. But, given the remarks of the member for Lowe, I will make some comments in relation to aircraft noise in Sydney in my capacity as the chairman of the Sydney Airport Community Forum. I will defer my remarks on UNICEF and the almost one billion functionally illiterate children throughout the world to another time.The facts are that the issue of the concentration of aircraft noise in Sydney was created by the Labor government. The long-term operating plan to which the member for Lowe refers was a consequence of the election of the Howard government in 1996 in response to what was in many cases the inhumane treatment of people living north and south of the Sydney airport through the concentration of aircraft noise by the then minister, the member for Kingsford-Smith.Essentially, the long-term operating plan became necessary because when the third runway at Sydney airport was proudly opened—by the then Labor government, I might add—the actual impact of the third runway on Sydney residents and those who live under aircraft noise was not anticipated by anyone, including those who did the EIS and those who politically supported it at the time. The problem that we have got with the third runway—and the third runway simply cannot be closed for reasons other than those which people with a utopian view of life would appreciate—is that the runway is 1,053 metres away from the other runway along which it runs.The precision aircraft radar monitor was purchased by Sydney airport authorities at the time that the third runway was opened. It was purchased because it was emerging technology which was designed specifically to enable—as the member for Lowe correctly points out—planes landing in parallel formation to continue to land and to maintain a reasonable landing rate with Airservices Australia and traffic controllers able to accurately pinpoint where the planes are during implement weather conditions. That has, of course, significant and positive safety implications for people living in Sydney.I remind the House that in 1994 and 1995—and, of course, until March 1996—we had a Labor government. We did not have a Howard government then. The PRM was purchased by the authorities as part of the technological development of Sydney airport to facilitate the use of the parallel runways. Airservices Australia have been working on this technology since then. In fact, there is only one airport in the world—only recently Minneapolis—that has actually started using their PRM. There are another four airports throughout the world which have the technology but have not yet started using it.The director of Airservices Australia announced last week to a meeting of the Imple mentation Monitoring Committee of the Sydney Airport Community Forum that he wished to start trialling the PRM at Sydney airport. The government's intention was to allow them to start trialling the PRM to the south of the airport. However, Mr Maclean, who directs Airservices Australia, advised the Implementation Monitoring Committee that he also intended to start trialling to the north of the airport. This is something that the government does not support.The reason we were happy to see it trialled to the south of the airport is that it has no environmental impact upon human beings because the approximately three planes per hour that are required to bank in order to come into a final landing flight path south of the airport will do so over open sea and have no impact whatsoever on the people of Kurnell. The problem, which I share, is that until there is a thorough environmental assessment we will not know just what impact noise will have on people living to the north of the airport. I, and other members of the Sydney Airport Community Forum, also remain to be convinced that, if Airservices Australia start using this technology to the north of the airport, they will not be distracted from a long-term operating plan.I remind the member for Lowe and those who are criticising the government that the only reason we are able to trial the sharing of aircraft noise in Sydney is because we got rid of the Keating government and Mr Brereton, who was then minister. If the member for Lowe is re-elected to government, unfortunately aircraft noise will be concentrated again. (Time expired)292222:59:002922Draper, Trish, MPMrs DRAPER0L6MakinLP10—Recently I had occasion to speak out publicly against the prospect of a film being released in Australia although not yet classified by the Office of Film and Literature Classification, a film entitled Lolita , based on the novel by Vladimir Nabokov. This in turn created something of a frenzy on the part of some people in the media. In particular, Mr Phillip Adams, in his Weekend Australian article, without actually naming me or bothering to speak to me about this issue, poured vitriol on my efforts to take some steps to protect our children and even accused me of being xenophobic. I have written a response to Mr Adams, and with the House's indulgence, I will read from that.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! It being 11 p.m., the debate is interrupted.23:00:002922House adjourned at 11.00 p.m.Notices2922The following notices were given:Mr Truss to present a bill for an act to amend the Social Security Act 1991 and other Acts, and for related purposes.Mr Williams to present a bill for an act to rename the Human Rights and Equal Opportunity Commission, amend the law relating to human rights, and for related purposes.Mr Slipper to move:That, in accordance with the provisions of the Public Works Committee Act 1969 , it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: CSIRO Queensland Centre for Advanced Technologies Stage 2 Development, Pinjarra Hills, Qld.Mr Slipper to move;That, in accordance with the provisions of the Public Works Committee Act 1969 , it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: CSIRO National Centre for Petroleum and Mineral Resources Research, Bentley, WA.Mr Slipper to move:That, in accordance with the provisions of the Public Works Committee Act 1969 , it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Lavarack Barracks Redevelopment Stage 2, Townsville.Mr Slipper to move:That, in accordance with the provisions of the Public Works Committee Act 1969 , the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Replacement nuclear research reactor, Lucas Heights, NSW. Mr Slipper to move:That, in accordance with the provisions of the Public Works Committee Act 1969 , the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Australian Embassy, Berlin—Refurbishment of heritage buildings as a chancery and apartments.Answers to Questions in Writing2924The following answers to questions were circulated:2924(Question No. 30)302924Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister for Education, Training and Youth Affairs, upon notice, on 11 November 1998:(1) What measures has the Minister's department undertaken which are categorised as positive discrimination programs, that is, providing preference to certain citizens on the basis of their gender, sexuality, age race, place of birth or some other personal characteristic.(2) What are the details and funding commitments involved in each case.2924Kemp, Dr David, MPDr KempBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—The answer to the honourable member's question is as follows:(1) The Department has not undertaken any measures which are categorised as positive discrimination programs.DETYA has been implementing Workplace Diversity, Equal Employment Opportunity (EEO) and Equity measures in line with Government policy and its commitments under the Public Service Act. The Public Service Act requires the department to develop, implement, monitor and evaluate a Workplace Diversity program which incorporates EEO and Equity agendas. The department has been active in meeting this commitment and ensuring that it implements a system that is fair and equitable, and values diversity and non-discriminatory treatment of staff.One of the EEO principles is that judgements are genuinely based on merit. The merit principle aims to ensure people are judged fairly and without bias or favouritism. When offering equal employment opportunities and making decisions based on the merit principle, there are some groups in our society who are unable to gain equal access for a variety of historical and systematic reasons including prejudice, discrimination and unfair treatment. For this reason four EEO groups have been designated. They are women, Aboriginal and Torres Strait Islander people, people of non English speaking background and people with disabilities.In accordance with this, DETYA participates in the Australian Public Service wide programs designed by the Public Service and Merit Protection Commission such as the Senior Women In Management (SWIM) Program and the Indigenous Career Development programs such as the Aboriginal Undergraduate Study Awards (AUSA), the Aboriginal Staff Sponsorship Program (ASSP) and Indigenous Cadetships.Strategies designed to assist the designated groups are not designed to give preference to these individuals but rather to remove obstacles preventing them from gaining equal access to employment.(2) What are the details and funding commitments involved in each case. The budget estimates for the 1998/99 financial year are as follows:DETYA Budget Estimates for 1998/99AdministrationAUSA/ASSP/Cadets$81,000SWIM$35,000SalaryAUSA/ASSP/Cadets$386,322SWIM$143,7052925(Question No. 40)402925Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister for Foreign Affairs, upon notice, on 11 November 1998:What were the (a) names, (b) positions and (c) qualifications of the persons who represented Australia at the 22nd session of the World Heritage Bureau which commenced in Paris on 22 June 1998.2925Downer, Alexander, MPMr Downer4G4MayoLPForeign Affairs10—The answer to the honourable member's question is as follows:(a) The names of the delegates were:(i)Ms Sharon Sullivan(ii) Dr Peter Bridgewater(iii) Mr David Walker(b) Their positions were, and remain:(i) Head, Australian and World Heritage Group, Environment Australia(ii) Chief science Adviser, and Supervising Scientist, Environment Australia(iii) First Secretary, Australian Embassy Paris and Deputy Permanent Delegate to UNESCO(c) Mr Walker has been a member of the Department of Foreign Affairs and Trade since 1985 and was posted to Paris in May 1995.Questions relating to the qualifications of MS Sullivan and Dr Bridgewater should be referred to Senator Hill as Minister for the Environment and Heritage.2925(Question No. 41)412925Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister representing the Minister for the Environment and Heritage, upon notice, on 11 November 1998:(1) Did the World Heritage Bureau at its 22nd session in Paris In June 1998 review Australian properties which have been inscribed on the World Heritage List; if so, with what outcome.(2) Did the Bureau consider Australian properties which have been nominated for the List but not inscribed on it; if so, with what outcome.2925Vaile, Mark, MPMr VaileSU5LyneNPAgriculture, Fisheries and Forestry10—The Minister for the Environment and Heritage has provided the following answer to the honourable member's question:(1) The Bureau reviewed the state of conservation of Kakadu National Park. It noted that Australian authorities provided additional information on Kakadu. The Bureau considered letters received from groups in Australia expressing concern about perceived threats posed by mining at Jabiluka. The Bureau decided to send a mission to Kakadu National Park. In taking this decision, the Bureau noted that progress in protecting Kakadu had been good and that adequate care had been taken by Australia in protection of World Heritage values. The mission has subsequently completed its visit to Kakadu. The matter was further considered by the World Heritage Bureau and the World Heritage Committee in November and December 1998.In relation to the Tasmanian Wilderness, the Bureau requested Australia to keep the World Heritage Committee informed of any potential boundary extensions that may be foreseen and to provide a timetable for the implementation of the Regional Forestry Agreement.The Bureau also considered information received from Australia on the state of conservation of the Great Barrier Reef, Shark Bay and the Wet Tropics.(2) No.2925(Question No. 84)842925Crosio, Janice, MPMrs Crosio7T4ProspectALP00 asked the Attorney-General, upon notice, on 23 November 1998:(1) What Commonwealth funding was provided in each financial year since 2 March 1996 directly to projects or programs for which he has portfolio responsibility operating in the electoral divisions of (a) Prospect, (b) Fowler, (c) Reid, (d) Chifley, (e) Lindsay, (f) Werriwa, (g) Greenway, (h) Blaxland and (i) Parramatta which are aimed at (i) combating or (ii) preventing all facets of the illicit drug trade.(2) With respect to each project or program referred to in part (1), (a) what is its name, (b) who operates it, (c) what are its aims and objectives, (d) what funding has it received and (e) in what year did Commonwealth funding commence.2925Williams, Daryl, MPMr Williams7V5TangneyLPAttorney-General10—The Minister for Justice and Customs has provided the following answer to the honourable member's question:(1) The Commonwealth's law enforcement strategy in relation to illicit drugs has a national focus. It does not target specific electorates. Agency resources are aimed primarily at targeting major drug-related crime and preventing the importation and trafficking in illicit drugs.(2) Not applicable. See response to part 1.2925(Question No. 87)872925Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister representing the Minister for the Environment and Heritage, upon notice, on 23 November 1998:(1) What arrangements were made for representatives of the World Heritage Committee to visit Kakadu National Park.(2) What were the (a) names, (b) positions and (c) qualifications of the representatives .(3) Who accompanied the representatives(4) Who met the representatives on the site or in its vicinity.2926Vaile, Mark, MPMr VaileSU5LyneNPAgriculture, Fisheries and Forestry10—The Minister for the Environment and Heritage has provided the following answer to the honourable member's question:(1) The arrangements are outlined in the itinerary for the Mission which was provided to Mission members. I have provided a copy of this itinerary to the honourable member. This itinerary is not a public document.(2) The members of the Mission, their positions on the Mission and their qualifications (reflected by their substantive position listed and their title) are listed in the table below;Members names (a)Position on Mission (b)Qualifications (reflected in their substantive position shown below of their title) (c)Professor Francesco FrancioniChairProfessor of Law, University of Siena, ItalyMr Bernd Von DrosteWorld Heritage Centre representativeDirector, UNESCO World Heritage CentreDr Patricia ParkerInternational Council of Monuments and Sites (ICOMOS) representativeChief, American Indian Liaison Office, US National Park ServiceDr John CookUS Government representativeRegional Director, Intermountain Region, US National Park ServiceDr Patrick DuganWorld Conservation Union (IUCN) representativeResponsible for leadership and coordination of the World Conservation Union's global programProfessor Jon Altmanmember nominated by the State PartyDirector, Centre for Aboriginal Economic Policy Research, Australian National UniversityDr Roy Greenmember nominated by the State PartyChair, National Land and Water Resources Audit Advisory Council—Member, Natural Heritage Trust Advisory Committee—Chair, Maritime Education and Research Alliance(3) The Mission was accompanied by the Mission Rapporteur, Dr Sarah Titchen of the World Heritage Centre, and two State Party observers: Ms Sharon Sullivan and Dr Peter Bridgewater.(4) The Mission met a range of people at, or in the vicinity of Kakadu National Park including: Park staff and other Environment Australia staff; staff of other Commonwealth Departments; Park Board of Management members; representatives of Aboriginal people from the Kakadu region affected by the Jabiluka Uranium Mine; representative of the Northern Land Council; representatives of conservation groups; and staff of Energy Resources Australia Pty Ltd.2926(Question No. 125)1252926Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 23 November 1998:Did the Minister, his or her predecessor or his or her Department appoint a (a) former member of the Commonwealth Parliament or (b) member of the secretariats of the national offices of the Liberal Party of Australia, National Party of Australia, Australian Labor Party, Australian Democrats or Australian Greens as a (i) statutory appointment, (ii) consultant or (iii) other appointment to government boards or posts between 30 April 1996 and 31 August 1998; if so, in each case, (A) what was the person's name and the position to which he or she was appointed, (B) to which political party was he or she affiliated, (C) what remuneration was involved, (D) was the appointment (I) full-time, (II) part-time or (III) casual, (E) what fees were applicable and (F) with respect to (I) travel allowance, (II) vehicles, (III) telephones and (IV) attendance fees, (aa) what entitlements were claimable, (ab) how often were entitlements claimed and (ac) what sum was paid under each entitlement.2927Ruddock, Philip, MPMr Ruddock0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—The answer to the honourable member's question is as follows:The following response is based on the available information in the Department of Immigration and Multicultural Affairs:(a) (i) No.(ii) No.(iii) Yes.(b) (i) No.(ii) No.(iii) No.(a) The Hon Robert Ellicott QC: member of the Australian Citizenship Council. The Hon Gary Johns: member of the Australian Citizenship Council. Mr Bernard Kilgariff AM: member of the Australian Citizenship Council. Mr Roger Shipton OAM: chairperson of the External Reference Group—Review of the Points Test.The Hon John Hodges: member of the Migration Agents Registration Scheme Review Reference Group and chairperson of the External Reference Group—Review of the Points Test.(B) The Hon Robert Ellicott QC: Liberal Party. The Hon Gary Johns: Australian Labor Party. Mr Bernard Kilgariff AM: Country Liberal Party. Mr Roger Shipton OAM: Liberal Party. The Hon John Hodges: Liberal Party.(C) Nil remuneration is involved.(D) (I) Nil.(II) The Hon Robert Ellicott QC, The Hon Gary Johns and Mr Bernard Kilgariff AM.(III) Mr Roger Shipton OAM and The Hon John Hodges.(E) Sitting fees were paid to Mr Roger Shipton OAM and The Hon John Hodges as Chairpersons of the External Reference Group—Review of the Points Test. (F) (I) (aa) Airfares and travel expenses associated with the Australian Citizenship Council meetings and the External Reference Group—Review of the Points Test meetings are met by the Commonwealth. Travel expenses include an accommodation and a meal allowance.Only the airfares were met by the Commonwealth for the meeting of the Migration Agents Registration Scheme Review Reference Group.(F) (I) (ab) Entitlements are claimed in connection with meetings of the government bodies. To date the Hon Robert Ellicott QC has claimed for one meeting, the Hon Gary Johns, Mr Bernard Kilgariff AM and Mr Roger Shipton OAM have claimed for two meetings, and the Hon John Hodges has claimed for three meetings.(F) (I) (ac) The Hon Robert Ellicott QC—$813.97; The Hon Gary Johns—$2,134.00; Mr Bernard Kilgariff AM—$3,968.75; Mr Roger Shipton OAM—$1,400.00; The Hon John Hodges—$2,823.14.(F) (II) (aa) A personal vehicle allowance is provided to members of the Australian Citizenship Council where appropriate, in line with Government regulations. As well, Australian Citizenship Council members are provided with two cabcharge vouchers per day, for travel to and from the Council meetings. Members travelling from inter-state have the choice of being provided with two cabcharge vouchers for travel by taxi to and from the airport, or driving their own car to the airport and being reimbursed the cost of parking (to a maximum of $25 per day).(F) (II) (ab) Entitlements are claimed in connection with every Australian Citizenship Council meeting. To date the Hon Gary Johns has claimed for one meeting and Mr Bernard Kilgariff AM has claimed for two meetings.(F) (II) (ac) The Hon Gary Johns—$53.80; Mr Bernard Kilgariff AM—$532.90(F) (III) (aa) Nil.(F) (III) (ab) Not applicable.(F) (III) (ac) Not applicable.(F) (IV) (aa) A sitting fee of $285 per day was paid to the Chairperson of the External Reference Group—Review of the Points Test.(F) (IV) (ab) Entitlements were claimed in connection with the meetings of the External Reference Group—Review of the Points Test. Mr Roger Shipton OAM and the Hon John Hodges have claimed for two meetings.(F) (IV) (ac) Mr Roger Shipton OAM—$570. The Hon John Hodges—$570. 2928(Question No. 138)1382928McFarlane, Jann, MPMs Jann McFarlane83CStirlingALP00 asked the Minister for Education, Training and Youth Affairs, upon notice, on 24 November 1998:Did the Minister's Department or an agency for which the Minister has portfolio responsibility, or their predecessors, let or make contracts, grants or secondments between 1 July 1996 and 30 June 1998 to the Chamber of Commerce and Industry Western Australia; if so, in each case, what are the details, including (a) the Department or agency involved and (b) the (i) purpose, (ii) date of approval and (iii) value or cost of the contract, grant or secondment.2928Kemp, Dr David, MPDr KempBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—The answer to the honourable member's question is as follows:(a) There were six grants directly from DEETYA or agencies for which the Minister had responsibility to the Chamber of Commerce and Industry (CCI) of Western Australia (WA) and one indirectly, through the Australian Chamber of Commerce and Industry (ACCI).(b) In addition, two DEETYA WA Office staff members were seconded to CCI WA.Details of Grants, contracts and secondments are shown on the Attachment(b) ATTACHMENTGRANTS AND CONTRACTS TO THE WA CHAMBER OF COMMERCE AND INDUSTRY (CCI WA)—(between 1 July 1996 and June 1998)AgencyDateNature of Grant or ContractPurpose of GrantTotal sum $DEETYA25/8/95 to 31/12/96National Skills Shortage (Metals)To redress welding and fabrication shortages within WA$1,297,965ANTA29/4/97User choice pilot projectTo pilot the User Choice model$50,000DEETYA4/5/97 to 30/4/98National skills Shortage (Metals)To redress welding and fabrication shortages within WA$921,000ANTA8/5/97MarketingTo promote, through an ACCI newspaper advertisement, the United Construction Fabrication Shop in Kwinana$1,180DEETYA4/4/97 to 30/4/98Demonstration model Contracted Entry Level Training AgencyTo trial models which provide improved Entry Level training support services for the Perth Metropolitan Area of Western Australia. $557,615 DEETYA26/2/98New Apprenticeship Centre—Entry Level Training Support ServiceThis Service provides employers , apprentices and trainees with a comprehensive, `one stop" integrated support service covering apprentices and traineeships on a regional basis.In relation to supply of employment services, the value of this contract, which is expected to be at least $2000, is not available until the completion of the contract period.Australian Student Traineeship Foundation (ASTF)1/6/98The Schools/ Industry Liaison Officers (SILOs) project. The Contract is between the ASTF and ACCI. ACCI have appointed SILOs in each state/ territory including the CCI WA.Aimed at developing effective schools/ industry links at a National, State/ Territory and local level.It is a 14 month project with a maximum amount payable by ASTF to ACCI of $1,728,000.In addition, two West Australian DEETYA staff were seconded to CCI WA during the period 1 July 1996 to 30 June 1998:. Tony Giles from 6/2/95 to 31/12/96 on a cost recovery basis, then on leave without pay until 30/4/98;. Joanne Eagle from 28/1/97 to 30/4/98, on leave without pay.2929(Question No. 165)1652929McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 24 November 1998:Further to the answer to question No. 2542 (Hansard , 5 March 1998, page 690), did Corrs Chambers Westgarth provide written advice with respect to the subject matter of its consultancy; if so, in each case, (a) on what date was the advice provided and (b) what were the major recommendations contained in the advice.2929Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:(a) October 1997.(b) A copy of the report, which was released publicly, has been forwarded to the Tabling Office.2929(Question No. 166)1662929McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 24 November 1998:Further to the answer to question No. 2542 (Hansard , 5 March 1998, page 690), did BCG Media Pty Limited provide written advice with respect to the subject matter of its consultancy; if so, in each case, (a) on what date was the advice provided and (b) what were the major recommendations contained in the advice.2929Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:(a) The report provided by Dr Stephen Webster on 3 October 1997 incorporated the outcome of work undertaken by BGC Media Pty Limited.(b) This is a matter potentially relevant to current proceedings in the Federal Court arising out of matters related to the waterfront dispute in 1998. I consider it inappropriate that this question be answered while those proceedings remain on foot, as this might prejudice the proper conduct of that litigation and the interests of parties to the proceedings.2930(Question No. 167)1672930McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 24 November 1998:Further to the answer to question No. 2542 (Hansard , 5 March 1998, p. 690), did Dr John Davies provide written advice with respect to the subject matter of his consultancy; if so, in each case, (a) on what date was the advice provided and (b) what were the major recommendations contained in the advice.2930Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:(a) The report provided by Dr Stephen Webster on 3 October 1997 incorporated the outcome of work undertaken by Dr John Davies.(b) This is a matter potentially relevant to current proceedings in the Federal Court arising out of matters related to the waterfront dispute in 1998. I consider it inappropriate that this question be answered while those proceedings remain on foot, as this might prejudice the proper conduct of that litigation and the interests of parties to the proceedings.2930(Question No. 168)1682930McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 24 November 1998:Further to the answer to question No. 2542 (Hansard , 5 March 1998, page 690), did Minter Ellison Lawyers provide written advice with respect to the subject matter of his consultancy; if so, in each case, (a) on what date was the advice provided and (b) what were the major recommendations contained in the advice.2930Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:(a) Material prepared by Minter Ellison Lawyers was included as an attachment to the report submitted by Dr Stephen Webster on 3 October 1997. (b) This is a matter potentially relevant to current proceedings in the Federal Court arising out of matters related to the waterfront dispute in 1998. I consider it inappropriate that this question be answered while those proceedings remain on foot, as this might prejudice the proper conduct of that litigation and the interests of parties to the proceedings.2930(Question No. 169)1692930McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 24 November 1998:Further to the answer to question No. 2542 (Hansard , 5 March 1998, page 690), did the National Institute of Labour Studies Incorporated provide written advice with respect to the subject matter of its consultancy; if so, in each case, (a) on what date was the advice provided and (b) what were the major recommendations contained in the advice.2930Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:(a) The National Institute of Labour Studies Incorporated provided a report in October 1997.(b) A copy of the report, which was released publicly, has been provided to the Tabling Office.2930(Question No. 170)1702930McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 24 November 1998:Further to the answer to question No. 2542 (Hansard , 5 March 1998, page 690), did Dr David Webb provide written advice with respect to the subject matter of his consultancy; if so, in each case, (a) on what date was the advice provided and (b) what were the major recommendations contained in the advice.2930Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:(a) Material prepared by Mr David Webb was included as an attachment to the report submitted by Dr Stephen Webster on 3 October 1997.(b) This is a matter potentially relevant to current proceedings in the Federal Court arising out of matters related to the waterfront dispute in 1998. I consider it inappropriate that this question be answered while those proceedings remain on foot, as this might prejudice the proper conduct of that litigation and the interests of parties to the proceedings. 2931(Question No. 180)1802931McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister representing the Minister for Family and Community Services, upon notice, on 24 November 1998:(1) What are the administrative costs to the date of answering this question for the payment of childcare assistance to out of school hours centres.(2) What is the lowest sum per week of childcare assistance being paid to an eligible parent.(3) How many applications for childcare assistance does Centrelink have on hand.(4) How many applications referred to in part (3) were received before 29 May 1998.(5) Will all eligible applications for childcare assistance received before 29 May 1998 be backdated.(6) Has Centrelink sent out multiple notifications of eligibility for childcare assistance to the same families.2931Truss, Warren, MPMr TrussGT4Wide BayNPCommunity Services10—The Minister for Family and Community Services has provided the following answer to the honourable member's question:(1) This information is not available.(2) The amount of Childcare Assistance a family receives in a week depends on the hours of care they use in a week and the family's income. There is no minimum amount of Childcare Assistance. Minimum payment is rounded to the nearest $0.10.(3) As at 27 January 1999, Centrelink had 1,817 unfinalised Childcare Assistance applications on hand.(4) None of the aforementioned 1,817 unfinalised Childcare Assistance applications on hand were received before 29 May 1998.(5) Centrelink includes a date of effect on the Childcare Assistance assessment notices sent to both parents and service providers. This date of effect is the date that the parent lodged their application (or the date which the parent contacted Centrelink to request an application form as long as that application form was lodged with Centrelink within 7 calendar days). Service providers may backdate Childcare Assistance a further 7 days prior to this date of effect.Outside school hours care service providers have been encouraged to backdate Childcare Assistance to 27 April 1998 (30 May in Tasmania) for customers who had lodged an application with Centrelink prior to 31 May 1998 (or 30 June in Tasmania). (6) Each time a family's entitlement to Childcare Assistance is reassessed Centrelink sends one notification of assessment to that family. This notification details all children in the family using child care as well as detailing the service providers used by those children.2931(Question No. 191)1912931McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Education, Training and Youth Affairs, upon notice on 24 November 1998:Did the then Parliamentary Secretary to the Minister for Employment, Education, Training and Youth Affairs undertake at a hearing of the Senate Employment, Education and Training Legislation Committee on 25 February 1998 to provide up-to-date school funding projections in real dollar terms; if so, (a) did he issue a direction in respect of the undertaking and (b) has the undertaking been fulfilled; if not, why not.2931Kemp, Dr David, MPDr KempBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—The answer to the honourable member's question is as follows:Hansard shows that Mr Abbott, then Parliamentary Secretary to the Minister for Employment, Education, Training and Youth Affairs was not in attendance at the Senate Employment, Education and Training Legislation Committee hearing on 25 February. It is possible that Mr McClelland has confused Senator Ellison, then Minister for Schools, Vocational Education and Training, with the former Parliamentary Secretary.At the hearing, Senator Carr asked that a table provided to the Committee in 1996 in response to Question on Notice No. 52 showing Schools funding in real terms to 1999-2000 be updated (question no. 660). This question was taken on notice. After seeking advice from Treasury, the Department answered as follows:"Question no. 52 may not be updated by the Department due to the Government's policy not to release information which would provide, or which may be used to calculate, cost index parameters." At the Budget Estimates hearing in June, Senator Carr tabled a further question asking whether it had always been government policy not to release such parameters (question no. 35). The Department answered in the affirmative.2931(Question No. 208)2082931Theophanous, Andrew, MPDr TheophanousQJ4CalwellALP00 asked the Minister for Foreign Affairs, upon notice, on 26 November 1998: (1) What is the position of the Australian Government in relation to the detention in Great Britain of General Augusto Pinochet.(2) Does the Government acknowledge that the celebration of the 50th anniversary of the Declaration of Human Rights adds significance to supporting the actions of the British, Spanish and European officials seeking to bring General Pinochet to justice.(3) Is it appropriate for Australia to bring to Chile's attention matters pertaining to the violation of human rights by the Pinochet regime, particularly crimes against humanity and other forms of violation of human rights, as requested by bodies such as Amnesty International.(4) Has the Prime Minister raised with APEC or the Chilean Government matters relating to human rights violations by General Pinochet.(5) Has his attention been drawn to the presence in Australia of former Chileans, many of whom have become Australian citizens, whose family members were killed or disappeared during the Pinochet regime, those responsible remaining free and untried.(6) Will the Australian Government support the case of Manuel Moreno, an Australian citizen originally from Chile, whose son was executed during the Pinochet dictatorship.2932Downer, Alexander, MPMr Downer4G4MayoLPForeign Affairs10—The answer to the honourable member's question is as follows:(1) The Australian Government recognises that there were many serious human rights abuses in Chile during Senator Pinochet's Presidency. The Government is committed to the protection and promotion of human rights as an integral part of its foreign policy. However, the Australian Government accepts that the issue of whether Senator Pinochet should be extradited to Spain is for the relevant British authorities to decide. Senator Pinochet's rights and obligations will be determined in accordance with existing arrangements under British and Spanish law, taking into account relevant treaty obligations. At the same time, the Government acknowledges that this is a very difficult time for the Government and people of Chile, particularly in the context of Chile's political transition and reconciliation. As citizens of a democratic state they face the challenge of balancing the need for justice with the requirements of reconciliation.(2) The Australian Government's enduring commitment to the principles enshrined in the Universal Declaration of Human Rights (UDHR) was recently reaffirmed by the Parliamentary motion moved by the Prime Minister and passed by the House of Representatives on 10 December 1998 to mark the 50th Anniversary of the UDHR. However, as stated above, the Australian Government accepts that the issue of whether Senator Pinochet should be extradited to Spain is for the relevant British authorities to decide. The Government therefore believes that it would be inappropriate to comment on these legal proceedings.(3) As stated above, the Australian Government is committed to the promotion and protection of human rights. However, the Australian Government also recognises the sovereign right of the Chilean people and Government to determine the most appropriate means of delivering and consolidating a transition to full democracy. The Australian Government does not believe that it would be appropriate or helpful to comment on the means chosen by Chile to attain this goal.(4) Advice from the Department of the Prime Minister and Cabinet is that the Prime Minister has not raised with APEC or the Chilean Government matters relating to human rights violations by Senator Pinochet.(5) and (6) The Australian Government recognises that serious violations of human rights occurred during Senator Pinochet's Presidency and acknowledges that many Chilean Australians suffered under his regime. In relation to the specific case mentioned, I would be grateful for more information before providing a response.2932(Question No. 244)2442932Andren, Peter, MPMr AndrenKL6CalareIND00 asked the Minister for Transport and Regional Services, upon notice, on 1 December 1998:Will he ensure that operators of licensed post offices will not face competition from the introduction of rural transaction centres.2932Anderson, John, MPMr Anderson4K4GwydirNPTransport and Regional Services10—The answer to the honourable member's question is as follows:The introduction of rural transaction centres will complement, not duplicate or compete with, existing businesses, such as licensed post offices. Communities will be able to apply for improved access to a menu of primary services with the option not to include services that are already available. Existing providers, such as post offices, will also be able to apply to become rural transaction centres.2932(Question No. 245)2452932Andren, Peter, MPMr AndrenKL6CalareIND00 asked the Minister for Transport and Regional Services, upon notice, on 1 December 1998:Has the Government raised the maximum weight limit of semitrailers from 42.5 to 45.5 tonnes; if so, will the Government compensate councils who need to upgrade their bridges as a result; if not, why not.2933Anderson, John, MPMr Anderson4K4GwydirNPTransport and Regional Services10—The answer to the honourable member's question is as follows:The Government has not raised the maximum weight of semitrailers from 42.5 to 45.5 tonnes. There is a proposal from the National Road Transport Commission to increase mass limits for heavy vehicles fitted with road friendly suspension under which the mass limit for a six axle semitrailer would increase from 42.5 to 45.5 tonnes.The proposal is being supported by the Government because of the productivity improvements it will mean for the road transport industry which will benefit the broader community.One of the issues that is being considered by Commonwealth, State and Territory Transport Ministers is funding for the bridge upgrading required to implement the mass limit increase and the Government has committed to contribute to a bridge upgrading program.2933(Question No. 251)2512933Edwards, Graham, MPMr Edwards83RCowanALP00 asked the Minister for Health and Aged Care, upon notice, on 2 December 1998:What is the (a) number and (b) proportion of Australians estimated to be addicted to hard drugs.2933Wooldridge, Dr Michael, MPDr Wooldridge8E4ChisholmLPHealth and Aged Care10—The answer to the honourable member's question is as follows:(a) It is methodologically difficult to directly measure the number of persons dependent on "hard drugs" due to a range of factors including the illegal nature of the activity and the difficulty of gaining access to such hidden populations.A 1997 study conducted for the Australian National Council on AIDS and Related Diseases (ANCARD) Hepatitis C Sub-Committee, estimated that there were 100,000 regular injecting drug users in 1997 with a further 175,000 people injecting drugs on an occasional basis (Hepatitis C Virus Projections Working Group, `Estimates and Projections of the Hepatitis C Virus Epidemic in Australia', August 1998).For the purposes of this study, a "regular" injecting drug user was someone who had injected for at least 12 months, an average of 10 times per month, with injecting in most months. Heroin and amphetamines (or a combination of the two) were given as the drugs most commonly injected.Funding is currently being provided by my Department to the National Drug and Alcohol Research Centre to revise the estimate of the number of dependent heroin users in Australia. An updated estimate is due at the end of the 1999 calendar year.I would be happy to provide the honourable member with the details when they become available(b) The estimate of 100,000 regular injecting drug users in 1997 represented 0.3% of the total population in that year.2933(Question No. 302)3022933McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Attorney-General, upon notice, on 7 December 1998:If the Human Rights and Equal Opportunity Commission presented him with a report in July 1 998 recommending the enactment of a Federal Religious Freedom Act, will the recommendation be mentioned in the Commonwealth-written report for the meeting of the Standing Committee of Attorneys-General tentatively scheduled to be held in Darwin on 1 5 and 16 April 1999.2933Williams, Daryl, MPMr Williams7V5TangneyLPAttorney-General10—The answer to the honourable member's question is as follows:Yes.2933(Question No. 321)3212933Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister for Transport and Regional Services, upon notice, on 9 December 1998:(1) What requirements exist for the new owners of privatised airports to (a) observe competition policy practices, such as competitive tendering for the use of retail space, and (b) avoid monopoly pricing practices on the lease of retail space.(2) Are the requirements referred to in part (1) being met by the new owner of Canberra Airport.2933Anderson, John, MPMr Anderson4K4GwydirNPTransport and Regional Services10—The answer to the honourable member's question is as follows:(1) (a) and (b) Overall, retail tenants of the privatised airports are afforded the same trade practices protection available to off-airport businesses. This protection is provided for through Commonwealth legislation such as the Trade Practices Act 1974 and applicable State or Territory Legislation governing commercial trading (these laws apply at leased airports). In the case of Canberra Airport, retail tenants are afforded the protection of the ACT Tenancy Tribunal Act 1994 and the Commercial and Retail leases Code of Practice made under that Act.(2) Canberra International Airport Pty Ltd advise that the terms of the leases (including rent provisions) held by the two retail tenants at Canberra Airport have not changed since the airport was privatised in May 1998.2934(Question No. 340)3402934Bevis, Arch, MPMr BevisET4BrisbaneALP00 asked the Prime Minister, upon notice, on 8 February 1999:(1) How many employees in the Minister's Department have their principal conditions of employment set by (a) an award, (b) an industrial agreement, (c) a certified agreement and (d) an Australian workplace agreement.(2) What is the classification of each person in the Minister's Department employed under an Australian workplace agreement.2934Howard, John, MPMr HowardZD4BennelongLPPrime Minister10—The answer to the honourable member's question is as follows:(1) I am advised that the number of employees who have their principal conditions of employment set by (a) an award, (b) an industrial agreement, (c) a certified agreement and (d) an Australian workplace agreement is:(a) nil;(b) nil;(c) 348; and(d) 34.(2) The classifications of persons employed under an Australian workplace agreement within the Department are: Senior Executive Band 1; Senior Executive Band 2; and Senior Executive Band 3.