1999-06-093913REPS641701999-06-09Mr SPEAKER(Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Committees6417641764176417Mr SPEAKERMr SPEAKER10000PON/A10—I have received advice from the Chief Opposition Whip nominating members to be members of the Joint Select Committee on the Republic Referendum.Motion (by Mr McGauran)—by leave—agreed to:That Mr Adams, Mr Danby, Ms Hall, Mr McClelland, Mr Price and Ms Roxon be appointed members of the Joint Select Committee on the Republic Referendum.Bills6417r8406417Bill presented by Mr Truss, and read a first time.641709:32:006417Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—I move:That the bill be now read a second time.This government recognises the integral role the family plays in Australian society. This government wants to improve the assistance that families can get through the tax and social security systems.This bill amends the Social Security Act 1991 to introduce improvements to the assistance currently provided by government to families. Specifically, this bill:. extends qualification for family allowance so that it covers both job seekers and students who have turned 16, and continues until age 21 for job seekers, and until age 25 for full-time students;. increases the fortnightly rate of family allowance to $50, payable in respect of a young person who is aged 18 to under 21, or who is undertaking full-time study and is aged 21 to under 25; and. ensures that certain young persons are not inadvertently deprived of a health care card by force of these amendments.These amendments will commence with effect from 1 October 1999 and will provide assistance to families of $42 million in the 1999-2000 financial year, making a positive impact on the living standards of Australian families, particularly those with low incomes.Complementary amendments to the A New Tax System (Family Assistance) Bill 1999 will take effect from the commencement of that act, that is 1 July 2000, to ensure the continuance of these changes under the government's tax reform package.I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Mr Martin Ferguson) adjourned.Bills6417r8366417Bill presented by Mr Truss, and read a first time.641709:35:006417Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—I move:That the bill be now read a second time.This bill complements the A New Tax System (Family Assistance) Bill 1999 that has already been introduced into the parliament. That bill, which forms part of the fundamental reform of the Australian tax system, introduces reform and improvements to the assistance currently provided by government to families. From 1 July 2000, gone will be the 12 conflicting and overlapping family payments. Instead, there will be three well designed, harmonised and generous benefits that will make a positive impact on the living standards of Australian families, particularly those with low incomes.The A New Tax System (Family Assistance) (Administration) Bill 1999 contains administrative, procedural and technical rules that will apply in relation to the new family assistance payments—family tax benefit part A, family tax benefit part B and child-care benefit. The bill will also include machinery type provisions dealing with two other family related payments, maternity allowance and maternity immunisation allowance.I consider that it might assist this House if I were to provide an overview of the delivery of the family assistance package.A new `Family Assistance Office' will be set up to help familiesThe new Family Assistance Office will deliver family tax benefit (parts A and B), child-care benefit, maternity allowance and maternity immunisation allowance. The law does not refer to the Family Assistance Office as it will be a `virtual' organisation using the existing infrastructure of Centrelink, the Australian Taxation Office and the Health Insurance Commission (Medicare Offices). It is expected that all Australian Taxation Offices, all Centrelink offices and all Medicare offices will have a Family Assistance Office as part of their office. The extended network of sites will ensure families have a greater choice about the way in which they access assistance.In order to give families these choices, the Secretary to the Department of Family and Community Services will have the power to delegate his or her powers to constituent agencies of the new Family Assistance Office. The heads of these agencies and their staff, as delegates of the secretary, will be able to process claims, make payments and perform other functions under the family assistance law.Making a claim for Family Tax BenefitThe primary carer will be able to make a claim for family tax benefit in one of the following ways:lodge a claim with the Family Assistance Office, through Centrelink, for fortnightly payments; orclaim a lump sum payment at the end of the year through the taxation system, either through the primary carer's tax return or their partner's tax return. Families will have a further option to reduce their or their partner's tax instalment deductions during the year in anticipation of their end of year family tax benefit lump sum entitlement.Making a claim for Child-Care BenefitFamilies will be able to claim child-care benefit for formal care in approved child-care services in one of the following ways:as instalment payments paid directly to their nominated child-care service to enable the service to reduce the fees that the family will pay—current arrangements under which child-care assistance advance payments are made to child-care services will be preserved for child-care benefit purposes. This will be achieved by regulations; oras a lump sum after the end of the financial year from the Family Assistance Office.Child-care benefit for informal care will be claimed as a lump sum for a period of care of up to 12 months and paid via the Family Assistance Office.Child-care benefit will not be delivered through the tax system because of the complexity of the information parents would need to retain to be able to correctly assess their entitlement.Making a claim for Maternity Allowance and Maternity Immunisation AllowanceFamilies will be able to claim single, one-off payments of maternity allowance and maternity immunisation allowance from the Family Assistance Office through Centrelink.Like child-care benefit, maternity allowance and maternity immunisation allowance will not be delivered through the tax system.Families will receive their correct entitlement to family assistanceFamilies who choose to receive fortnightly payments will estimate their income for the current financial year. Their estimated income will be compared with their actual income at the end of the year. Families who have overestimated their income during the year and have been underpaid will receive a `top-up' payment at the end of the year. On the other hand, families who have underestimated their income and have been overpaid, will be required to pay back the amount they were overpaid during the year. This is much fairer than the current arrangements for family allowance where families who underestimate their income are required to pay back the amount they were overpaid but families who overestimate their income during the year do not receive a top-up payment. It is also fairer than the current arrangement for child-care assistance where families do not receive a top-up payment if they are underpaid, and are not required to pay back overpaid amounts.Administrative arrangements for Maternity Allowance and Maternity Immunisation AllowanceThe administration of these payments will not change significantly under the new family assistance regime.Administrative arrangements for Family Tax Benefit and Child-Care Benefit will be simplifiedSimpler rules will be administered by one agencyRather than dealing with potentially 12 forms of assistance with different eligibility rules and payment arrangements through three different agencies, families will now have to deal with only three payments with similar eligibility rules and with one agency, the Family Assistance Office.Same rules for all familiesThere will be one set of rules for all families regardless of how they choose to receive family assistance. For family tax benefit, this means that regardless of whether families receive fortnightly payments or as an end of year lump sum claimed with their tax returns, they will all be subject to the same eligibility criteria, rate calculators and administrative arrangements under the family assistance law. For child-care benefit, regardless of whether families receive ongoing payments or lump sum payments from the Family Assistance Office through Centrelink, the same eligibility rules and rates will apply.Under the new arrangements, decisions made by the secretary regarding entitlement to, or eligibility for, family tax benefit and child-care benefit will be reviewable by the secretary, or an authorised review officer, regardless of delivery option. It is expected that where family tax benefit is paid through the tax system, the commissioner, as delegate of the secretary, will carry out the review functions for those customers. There will be further rights of appeal to the Social Security Appeals Tribunal, the Administrative Appeals Tribunal and the Federal Court. Rules explaining the process for review of decisions are set out in part 5 of this bill and will be kept separate from the Australian Taxation Office appeal and review process. Determinations made by approved child-care services regarding child-care benefit in special circumstances will not be reviewable. Approved child-care services and registered carers will also have the right to appeal to the Administrative Appeals Tribunal about the secretary's decisions affecting them, except where the decision is the result of a Commonwealth planning strategy affecting the distribution of child-care places.It will be easier for families to repay overpaymentsAs family tax benefit is partly administered through the tax system, overpayments of family tax benefit will be recovered from a claimant's tax refund where possible. This bill will also allow another person, for example the claimant's partner, to make his or her income tax refund available to offset a claimant's family tax benefit debt. In such cases, where consent is given, the commissioner will apply the partner's income tax refund to reduce or extinguish the claimant's family tax benefit debt. The new administrative arrangements for recovering overpayments of family tax benefit, will make it much easier for families to repay a family tax benefit debt. Where it is not possible to recover overpayments of family tax benefit from the taxation system, and for overpayments of child-care benefit, these will be recovered by the Family Assistance Office under existing Centrelink arrangements.Since child-care benefit will not be delivered through the tax system, tax refunds and debts will not be applied against child-care benefit debts and payments. Also, other family assistance overpayments will not be recoverable from child-care benefit. However, child-care benefit overpayments will be recoverable from family tax benefit or from social security payments.Family Tax Benefit paid through the tax system will be a payment, not a tax rebate or an increase in tax-free thresholdAlthough claimants will be able to lodge claims for family tax benefit and receive lump sum and top-up payments through the taxation system, the family tax benefit entitlement will not be in the form of a tax rebate or an increase in a person's tax-free threshold.Traditionally, measures like family tax benefit (such as the family tax assistance) have been provided as tax rebates or as an increase in a person's threshold where the rate of family assistance is calculated by the Australian Taxation Office and offset against tax payable.A similar approach was not adopted for family tax benefit, because the administrative mechanism of delivering family tax benefit through a person's income tax assessment would have been very complicated and families would not have been able to benefit from the simpler structure and administrative arrangements of the proposed system. For example, it would not have been possible to ensure that all families receive their correct entitlement regardless of delivery option, which is the main feature of family assistance reform.I commend the bill to the House and present the explanatory memorandum, which also covers the next bill I will be introducing to the chamber.Debate (on motion by Mr Martin Ferguson) adjourned.Bills6420r8356420Bill presented by Mr Truss, and read a first time.642009:47:006420Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—I move:That the bill be now read a second time. This bill accompanies the A New Tax System (Family Assistance) Bill 1999, the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999 and the A New Tax System (Family Assistance) (Administration) Bill 1999. Together, they will facilitate the introduction of the new family assistance package from 1 July 2000.The bill:. amends a number of Commonwealth acts that refer to concepts and terms that are relevant under the existing family assistance structure and repeal or amend the references to reflect the new family assistance regime;. provides for the appropriate calculation of family tax benefit part A for those recipients in receipt of income support—or whose partners receive income support;. allows the use or disclosure of information by or between the three agencies involved in the transition to the new family assistance regime—Centrelink, the Australian Taxation Office and the Health Insurance Commission—for the purpose of identifying shared customers (so that customers receive only one letter about the new arrangements instead of, potentially, three); and. makes some other minor technical amendments.I commend the bill to the House.Debate (on motion by Mr Martin Ferguson) adjourned.Bills6420r8326420Debate resumed from 8 June, on motion by Dr Wooldridge:That the bill be now read a second time.09:49:006420O'Keefe, Neil, MPMr O'KEEFECE4BurkeALP00—As has already been indicated to the House, the opposition is not opposing the passage of this legislation but we do have a number of comments to make about it. I do not believe that any consideration of the National Health Amendment (Lifetime Health Cover) Bill 1999 can be made without reference to the broader context of the health debate and health funding issues.With respect to the specific legislation relating to the Lifetime Health Cover health insurance premiums proposal, I suppose the intention of the bill and the proposal before us are best summed up in an article that was published in the Canberra Times on 20 March. In the article the journalist refers to the current arrangements. I point out that they are what we call flat rate arrangements whereby, in Australia at the moment, private health insurance premiums are the same for everyone, irrespective of their age and of the services they use or do not use. That leads to the situation where people who do not think they are going to be at risk in the health system do not join private health insurance schemes and those who think they are at risk do join. As a result of that, the health funds are always complaining that not enough people are in them and they do not have enough money to do the job properly. That led to the government's grand scheme earlier this year of the 30 per cent rebate to encourage more people to join health funds. I believe it is the failure of that scheme that has led to this one, but I will come back to that in a moment.The difference between the current scheme and that which is proposed through this legislation—to build in a concept of lifetime community rating—is that people are being very strongly encouraged to join schemes at a younger age by being offered premiums that are much lower if they do so. Each year that you do not join, the premium automatically goes up. If you put off joining a health fund until much later, your premiums will be much higher, so you should be smart enough to work out that it is in your interests to join early and pay for your lifetime. In doing so you retain that low entry premium rate for the rest of your working life.That is all very well in principle, and from our side of the fence we are prepared to support arrangements which see private health insurance continuing in Australia and to support arrangements that see the premiums or the price related to the product that you receive. But there are potential problems here. It is not as if this particular proposal is going to solve all those problems. The sorts of things that we can already see happening show that most members of private health insurance funds will receive only a very marginal benefit at best. There are some potential benefits to the funds by having more members, but they can be realised only if there is a strong control by the funds over medical costs and charges.This is a fundamental point. During all the years of the Labor government between 1983 and 1996 we were in a constant battle with the medical profession trying to keep the cap on medical charges across the nation, be they hospital costs, be they GPs' fees or whatever. It was a constant battle. That could be achieved only by keeping a strong disciplinary control over the standard fees charged in the system and by ensuring that the health funds kept a limit on what they were prepared to insure for and kept the premiums reasonable. Anybody with a bit of memory of this will remember the constant public campaigns by the medical profession against the former Labor government because they did not like this discipline. The fact is that overall health costs in the Australian economy as a proportion of overall GDP, compared to similar economies that do not have this discipline, are significantly lower because the government of the day was prepared to exercise this control and discipline.This is now changing. There is a movement to encourage people into private health funds or to force them into private health funds, and we have now obviously seen a complete lack of discipline over the costs of private health funds. The 30 per cent rebate, which took effect from 1 January this year, has led to a relatively small increase in the number of people in the funds, and the primary benefit is enjoyed by people who are high income earners who can afford private health insurance and who have all got a 30 per cent rebate. That is an absurd proposition. What do we see being announced in the media this week and last week? More increases in the premiums. What does that lead to? The people who can afford to pay the higher premiums all rush off and pay them and all get a bigger 30 per cent rebate. So the government has not solved a single problem. All it has done is encourage a spiralling increase in health fund premiums, without affecting in any way the amount of money available for the public health system or the private health system.We are talking here about a philosophical issue. We have a government that actually believes that health services are better provided by the private sector, that is, by private hospitals, by private doctors, by private practitioners. It actually believes that these people do it better, and it believes that the level of health care that you get should be determined by your willingness to pay for those services. That leaves the public sector, the public hospitals, always battling for funding but now with an ever increasing problem because the government is saying, `Look, these people are in private health funds and we are forcing more and more of them into private health funds. You go off and get your health services from them.'The Prime Minister, who very publicly campaigned in the lead-up to the 1996 election on the public proposal that they supported Medicare, that they supported the public health system, that they would not be doing anything to downgrade that, has in effect set about three very major steps. One was to severely cut the amount of funding available to the states for their hospital systems, knowing that the states in turn will cut their public hospital systems. The second was to allow doctors to start increasing the difference between the price charged at the medical practice and the amount the person actually gets through their rebate. That gap has increased considerably in Australia in the last four years, allowing that cost creep-out to occur. The third is by this doctoring of private health funds to actually allow increasing premiums, therefore taking the lid off it all and pushing people now into these private health funds.I went to some statistics which have been quoted at different times in this parliament by my colleague the member for Fremantle, who drew on not just her own knowledge and research as a former health minister but also on some very interesting health statistics that are available publicly. I want to quote a couple of them. One is to do with this assumption that the private sector actually does it better and that the public sector costs more. The Australian Bureau of Statistics catalogue called Hospitals Australia 1991-92 came up with some figures estimating that the cost in a private hospital per patient was then $475 per day compared to $453 per day in a public hospital. On those figures, the public hospital system, under a former Labor government, with the squeeze on costs from above applied by that Labor government, was delivering across Australia services that cost $22 a day less per patient per bed per hospital. That amounts to hundreds of millions, if not billions, of dollars in savings. I do not know what the actual multiplication is, I do not know how many hospital beds there are in Australia on any given day, but it is a lot of money.On the cost question, ABS statistics prove without equivocation that the public sector is delivering a lower cost service. Of course it is, because it does not have profit margins built in. It has the same people providing the same services, but not to make a profit for the owners. That is where the difference is. The automatic response of those on the other side is that, of course, the public sector is not as good. A ministerial statement on hospital care, reported in Hansard of June 1995, indicated that:Given that public hospitals deal with a more complex case load, with older and sicker patients and a greater number who have had major accidents and medical emergencies, all things being equal, patients are more likely to experience adverse events in private hospitals.In other words, from an analysis of what has taken place, the things that go wrong—where an operation goes wrong, a misdiagnosis occurs or the wrong treatment is given—are more likely to occur in a private hospital. We have statistical evidence to show us that the public sector is in fact cheaper and safer; yet the people on the other side of the chamber, because of their ideological commitment, irrespective of the evidence and facts before them as the government of Australia, continue on with this obsession of forcing Australians into private health insurance.The other myth that government members perpetrate is that if we can get more people to join private health funds, we will have more money to spend on health. The community as a whole is concerned about the issue that there does not appear to be enough spent on health. Obviously we need to provide more money for the states to fund the public health system. A very interesting article in the Canberra Times demonstrates, not that the more people who go to private health funds the less money there is for health, but that it does not make any difference; it does not make a single iota of difference. The fact of it is that government in Australia, be it federal government or state government, knows that if you do not provide health services, people are going to kick you out. So you find the money in your budget. We have evidence that this leads to what we call cost shifting. The minute one sector finds some funds to push into the system, another sector will say, `Right, we do not have to spend it there anymore.'The evidence shows that between 1990 and 1998 private health membership decreased from 50 per cent to 30 per cent—in other words, the number of people in private health funds went down because the premiums kept going up. If you follow the government's logic, that would mean that the amount of money available for health expenditure would go down as well. But that did not happen. Health as a proportion of Australia's GDP remains stable at 8.4 per cent. In other words, as people dropped out of private health funds, government found the funds to top them up. That is the fact of it. Mr Deputy Speaker, I can tell you absolutely that, if the government is successful in forcing more people into private health funds and forcing them to top up the amount of funding, government will then begin to cut its budgets and use the money elsewhere. In other words, it is going to make no difference to the amount of funding available for the health system.Labor's position has always been—and it holds this position very strongly in this current public health debate—to ask why on earth you would pay out hundreds of millions of dollars in rebates to high income earners when you could instead leave the system exactly how it is and put the money straight into the public health system to assist the states with their public health costs. Why would you do this? You would do it only if you were trying to dupe the Australian public or if you had a long-term plan to cut public hospital and public health spending, force more people into paying for themselves under the user-pays system and, in the process, run down the public health sector. I do not have the slightest doubt that that is the real intention.Go to Victoria and have a look at what has been called `the great Kennett experiment'. Here we have the living evidence of it. The Kennett government was elected in 1992 in Victoria with the numbers in both houses, lower and upper. Jeff Kennett did not have to worry about having to negotiate with the Senate; he has done just what he likes. He has implemented classic Liberal right-wing private sector policy. He has sold the assets, he has wound back funding for public hospitals and he has wound back funding for public schools. He has been part very much of the ideological game of reducing the public sector. It does not matter whether it is teachers or police officers or doctors and hospitals, cut it all back and pay the private sector to do it. Yet here is the evidence that paying the private sector to do it actually costs Australians more. In 1992 it was $22 a day more per patient. I have not seen more up-to-date figures, but it will be more than that. Those trends do not go backwards. Despite the fact that we are following a policy that provides potentially less safe health care and that provides more costly health care, this government continues to do it.I place those thoughts on the record because Australia has been conned and duped over Medicare and over hospital funding. Australia was told by the Prime Minister that he would not run down Medicare. Australia was told by the Prime Minister that the government would basically leave things the way they were and continue to support the public health system. In fact, it has been everything but. In terms of sensible economic and quality decision making, it is a stupid policy. I think the more Australians understand this the better off we are for it. (Time expired)10:09:006424Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—One of the more fundamental flaws in the cry of some of the opposition members that we should just pump more funds into the public health system and all will be right with the world is that it overlooks, naively, the fact that our public health system needs a viable private health system to survive. It also overlooks the fact that people seek choice, that they want choice, that they are entitled to choice in the type and standard of health care that a contemporary industrialised nation should provide. Australia does not want a totally public health care system. Australians do not want to have to depend on government funding for every aspect of their health care requirements. Many more Australians are capable of taking responsibility, in varying degrees, for their own health care.This government is committed to achieving the highest quality system of health care we can, and the policies we are pursuing are designed to provide a more efficient, more productive and more effective health care system. Considering the pressures that our health care system is under, this is, as they say, a big ask. But we recognise that the state of our health care system requires constant attention and, in particular, that the balance between the private health sector and the public health sector requires constant redress. One cannot, and does not, effectively exist without the other.Health care is a matter of paramount concern to many Australians. Recent research indicates that health and hospitals rated the number one concern for most Australians. That is not to suggest that Australians are overly critical of the entire health care system, but it serves to illustrate what their concerns are for their future and, thus, what our national priorities ought include. That is why improving health care for all Australians has been a key element of this government's reform agenda since coming to office in 1996. Australians value choice, and they value the choice that the mixed system of public and private health care can provide. Currently, that mixed system is out of sync. It is out of balance. Hardly a day passes without a story about the shortage of doctors in rural Australia or the increasingly higher cost of drugs or the level of surgical waiting lists.People's expectations have changed in regard to health care. The public want more and better health services but have demonstrated a reluctance to pay higher insurance premiums or, indeed, higher taxes to get such services. Australia is not unique in that regard. Comparatively speaking, Australia has an excellent health care system with first-class health professionals on a par with any other in the industrialised world. But the fact is that we are also in company with most other countries in the industrialised world in terms of the struggle to meet the increasing health requirements of our people without increasing health expenditure. We are not in the position of the United States, which is in a league of its own when it comes to health expenditures, but the fact is that the demand for health services in this country is increasing faster than the supply. It is essential that we strike a balance between the private and public sectors to try to meet these demands and expectations and to ensure that all Australians have a level of choice as well as access to an excellent health care system.Private health insurance is an essential component of the Australian health system. It contributes over $4 billion annually to total health expenditure. However, as we all know, since the introduction of Medicare, private health insurance coverage has declined steadily. In March 1983, following the election of the Hawke government, 65.8 per cent of the population was covered by private health insurance. Twelve months later, in March 1994, following the commencement of Medicare, the proportion of the population covered by private health insurance had fallen to 54.9 per cent. By the end of December 1998 this figure had fallen to just over 30 per cent of the population. So 15 years after the introduction of Medicare we have a health system that is seriously out of balance and facing a future of increasing financial pressures. Why are we concerned that Australians have access to a viable private health system? For a start, we cannot afford a totally public health care system, nor should we. The fundamental principle of Medicare—universal equity of access to medical and hospital services for all Australians—was not ever meant to exclude the private health sector. It was in fact a safety net. In fact, its long-term viability was predicated on the basis of a healthy and viable private health insurance component as part of the overall health care landscape.Yet from the commencement of Medicare more and more people placed themselves at the mercy of the government and opted out of or failed to take up private health cover. The decreases in private health insurance memberships have created unsustainable pressure on the public health system. It cannot and will not cope. It would be irresponsible of any government to allow this to continue unabated, and this government is doing what it can to reverse the trend of declining health insurance coverage.The twin issues of the rapidly increasing per capita health and long-term care costs and the changing demographic profile of Australians require urgent attention. Yet, whenever this government seeks to introduce initiatives to meet these long-term problems head on, the opposition froths at the mouth and labels us as anti-Medicare. Anyone who dares to come up with a solution, or indeed come up with a responsible health policy designed to meet the pressures of the coming decades, is immediately labelled anti-Medicare. The public do see through this very hollow cry. As much as the opposition seeks to paint the government as being anti-Medicare, the inescapable fact is that this government has committed to a growth in funding in public hospitals. The health care agreement that was signed in August 1998 for the following five years has an unprecedented 10 per cent increase in funding to the state public hospitals. Unlike the Labor health care agreement for public hospital funding signed in 1993, the 1998 funding was all new money with none coming from a reduction in the financial assistance grants. This health care agreement has growth inbuilt over the next five years, so the increase in Commonwealth funding to state public hospitals is 19.2 per cent. Contrast this with the 1993 health care agreement for public hospital funding that the Labor Party signed. The extra money that was going into the public hospitals was in fact paid for by a reduction in financial assistance grants to the states, the so-called Medicare guarantee. It was robbing Peter to pay Paul. What sort of sustainable health policy is that? The Commonwealth money went up, the state money went down—and this is the same Labor Party that says we do not support the public health sector. But it is also an inescapable fact that, under the Australian health care agreements, every time the insurance levels drop the Commonwealth has to make it up to the state and territory governments. It is estimated that every time health insurance levels drop just one per cent the Commonwealth has to pay an extra $83 million to state and territory governments.Commonwealth expenditure for public hospitals under the Australian health care agreement for 1998-1999 is expected to reach more than a record $5.6 billion, with a projected rise to $6.6 billion by 2002-03. If we do not do something to arrest the decline in private health insurance membership, the federal government will face $500 million extra funding for the states and territories each and every year—just to maintain the status quo. The fact is that we must encourage private health insurance.More than one in every two operations, one in every three admissions and one in four bed days are provided in the private sector. Health fund contributors today pay for six million bed days each year out of a total of 22 million bed days. Every privately insured patient who occupies a private hospital bed frees up a public bed for Medicare patients.The annual premiums paid by members to their health funds, and paid from the funds to hospitals and other providers, makes a larger contribution to our overall health bill than the Medicare levy funded by almost every Australian taxpayer. Health funds contribute $4.5 billion, the Medicare levy about $3.6 billion. Private health funds contribute around $400 million a year into our public hospital budget. Public hospitals receive more than $200 a day payment from health funds for each private patient bed day. Private hospital insurance provides a revenue stream to public hospital funding; one cannot survive without the other.Let me turn to another inescapable fact concerning the demographic profile of Australians. Our population is ageing. The relevance is simply this: health care costs increase dramatically with age. According to the Australian Institute of Health and Welfare report Australia's Health 1998, from one's teenage years to the mid-40s most people's health care costs are low. They begin to increase about the age of 45 and then pick up when people reach 75 and over. The health costs for the average 75-year-old are about three times that for the average 25-year-old.As our population ages, our health costs increase. In 20 years, when the postwar baby boom generation reaches their 70s, Australia's health care costs will blow out dramatically. If we do not address this ageing phenomenon now, the health care system will be in danger of imploding. There will be too many ageing and ailing baby boomers and too few people working to pay for their health costs. We must also factor in the advances in medical science and medical technology, and add to this the foreshadowed proliferation of genetic technology and services that will be available within the next 20 years. As people live longer, they will demand and expect higher and better levels of health care.Future Australian governments will face a phenomenal health problem, and this government takes its responsibilities seriously. It is putting in place strategies for the future based on policies designed to address these problems before it is too late. We appreciate that, to avert the impending problems of financing a sustainable health system in Australia, there is no one simple answer. A comprehensive approach is required. Incentives in the private health insurance arena are just one part of that approach.In particular, Lifetime Health Cover, which will be introduced upon the passage of this amendment to the National Health Act 1953, is one part of an overall strategy to improve the take-up rate and retention of private health insurance. The combination of private health insurance incentive schemes—the 30 per cent rebate which came into being on 1 January together with the Lifetime Health Cover scheme—will help put the balance back into the private-public sector equation. Part of our strategies and policies will be to ensure that Australians look at health insurance as a long-term commitment. We need to give Australian people the incentive to commit long term to private health insurance.The 1953 National Health Act contained the principle of community rating and the reinsurance system, which is fundamental to the administration of private health insurance in this country. The system of community rating means that health insurance companies charge policy holders the same community rated premium. It was designed, one assumes, to ensure that people cannot be discriminated against in obtaining health insurance on the basis of their health risk—that is, age, sex, race, health status and claims history. The reinsurance system underpins the community rating principle by requiring health funds to cross-subsidise each other to spread the burden of high claim members. This is fine and works well when health insurance membership numbers are high and the membership profile represents the general community profile. It was fine in 1983, for example, when over 65 per cent of Australians had private health insurance.But in practice, as memberships have declined, this has meant that every policy holder, young or old, sick or healthy, is considered to have the same risk of making an insurance claim. In reality, as people with lower risks dropped their private health insurance in response to Medicare or to premium increases or for whatever reason, they left a residual of higher risk groups, which resulted in declining incomes and increases in claims for health funds. The low risk policy holders subsidise the high risk. If the low risk holders have no incentive to stay within the private health care system and drop their insurance, the result is adverse selection. If the low risk—the healthy and the young— drop out and only the high risk remain and the costs increase for those who remain covered, we have a problem. Added to that, fewer private patients means there are more public ones, and the fact is, the public system cannot handle it.We have introduced a number of initiatives including this bill, the National Health Amendment (Lifetime Health Cover) Bill 1999 , designed to provide incentives for Australians, who seek to have a choice in their level of health care, to take up health insurance under a lifetime cover. The intended effects are increased reasons for younger people to join and corresponding deterrents to join at older ages. It is intended that people would be discouraged from joining for short periods in anticipation of particular health care needs in the immediate future—the `hit and run membership', as it is colloquially known—and existing members will generally have increased incentives to retain membership.The two significant expected changes in membership will be an increase in total numbers and a reduction in average age of members. The overall effect will be to increase the financial viability of insurers, to sustain a viable private health care sector and relieve pressure on the public health care system—and thus strike the much needed balance in our health care funding. We need many more Australians to make a long-term commitment to private health insurance. We need many more Australians to recognise that the state cannot afford to provide unlimited health care at world-class standards. This government is introducing incentives to reward individuals for saving and investing in their own health care. More people must take responsibility for their own health care needs, not expect it all from the public purse.What is this government introducing for the long term? This is an initiative with a long-term focus. We are looking for long-term solutions and not quick fixes. Over time, the Lifetime Health Cover will result in a broader cross-section of the community being covered by private health insurance. Younger people will be encouraged to join health funds at the cheaper rate and it will encourage long-term consideration of one's responsibilities, including private health insurance. At the very least, Lifetime Health Cover will slow down the rate of premium increases and, as the age profile of people insured changes, premiums can begin to stabilise because the funds will have more people in the `good risk' category.I acknowledge the opposition's support of this bill but, in view of their lightweight responses, I ask: what is the opposition's detailed analysis of these problems currently facing Australia's health system? I ask this rhetorically, for the opposition has no analysis, no policy, no suggestions, no vision, no answers—nor comprehension, it seems, of the myriad issues that arise. In fact, the opposition says there is no crisis in private health, that there is in fact no problem. I listened in wonderment last night as the opposition members recited this chant one by one. Where have you been? In the blissful state of ignorance, it would seem. To ignore blithely the undoubted impact on our health system of a decline in private health insurance cover, from over 65 per cent of the population to just over 30 per cent in 15 years, without any recognition during its 13 years in government of the problem that this issue was causing, must be part of this same state of ignorant bliss where an opposition can believe that it is not expected to have alternative policies, not expected to proffer alternative ideas and not expected to put forward alternative proposals.I have come to understand that the Labor Party plays the politics of opposition for all it is worth, no matter what the electorate or their constituents are entitled to expect from them. They should at least be able to expect some sort of positive, pro-active, independent minded positioning from someone within the Labor Party to add to the debate on the vital issue of Australia's health care system. But no, a deafening silence on the positives and a focus on the negatives. No matter. That is their choice.What do others say about the government's initiatives? The Association of Independent Retirees has welcomed the introduction of Lifetime Health Cover and noted:This is the first time that a Government has given recognition to those who have given long standing support to private health.The Australian Private Hospitals Association has said:The issues involved in health financing and health insurance are as complex are they are varied. For this reason, no single measure will fix the problems . . . this Government has now clearly demonstrated it is serious about implementing a process of significant and sustained policy reform in relation to the private health sector . . . we believe Lifetime Health cover will help bring about a positive shift in community attitudes to the value of private health insurance.The private hospital sector is particularly significant in my electorate of Curtin, where there are 12 private hospitals providing a first-class service to the wider community, including St John of God Hospital, Bethesda Hospital, Hollywood Private Hospital, the Cancer Foundation Cottage Hospice, the Perth Clinic, the In-Vitro Private Hospital and the Eye Surgery Foundation among others, all providing much needed health services including specialist services of a type and range that only the private sector can offer. There is no escaping the fact that the public health system currently costs Australians billions of dollars a year and is being stretched beyond available resources. This bill is another step towards a more balanced health system comprising a strong private and public sector which will enable there to be a sustainable health system for everyone.10:28:006428Lee, Michael, MPMr LEEMG4DobellALP00—I begin by saying that there is a challenge for the honourable member for Curtin, who claimed on several occasions during her speech that the opposition is simply `demanding that the government pump more money into public hospitals'. I think they were her words. For the honourable member for Curtin's information, it is not just the Labor Party that is making these claims; it is her colleagues. The Western Australian Premier, Richard Court, fought vigorously for the federal government to face up to its responsibilities and to put more federal funding into Western Australia's public hospitals. The current Western Australian Minister for Police, Kevin Prince, in his then capacity as the Western Australian Minister for Health, fought a tough battle to try to make sure that Western Australia at least got a fairer share of federal funding for Western Australia's public hospitals.So I say to the member for Curtin: it is not just the Labor Party that is arguing that the federal government has to put more money into treating public patients, and private patients, in public hospitals; it is also her own colleagues at the state level. And it is not just in Western Australia. Right around the country, people such as Mike Horan, the former Deputy Premier of Queensland, the Tasmanian health minister, the Victorian health minister, and coalition colleagues at the state level were trying to ensure that Dr Wooldridge, the federal minister for health, put more federal funding into public hospitals.In no small way due to the strong efforts of the state ministers for health, Dr Wooldridge was forced to partly increase federal funding for public hospitals, but it went nowhere near providing enough money to make sure that our public hospital system can cope with the pressures that are being placed on it—pressures that arise from changes in technology, changes in the number of operations that are performed these days, and the cost of those operations—and there is a great need to make sure that we do put extra federal and state government funding into our public hospital system.The problem is that the coalition has never understood that it is not just the two-thirds of Australians who rely completely on Medicare who are treated in our public hospitals; the one-third of Australians who have private health insurance also often rely on the public hospital system. Whether or not they have got private health insurance, when someone is really sick, or if there is an emergency, they turn up at their local public hospital emergency department. If someone has a very serious illness and needs tertiary care, whether they are a public or private patient they are more likely to be treated in one of our large teaching hospitals. That is why Labor argues that the most pressing need in the health care system today is for the federal and state governments to put more funding into the public hospital system.The very fact that we are here today debating this proposal for unfunded lifetime community rating is an admission of failure, and I will explain why. I am sure many people remember that, during the Fraser-Howard years in the 1970s and 1980s—in the seven years that Malcolm Fraser was Prime Minister and the current Prime Minister was Treasurer—we had seven health schemes in seven years. You have at least got to give credit to John Howard; he is on track to maintain that record, because here today, with the debate about lifetime community rating, we have John Howard's fourth health scheme in four years. So he is on track.The first health scheme under the Howard government was promised before the 1996 election, and it was a proposal to provide a rebate of up to $450 for certain families. That was expected to cost about $500 million a year. During the election campaign, the Prime Minister made some pretty courageous predictions about that scheme. He was asked by a journalist at a doorstop in February 1996:What is your target for the number of people who will take out private health insurance?Howard: Well our target is that by the year 2000 it should be 40 per cent.The journalist went on to ask:Sorry, is that 40 per cent moved back in or 40 per cent?Howard: No, no, by the year 2000 it will be 40 per cent.There is a very big gap between the 30 per cent or so who are in private health insurance today and the 40 per cent that the Prime Minister predicted would be there by the year 2000. So the Prime Minister's credibility and predictions about the first scheme, the Private Health Insurance Incentive Scheme, were way out.At the time, the Prime Minister promised three things about his first scheme. He said the rebate would deliver lower premiums and higher membership of health funds, and would take the pressure off public hospitals. Instead, as soon as the rebate came in, the health fund premiums went through the roof, the membership continued to decline and we have seen the pressure on public hospitals actually increase, not decrease. So it had no beneficial impact whatsoever.Then we had the horror budget of 1996 that cut federal funding for public hospitals around the country. Financial assistance grants to the states were also cut in 1996—the very financial assistance grants that the member for Curtin was moaning about were actually slashed by the first budget of this government and, in addition, the government brought in the Medicare levy surcharge. The government said that if a couple earned more than $100,000, or if a single person earned more than $50,000, they would have to pay a one per cent tax surcharge if they did not have private health insurance. The government made some predictions about that too. On page 145 of the government's own 1996 budget portfolio statement for health, there is the following statement:The funding estimates are based upon the assumption that the coverage of private health insurance will increase from 32 per cent of the population to 34 per cent of the population.We did not see that two per cent increase either. Also, the minister for health put out a statement on budget night saying:We are expecting about 70,000 high income earning single people and 65,000 couples and families to join health funds as a result of this measure—that is, the Medicare levy surcharge—This alone would increase the participation rate by 1.5 percentage points.So the government claimed that there would be a two per cent increase in health fund membership due to the PHIIS scheme—the $450 rebate—and another 1½ per cent increase because of the Medicare levy surcharge. These again were bold assumptions; not quite as bold as the Prime Minister's claim that we would get an increase back up to 40 per cent, but what did we see? We saw a straight-line decline in private health fund membership during the Labor government years, then the government invested $500 million a year of taxpayers' money and imposed the Medicare levy surcharge, and the straight line continued. We got a blip of one-quarter, but it was a straight line. So, in effect, the government blew $500 million a year for nothing. We did not get a reduction in premiums. We did not get an increase in fund membership. We did not take the pressure off public hospitals. So the first and second Howard government health fund schemes—the $450 rebate and the one per cent Medicare levy surcharge—were flops.In the lead-up to the last election the government was desperate to be seen to be doing something about health so we had the Prime Minister develop the most recent plan to provide a 30 per cent rebate for private health insurance fees. That increased the costs of the rebate from $500 million a year to $1½ billion a year—$1,500 million a year. What made it outrageous was that this plan was for an un-means-tested rebate, which is something that we on this side of the House have always argued has been so unfair. Why should the Prime Minister or the Leader of the Opposition get a 30 per cent rebate on their health insurance premiums when low income families get quite a minimal benefit from the change from the $450 rebate to the 30 per cent rebate?We had the government running around with its taxpayer funded ads guaranteeing there would be a 30 per cent reduction in the cost of health insurance—a 30 per cent tax rebate—when the families who were already receiving the $450 rebate got a rebate increase of about $150, which was much less than a 30 per cent reduction in the cost of their private health insurance. People like the Prime Minister, the Leader of the Opposition and me, because we were never eligible for the old means-tested health insurance rebate, got the full value; we got our $600 payment in our wallets through the introduction of the third Howard government's health insurance scheme. I cannot think of anything more obscene than the Prime Minister of Australia or a person on a politician's salary getting $600 which could be much better spent directly on providing care for people in public hospitals right across the country.We all know of course that certain predictions were made about how successful that new scheme would be in encouraging new people to join private health insurance funds. We had the Minister for Finance and Admin istration, a couple of days after the budget earlier this year, letting slip the government's expectation for an increase in health fund membership. We even had our good friend Russell Schneider there, as always very effectively representing the interests of the health funds, leaking out information about a 100,000 increase in health fund membership—and I am sure we all remember the article in the Australian raising expectations, creating an impression that the 30 per cent rebate is such a success that people are flooding back into the health funds. It was only when the figures came out weeks later that we saw that the source of the leak had released the number of new people who had joined funds but had forgotten to mention how many people had left funds.When you actually looked at that, sure, there had been another little blip, just like the blip we had after the $450 rebate scheme. But it is inevitable that we will be back to that straight-line long-term decline because once again the government has spent a massive sum of money on a health insurance rebate that is not making health insurance cheaper for consumers and that is not making an increase in the number of members. Yet members such as the member for Curtin and the member for McPherson, who were given their lines by the minister for health's office, get up in the House and they just prattle it off: `This initiative'—this lifetime community rating—`will slow the rate of premium increases. This initiative will stabilise membership.'I say to the member for Curtin and the member for McPherson: don't just read out the lines that the minister for health gives you. Today I challenge the minister for health, when he comes in to sum up this debate, to repeat the lines that he has been giving government backbenchers. I challenge the minister for health to say the very words that the Liberal backbenchers have been using. I challenge Dr Wooldridge to say in this House that he commits unfunded lifetime community rating to `slow the rate of premium increases' and that he commits unfunded lifetime community rating to stabilise membership. I will have a bet with you, Mr Deputy Speaker. I will bet he does not say those words. He is quite happy to let other coalition backbenchers make fools of themselves, by coming into this House and making statements that the minister knows will be proven to be untrue, but the minister is too smart to fall for this trick; he gives other people the lines but he does not come here and say them. I challenge him to prove me wrong.HK6LINDSAYMr Lindsay—What is the bet?MG4Lee, Michael, MPMr LEE—I will have a bet with my friend the member for Herbert.HK6LINDSAYMr Lindsay—A can of Coke.MG4Lee, Michael, MPMr LEE—He's obviously being very brave here today—he's risking a great deal. I am not sure if this is against the standing orders, Mr Deputy Speaker, but if it is not a breach of standing orders I will challenge the member for Herbert that, if the minister for health is prepared to come in and repeat the lines that he and his office give Liberal backbenchers—EM6STONEMrs Stone—He is not answerable to the opposition spokesperson.MG4Lee, Michael, MPMr LEE—Who isn't?EM6STONEMrs Stone—Our minister.MG4Lee, Michael, MPMr LEE—The parliamentary secretary at the table says `our minister'—presumably Dr Wooldridge—is not answerable to the opposition.Mrs Stone interjecting—MG4Lee, Michael, MPMr LEE—We know that. I am sure Mr Harley-Green, aged 71, the older Australian from Sydney, also knows the minister will do what he wishes to do, but we challenge him to come into the House and just say the very words that all the Liberal backbenchers have been given. Let him come into this House and put on record his prediction—the government's prediction—that this initiative will slow the rate of premium increases, that this initiative will stabilise membership. All of us on this side of the House could not be happier if that were true. That is why we are not opposing this particular piece of legislation. If the government can guarantee that this measure will not only stabilise premiums but also slow the rate of premium increases and stabilise membership, then nothing could make us happier. All the evidence to date is that in four years their four schemes have flopped. The $450 rebate flopped, the one per cent Medicare levy surcharge flopped, the 30 per cent rebate has flopped and, unfortunately, there is no guarantee that lifetime community rating will succeed.The reason why we have these concerns is that the government has demonstrated that it has been unable, despite spending massive amounts of taxpayers' money, to face up to its own responsibilities, especially as far as public hospitals are concerned. The point we are trying to make is that this issue in particular is a very complex one. This issue has not arisen in the last few months. This proposal for unfunded lifetime community rating was actually proposed by the Productivity Commission in February 1997 after the first massive round of increases in premiums. The government was so embarrassed by having allowed a junior public servant to approve those premium increases that the Prime Minister, under pressure, agreed to set up the Productivity Commission inquiry. That report came down in February or March 1997 and the minister put out a press release. I was here in Parliament House, by accident, on the day the minister put out the press release in my then capacity as the shadow minister for health.The health minister's press release in February 1997 said that the government approved in principle the introduction of lifetime community rating and that legislation would be introduced into the parliament within six months. Ever since February 1977, the Labor Party—when I was the shadow minister and now when my colleague Jenny Macklin, the member for Jagajaga, is the shadow minister—has been calling on the government to release the modelling that was done for the government, all the studies that the government said it was commissioning in February 1997 and all the work that has been done to try to work out what the impact of lifetime community rating will be. In some ways we in this House are taking a gamble on what is going to happen with lifetime community rating. Because the government has refused to make the information available, we are being forced to take the government on trust as to what the modelling predicts. We have no idea whether the modelling will prove to be accurate, but we do have a number of concerns about what the impact of lifetime community rating will be.In giving people a one-year period of grace to join a health fund before the new rules take effect, it is possible that we could see a stampede into health fund membership, especially of people between 50 and 65. The member for Curtin said that people of that age group are a higher risk than young people. Presumably that may mean that premium increases could accelerate rather than moderate if there is a stampede in of people who are considered a poor risk by the honourable member for Curtin. If premiums go up dramatically because a large number of people close to the age of 65 join a health fund, then this may end up producing again only another blip. We have had two blips already. We may get another blip—perhaps a larger one—but it may not address the issue in the way that many government members are suggesting.There are many young families whose first priorities are to pay off their mortgage, to buy the food and to make sure the family budget is met. They will find it very hard to be able to afford on top of the ordinary costs of living the costs of private health insurance. If you are saying to those families, `If you don't join a health fund by the time you're 30 you are forever locked out,' we may make it less likely that younger people will join health funds when this scheme comes in. These are questions that could have been addressed if the modelling had been made available to us.The other point to make is that when the scheme was first proposed in February 1997, it was carrots and sticks. There were discounts to young members and penalty premiums for people who joined late in life. In the two years since the scheme was first developed, the carrots have disappeared and we just get the sticks. I am sure there are people in the gallery who might have liked a discount if they had been in a health fund for a long time or a discount to encourage them to join a health fund when they were young. Unfortunately, all the minister says is, `We've legislated to allow a health fund to give you a discount,' whereas the previous scheme not only legislated the increase—the penalty if you joined late in life—but also ensured the legislation was there to provide the scheme with the balance of a discount for people who were younger.The member for Jagajaga has also outlined our concerns about the clawback, that we could actually see less federal funding for public hospitals if there is that stampede in, if there is an increase in health fund membership above 34 per cent, and that is something we will pursue in another place.The final point to make is that the only reason we are here is that the government's fourth health scheme in four years has failed. The only reason we are here is that this government has failed to meet its responsibilities to Australia's public hospital system, the system that looks after the needs of the two-thirds of Australians who rely on Medicare and even the one-third of Australians who have private health insurance. Only when the government faces up to its responsibilities and increases the federal funding for public hospitals can we ever expect the Australian health care system to improve.10:48:006432Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—I thank the member for Dobell for an informed and thoughtful contribution to the debate, something that perhaps has not been in evidence in the contributions from some of the previous speakers from the other side in this debate on the National Health Amendment (Lifetime Health Cover) Bill 1999 . There needs to be a bit of plain talking and clear thinking about the health issues that face the country today. That is not helped by some of the contributions which have been basically emotional and scaring type contributions. The health of the private health insurance industry is an important issue in this debate in Australia today.From the contributions that I have heard, I have no doubt that it is the Australian Labor Party's policy to move to destroy the private health system. In their view, that would be the ultimate goal—to have a private health system that collapses. Their model would have a single public system that would be overloaded, inefficient and run down, would have long waiting lists and would survive with poor technology. We have seen that already in some of the Labor states where this is beginning to appear in the public hospital system. There is nothing more frustrating for the customers—the patients—to see the hospitals overloaded and run down with paint peeling off the walls and to see the long waiting lists and so on.What drives the Labor Party in this way on this particular issue? It is the politics of division and class envy, which I totally reject. They forget that so many of the battlers and low income earners in this country do choose to have private health insurance. I know that some of the pensioners in Townsville scrimp and save and go without because they do not want to give up their private health insurance. They see that as a most important part of their expenditure in their budget. They see it as important to keep up their private health insurance payments.Why do the battlers in our community have to pay the premiums that they do? It is because of the raiders in the system, the hit-and-run merchants, who when they need some kind of health care join the health system, have their procedures and then retire. That causes increased premiums for those who are in the health system for the long term. Is that fair? Is it fair that someone can come in for 12 months and have a major procedure and then opt out again?Certainly in my own case I was very fortunate. I have had private health insurance for a long time, and in 1997 I was able to have open-heart surgery—which cost $25,000—through private health insurance. But a year later my dad had to have the same procedure. He went into the public system and he got exactly the same quality of service and care; the care that I received, he received in the public hospital system. There is no question but that the two systems running in parallel provide very good quality service indeed.Locally in my electorate, in Thuringowa, we have two private hospitals: the Mater Hospital, run by the Sisters of Mercy, and the Wesley Park Haven, run by the Uniting Church. Both of them provide an outstanding quality of service. Both of them are investing huge amounts of money in technology, as you will see if you go and look at the cardiac catheter labs, for example, or the X-ray facilities. The Mater is about to have an MRI installed. The quality of service is wonderful. Also, Townsville is getting a brand-new $170 million general hospital—a level 6 hospital as good as you can get in the Commonwealth of Australia. So the public and the private system are both serving Townsville very well indeed.I would like now to take the opportunity in this debate on the National Health Amendment (Lifetime Health Cover) Bill 1999 to debunk some of the myths that there seem to be in the debate on health in Australia. First of all, there is some feeling that money that goes to private health insurance, where the government provides a 30 per cent rebate, somehow or other ends up in the pockets of the health insurers. That is absolutely not the case. Virtually all of the private health insurance companies are not-for-profit operations, and the money basically ends up back in the health system itself. From memory, there are only four for-profit health insurers—which are very small indeed—out of 46 or so private health insurance funds. So there is no suggestion at all that the money that goes into private health insurance in the form of a government rebate ends up in the pockets of some director of a health insurance company.The second myth that I would like to debunk today is the opposition's suggestion that investment of $1.7 billion in a private health insurance rebate somehow or other is not good value. Every dollar that the government puts in attracts $2 of private investment, basically. That is the bottom line. Every dollar of subsidy that the government gives encourages private people in the community to invest two of their own dollars in our health system. Any business person will tell you that it is a pretty good investment to put in a dollar and attract a further $2. If that were not the case—if private health insurance were not there—where would that money come from? If the Labor Party are so hell- bent on destroying the private health insurance system, they would have to say how they would make up that particular money—the money that our community currently contributes to our health system through private health insurance. We would be talking about something like $5 billion if private health insurance fell over. You, Mr Deputy Speaker, know how they would make it up: it would be back to deficits. That is the only way that it would occur, and that is why we need a very healthy private health insurance system in this country today.The third myth I would like to debunk is that the government has an agenda to run down Medicare. How could that be when it is on the public record that, under the current agreement with the states, there has been a 17 per cent increase in funding for health over the life of the agreement? I do not think that is a sign that the government is in any way trying to run down Medicare. I note, however, that the shadow spokesperson, the member for Jagajaga, made the ALP's position clear. In her press statement, she says:It is time the Government came to terms with Medicare as a central pillar of Australia's health system and puts its time and resources into improving the public system.A 17 per cent increase is a pretty good increase in resources to improve the public system. The government's record is there for all to see. She also says:The Government has put the private health insurance industry on life support and the patient is unfortunately not doing well.I think this is further evidence that the opposition has this feeling that they would be very happy if private health insurance fell over. Last night, in leading the debate, the member for Jagajaga said:Where we part company with the government is in its fixation that membership of private health insurance has to be artificially boosted at public expense.I remind the member for Jagajaga that on 26 October 1993 one of her own colleagues, Senator Graham Richardson, had this to say:In my view, we cannot continue to have private health insurance bleed in the way that it has in the past years because this does increase the strains on the public system. The government recognises that. Senator Richardson recognised that. I just wish that the member for Jagajaga would recognise that. Again, in her contribution last night, she said the opposition:. . . will oppose measures that limit access to the public hospital system or anything that results in resources being taken from the public sector to subsidise the private sector.On that, Richardson, on 8 December 1993, said:When you add millions of people into a public system which is already showing some strain in some places, you will get problems. To pretend you will not is to ignore the obvious.Yet the member for Jagajaga and the Australian Labor Party continue to ignore the obvious.The total health bill in the country at the moment is about $40,000 million and of that the Commonwealth meets 45 per cent, the states meet only 22 per cent and private expenditure is 33 per cent. Just imagine if you took private expenditure—that includes expenditure on private health insurance—out of the system. You would be facing a shortfall of $13,000 million in the amount the Commonwealth would have to find to provide the same level of service in the public system. That is just not realistic and it is something that I believe the opposition should be cognisant of. Again last night the member for Jagajaga said:It is scandalous the extent to which this government is prepared to subsidise private health insurance for no benefit whatsoever to the health system.Gosh! No benefit to the health system? For every dollar that we subsidise, we get $2 from private people to help the health system. It seems pretty simple mathematics to me. Former Senator Richardson, again on this particular subject, said on 9 February 1994:We cannot continue to see a never ending drop in the numbers who are in private health insurance, because the money that they put into the system has to come from somewhere. Every year they are putting in a couple of billion dollars that we are going to have find from somewhere, if we do not find it from private health insurance. That means a further strain on the public purse. I am worried about the capacity not just of this government but of future governments to be able to meet that kind of commitment. Obviously, the member for Jagajaga is not worried.Another issue that I would raise as part of this debate is the concern that private hospitals are facing what some term as `disaster'. Certainly, the Australia Private Hospitals Association is very concerned about the way things are going at the moment. The bottom line for them is simply this:The raft of measures implemented by the Howard government to restore balance to Australia's health system (all of which have been vigorously supported by the APHA) will have been wasted if the viability of the private hospitals industry cannot be sustained.Without a robust private hospitals industry, providing services for the privately insured, increases in the level of health insurance coverage will fail to alleviate pressure on public hospitals.I think, from the industry itself, these are telling words which show the importance of the measure before the parliament this morning.I would observe that the private health insurance industry is under pressure. When Medicare commenced in 1984, its long-term viability was predicated on a viable and healthy private health insurance sector. The drop in membership numbers engineered by Labor has created unsustainable pressure on the current public health system. The government is determined to ease the burden on Medicare. Our goal is to strike a better balance between the private and public sectors, ensuring that Australians have a level of choice as well as universal access to excellent health care. Fine words and that is what the government is putting into deeds in this legislation.There have been some inaccuracies in the media that I have seen in relation to the bill and health in general. I would like to address those. There have been some claims that Lifetime Health Cover abandons the system of community rating under which older people cannot be discriminated against. In fact, the principles of community rating are maintained under Lifetime Health Cover. Higher premiums can only be charged to someone who delays joining until later in life. Therefore, a 60-year-old who joined at the age of 30 would pay a lower premium than a 35-year-old who had just joined.There has also been a really strange claim that the government is abandoning Medicare. You and I know we are not. Nothing is further from the truth. The government has in fact, as I said earlier, increased spending on the public hospital system by 17 per cent through the recently finalised health care agreements. The Doctors Reform Society makes the claim that the government is taking money away from the public system to pay for the private system. This flies in the face of the government's increasing, not decreasing, commitment to the public system.Lifetime Health Cover is a cheap initiative to implement. The vast majority of the allocated costs are for an education campaign to inform the Australian public about the implications of the scheme—and I support that—but they will always have the choice of the Medicare system. Lifetime Health Cover does have a positive impact and it is widely welcomed by those people in my electorate who have spoken to me. I am very pleased that the government has been able to make this particular issue available to the public of Australia.The member for Corangamite made an interesting point yesterday. He hit the nail on the head when he observed that most people would rather be healthy but not rich instead of wealthy and sick. This is supported by the fact that there are some 700,000 Australians earning less than $20,000 year who have private health insurance coverage. That is a very telling point. I would also observe that about 30,000 people in Townsville and Thuringowa currently have private health insurance. Former Senator Richardson noted in August 1996:I was never comfortable with the thought of wealthy people elbowing battlers out of queues in public hospitals.I think that is a pretty telling comment.I conclude with the observation that the government has taken this decision to ensure a strong health system into the future with a balance between private and public sectors. I say to the people of Australia and those who are listening to this parliamentary session this morning: remember, you will still have a choice for health care—Medicare will be there to look after you and your family now and into the future.11:07:006436Griffin, Alan, MPMr GRIFFINVU5BruceALP00—We are here today to debate the National Health Amendment (Lifetime Health Cover) Bill 1999 . As has been said by earlier speakers, although there are considerable concerns about how the bill will operate, the opposition is going to support it at this time. However, we are keen to see the detail considered further in a Senate inquiry.The development of private health cover in this country is an interesting issue—there is no doubt that there are some real problems there. The percentage of the Australian public with private health insurance has decreased significantly since the early 1980s in particular and the introduction of Medicare. The current government has, on a number of occasions, endeavoured to introduce policy changes to deal with those issues and to try to arrest the decline in membership and have a situation where an increase can occur in private health cover.In 1996, we had the means tested rebate approach. At that time, there were high hopes held for how that would impact on private health cover, but it did not really work. Then there was an increase in the Medicare levy surcharge for higher income people, again designed to ensure that private health cover levels increased. Once again, that was not particularly successful and there was a continuing decrease in percentage of population covered by private health insurance.The most recent change we had prior to this legislation was the 30 per cent rebate scheme—some $1.7 billion—which was part of the coalition's policy at the last federal election and was passed by the parliament some months ago. Although we have not seen a full year of operation of that rebate, it does not appear to have worked either. There are some signs of minor increases in membership of funds, both in the percentage and in real terms, but at the end of the day, in terms of what was expected, what was claimed, what was hoped for and what was proposed, we do not seem to be seeing the same sort of improvement with that particular measure.Now we have another measure with this bill around the question of Lifetime Health Cover. We are going to see a system introduced where the premiums charged relate to age, with the intention of encouraging people to go into private health cover at a much earlier age, to avoid hit and run tactics by people waiting until they are older and more likely to need private health cover before they get insured. In that way they save years of premiums and at the same time, if they time it right, still get access to the services that they will require for illness in more advanced years.I do not have a real problem with the concept of what is being proposed, but I do think there are a range of issues that are still to be addressed in how it will operate. In some respects, it characterises a lot of different matters that the government has proposed in the health area where there are budget projections, views and formulas that have been considered, and results that have been projected and stated on the public record as to how it will work, but we do not know the detail. In reality, previous initiatives that have been introduced and the claims that were made originally with respect to the success of those initiatives have been found wanting in their operation. That raises some interesting concerns as to how this will work at the end of the day.When we look at the private health insurance policy of this government, I am reminded very much that it is a variation on the Demtel man: there is a policy and then `There's more'. I do not know whether we will get free steak knives next, but it may well be part of what is proposed in trying to address this issue.When we look at health policy, there are a few things we can identify. One is that with the ageing of the population, with baby boomers coming into their latter years, the ageing population will have an increased need for serious health care in the years to come. Also with improved technologies and developments in the medical area, there are many things now that can be treated that could not be treated previously, or can now be treated better. All of that has implications for the cost of the system.The costs of the system are increasing over time. That is not an unusual thing. It is not only Australia that faces those conditions; it is a world-wide problem. So we know health cover and health costs will increase over time. It is incumbent upon government to try to ensure that the public get access to proper medical services, while at the same time endeavouring to control the cost blow-out that is occurring. What it means and what it shows is that throughout the health area there is always going to be a need for priorities to be decided upon and decisions taken with limited government funds about what we seek to achieve. That is where we have a real problem with the private health subsidy as one of the initiatives that is being used to try to address the levels of private health insurance. The $1.7 billion subsidy has not appeared to work. That $1.7 billion could have been utilised elsewhere in Medicare.The previous speaker, the member for Herbert, talked about the fact that the accusation is that the government has been starving Medicare of funds. He basically said that that is not true and that the funds have been increasing. The fact of the matter is that costs in the health care area are continuing to increase and they will continue to do so.The issue here is: what do you do with the money you have available? And, in the context of private health insurance, if a chunk of the money that is going to that subsidy had actually gone to Medicare there would have been some real, identifiable results on waiting lists and on the standard of care available in public hospitals. That in itself would have had a real and abiding effect on the general health of Australians. Medicare has been starved of the sorts of funds that are required to maintain a modern, viable and efficient health system.Beyond that, this measure is basically raising premium levels on the basis of age over time. I note that there is a grandfather clause for people who are currently 65 years of age and over, so it will take some time for the system to take effect. One of the things that are of concern and that I am not sure this legislation addresses is the issue of younger people and private health insurance. I think the shadow minister quoted Russell Schneider on this issue. Although I will not comment directly on that, I will make some comments on that concern. Younger people are not showing an inclination to believe that they need private health insurance. I personally have a concern as to whether economic means—as are being used here with the penalty of a higher premium, the longer you wait to go into private health insurance or taxation rebates—are necessarily going to address that issue. I do not think it is entirely an economic issue; I think it is an issue of lifestyle choice. A lot of younger people, in particular, do not think they are going to need private health insurance and therefore do not see it as being a priority for them in their circumstances. Where there are limited amounts of money available to do what they wish to do with their lives, they are making the choice to avoid private health insurance, regardless of the economic impact it may have, because they do not believe they actually need it.That question of recognition of the value in a product is something the industry has to look at as well. There is a range of different products within the private health insurance area to fit in with the particular needs and circumstances of individuals, but the fact is that the industry has a pretty poor reputation. For example, there was a Sun-Herald poll recently—not that I often quote the Sun-Herald, I might add—which said that only about 13 per cent of people believe private health insurance offers value for money. That sort of public perception is a very difficult thing for the industry to deal with, but it also has real implications for how measures such as this may operate and may actually work in the context of the system as a whole.When we looked at the future and a range of unanswered questions around this legislation, we looked to a Senate inquiry. There are a range of things that need to be looked at in that inquiry—whether this system will work and those sorts of issues need to be addressed. Hopefully the government will be more forthcoming with answers. I know that the shadow minister has sought information from the government about the formulas that have been utilised to develop this proposal.If we are looking at a major change in the system such as this, we need to try to ensure that there is some public confidence that it is an answer or part of the answer rather than being another bandaid—admittedly a potentially rather large bandaid—that will not deal with the inherent issues of private health insurance. That is something that the industry really has to look at.When we look at Medicare as a system which provides health care for the Australian public, we do have some issues for the government to address—on funding in the overall sense and on ensuring that the states basically play their role in making sure we have a proper public hospital system. Those issues are of greater moment for the general public in this country than some of the private health insurance measures that we really cannot be convinced are working or are going to do the job. I look forward to seeing what happens out of the Senate inquiry. I think there are a range of issues that need to be addressed and I am hopeful that the government will provide some of the answers that are required in the context of that inquiry. At this stage, the opposition, as has been said previously, supports the legislation. We will see how the process of achieving some of those results and some of those answers goes in the Senate inquiry.11:20:006438Crosio, Janice, MPMrs CROSIO7T4ProspectALP00—I opened my Saturday paper a few weekends ago and was greeted with the sight of the Minister for Health and Aged Care smiling away, red-nosed in his dank wine cellar with a glass of red wine in his hand, as if all was right with the world and with his place in it. I will not venture my views on the unpleasantness of seeing him in that Saturday morning paper, but I can tell you I did not enjoy my breakfast.Despite the minister for health's seemingly relaxed attitude to life and his portfolio, all is not right with the health system in this country. The minister might be satisfied with presiding over a health system in crisis. He might like to toast himself on his achieve ments at the end of the day with a very nice pinot noir, but the people who depend on the public health system in Australia and those who work inside that sector certainly do not share the minister's confidence.They know that over the last three years this minister has presided over three dramatic changes to the private health insurance industry that have been nothing but unmitigated failures. And now we have before us today, in debating the National Health Amendment (Lifetime Health Cover) Bill 1999 , the fourth reform. All the while, the public health system has slid further and further into crisis. The minister, in his desperation, has even ploughed $1.7 billion of public money into the private health insurance industry, and yet all the while he has ignored the one thing he should have done in the first place: concentrate the government's resources into making public hospitals and Medicare stronger. As I said, this is now his fourth major change in less than four years. You would forgive our side of the House if we were not too confident in its outcome, knowing what has gone on over the past three years.It all started, Mr Deputy Speaker, as you are well aware, in 1996 when the minister brought in the means-tested rebate for private health insurance, promising that it would fix the industry's problems. We all remember that. After 13 years in opposition telling us how they were `gunna do this' and `gunna do that'—they were great `gunnas'—to fix private health insurance, we on this side of the House expected at least to see some results. We saw some results all right—of the negative kind. The rebate failed miserably to arrest the decline of the private health insurance industry. It was egg on face time for the minister, and the first of many he was going to experience. The Prime Minister had promised an extra 1.8 million private health insurance members through this policy, an increase of 40 per cent. What he got was a good deal less. Only an extra 35,000 people took out private insurance, and that was for only one quarter.The private health insurance industry has pulled the rug out from under the minister within weeks of his introducing the policy by dramatically increasing their premiums and basically making that rebate worthless. Indeed, the private health industry has been its own worst enemy during this whole health debate, increasing premiums by an average of 4.9 per cent, two to three times higher than the rate of inflation, and making the public wary of its intentions and the services that it offers.Next the minister devised the one per cent Medicare levy surcharge, with the idea that it would force people on higher incomes to take out private health insurance. However, it was not too long before the minister realised that this idea was not up to scratch either. Soon after he had launched that policy, a secret minute from the minister's own department made it clear that the government was considering reducing the threshold at which the Medicare levy surcharge cut in—an admission, in anyone's language, that the original plan had failed and that more people had to be brought into the net. The one per cent Medicare surcharge failed because it did nothing to improve people's perceptions of the services offered by private health insurance. It merely attempted to herd people towards taking it up by introducing scare tactics and carrying a big stick in the shape of a tax penalty.Finally, perhaps in desperation, the minister unveiled his biggest plan, and his most embarrassing and costly failure to date, the 30 per cent rebate scheme. The minister introduced the 30 per cent rebate scheme secretly hoping that it would bring an extra 550,000 people into private health insurance membership at a cost of $1.7 billion a year. Indeed, the private health industry itself was saying that 2.5 million new enrollees would result from this wonderful measure, lifting coverage to 45 per cent. It has, of course, not come close to achieving either of these objectives, that is, the 550,000 as indicated by the minister or the 2.5 million as indicated by the private health industry.As the shadow minister for health said before, this has got to be the worst piece of public health policy in Australia's history. It is surely the worst targeted and most ill-considered policy to date as well. Of the $1.7 billion spent so far, $1.68 billion has gone to people already holding private health insurance—$1.68 billion paid for people already holding private health insurance. This means that over 99 per cent of the total cost of this rebate has gone to them. It is $1.68 billion just thrown down the drain. As the editorial in the Australian Financial Review recently stated:The non-means tested $1 billion-plus rebate was really a very inefficient way of supporting private insurance because it went largely to people who were already insured for a wide range of reasons.The government really should be looking at scrapping the rebate, which was born more as an election initiative than a reform.If this money had gone into public hospitals, where it could have done some good, it would have helped an estimated 275,000 extra patients. Instead it has gone into the pockets of a select few people with private health cover.It would not be fair of me if I did not admit that the $1.7 billion has indeed managed to add a few new people to the private health fund membership lists, `a few' being the operative phrase. It actually added a paltry 57,000 people to those lists. That is 57,000 people, when the government and the minister had hoped for 550,000. Fifty-seven thousand people stands for just a 0.2 per cent increase in the proportion of the population covered by private health insurance. That is how well targeted this government's spending of $1.7 billion has been. The $1.7 billion is spent, and all the government gets is that 0.2 per cent increase in the number of Australians with private health insurance. And the minister vainly tries to convince both himself and the rest of the country that this equals a surge—in his own words, a surge—in the sector's membership. This is also after trying to convince us that the $1.7 billion was not meant to increase membership after all; it was simply meant to arrest the decline in private health numbers. What a load of rot. Even if that was the case, does the minister genuinely think we should applaud the spending of $1.7 billion a year to simply tread water, to maintain the status quo in private health insurance numbers? To paint a better picture of just how grotesque this waste of money has been, we should remember that the Productivity Commission's review last year of assistance offered by the Commonwealth to various sectors around the country found that total budget support for the primary production sector came to $823 million, while assistance to manufacturing was $1.4 billion. In other words, the government has thrown more money away—$1.7 billion—on a failed private health scheme, a scheme that has brought no benefits to the health system in this country, than it has given in assistance to either primary producers or the manufacturing sector.There will be a future for the private health insurance sector in this country only when it recognises the need to convince Australians why private cover is such a good idea in the first place. If, as it stands at the moment, the products private health funds offer are regarded by the public to be poor value, the funds need to improve those services and products. Once these improvements have taken place, the government's role, if there is a role for it to play, could be helping the private health insurance industry get their message across—not trying to coerce people into investing money in a product that offers bad returns and bad results.The wrong way to go about improving private health insurance numbers is using scare tactics or penalties in order to push people into private cover. This has been the minister's preference so far, and unfortunately this bill before the House seems to now continue that trend. The minister and the government continue to ignore the one basic truth about private health cover: you cannot coerce people into taking it up. This bill seeks to introduce lifetime community rating for private health cover and, as I said earlier, signals the fourth major change that this government has made to its private health policy in just over three years. Indeed, as our shadow minister for health noted in her speech last night, this government is very close to bettering Malcolm Fraser's feat of five health plans in five years. Given time, they will catch up and pass him.Like the government's previous attempts at propping up the private health industry, the bill before us today features more of the same unfortunate trademarks. It has been poorly designed, it is based on penalties and punishment to push people into private cover and it is unlikely to meet the minister's or the government's targets. By offering an initial holiday period, the government is turning up the notch on the scare factor. `Join by this date and we won't penalise you; join after that and you'll be sorry,' is the stick they are wielding. It is attempting to scare people into buying a product that they often do not need and that some just cannot afford. It is also asking people, particularly our young people, to take a tremendous leap of faith that health insurance policies will remain the same and that they will be the beneficiaries in 40 years time.That is not just the opinion of the opposition. Health academics and professionals and political commentators alike support that particular view. The architect of Medicare, Professor John Deeble, has said that he does not believe the scheme will encourage people into private sector cover at all. Indeed, he believes it will lock people out because they will be put off by the penalties that increase every year that coverage is not taken up. Brian Johnstone, spokesperson for the Australian Healthcare Association, says the government's plan `still does not escape the reality that the suites of products'—meaning private insurance and hospitals—`they are selling are not very attractive.'Health policy expert from the Australian National University, Dr Gwen Gray, has criticised the targeting of the Lifetime Health Cover scheme by saying that it was just as likely to attract people who were unwell and used a lot of health care, when the minister's objective was to bring young, healthy people on board and subsequently reduce costs to the private insurers. Then there is Ross Gittins from the Sydney Morning Herald, who said:There's so much potential for the scheme to backfire. Faced with an ever-rising cost of insurance the longer they delay, people may become less motivated to `take their medicine', not more. And what about Russell Schneider, the chief executive of the Australian Health Insurance Association? Mr Schneider is someone the government would have depended on for his support of the scheme. His comments must have been a very severe body blow to the minister. Mr Schneider said that the scheme would not fulfil its objective of increasing private health cover membership among young, healthy people. He said, `Most young people under 30 can't afford it'—private health cover—`and most don't want health insurance anyway.' So why is the government chasing them?What all these commentators seem to agree on is that whatever penalty the government imposes—which in this case is an additional 2 per cent charge per year for anyone over the age of 30 who joins a private health fund, increasing to a maximum 70 per cent for people joining at age 65 or older—people will not apply for private cover if they do not think it represents good value. To be frank, at the moment the majority of people do not believe it represents good value. A recent survey conducted in Melbourne's Herald Sun newspaper showed that 86.6 per cent of respondents thought private health cover was a waste of money. The Australian Bureau of Statistics tells us that there are 1.3 million Australians between the ages of 20 and 24, and yet only 8,609 took out private health insurance in the last quarter. That equates to just 0.6 per cent of all Australians of that age.If people thought private cover offered them the health services they needed at a value for money price, they would quite simply join a health fund. The fact that they do not means the private health insurance industry needs to evolve to a position where it provides a product that is priced according to the benefits it offers. At the moment, many people, particularly the young and the healthy—those the government want to attract to private cover—consider that it is priced way above the benefits it represents. Private health cover's proper role in Australia should be to complement Medicare, not compete with it. Private health cover is there to play an auxiliary role to a strong public health care system. The private health insurance industry and the government should stop chasing after people who are not interested in private cover, and they should tailor the industry to become more attractive to those who might consider it necessary.As the shadow minister for health has already explained, the opposition does not oppose the principle of lifetime health cover, and we will not be voting against the bill in this House. However, the bill certainly falls short of the minister's so-called `last great reform' of the private health insurance industry, and we will give it our detailed consideration in the Senate. One aspect in particular that concerns our opposition is the current clawback provision which exists under the Australian Health Care Agreement, especially if the government intends to use it to withdraw more funds from the public health system and redirect them towards the private system. The clawback provision in the AHCA is a critical clause that states that, where private health insurance exceeds a particular trigger level of 34.3 per cent nationally, the states start to lose Commonwealth funding for public hospitals. If the participation rate gets to 36 per cent, the states stand to lose $200 million or more if the rate moves higher. While such an arrangement may save the government money, it may prove disastrous for an already financially strapped public health system.Increasing levels of private health insurance cover do not necessarily suggest that less people are using public hospitals and can therefore operate on reduced Commonwealth funding—the department of health has admitted as such—and this is the case for two reasons. Firstly, the young people that the government hopes to encourage to take up private cover rarely use hospitals. In other words, young people who may take out private insurance are not opting out of using public hospitals for private ones. They do not usually need any hospital at all—period. Secondly, lower cost policies with a high patient contribution have been marketed to attract people who would otherwise pay the Medicare levy surcharge but in most cases still intend to use public hospitals should they get sick. Take further funding away from the public health system as private cover numbers rise, and you place the system under even greater strain.This bill is introduced into the parliament during a climate of concern and crisis in the health system in this country. Public hospitals and Medicare are under strain like never before. We have seen the government throw away $1.7 billion on a failed private health initiative—a scandal for which this Lifetime Health Cover scheme is designed in no small way to cover up—and now we hear whispers concerning the sale of Medibank Private and even more ominous sounds from the government's friends concerning means tests for entry into public hospitals. Medicare and an adequate and accessible public health system should be the health priorities of this government, and we in the opposition will not let the government run away from this responsibility.Private health cover should exist for Australians who want it, who need it and who can afford it. The two, as I said earlier, should complement each other, not compete—and certainly not compete for Commonwealth funding. There should be only one priority in this regard—public health. Above all, we, as the opposition, will not allow the government's changes to the private health insurance contained in this bill—and whatever it plans for the future—to reduce the public health system to a shell of its former self. We will be watching very carefully and putting forward amendments in the Senate to make sure that, if this is the government's agenda, it will not succeed.11:39:006442Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—As has been indicated in the debate earlier, the opposition will be supporting the National Health Amendment (Lifetime Health Cover) Bill 1999 but will be using mechanisms in the Senate to raise some questions and concerns that we have with the possible outcomes of the bill. But I think it has to be said in the context of this bill that, of course, this is the fourth go in four years of trying to do things in a belief that the government can bolster the private health insurance sector.As the opposition has continually said throughout the debate, we believe that the government is misguided in having as its central plank of health policy an intention to increase coverage under private health insurance in the absence of other measures. Indeed, we have continued to put on the record our concern that, in fact, there are more efficient ways of improving Australia's health system than the measures that have been used to date to try to encourage people into private health cover. My colleagues have emphasised this throughout the debate.Regrettably, those opposite have not been willing to listen to what is the core of the case that we are putting. Later in my contribution I want to discuss in part the effect of ongoing policies not only at Commonwealth level but at the state level for the provision of public hospital care in the region that I represent. But insofar as this legislation attempts to—by the notion of lifetime health cover—bring an element of risk rating into the funds and move away from the requirement that private health insurance be community rated, as has been stated, the Labor Party in principle supports this.We have some observations about the way in which it is being implemented. There is concern that down the track it will, yet again, not lead to a reduction in the cost of being in funds, because—it should be recognised from the outset—it introduces a penalty on the basis of age and other requirements on people who join the funds. When we look at the cost of the previous measures that the government has introduced to try to encourage people into health funds—we look at a sum quantum of $1.7 billion a year—one has to ask whether that amount of money could be put to better use.It is interesting that this piece of legislation is vaunted as arising out of the first recommendation of the Industry Commission's Report No. 57—Private health insurance, 28 February 1997. Indeed, the Industry Commission recommended that the notion of community rating for private health insurance be removed. But also it is a little intriguing if we look at some of the comments that were made by the report, especially at that time, about policies that had been announced in 1996 for a package of rebates and levies to encourage membership of private health insurance. In the report the Industry Commission makes it quite clear that there are actually two aspects to that package—which was, of course, a smaller means tested package at the time and is now a 30 per cent rebate for all.One of the things that the Industry Commission highlighted was that they believed the rebate did not cost-effectively relieve pressure on the public system. They also indicated and queried whether this really had the types of effects that are claimed by the government on the range of choices available to consumers. As the opposition has stated continually, the effect of the rebates was that they were generous in that they went to those who were already insured. In the report of the measure that they were then discussing, the commission said that roughly $9 in every $10 of the rebate would be directed to those who were already in the funds. The commission went on to say:. People who take up private health insurance as a result of the incentives are more likely to be lesser users of the public system in any case. Older and lower income people are the most intensive users of the public system—and the rebate is unlikely to make private insurance attractive to many of them.So why does the government continue to rely on a series of policy initiatives which are of very dubious outcome? The opposition hopes that in this measure there might be a little ray of sunshine, and that the government might be reconsidering the overall thrust of what it hopes to achieve. But in saying that, we again emphasise that we do not believe that these measures should be at the expense of the public health system.Therefore, the opposition believes that there needs to be a thorough investigation of the impact of increased private health insurance membership on public health funding. It is clear that, under the Australian Health Care Agreement, the states signed off on a measure that would see them losing funding on the basis of an increase to an agreed level of coverage. This underlines our concern that the government, rather than having a belief that the public health system should work in a complementary fashion with the private health system, has built a degree of competition into the funding mechanisms.Having said that, I think we need to stress the point that these measures have all been directed at the private health funds. In fact, the government has not directed its concern or its measures to looking at the way in which services are provided in the private health system. There is a distinct difference between the ways we should be looking at those things. One of the reasons for underscoring that it would be more efficient to have the public health system directly funded rather than these measures is that there would be a greater degree of control over the way in which those resources would be used. For, indeed, the private health insurance system is merely a system of payment.There is much literature which indicates concern that this move towards concentration and reliance on the private health insurance sector does not contain potential cost blow-outs in the health system. In fact, looking at the way the public health system actually works in tandem with the private health system, and the fact that from time to time there is a crossover of patients in those systems which have different direct funding mechanisms for their treatment, it is more important that governments at both Commonwealth and state level can control the costs.I indicated from the outset that I wished to particularly mention my concern with some of the things that are happening in the public health system in my electorate of Scullin. The history of those concerns involves the Commonwealth government because, within the northern suburbs of Melbourne, we have seen a consolidation of the previous repatriation hospital with the Austin Hospital, and a rationalisation of the provision of public hospitals along the Bell Street corridor which led to the closure of PANCH Hospital and the opening of the Northern Hospital in Epping.There has been a great degree of dissatisfaction within the local community with each of the elements in this development. The Austin Repatriation Hospital has now been offered for private sale. This is a sale that is having a very rocky road, with the Victorian government's role being seen as very ham- fisted. The expected costs to any prospective buyer have changed over time. Awareness has grown about the type of sale that is envisaged, because this is an acute care teaching hospital and its sale is without precedent. This has led to a degree of identification of what would be expected of a private concern in running it, as this had not really been envisaged and thought through.Previously, I have raised the concerns of people within a number of public hospitals about the move to outsourcing of, for instance, pathology services. Where those hospitals are teaching hospitals, this has led to a degree of concern about how the teaching element of those hospitals can get access to services such as pathology. This issue remains at the core of some of the concerns that have arisen over the Austin sale. If, in fact, the Austin and Repatriation Medical Centre is sold to a for-profit organisation with a responsibility to make profits for its shareholders, how can we protect those teaching and research aspects of the institution? Indeed, as these aspects would not have any direct profit-making element to them, one has to query whether there would be any commitment from a purchaser in those circumstances.The other thing that has to be said about the Austin Repat is that over the last two to three years it has been in continual financial crisis. Last year, there was a bailout of approximately $5 million to enable the day-to-day running of the hospital. Earlier this year the theatres were closed down, for non-elective surgery, for a period of four to five weeks to get over a cash flow problem that the hospital had. The reserves of the hospital have been run down and reduced considerably and the deficit is over $20 million.This is an extraordinary amount of money. It is of continuing concern for the local community that relies on the services of the Austin Repat. The two institutions that the Austin Repat replaced—the Austin Hospital and the Repatriation General Hospital Heidelberg—had very fine reputations as institutions of excellence. In each case they had research centres in particular aspects of medicine that were well renowned. The community had an expectation that, under a merged entity, that would continue. I stress that that merged entity in part arose from the agreement that the previous government made—continued by this government—with state governments about integrating the repatriation hospital system with the state hospital systems. I know that in particular in the veterans' community there is still continuing disquiet about the outcome of that.Whilst I acknowledge that there has been continuing development of the agreements between the state and the Department of Veterans' Affairs about the appropriate access to hospital services for veterans, there is concern as we see the rundown of these institutions and this move towards privatisation—which it is clear, and it is becoming even more apparent, is really on the basis of ideology rather than any efficiencies that can be gained. Last week the Age, in an editorial headlined `Putting the Austin at risk', said:The Government has so far failed to justify the hospital's privatisation.In an insight article, the Age had indicated that it was now down to two bidders. One of those is a not-for-profit bidder—the Sisters of Charity, a Catholic order of nuns. The editorial went on:But it is rumoured that the Treasurer, Mr Alan Stockdale, and other key figures strongly oppose the Catholic bid on the basis that selling to a charity would not represent a true privatisation. This suggests a preoccupation with ideology rather than outcomes.This is of concern. Other elements to this sale that are of concern are that many of the aspects of the sale are shrouded in secrecy, those that are involved in working in the Austin have been gagged by confidentiality agreements and other aspects of the commercial arrangements have been given the title `commercial in confidence'. This leads to the community being very concerned about what is actually happening and not being given access to the proper information.Some might say that this is directly a state matter. But at the end of the day there will be a considerable benefit to any buyer of the Austin and Repatriation Medical Centre by way of income for the payment of public patients at that institution. Those public patients will be paid for under the agreements between the Commonwealth and state. If this fiasco continues without the Commonwealth taking an interest in trying to make sure that there is a proper and justifiable outcome, then I think we as a Commonwealth parliament are abrogating our responsibilities.The other associated matters about the provision of public hospitals in the local area in the northern suburbs of Melbourne concern the closure of the PANCH hospital. PANCH was the Preston and Northcote Community Hospital, and it truly operated as a community hospital. Those people that lived in the suburbs it served had great affinity for it. When that institution was closed and the new institution at Epping—the Northern Hospital—was opened, there was a promise by the state government that there would be health provisions at the PANCH site. The state government indicated that it would provide a range of day surgery, renal dialysis, chemotherapy, medical procedures, outpatient clinics, diagnostics and aged care programs. Now, two years down the track, not only is the community that surrounds the PANCH site still waiting for this promised integrated care centre; it has been indicated to them that they will be waiting a long time, because in fact the state government has the intention of selling the PANCH site.I have to emphasise that, as part of the deal for the integration of the state and Veterans' Affairs hospital systems, as part of the deal to rationalise the hospitals in the Bell Street corridor, there was an element of Commonwealth funding that was offered to ensure that the Northern Hospital at Epping was built and opened. We were there directly as a special element of funding of that institution. We have a responsibility to revisit what has actually happened, to revisit agreements that were made over the provision of those services in the Bell Street corridor and then further up into the northern suburbs, and to ask whether what was has happened is what was promised. Even the Northern Hospital, which has just celebrated its first birthday, is trying to grapple with a deficit of the order of $1.7 million on its recurring funding—without any access to the additional funds that a stand-alone hospital would have because it is now a member of the north-western network. The importance of this type of bill should be seen in the context of our overall health system. The private health system and the public health system need to complement each other. (Time expired)11:59:006445Theophanous, Andrew, MPDr THEOPHANOUSQJ4CalwellALP00—I am happy to be participating in this debate on the National Health Amendment (Lifetime Health Cover) Bill, especially in view of the fact that one of my responsibilities between 1993 and 1996 was to hold the position of parliamentary secretary to the minister for health. I will begin by saying that the Hon. Graham Richardson, who was minister for health at the time I was parliamentary secretary, has been quoted out of context in government statements about this issue. The government is fond of quoting former Senator Richardson in respect of the need for changes to private health insurance and the need to boost private health insurance. Indeed, he was a minister concerned with that. But I want to make it perfectly clear that his approach was quite different from that which the Howard government now envisages.I believe that the government has unfairly quoted former Senator Richardson in respect of what he was trying to do when he was health minister. In fact, what he was trying to do was to strengthen private health insurance, but within the context of retaining and further strengthening Medicare and the whole public hospital system. In other words, Graham Richardson was trying to have a balanced approach which created both of those situations. That indeed now is certainly the position of the Labor Party. The Labor Party is concerned to ensure the survival and strengthening of Medicare, especially in relation to public hospitals, but also to assist in putting in place a private health system that works and a private health insurance system that works.It is interesting that, as we enter the fourth year of the Howard government, there have been four attempts—four different additional elements—to fix up what it considered to be the problems of private health insurance. And each time such an approach has been put into place, we have been told, `This one is going to work; this one is going to be terrific. Don't worry about that—this one is going to get people into private health insurance, it is going to keep them there, and they are going to be very positive about private health insurance.'As you would be aware, Mr Deputy Speaker, the last exercise—the one that we saw last year—was an extremely costly one. One and a half billion dollars—that is $1,500 million—went not into the general health system of Australia, not into the public hospitals, but into helping people maintain their position within private health insurance. And why did we come to that point? We came to that point because the government was not prepared—and still is not really prepared, as I shall explain shortly—to take up the issue of why private health insurance premiums constantly go up.It was a bit of a joke to say to people, `Oh, look, here is this 30 per cent rebate that the federal government is going to supply for your private health insurance.' Why was that rebate required? In the government's own terms, it was required because private health insurance had become too expensive for people. We will have to examine the question of why it has become too expensive. But what happened—this was the hoax to which the Australian people were subjected—was that within only a few short months of the rebate coming in, the vast majority of the private health insurance companies put up their fees. And did they put them up in line with increases in the level of inflation? No, they put up their fees significantly above that. Some put their fees up 20 per cent. So you get this rebate from the government, supposedly to help you with your private health insurance, and then the next thing you know you have been slugged with a big increase by your health insurance company.What are the main reasons why people are dropping out of private health insurance? One reason is the constant increase in premiums. But there is a second, very important, factor which Senator Richardson identified and which this government, until about two weeks ago, was not prepared to do anything about. I refer to the problem of the gap. It is distressing for people who have private health insurance to find that after they have been to a private hospital they are issued with a big bill on top of their private health insurance premiums and the Medicare levy—the so-called gap. If you are in hospital for a few days, this bill can amount to a few thousand dollars for additional services which are not covered or for the gap in terms of doctors' charges, the operating costs and even the actual stay in the hospital.The aim of the Richardson proposal was to try to close this gap, and nothing was done about this until two weeks ago when the government was seeking to get the support of Senator Harradine for a certain matter that everyone is aware of. And what happened? Senator Harradine raised the issue of this gap—not only in that context but in the context of supporting this legislation. He raised this issue and, for the first time, we have the government reluctantly trying to do something about the gap question.Of course there were tortuous discussions with the AMA. Senator Richardson, when he was the minister, also had tortuous discussions with the AMA. But there is a difference: the AMA, at the time when Senator Richardson was trying to do something, was totally hostile to the Labor Party and anything coming from the Labor Party—even sensible proposals. We still have a situation today where the majority of the doctors' representatives still do not want to close this gap. They do not want to close this gap because they do not want insurance companies to have arrangements with specific private hospitals which would allow this gap to be closed. This country has to decide about its health system. Do we want a health system in which costs are going to be contained or do we want to go the way of the United States where health costs have become ridiculous and some people, if they go into hospital, have to virtually mortgage their houses and everything they have in life in order to pay for medical expenses if it is a serious operation? Hopefully, we will never get to the American model.Our model, Medicare, is a good system, but our model has the problem in relation to private hospitals and private health care of the increasing size of this gap and the increasing payments which people have to make on top of private health insurance. This issue has to be addressed if we are serious about the health system. The way this issue has to be addressed is through discussions and negotiations between the government, the private health insurance companies, the private hospitals and the doctors that serve in private hospitals. Nobody is saying that doctors and specialists should not get a good income. Nobody is saying that, but where the incomes become excessive and such that they threaten the whole survival of the system we are really in trouble. So I say to the minister—whom I have some regard for, I might say—get on with the job in terms of the gap insurance issue. Get on with the job—go and talk to the private hospitals, go and talk to the private providers. Let us close the gap. Let us do something really serious in this area of reducing costs because it is only when we do this that we are going to get the premiums for private health insurance reduced, rather than having the ridiculous situation, as I mentioned earlier, where the government gives a rebate on the one hand and the health insurance companies take on the other.This idea of lifetime insurance has a lot to commend it. The opposition is supporting the general principle—we are saying it has a lot of good things to commend it—but the very question that I have raised to this point is still not dealt with. We have this situation where we are going to try and encourage and even push younger people and people who do not use medical services very much to in effect safeguard their future by getting them to start paying for private health insurance at an early age—fine—and for a lifetime—fine. But what are we saying? We are going to do all this, but we are not going to say anything to the private insurance companies about reducing their premiums. They are going to get a windfall out of this and we are not doing anything at all about them reducing their premiums. Of course you have a situation where those between the ages of 30 and 65 will have to pay significantly higher premiums. So not only are we not reducing the premiums on the young for coming into the system but also we are going to significantly increase the premiums for those above the age of 30. We are going to increase their premium costs, but we are not saying to the insurance companies, `Hey, what are you going to do for the community? Are you going to reduce your overall costs or are you just going to take this additional amount and put it in your pocket and profit from it?'One cannot be very encouraged by the comments of the private insurance organisations on this matter, and my view is this bill ought not get through the Senate until provisions are put into it that deal with this issue. The opposition is going to look at this question very carefully, I can assure you. We have recommended that the bill, when it goes to the Senate, go to a references committee and that people be able to put their case in relation to this matter. We hope that the references committee will look into this issue and make recommendations in relation to the insurance companies and what they are trying to do in this situation.I do not think the Australian people are going to be very happy to give a huge windfall to the insurance companies and find that they are doing nothing to reduce premiums overall. The companies say that they are active, but they are not really active in getting the agreements that are required to close the gap. So we must address the issues of the increasing cost of our health system. A proportion of it is due to increased technology but also a significant proportion of it, unfortunately, is due to greed and to the idea that people are going to take more out of the system than they should be entitled to. As I said before, specialists and medical people should be entitled to a generous salary, a good salary, for their contribution. I have always had very great concerns, I might say, about the fact that we allow in this country medical specialists to be owners of private hospitals. In general terms, we have a problem with conflicts of interest, but in this situation we do actually have a significant number of private hospitals which have as their owners or part-owners medical specialists, very often the very same medical specialists that are working in those private hospi tals. That is a matter that ought to be looked at with some concern.I have raised this big issue about lifetime cover. We have to make sure that the lifetime cover is not such that people, especially those between 30 and 65, who are going to pay more are paying so much more that we will end up with the opposite of what the government is trying to do. That is to say, we could end up with a situation where nobody between the ages of 30 and 65 is going to be very interested in getting private health insurance. We have to look at this in a way which deals fairly with all the actors. As I said before, this was an issue which Senator Richardson did want to take up—that is, the way we could get agreements between the specialists, the people who work in private hospitals and the private hospital entrepreneurs and the health insurance companies so that we could close that gap.I want to turn to a matter that has been raised by a number of my colleagues. Here we are, moving around in desperate ways trying to fix up the private health insurance system without, as I mentioned, tackling the real issues. We also have the problem that, in so doing, we spent last year $1.5 billion on this. Meanwhile, our public hospitals continue to be run-down and continue to have insufficient resources.Why hasn't the government been able to find more money for public hospitals, which are the core of the Medicare system? Without having that core there, without having that base to provide the whole foundation of our health system, we are not in a position to deal with the other issues. Private health insurance should be something that people have on top of the guarantee that they have that the Medicare system and the public hospital system and the free doctor system that we have under Medicare is going to remain and is going to be paid for.It is remarkable that all the states together went to the Commonwealth and said, `Give us $700 million to $800 million and we will fix all the problems in our public hospitals,' and the government responded, `Oh, where can we find that money? Oh, what about the budget surplus? What about all these other factors? We can't find that sort of money. No, we can't do that.' But then, all of a sudden and out of the blue they can find $1,500 million to try to save the private health insurance system and they can give that as a bonus to people and support the private health insurance industry without requiring a single thing from them. And this is supposed to be wonderful public policy.I say this to the minister for health: get tougher on those people who want to use the system for greed rather than for service to the community, get tougher on the private health insurance providers and make sure they do their duty, especially as they are going to get a windfall out of this. Also, get tougher on the providers in private hospitals and the others to come to agreements and arrangements to close the gaps. The federal government have enormous powers in this area and they ought to be using those powers instead of sitting around being befuddled by people from the Australian Medical Association and other groups that do not want to achieve an agreement. Let us get an agreement in this country and let us resolve these issues. (Time expired)12:19:006448Emerson, Craig, MPMr EMERSON83VRankinALP00—Labor will not be opposing this National Health Amendment (Lifetime Health Cover) Bill 1999 , but it is yet another attempt to increase private health insurance coverage—the fourth health policy in four years of the coalition government. In this respect the coalition is remarkably consistent. It had seven different health schemes in seven years of the Fraser government and now it has had four different health schemes in four years of the Howard government. Coalition governments are maintaining their average of a new variation on the health scheme every year.We have seen a means tested private health insurance rebate introduced by this government. That did not achieve the stated objectives of increasing private health insurance coverage. It was followed by a non-means tested private health insurance rebate of a massive $1.5 billion a year. That second non-means tested rebate had more to do with disguising tax cuts for high income earners under the government's tax package than with good health policy. Under the package, the tax cuts were already extremely high and the government needed to figure out a way to put a little more icing on the cake. It came up with this scheme of giving $1.5 billion to private health insurance policyholders on a non-means tested basis.The Minister for Health and Aged Care would have to be very disappointed with the response to this massive new rebate. He is grasping at straws if he thinks that the take-up figures that have been released to date are good. They are very disappointing indeed. We find a situation where the Minister for Health and Aged Care has to look at yet further changes to the government's health policy to try to increase private health insurance coverage. They sought to do so under the $1.5 billion scheme through a large advertising program which has been judged, independently, as highly misleading because it told all Australians that they were entitled to a 30 per cent rebate whereas in fact those who already had access to the means tested rebate would not be getting anything like 30 per cent. This is yet another example, unfortunately, of the government spending taxpayers' money on highly misleading and false advertising.The coalition's track record on health was not lost on the then shadow minister for health, the Hon. Peter Shack, when, in July 1989, he told a private medical seminar:We went through Medibank Marks 1 to 4, or 4½ or 5, when we were last in government. Since we have been in opposition we have had four health spokespersons and we have produced four health policies—two of which were never made public. I think the last one in the 1987 election probably lost us votes instead of winning us votes.The shadow minister made those candid comments in a private seminar because he felt confident that he would not be reported. He was in fact reported. There have been seven health policies in seven years in government from the coalition. In opposition, there were four health policies by four health spokespersons up to 1989, followed now in government by four health policies in four years.The reason we are contemplating the bill before us today, the National Health Amendment (Lifetime Health Cover) Bill 1999 , is that the Prime Minister has never been com fortable with Medicare. He told the John Laws program on 1 June 1987, just before the 1987 election campaign:There will be many major reductions in health, the Medicare system is a total disaster, we will be proposing changes to Medicare that amount to its de facto dismantling. We will pull it right apart.Three days earlier, on 27 May 1987, the current Prime Minister told the Alan Jones program:What I'm going to do is take a scalpel, without punning too much, to Medicare. I'm going to say to people if you want to get out of Medicare and make your own private health insurance arrangements you can do so. They will be given an incentive to do it. They will not have to pay the levy. I'll get rid of bulk billing completely for people rather than pensioners. I'll free up the whole private health insurance market so that health funds can in competition with each other offer a variety of packages to help consumers.Those are the words of the current Prime Minister of Australia. Don't they give us a sense of deja vu?The bill before the House today has precisely the effect of freeing-up the private health insurance market. That is the first part of the Prime Minister's long-held and long-cherished agenda. The second part is taking a scalpel to Medicare—his dear ambition, thwarted only by the huge public popularity of Medicare. That is why the Prime Minister's strategy has moved from a public commitment to `take a scalpel' to Medicare—to `pull it right apart', to use his words—to a new strategy of dismantling Medicare by stealth. This dismantling of Medicare by stealth by the Prime Minister is a reluctant acknowledgment of the revelation by the then opposition health spokesman, in July 1989, to the same private seminar to which I referred a moment ago, where the opposition spokesman said:The political strategy is to recognise, regrettably, that the constituents whom we have to win are wider than this room and Medicare does have substantial support.The dismantling of Medicare by stealth by the Prime Minister involves three stages. The first stage is to starve the public hospital system of funding, and this government is doing that. In its first two budgets the government cut $800 million from the public hospital system. The second stage is to increase subsidies for private health insurance. As I indicated earlier, the first was means tested. The second, enacted late last year, was a $1.5 billion annual subsidy with no means test at all. The third stage is to refuse to inject extra funds into the public hospital system so that it becomes at best a safety net for struggling Australian families. But the Prime Minister hopes the cash starved public hospital system will eventually fall into disrepair and disrepute and then he can realise his dream of taking a scalpel to Medicare.The Prime Minister should heed the immortal words of the shadow minister for health on 25 January 1990 in a famous press conference on the eve of the 1990 election campaign. The shadow health minister held that press conference to announce that the coalition did not have a health policy at all going into the 1990 election, after promising for more than two years that they would have one. At that famous press conference, the shadow minister uttered these immortal words that the Prime Minister should heed:You might accuse us of a lot of things but one of the things I don't think we're guilty of is learning from our past mistakes.How true that is. This government has never learnt from its past mistakes on health. In a great moment of candour, that point was readily conceded by the shadow health minister in 1990 when, rattled at a press conference where he had to announce that after two years of working on a policy to take a scalpel to Medicare, to dismantle Medicare, to pull it right apart, they had no health policy at all. The reason for that is the overwhelming popularity of Medicare. They knew that they could not go to the 1990 election with a stated policy of destroying Medicare, so they went quiet; they abandoned completely any pretence at a health policy. In that same famous press conference, the shadow health minister said a few minutes beforehand:Now I want to say to you, with all the frankness that I can muster, the Liberal and National Parties do not have a particularly good track record in health and you don't need me to remind you of our last period in government.The Prime Minister should learn from his past mistakes, but he will not. He advocated a goods and services tax way back in the early 1980s and, 20 years later, he is prosecuting it. The Prime Minister advocated the dismantling of Medicare 13 years ago, and he intends to achieve it—this time by stealth.But that does not mean Labor opposes the legislation before the House. What we do oppose is the denial of adequate funding for the nation's public hospital system. As my colleagues on this side of the House have pointed out, the states made representations to the government that for $750 million—half the amount that is being splurged on a non-means tested private health insurance rebate—they could fix up the problems in the public hospital system. But the Prime Minister said no, because that would not be consistent with his agenda of dismantling Medicare by stealth.This bill introduces Lifetime Health Cover. It encourages people to join a private health fund earlier and to stay in it. In virtually all Western countries, private health insurance is risk rated, not community rated, and I have no difficulty with private health insurance, as a concept, being risk rated rather than community rated. But Labor's objective is to strengthen Medicare as the best route to controlling medical costs and avoiding the disasters of, for example, the American system, which costs a much higher proportion of gross domestic product than the Australian system.The role of private health insurance should be to complement Medicare, not to replace it, as the Prime Minister wishes. Labor is able to support this legislation because the measures it contains can lead to complementarity between private health insurance and the Medicare system—hopefully, an improved private health insurance system and improved coverage of private health insurance but as a complement to a strong, viable Medicare system. That is not a third-rate Medicare system which falls into disrepair and disrepute, as the Prime Minister wishes, so that over time it loses community support and he can then move on Medicare, not by stealth but by a stated public policy. That is what he would love to do. He would love to reannounce his 1987 commitments to tear Medicare apart, to pull it right apart—to take a scalpel to Medicare.I hope and trust that the Minister for Health and Aged Care does not share the Prime Minister's view that the way forward on health policy is to dismantle Medicare. I hope and trust the Minister for Health and Aged Care is committed to private health insurance complementing a strong, viable public health insurance system. For us on the Labor side, a strong health insurance system in Australia would involve a combination of a competitive private health insurance system and a publicly funded Medicare system, but it does not involve realising the Prime Minister's dream of taking the scalpel to Medicare and pulling it right apart.We are able to support this legislation and we hope it achieves its stated objectives, but we say to the government: do not try to take any further measures to dismantle Medicare—to make it a third-rate system that falls into disrepair and disrepute—because I can provide the assurance that Labor will always support the Medicare system. We would, in government, ensure that it is adequately funded and we do not want to see any further instalments on the Prime Minister's agenda of pulling Medicare right apart. With those words, I say once again that we support this legislation and we trust that it will be put in place to complement a strong public health insurance system in the form of Medicare.12:34:006451Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—in reply—I thank honourable members for their contributions in this debate. The National Health Amendment (Lifetime Health Cover) Bill 1999 introduces an important structural reform to ensure the continuing stability of both public and private health sectors. It is a policy with long-term rewards for Australians and the system will benefit the whole country. This is not a quick fix or a bandaid solution; it is based on a recommendation that came out of the Industry Commission inquiry into private health insurance in 1997. We have developed and refined the scheme through comprehensive actuarial modelling and extensive consultation with consumer and industry groups since 1997.Lifetime Health Cover is a carefully considered part of an overall plan to improve the performance of the private health insurance industry in the medium to longer term for the benefit of all Australians, whether or not they choose to take out private health insurance. Both the public and private health sectors in Australia are under pressure. When Medicare commenced in 1984, its long-term viability was predicated on a viable private health insurance sector. Neglect of this sector over many years has created unsustainable pressure on the health system as a whole. By seeking to stabilise numbers in private health insurance and improve the risk profile of people with private hospital cover, Lifetime Health Cover will improve the stability of the private health insurance industry and ease the pressure on the public hospital system.I note in some of the comments that have been made throughout the debate that there have been certain allegations made. I will comment very briefly on some of those. My first comment concerns the motives of the government in doing this. We saw from the Industry Commission's report in 1997, now the Productivity Commission, that one of the big difficulties that private health had was adverse selection, that is, people who are older and sicker tend to—the honourable member should stay for a moment—be the ones who stay in and this leads to a bad risk profile. If we can improve this, it will have two effects. The first effect is that it will slow premium increases. This does not mean that it is going to happen overnight. The Trowbridge report suggests that it will happen over a decade, but it also suggests that premiums will be roughly 10 to 15 per cent less than they would have been if nothing had been done.The second reason for doing this is to stabilise health fund membership. This has proved particularly difficult, although we have certainly had some success in reducing the number of people who have dropped out of private health insurance. I notice that the Labor Party was very happy to dance with glee after one quarter's results—to pronounce what we had done as a failure. Things take much longer than that, and with Lifetime Health Cover it will be three to five years before we get the full effects, but we do believe it will slow the drop-out rate and we have very good evidence that this will help stabilise health fund membership.The member for Rankin made certain comments about a speech which the Prime Minister made in 1987. The Prime Minister certainly does not walk away from this speech, made 12 years ago. As someone who has been his health minister for over three years, I can say his views now are very different. We have no plan now or at any time in the future to dismantle Medicare and for the member for Rankin to suggest any further measures to dismantle Medicare is quite misleading.The only thing that has put Medicare under pressure is the neglect that happened with Medicare over many years by allowing costs to blow out in an unsustainable manner, so that when we came into government we had the PBS going out at 6½ per cent per year compound.Ms Kernot interjecting—8E4Wooldridge, Dr Michael, MPDr WOOLDRIDGE—Yes, we have been stunningly successful, more successful than any other OECD country. We now have the long-term rate of growth of health under GDP—something you could only ever dream about.Finally, the member for Rankin mentioned ensuring that the health system is adequately funded. Certainly, the system does need to be well funded. The Health and Aged Care portfolio is a large amount of money, about 15 per cent larger than the budget for the state of Victoria. We have been able to put substantial amounts of new money into areas of importance. One is the public hospital system where, over the five years from 1998 to 2003, there will be a 17 to 19 per cent real increase in funding over the previous five years, 1993 to 1998.This is the reason why, at a state level, health is not as much of a contentious issue as it was in the first half of 1998. This agreement is in place, substantial new money is flowing into public hospitals and states are finding that they now have resources to do things they were never able to do under the previous agreement with the Labor Party. Quite frankly, the Labor Party had conned the states.This bill is a substantial reform. We have thought it out carefully. I think we have all bases covered. There is provision for hardship. There is provision for different groups like the Defence Force, people who may be overseas and people who leave the country for various lengths of time. We believe it is a fair and equitable system and commend the bill to the House.Question resolved in the affirmative.Bill read a second time.6452Leave granted for third reading to be moved forthwith.Motion (by Dr Wooldridge) proposed:That the bill be now read a third time.12:40:006452Lee, Michael, MPMr LEEMG4DobellALP00—I wish to put a question to the minister. I am not aware of the minister responding to this question, which came up during the second reading debate. A number of government backbenchers have used the expression `this legislation will reduce premium increases and stabilise fund membership'. I am wondering whether the minister might give the House the same assurance. If he is prepared to make the statement that this will reduce premium increases, is this the average premium that will be paid by all fund members or will there simply be reduced future increases in the base premium, which is a rather bogus figure, given that there are going to be a large number of people paying more than the base premium? Is the minister prepared to make that guarantee and is it the average premium or only the base premium?12:41:006452Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—If the honourable member cares to read my contribution in Hansard —unfortunately, he was not in the House for that a few minutes ago—he will see that he has comprehensively lost a can of Coke.12:42:006452Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—by leave—I wonder whether the minister could clarify, for the benefit of the House—I apologise for not being in here when he started his remarks—the point about whether or not it will be the base premium that comes down or the overall average premium. That is the first point. The second point is: it would be helpful if he could also respond to the remarks I made last night. I understand some work has been done, some actuarial advice, which the department has available which shows that the department expects to see an increase in the level of private health insurance up to 36 per cent. I would be interested to know whether the minister intends to make that material available publicly so that we can understand the actuarial position.12:43:006453Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—by leave—I do not want to push my luck, but to have the Labor Party vaguely support something the government does in health it is worth being gracious. On the latter point, the figures that the honourable member raised are out of the Trowbridge report; I cannot see any reason why we should not make this available to the opposition. I would be happy to do so. I would caution, though—given that the opposition seems to have had a preoccupation for 3½ years with certain figures, with two shadow ministers on the bench at the moment—that these figures are predicated on a number of assumptions that we have changed in our model.The model we have introduced into the House is not as severe as the original model, that is, the age of entry is 30, not 35; the step-ups are two per cent, not 2½ per cent and they finish at 170 per cent of base premium at age 65 rather than 200 per cent of base premium at age 75; and people over 65 are exempted for life. The original figuring was on a whole different range of assumptions. Even if Trowbridge is correct, the changes we have made will seek to lower that level. I think it would be very unlikely that we would see the increase they propose.I also point out that that increase will occur over a number of years; it will not happen overnight. It will be a slow thing as the drop-out rate from private health insurance is affected, and that may have the numbers drift up a little bit. Given that this does not start till 1 July 2000, I do not believe the issue of clawing money back from the states is a valid one. The agreement with the states will then have three years to run. Any drift up in premium numbers will be over a period of three to five years. If the states do not like it or it is coming to hit the target figure at which we review funding, I imagine they would not negotiate that sort of thing in the next agreement in 2003. We would not expect to see its full effect until then.As to the effect on premiums, again this is an imprecise science. As I remember the Trowbridge report—and it is in the report so the honourable member will have access to it when I make it available—they are talking about the base premium and that would be lower than it would have been if we had done nothing. Given that everyone is grandfathered into it by 1 July 2000, even in 2010, 10 years after it is introduced, probably the majority of people with private health cover will still be on the base premium.Question resolved in the affirmative.Bill read a third time.Bills6453r8246453Debate resumed from 2 June, on motion by Mr Anderson:That the bill be now read a second time.12:46:006453Kernot, Cheryl, MPMs KERNOTXW4DicksonALP00—The Stevedoring Levy (Collection) Amendment Bill 1999 pretty much reflects everything else this government has done in the area of so-called waterfront reform. By that, I draw the distinction between what is up-front and on the table and the way in which that is a completely different creature from what is beneath the surface. The opposition will not delay passage of this bill through the House. But we will be referring it to a Senate committee, and we do not rule out amending or even opposing the bill, following the committee's examination of it. We are taking that action because we are not convinced this bill is what it purports to be.On the surface, there is an increase in the appropriation cap contained in the Stevedoring Levy (Collection) Act from $250 million to $350 million—an increase of $100 million. The government says that that increase is to meet the cost of higher than expected redundancies from the stevedoring industry. People might say that, at face value, that sounds reasonable. The rate of the levy will not change from the current $6 per vehicle and $12 per container; instead, the government says the period of collection of the levy will be extended by a couple of years to meet the appropriation increase.When the Stevedoring Levy (Collection) Act 1998 was introduced, it set a limit of $250 million that could be authorised for stevedoring reforms. Now, as the explanatory memorandum puts it, `the estimated number and cost of redundancies is greater than anticipated'. The memorandum continues:Therefore, the Government is seeking to ensure that it is able to authorise funding to meet the total expected cost of redundancies and ensure that sufficient funds are available for other worthwhile reforms and to meet the administrative costs associated with collection of the levy.That is what is on the surface, and a quick glance might make it all seem very reasonable. But further investigation of what is beneath the surface shows a rather different picture emerging. Last week, before the Senate Rural and Regional Affairs and Transport Committee, the Department of Transport and Regional Services Maritime Division gave evidence that the current estimate of the total payout—that is important—for redundancies was `in the order of $195 million'. Remember that we had a cap of $250 million and the department says the total estimate so far is $195 million. What does that $195 million cover? We were told at the same Senate committee hearings that it covers all applications for funding for redundancies received by the Commonwealth.The obvious question is: is everybody expected to apply for this? We are told that this $195 million includes two applications yet to be approved by the minister and forwarded to the Maritime Industry Finance Company—known as MIFCo—for investigation and payment. It is important to note that the closing date for applications was 30 April. What that means is that unless the government makes a deliberate choice to admit further applications—and it has not indicated that it intends to do so—all applications for funding for redundancies are now lodged. And the department estimates that that is all going to cost $195 million—and remember that we still have $250 million. That is a $55 million shortfall on the initial cap of $250 million.That raises the question: what is the further $100 million for? In his second reading speech, the Minister for Transport and Regional Services says the funds are also available for stevedoring companies for non-redundancy related reforms. He refers to activities covered by section 18 of the act: the introduction of new technology, new wharf facilities, occupational health and safety training programs or programs aimed at improving employees' ability to use new equipment. Is it reasonable that these could add up to $100 million? Even if you put millions in each of these areas, it could be argued that this would be wildly out of kilter with funding allocations in similar areas in other portfolios and other agencies. Not only that, the scope of section 18 of the act is wide enough to permit funding of a fairly broad range of activities. That is what we need to keep a particularly close eye on. For example, it allows for payments in respect of activities in connection with the reform or restructuring of the stevedoring industry. It allows for payments for administrative costs in connection with those activities. Yes, these activities have to be prescribed by regulation, so there is a level of scrutiny there, but it is still very open-ended.How are the funds to be allocated in relation to these non-redundancy related reforms? Are they going to be paid to individual stevedoring companies, as is the case with the redundancy payments? If so, will MIFCo enter into contracts with the companies, and will those contracts be made public? If the funds are not going to individual companies, how does the government propose to spend them? There is no indication in the budget papers of where the money might be spent, and I think that does beg questions of accountability and transparency for the public or the stevedoring industry in an arrangement that increases the amount to be raised by a levy on an industry and then does not give any indication where the extra funds—we are talking about $100 million here—are going.On another bill yesterday I was talking about the increases announced in the budget in duty on aviation fuel. It is quite fascinating that the government can go on about how levies and duties are inequitable in one area but find the same arrangement remarkably convenient in another. Aside from that, at least in the case of the aviation industry it gets to know where the increased fuel duties it will be paying are to be directed. Some might not like the increase, but at least they can say, `Well, this increase is going to pay for the restructure of the Civil Aviation Safety Authority,' or, `It is going to keep down the costs of navigation services at regional airports'—an important cause. But in the case of this levy we have absolutely no idea where the money is going other than into `non-redundancy related reforms'. It may be that these reforms are legitimate and useful. I think we have room for doubt on this, given the government's record in this area. But, more than that, we cannot make a proper assessment because we do not know what they are, how much funding will be allocated to them and against what performance criteria or outcomes they will be measured. I do not believe that can be called accountable expenditure and I do not think that is about transparency and openness in government.Another possibility, which I readily concede, is that it is the interest MIFCo pays on its borrowings that is going to use up the additional funds. That was being implied but not stated by the Department of Transport and Regional Services in last week's Senate estimates hearings. There is a significant interest payment on $195 million, the Senate committee was told, but when pressed for some further detail on MIFCo's borrowing arrangements the Assistant Secretary of the Maritime Division was unable to provide it. `The Commonwealth does not presently have available to it a schedule of loan repayments over the full period of the loan,' she said. This is apparently because MIFCo is in the process of reconsidering its borrowing arrangements. So we are back to square one, with no idea of just how much of this extra $100 million, not to mention the existing shortfall of $55 million, is going to go in interest payments. We do not know what MIFCo's new borrowing arrangements might be, so I think we are unable to make a reasoned judgment about whether $100 million is a reasonable figure or a ridiculous one; a real try-on.Even if we leave aside the issue of the coalition's tactics in relation to waterfront reform, this bill still remains highly questionable in that it essentially asks this parliament to approve $100 million worth of additional appropriation without bothering to justify, in anything other than the vaguest terms, how those funds will be directed. Unfortunately, we cannot leave the coalition's tactics and agenda out of this debate. We cannot look at this bill in isolation from the history of the coalition deliberately setting out to provoke, manipulate and escalate a dispute on the waterfront. So the issue of motivation, I am afraid, comes into an assessment of what is to be achieved by this bill.The history of the coalition's approach to the waterfront raises some very obvious questions. The fundamental one is: what guarantee do we have that the aim of this exercise, this extra appropriation of $100 million, is not to find some means by which to pump funds into a manufactured reduction of stevedoring costs so that the government can seek to justify the actions it has already taken? What guarantee do we have that these funds will not be appropriated to deliver the government's claims of a downward trend in stevedoring costs—without actually delivering that reduction through genuine reform? A bit of an undercover subsidy here is quite a possibility. What guarantee do we have that these funds are not going to be used in one way or another for the blatant political purpose of pursuing the ideological view the coalition has of what constitutes waterfront reform? The answer is that we do not have any guarantees. If you go back to the purpose of the original levy, I think it is fair to say that it was not raised because the government was feeling a sense of pastoral responsibility for waterside workers. So there is a question of doubt on motivation, and basically I think our doubt is a fair doubt because of the lack of detail about what the $100 million is to be used for.The opposition will not stand in the way of further redundancy payments and further reform, but we are not about to sign off on this bill at this point in time until we have some clearer answers. That is why this bill will go to a Senate committee—because swimming beneath the surface of what looks like a simple appropriation for more redundancy payments, unfortunately, is a record of conspiracy and deceit, a record that raises serious questions about the motivation for the increase in this appropriation cap and the intent behind it as well. It is a view that I understand is shared by some coalition supporters as well, users who are saying, `What is this $100 million for?' That is the challenge for the minister to outline before this bill gets to the Senate, and that is why the opposition will not be announcing its final position until we have had some of these questions answered.13:00:006456Baird, Bruce, MPMr BAIRDMP6CookLP10—I rise to support the Stevedoring Levy (Collection) Amendment Bill 1999 . I believe that it is important and appropriate in the overall micro-economic efficiencies which the government is developing. It is interesting to follow the member for Dickson, who has raised some questions. I find it interesting on two grounds: firstly, it is interesting in terms of her own personal position as the former Leader of the Australian Democrats where she provided the assistance to remove the secondary boycott provision, which the party she now represents wants to roll back. There is also the question of why $100 million more is being used for this fund when the parameters of the fund are outlined in legislation. Some $420 million was provided by the ALP to establish WIRA, of which $160 million came from the taxpayer, and there is the whole question of where it ended up. After the payouts were made, after it was com pleted, the level of productivity and reliability fell behind again. It is somewhat interesting that the government is being asked about the additional $100 million when the $420 million used before failed to achieve the objectives that were required. The indication is that MIFCo is for redundancy payments only, and the deadline for the redundancy submission has passed. The extra funding is used for investment, for extra redundancies and maintaining the ability of the government to look at the further reforms under section 18 of the act.XW4KERNOTMs Kernot—There aren't any.MP6Baird, Bruce, MPMr BAIRD—The member for Dickson makes comments about the whole aspect, looking for conspiracies—and she would certainly know about conspiracies—but in this piece of legislation there is no evidence at all of the conspiracies she is suggesting.XW4KERNOTMs Kernot—Unfortunately, there is.MP6Baird, Bruce, MPMr BAIRD—Look at the record of the party that you now represent. What was the $420 million used for and where—XW4KERNOTMs Kernot—Talk about the bill—I challenge you.MP6Baird, Bruce, MPMr BAIRD—You want to raise these issues. The amount of $420 million was spent before with very little to prove what was actually achieved. It is interesting that 10 years ago Labor's transport minister Ralph Willis stated in relation to waterfront reform:Through various reports commissioned by this (Labor) government it is now common knowledge that Australia has been poorly served by its shipping and waterfront industries. The gross inefficiencies that have been allowed to develop in these industries have restricted our economic growth, reduced our living standards and impaired our capacity to develop export markets.This was the Labor Party's transport minister. He was saying 10 years ago that it was a disgrace and that reforms needed to be carried out. So at that time the government set up WIRA. WIRA was a disaster; it failed to meet its objectives. In 1998 the government announced what the MUA would never let the ALP introduce—the seven benchmark objectives agreed to by Australia's major stevedoring companies, Patrick and P&O.Recent figures show that the whole level of productivity on the waterfront has improved dramatically. There is a better work force management and, as a result, lower costs, which of course are passed on to the Australian economy and improve the overall efficiency of the waterfront, of the Australian economy, of the costs to importers and of the costs to exporters. Part of the seven benchmark objectives were: an end to overmanning and restrictive work practices; higher productivity (five port average crane rate of 25 container movements per hour); greater reliability through less industrial action and elimination of disruptive work practices; an improved work safety performance; lower costs across the waterfront logistics chain; full and effective use of existing and new technology; and improved training. This was set out at the time. All of those seven objectives are appropriate and, in the context of what was said 10 years ago by Ralph Willis, highly in line with the objectives that should have been established 10 years ago.Now the member for Dickson comes in and says, `We are not sure about this.' Yet the seven objectives are in line with looking at the technology and looking at the questions of overmanning. Many of the objectives have already been achieved. Obviously we still have a way to go, and this is the object of increasing the amount of funding available.The data on strikes and unreliability, indicating working days lost per 1,000 employees, published in Industrial Disputes Australia 1996, an ABS publication, matched the record of the stevedoring industry to the rest of Australian industry. It found that in the decade preceding publication in the stevedoring industry the rate of industrial disputes ranged from 780 to 3,270 annually compared with other industries which suffered a range of only 76 to 248 days. In 1997, stevedoring working days lost per 1,000 employees was 930, 12 times the average national amount. Of course, that is simply unacceptable in terms of occupational health and safety—again a measure to see how they perform with other industries. It is clearly out of line. In the first half of this decade, the cost per employee ranged from $536 to $1,258 per employee in the stevedoring industry compared with $176 to $265 in other industries. The cost of insuring the average waterside worker is $1,460, six times greater on average than the national average. The rate of accidents and disease is 169 cases per 1,000 employees compared with the all-industry average of 29.We all know about the rorts in the stevedoring industry and the industry continues to have significant problems. Issues range from the petty—a threatened strike over recovering a billiard table—to the outrageous—delaying ships to cause extended overtime and then simply nicking off, to use the colloquial expression. There is the example of the crane driver who, out of a 50.3-hour average working week, spends 14 hours on relief time, 10.5 hours on holidays and sick leave, 8.5 hours on idle time or training and 3.2 hours on meal breaks, leaving only 14.1 hours—or 28 per cent of paid hours—doing what he or she is supposed to be doing: driving the crane. On Saturdays the crane driver works for 15 paid hours, of which 2.5 hours are paid meal breaks, 4.5 hours are other duties and eight hours are spent actually driving the crane. These are examples of why this industry must continue to be reformed.As for pay rates, the 4,500 MUA waterfront workers are not battlers; they are much better off than average income earners across Australia. On average, they earn $74,000, with the highest earnings of $110,000 for what is effectively a 30-hour week. Compare this with other occupations: a police officer's wage averages $47,000, a nurse's $43,000 and a construction worker's around $35,000 annually. So they are certainly paid very well but their productivity is pretty low. Australian ports, on average, have a crane rate of 18 lifts an hour, when in New Zealand they do 25, in Antwerp it is 27.7 and, of course, other places do even better than that.Both P&O and Patrick have agreed to the seven benchmark objectives. They have undertaken to meet the full cost of these reforms through the application of a levy on each container being moved across the port. The levy will be referred back to MIFCo—a Commonwealth company wholly owned by the government—to assist in the whole area of redundancy and waterfront reforms. P&O and Patrick have willingly agreed to do this. The government established MIFCo for that purpose. Since establishing that fund, a high number of redundancies have been applied for by the waterside workers. Since April 1998, over 800 people have applied for redundancies under the program. The take-up rate has been greater than was originally planned, so obviously there is now a need to increase the appropriation rate—from $250 million to $350 million. I think that is appropriate.Of course, as has been pointed out, that does include other objectives. In order to raise this funding and so that the taxpayer is not out of pocket, the government has extended the life of the levy from 2008 to 2010 rather than increase the rate of the levy, which currently stands at $12 per container and $6 per vehicle. This is in stark contrast to the ALP's $430 million paid out previously under the WIRA program. That was certainly a $160 million waste of taxpayers' money.As for meeting our objectives, the first of these—the rate of overmanning—has been well met. There are obviously non-redundancy related reforms which are important: the use of new technology such as electronic commerce, new wharf facilities, occupational health and safety training programs and training programs aimed at improving employees' ability to use new equipment. The government will only agree to fund those initiatives which have objectives or outcomes in line with the government's seven-point plan. This bill will allow the government to continue that program to make sure that the funds are available.This is, in fact, a new era for the Australian stevedoring industry in restructuring their operations with the aim of achieving world's best practice in productivity and reliability and offering service which is competitive internationally. Hopefully, one day we will be able to match the levels of container movement which is seen in New Zealand, Antwerp and many of the overseas ports.It is very clear that the government has met its first objective of eliminating overmanning. We can see what has been achieved in Melbourne with government reforms. The publi cation Waterline says, `the crane, elapsed and net rates are the best recorded to date in Waterline for Melbourne.' Crane rates in Melbourne over the past year have consistently improved. The December 1998 quarter's figure is almost 15 per cent higher than the rate for the same quarter a year before. By contrast, the trend in Sydney over the same period was the reverse: a 15 per cent drop in productivity. That was simply because the MUA declined to implement the agreements reached with Patrick.According to VECCI's annual survey, confidence in the port of Melbourne is at an all-time high. There is an improved level of confidence in the port reform process and a higher level of satisfaction with the transport chain of the port compared to six months ago. Respondents identified cost, timeliness and transport access as the most critical factors requiring attention. This is from the users, and they are satisfied with the reforms that have been made. The seven-point plan established by the government is under way and is achieving results. The level of productivity is improving; the crane rate is improving significantly. But there is much work yet to be done in Sydney as it is still not comparing favourably with Melbourne.It is important to recognise that the government is on track for reforming the waterfront. This is an area where a lot of money was spent by the previous government—some $420 million, of which $160 million came from the taxpayer—and produced very little overall, despite having established WIRA. The government has moved on its seven-point plan: it is on target. It increased the cap. There is no conspiracy theory here, as the member for Dickson seems to believe. The guidelines are established and must be approved by the government in order to be implemented. This is about improving Australia's international competitive position. What could be more simple than that? This is the type of objective that every government should have at its core: improving the overall efficiency of its basic infrastructure and its basic transport. I commend the bill to the House.13:14:006459Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—You have heard the myth. Now let us try some facts. The bill before the House, the Stevedoring Levy (Collection) Amendment Bill 1999 , proposes to increase the amount of money that is made available to the organisation called MIFCo from $250 million to $350 million. That, coincidentally, brings the amount of money being levied on users of ports in Australia and being provided for so-called waterfront reform under this government close to the amount that was spent under the former Labor government's WIRA program, which was over $420 million. So we have got to the point now where, with little explanation of the reasons, and after all the attacks that the government has made on the former government and its expenditure of money to bring about waterfront reform, we are seeing that the amount of money that this government is spending—ultimately public money; it is effectively a tax that is being levied on the users of ports that ultimately ends up on the cost structure of people who buy the products that go through the ports—is actually approaching the amount that the Hawke government spent back at the end of the 1980s and in the early 1990s.It was very interesting to see in the Senate estimates several days ago that a Ms Blackburn from the department was being questioned and was asked why there was a need to increase the amount of money that was being provided to MIFCo to the extent of $100 million. The essence of her answer was interest costs, that there was a great need to increase this amount of money because they had to borrow money on the money market to finance the redundancies and the like that MIFCo has been established to deal with, and there was a lot of interest that had to be paid on this money.XW4KERNOTMs Kernot—$155 million.YU5Tanner, Lindsay, MPMr TANNER—We may well ask, as the member for Dickson indicates, whether or not this was actually foreseeable a year or so ago when MIFCo was established, as, of course, there has been very little movement in interest rates since that time. It is a rather peculiar explanation for the need to come back and find an additional $100 million. It is also of note that, in the same Senate estimates questioning by Senator O'Brien, Ms Blackburn effectively conceded that no conditions were being imposed on the stevedoring companies in return for getting access to this money. So there are no real performance criteria, there are no conditions being imposed on the companies to ensure that they actually do improve their performance.It is salutary to examine the background to this issue to compare the government's claims with the reality of what has eventuated. The government of course claimed that the waterfront was grossly inefficient, that there were enormous increases in crane rates that could be achieved if only their version of waterfront reform was imposed, that waterfront workers were persistently engaged in rorting the regulations and in deliberately working slow and in nicking off, and were overpaid and were grossly overstaffed. That is the litany, the rhetoric, that we heard interminably throughout the course of most of last year and the previous year from the government and particularly from the Minister for Employment, Workplace Relations and Small Business.I would like to quote from the document that the minister for workplace relations put out the day after the infamous mass sackings of Patrick's workers in April last year. That document was entitled `Seven benchmark objectives', and I quote:The benefits of restructuring will begin to flow immediately; however, the Government expects that significant progress will be made toward achieving the key objective benchmarks set out in the introduction within 6 months. Within 12 to 18 months we expect that these objectives will have been achieved.In line with that, earlier this year we had the Minister for Transport and Regional Services stand up in question time and tell us all how a miracle was occurring on the wharves: that you had people doing 40 boxes per hour and there had been a dramatic increase in productivity, that as a result of the activities of Mr Chris Corrigan and the government's alleged waterfront program, as a result of the mass sackings of waterfront workers, as a result of the use of batons and guard dogs and dodgy corporate restructuring—DH4HOLLISMr Hollis—And balaclavas.YU5Tanner, Lindsay, MPMr TANNER—and balaclavas, we had a massive increase in productivity on the waterfront. As the former shadow minister for transport, I was rather amused at these claims, knowing, as apparently the current minister does not know, that it is not all that difficult to achieve high rates of crane lifts on particular vessels because of the configuration of the cargo and other circumstances. What matters is the average over time, so to quote individual examples where you achieved a 30 or 35 or even 40 boxes per hour rate is effectively meaningless. But the minister came into the House and told us that miracles were being achieved and that this was all as a result of the government's courage in tackling waterfront reform.At the time, along with others, I interjected that the minister would do well to wait for the official Waterline statistics, which are universally acknowledged as an accurate and reasonable measurement of crane rates. Of course, since that time we have actually received those statistics, and I have them here. It is very interesting to read them. We will look, for example, at the statistics for the five-port average crane rate—the five major ports, the average crane rate—over the entirety of 1998, in other words, including the pre and post dispute periods, right up to the end of December 1998.The average for crane rates over that period reads as follows, on a quarterly basis: 18.8, 18.7, 19.1 and 18.9. In other words, the average crane rate over the five ports prior to the dispute was 18.8 and the average crane rate at the end of last year, well after the dispute, was 18.9. And, yes, there have been some variations within individual ports. Melbourne had improved significantly, continuing a trend that has been occurring since well before the infamous sackings of last year. Brisbane went back a little bit. Sydney went back a little bit. Adelaide continued to improve. Adelaide, of course, is the port where there was no involvement in the mass sackings on the part of the stevedore there, which was consistently opposed to the strategy of the government, and where consis tently you get the highest crane rates in the country.So what we see, contrary to the government's rhetoric about the great achievements of their waterfront reform program, is that we have only seen marginal further improvement in crane rates. This, I point out, is simply a continuation of a trend that has been occurring for the last three years, so that over the last three years you have seen slow, not spectacular, but steady improvement in the crane rates. All that we have seen thus far from the supposed reform program of the government is a continuation of that trend. In order to achieve that, what they did was engineered mass sackings of 2,000 workers, brought in the dogs and had the people with balaclavas and the batons cause one of the most damaging industrial disputes in this country's history. That is all they achieved.And they have the nerve to attack the former government's WIRA program which, in the period from 1989 through to 1992-93, increased the crane rates—under the old measurement, I hasten to add; but, nonetheless, for the purpose of the argument that is neither here nor there—from averages of around 12 or 13 to 18, very substantial increases in crane rates that were universally acknowledged throughout the industry but not by the government, and saw a dramatic reduction in the waterfront work force at the time, with not a single day lost in industrial disputation.And yes, this cost money. Yes, there was over $400 million of taxpayers' money being used to finance it. But how does that differ from what is now going to be $350 million of taxpayers' money—and it is a tax; it is a levy—how is that different? What we have seen is a government that has not delivered the goods but has gone to ridiculous, extreme, vicious lengths trying to destroy a trade union—supposedly to deliver those goods—and that has been unable to deliver anything like the outcomes that were delivered by the previous government.The next reality check that is worth considering is what the shipping companies are saying. The shipping companies are now going public, saying, `Where are the reduc tions in stevedoring costs that we were promised? What is happening? Where are the price cuts?' Answer: there have not been any. Mr Corrigan says, `Give me a bit of time.' This is the same Mr Corrigan who pocketed millions of dollars worth of unrealised capital gains as a result of the Lang Corporation shares going through the roof. But no, he still wants to keep pocketing a bit more money for the time being before he condescends to actually giving some price reductions to people. Of course, the claims from the NFF early in 1998 about how much the average rate for a box could be reduced appear to be something of a distant memory.It is also worth noting—on a slight tangent—that shipping reform appears to be off the agenda. The very difficult agreement put together and gradually crafted between the MUA and the employers on a whole range of very difficult issues is simply sitting there waiting for the government to actually get moving and get it implemented. The government is big on rhetoric, big on vicious attacks on trade unions, but very small when it comes to actually achieving outcomes.There are some pretty serious questions about MIFCo and the use of the money being raised through this levy which deserve some consideration. The questions are about what the money is actually being spent on, what is being sought in return and who is seeking to access the money. Labor will therefore be seeking to refer this piece of legislation in the Senate to a Senate legislation committee to give the senators and also the Australian people the opportunity to explore those questions.It is again worth considering the background to this particular legislation. We can go back to late 1996 and early 1997 and the hiring of the ACIL consultancy to deliver some recommendations to the government about strategies for waterfront reform. The original ACIL report was not radical enough for the Minister for Employment, Workplace Relations and Small Business. It presumably did not have any references to guard dogs and dodgy corporate restructuring and the like, and so he went and got somebody else. He brought in Stephen Webster and his sidekick, John Davies. They, in turn, through ACIL, subcontracted to Mark Textor, Liberal Party pollster; Jonathon Gaul, media strategist and former Liberal Party staffer; and various other people about developing a secret strategy to pursue waterfront reform.As a result of that, we saw the polling data from Mark Textor—$42,000 worth of taxpayers' money in order to provide to the government secret polling data and focus group information about what people thought about the waterfront—and Jonathon Gaul, at $200 an hour, providing a media strategy. You do not need to be a great thinker or a genius to work out what that media strategy was, because we saw it in the form of the minister for workplace relations and the disgraced former Minister for Transport, Mr Sharp, day in, day out, simply viciously attacking and demonising wharfies with a variety of outrageous nonsense, lies and stories that were simply untrue.I cite in passing, as one simple example, the infamous Fremantle wharfies' strip show story. The minister had great fun in telling the House about how the wharfies in Fremantle had done 14 boxes an hour on their first shift, six boxes an hour on their second shift and 30 boxes an hour on their third shift, and the reason they had done 30 on the third shift was that they were all knocking off to go to a strip show. The substance behind this story was, of course, that there were entirely legitimate reasons for the variations in box rates—which the minister apparently would not understand. The second shift had particularly difficult cargoes to unload because they had to shift individual boxes—some had to come off, some did not, and the like—whereas the third shift had a very straightforward task of taking the boxes straight off.The basis of the story about wharfies going to a strip show was that one person had jokingly said to his supervisor as he was leaving, `I'm off to a strip show.' It was not serious. It was not a statement of fact; it was simply a joke. But the end result was that you had the minister in this House saying that all Fremantle wharfies were bludgers and that they speeded up their work in order to ensure they could all nick off to a strip show, with no regard whatsoever for the distress he might have caused individual families, for example. This is a good illustration of the outrageous propaganda and vicious lies that were thrown time after time at Australian waterside workers.We then saw the strategy unfold and Mr Webster act as the go-between between the minister and Chris Corrigan and the people that he hired to send mercenaries to Dubai to be trained to be a replacement work force. We saw the so-called activist strategy endorsed by the Prime Minister, with leaked documents indicating that the strategy being pursued was not even designed by Chris Corrigan. It was designed by the government. The government designed the strategy. It orchestrated the whole exercise. It laid out the plan. Peter Reith, John Sharp and John Howard laid out the plan to sack 2,000 Australians purely because they were members of the Maritime Union of Australia, to train a replacement work force and to facilitate a corporate restructuring on the part of Lang Corporation and Patricks which would ensure that those workers could not pursue their legitimate entitlements. Hence, we then had the Dubai fiasco and the parallel NFF operation on Webb Dock. What a total charade that was.We were told that this was the third entrant at the port of Melbourne. This was the new entrant in the stevedoring industry in Melbourne and what a great thing this would be. You had the NFF representatives, the Paul Houlihans of the world, standing up there and saying, `We're going to compete. What's everybody complaining about? The MUA's just trying to stop competition.' It did not take long for the mask to come down. It did not take long for the charade to be abandoned. What the NFF operation was about was simply to facilitate the training of the replacement work force for Patricks. It was never going to be a competitor to Patricks. It was always about the sacking of the Patrick work force. All of this culminated in the disgraceful events of the nights of 7 and 8 April 1998 where the dogs were brought in, the goons with the balaclavas came in, where the corporate restructuring achieved its purpose and where the wharfies were sacked en masse. Of course, I do not need to recount the history of what followed.It is an absolute outrage—and it continues to be something which I think the people of this nation should treat extremely seriously when they think of this government—that you have had a government which has been prepared to orchestrate, to create, one of the biggest industrial disputes in this country's history; to actually create it, to plan it, to set out the details and to spend taxpayers' money on it. Not just to facilitate it, not just to turn a blind eye, not just to fail to intervene but to actually create an industrial dispute of this magnitude is totally unprecedented in this country and I suspect in virtually any other democratic country in human history.This is an extraordinary performance by this government and all people should revile the government for that—and the taste lingers in legislation such as this we are considering today. But it is important to remember that, just as in the case of this legislation, there are various other matters around that still flow from this dispute. It is not over. I have got legal action pending against the Minister for Employment, Workplace Relations and Small Business seeking to force him to reveal the various documents that form the basis of the strategy—documents, reports, consultancies that were paid for by the taxpayer to the tune of $1.3 million. That legal proceeding will be pursued vigorously.The non-union labour who were duped into being part of the government's outrageous scheme are now taking legal proceedings against the government and against Mr Corrigan for being discarded once they ceased to be of any use. We have the great outstanding question, which I raised in the Main Committee the other day, as to why it is that, with a mountain of documentary evidence, when Chris Corrigan told the Industrial Relations Commission on 8 February 1988 that he had no involvement, no financial obligation with respect to the Dubai exercise, that he was not telling the truth and that he knew he was not telling the truth, the Director of Public Prosecutions pre-emptorily dismissed any prospect of a prosecution and did not even see fit to refer the matter to the Australian Federal Police for further investigation, even though there were many documents showing explicitly a direct financial obligation between Mr Corrigan and Lang Corporation—documents including documents he had signed—and the perpetrators of the Dubai scheme.In conclusion, I think the great lesson that we can all learn out of this exercise is that there is an appropriate way to go about reform in this country and there is an inappropriate way. As the world is changing, as economic structures change, as globalisation increases pressures, we face many issues where we have to deal with questions of reform and changing structures. In some cases pain will be felt by people who benefit from existing structures, be they farmers or irrigators in the Murray-Darling Basin where clearly we have to restrain our use of water and overcome our previous excessive use of water or doctors and surgeons who, through a variety of anticompetitive practices, have managed to bolster their incomes—and lawyers are in the same category—or any variety of occupations where there are regulatory structures which are now under scrutiny such as the taxi industry, pharmacies and many others. The underlying principle that should guide us in all of these endeavours, and should have guided this government, in dealing with the waterfront is that these people are entitled to be treated with some respect and some legitimacy. They are entitled to have a negotiated outcome where they get reasonable treatment. (Time expired)13:34:006463Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—I suspect that my contribution might be slightly different from that of the member for Melbourne. I do not know why he did not just copy a sheet out of Hansard from last year some time and hand it to the clerks and sit down and be done with it rather than trying to rake over old ground and old debates in this place.Waterfront reform is critical to this country. For the first time in the history of this nation, we have a waterfront operation in Melbourne that this nation can be proud of. That is borne out, I note, by a report that came out this year from VECCI, the Victorian Employers Chamber of Commerce and Industry. VECCI said that a year after the conflict on the docks in Melbourne, and indeed in Sydney, that Melbourne port users were happier and more optimistic than they had been for six years. The port users survey compiled by VECCI showed 92.1 per cent of the companies using the port believed that its performance was satisfactory or better—92.1 per cent! That is incredible for a country which had a worldwide reputation of unreliability. If I recall the statistics correctly, Australians used most of the insurance money around the world that was set aside to cover losses of freight companies and freight forwarders when they ran into industrial disputes in overseas ports.We were so unreliable that the Japanese constantly discounted our prices for raw materials that we were selling to them because they could not count on absolute continuity of supply—absolute unreliability—and here we now have a waterfront that is truly reformed. The process is going on and it will continue. That is why we are here today to approve additional funding in order to allow the levy to continue so that more operators on the Melbourne waterfront and operators in Sydney can come on board, reform their operations, reduce their overmanning and get on with the efficiencies and productivity that will lead to lower costs and greater and greater satisfaction by those companies that use our wharves.Australia is a great trading nation. There is no question about that, and we always have been. The tyranny of distance that we talk about in this place is no more true than on our waterfront. We rely on goods, both coming in and going out, because we are not linked anywhere by land to any other country to export or import.YU5TANNERMr Tanner—Thank you for telling us.OT4Charles, Bob, MPMr CHARLES—The member for Melbourne is welcome. Those sorts of smart alec remarks are probably not appropriate to the debate. VECCI said that 69 per cent of surveyed companies believed that waterfront performance would improve further in the second half of this year. Ms Feely, the Director of VECCI, said Melbourne's crane rate of 21.5 containers an hour was now significantly higher than the national average of 18.9, making the port ripe to become the hub port for Australia. She also said, with port reforms firmly in place and waterfront turnaround improved, road access had now emerged as a key issue for exporters rather than industrial unrest.That is new and different and exciting, isn't it? I think even the member for Melbourne would approve of the fact that we are not having strikes on the Melbourne waterfront any more. That can only be for the good of the nation. Certainly, the employees are being well paid but they are working at productivity rates that no-one ever imagined could occur on our 17th and 18th century waterfront. No-one believed that that level of productivity could ever be achieved in Australia.The member for Melbourne talked about WIRA and 1989 to 1993-94, and he is right: the Australian public poured $400 million of taxpayers' money into waterfront reform that achieved absolutely nothing. I agree that we improved crane rates a little bit but we did absolutely nothing for productivity—strikes were still rampant and the industry was completely out of control because the Waterside Workers, now the Maritime Union, ran the docks. Management did not run the docks, the state government did not run the docks: the union ran the docks and you know that as well as I do.If the union are going to manage, then the union ought to be responsible for the cost outcomes as well. But, of course, they take no responsibility for the cost or the efficiency. They do not have to make a profit: all they have to do is service their members. The union believed that their members interests were best served by constantly going on strike, by overmanning, by creating demarcation issues and safety issues and whatever you can think of to the point that our waterfront was an international joke.Now VECCI says that 92.1 per cent of those using the waterfront in Melbourne believed the performance was satisfactory or better than satisfactory. The port of Melbourne is Australia's No. 1 container and general cargo port. In 1997-98, our port handled in excess of $52 billion worth of trade. It contributed $5.4 billion to the Victorian economy and directly supported around 670 firms and 8,500 jobs. It handled 38 per cent of the country's container trade, or over one million containers a year, and container trade through the port is forecast to grow by an average eight per cent per annum well into the next century. In addition, the Port of Melbourne served more than 40 individual shipping lines. Respondents to the survey said that their confidence in port reform is at unprecedented levels, and so it should be because they are getting better service. Users now say their biggest problem with the port is road access and making sure that they coordinate road transport with shipping times, and I accept that.I do not deny that the waterfront can be a dangerous place to work: it is. I was on the Maribyrnong one night not long ago and I saw a container fall from a crane. It made one hell of a noise—it was almost like World War III. Thank goodness there was no-one in the vicinity, and no-one under the box, but it was certainly frightening. So the waterfront can be a difficult place to work. In years past, back in the 1700s and 1800s, it was an extremely difficult place to work. A lot of the work was done manually without mechanical equipment to help. It was arduous and the hours were long. Often the days were hot and it was frequently wet. Workers had to work in very poor conditions. Conditions on the waterfront today are excellent, as they are in most industrial plants.The point of the legislation is to continue the reform process, because more companies want to come on board and sign agreements with their unions and relieve themselves of the part of their work force that is no longer necessary. The Stevedoring Levy (Collection) Amendment Bill 1999 amends the Stevedoring Levy (Collection) Act 1998. It increases the amount that may be authorised by the minister under section 18(2) of the act, for the purposes of stevedoring reform, from $250 million to $350 million. I take issue with the member for Melbourne because this bill is not a tax. WIRA was a tax. WIRA used taxpayers' money to pay for so-called redun dancies, and those who were made redundant came back to work in the industry again through the pool.YU5TANNERMr Tanner—And the levy as well.OT4Charles, Bob, MPMr CHARLES—The levy comes out of the operations at the ports where restructuring is taking place. The levy is not a tax and it does not come out of taxpayers' funds. It is an industry levy, like any other industry levy, that makes a contribution to the industry itself. In order to access the funds available for reform, stevedores must commit to the government's seven benchmark objectives for waterfront reform. They are: an end to over-manning and restrictive work practices; raising container crane productivity to a national average of 25 containers an hour; improving reliability, particularly reducing industrial disputation; lowering the high work related injury and fatality level; assisting in reductions in costs throughout the logistics change to the waterfront; making effective use of technology; and, promoting training and apprenticeship programs. I commend the bill to the House.13:45:006465Hollis, Colin, MPMr HOLLISDH4ThrosbyALP00—The member for La Trobe said in his introduction that the member for Melbourne, in his contribution to this debate, was speaking with an outdated script. I say to the member for La Trobe, as he is leaving the chamber, that he obviously did not have a look at the speech by his colleague the member for Cook, because if there was ever an outdated script in this debate today it was that delivered by the member for Cook. It is very interesting listening to the member for Cook. I have said, time and time again, I think the nearest he has ever been to the waterfront is when he puts his well-shod heel onto a luxury yacht at Dolls Point. What the member for Cook did not say was that those who were most vocal in accusing the workers on the waterfront of rorts were involved in a few rorts themselves. Some of them are not even in this parliament now because of that rort.We heard about the billiard table. That must be the most publicised billiard table in the world. We heard about the nick-off. Well, the old nick-off that they are using has been proven to be a set-up. They are old argu ments. As I have said, those opposite have never even been near a waterfront. I have said it many times, I have said it to the member for Cook, I have said it to other people: if they want to have a look at the waterfront, come down to my electorate. It is almost adjacent to that of the member for Cook. He can have a look at the waterfront in operation at Port Kembla.We also heard the usual litany. We were told that WIRA was not a success. We heard that from both the member for Cook and the member for La Trobe. Quite frankly, they are the only people who believe it was a failure. Those listening to this debate and reading this debate must be aware of the ideological—indeed, the pathological—hatred those opposite have for the trade union movement, especially for the Maritime Union of Australia. The member for La Trobe proved in what he said in his contribution that he knows absolutely nothing about the waterfront. You cannot isolate one aspect of the waterfront from other aspects—it is a complex meshing. I would suggest that if the member for La Trobe or, indeed, the member for Cook want to be taken seriously when they talk about the waterfront they should have a look at the report from this parliament, Warehouse to wharf. Many members of the government, then in opposition, served on that committee.What a surprise it is to see this bill, the Stevedoring Levy (Collection) Amendment Bill 1999 , introduced with such haste and speed today. As the shadow minister has outlined, the opposition will not delay the passage of this bill in the House, but we will refer the whole bill to a Senate committee for further scrutiny. We do not rule out the prospect of amending or opposing it. Government legislation relating to the waterfront is always an illusion. We on this side are always suspicious when the government brings in legislation dealing with the waterfront. Let us get one thing clear: we on this side of the chamber are not opposed to reform in the trade union movement, on the waterfront or anywhere. We are not opposed to reform, but we simply do not trust those opposite.We can remember the original legislation introduced into this place the very night Patrick Stevedores sacked its entire waterfront work force, including 45 workers in my electorate. That legislation, we were told, had nothing to do with the Patrick sackings. We were also told that the government had no knowledge about Patrick's intentions. Mr Deputy Speaker, as you and others know, there are many questions not answered. As the member for Melbourne said, reports commissioned out of the former minister's office, and paid for by the taxpayer, have still not been made public. It is absolutely outrageous that taxpayers' money was used for these reports and that they were not made public. But the minister was so well prepared that he wandered into this place and introduced the legislation, still proclaiming no knowledge, and the Prime Minister slapped him on the back with great congratulations.This legislation we are talking about today is a continuation. As time went on, we discovered that the minister did indeed know a lot more than he had disclosed to this parliament. We discovered through departmental leaks that the cabinet had signed off on a strategy to connive for an industrial dispute with the Maritime Union of Australia. We discovered a mountain of paperwork, briefing notes and diaries through the Federal Court procedures initiated by the MUA to have its membership—the workers—reinstated because of this government's core involvement in illegal mass sackings. We are therefore great suspects of this bill. We are concerned about this bill. We are concerned about the intentions and we are concerned as to why this bill was introduced into this chamber with great haste. As I said, this is a repeat of circumstances from the original legislation. When you want a sham, you race some legislation into this House, you give the members of this chamber no time for scrutiny and then, when the opposition stands up and starts questioning the government or the ministers on why they are racing this legislation in with such indecent haste, we just get a volley of abuse from the other side.We are also concerned that the explanatory memorandum does not seem to ring true with the purpose of this proposed legislation. The bill seeks to increase an allocation of $100 million contained in the Stevedore Levy (Collection) Act 1998. The government says the increase is to meet the higher cost of expected redundancy from the stevedoring industry. The government says that the rate of levy on containers and vehicles will not increase, but the time period for the levy operation will be extended.Mr Speaker, I ask you why. We know through the diligent questioning by my colleagues in the Senate that evidence provided to the Senate Rural and Regional Affairs and Transport Legislation Committee confirmed that the current estimate of the total payout for a redundancy was in the order of $195 million. The committee was informed that the $195 million covered all applications for funding for redundancies received by the Commonwealth. This includes two applications yet to be approved and, indeed, still to be examined. The closing date for a redundancy application was 30 April. Therefore, it is unnecessary for the additional allocation presented in this legislation to be put before this House. Again, evidence to the Senate committee makes clear that all redundancies are to be met with the $195 million. This is $55 million short of the original cap of $250 million set within the original legislation.Does this government intend to deliberately extend the time period for further redundancy applications? We have no answer to this very important question. The government is mute on this essential question, as it is so often mute. According to the explanatory memorandum, the extra $100 million can be used by stevedoring companies for non-redundancy related reforms. These include the introduction of new technology, new wharf facilities, occupational health and safety training, and programs to improve workers' ability to use the new equipment.I support the introduction of new technology and, particularly, new wharf facilities. I have long supported waterfront reform, but responsible waterfront reform involving each of the players in the industries, not just the workers or the MUA. As I said before, the waterfront is a very complex issue. Those opposite always single out one aspect of that complex equation, and that is always the Maritime Union of Australia.If we are going to debate reform, let us do it honestly and openly, and let us put all the cards on the table. Let us stop using the futile argument of picking a European or an Asian port and comparing it with Australian ports. Firstly, as I said many times before, we do not have to use the same equipment. Compare like with like—that is what we are asking the government to do. Secondly, the major European and Asian ports always quoted by the government are hub ports. Vessels in Singapore, for example, are unloaded immediately. Singapore does not have container juggle as we do here in Australia. This port does not have to entertain the prospect of a double lift from not only ship to shore but also warehouse to ship.I wish some of the experts opposite would visit ports. It is always interesting to me—and I have not been able to fathom this out—that government members opposite such as the member for Corangamite and the member for Hinkler, who know something about the waterfront, never speak in these debates. I have to ask myself, `Why don't the member for Corangamite and the member for Hinkler, who know something about the waterfront and waterfront reform, speak in these debates?' Have they been gagged? Maybe the government whip or someone else gags them or, as I suspect, are they too embarrassed because of some of the nonsense spewed out by members opposite—such as we heard today from the member for Cook and the member for La Trobe—to join in these debates?I suspect that the government is proposing to extend the levy rate to reward Patrick Stevedores for their disastrous, illegal and immoral attack on the workers and the trade union movement. This is a taxpayer funded waterfront reform project to get the long suffering taxpayer to contribute to some infrastructure spending on wharves and technology introduction. First, the taxpayer is told to contribute to a long conspiracy involving the government and stevedoring companies to illegally sack workers detailed in nearly $2 million worth of still secret consultant reports. It is time that this parliament started demanding that those taxpayer funded reports were released. Then the taxpayer is told again to fork out money to help pay out workers in redundancies. Now the taxpayers will fund private company investments of such things as wharf facilities and introducing technology.Why can the government not just say honestly and openly that this is what the legislation seeks to do? Why do we have to play around and fit a puzzle together when quite clearly the story presented by the government does not add up? Is this bill about paying out further redundancy which the government, through deliberate policy decisions, has decided to extend? Or is it a taxpayer funded contribution to Patricks and P&O to allegedly improve their waterfront operations? Will the minister come out with the answers or will we continue to engage in manoeuvring worthy of a best selling spy novel?Other questions are raised over how this extra $100 million is to be allocated to so-called `non-redundancy related reforms'. Just how far will $100 million go? Will the funds be paid to individual stevedoring companies? Will the Maritime Industry Finance Company enter into the contracts with these individual companies and, if so, will the contracts be publicly open to scrutiny? If the funds are not to be directed to individual companies, how does the government intend to distribute the funds?The legislation is full of questions. It is open to absolute scepticism and plain old distrust from this side of the House. We do not trust the crowd on the other side of the chamber when it comes to anything to do with the waterfront. Everyone—not only on this side—knows this government's record on the waterfront. We are all aware of its past inappropriate and illegal dealings with Patrick Stevedores, the Dubai debacle and the massive publicly financed attacks on the trade union movement. We all know that this government pays enormous lip-service to public honesty, transparency and accountability.10000SPEAKERMr SPEAKER—Order! It being 2 p.m., the debate is interrupted. In accordance with standing order 101A, the debate may be resumed at a later hour. The member will have leave to continue speaking when the debate is resumed.Ministerial Arrangements646814:00:006468Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I inform the House that the Treasurer is unwell and will be absent from question time for the rest of this week. The Minister for Finance and Administration will answer questions on his behalf.Questions Without Notice646864686468Sciacca, Con, MPMr SCIACCA6J4BowmanALP00—My question is addressed to the Prime Minister. Prime Minister, do you condone the decision to forcibly deport a heavily pregnant woman to China in 1997? Have you satisfied yourself that this decision, which also involved the woman's sedation, was appropriate? Are you aware of her recent claims that she pleaded to be allowed to bear her unborn child in Australia prior to returning to China? Why wasn't this allowed? Where is this woman presently, and what assurances of protection and guarantees of safety has she been given by the Australian government? Finally, why won't you initiate a full judicial inquiry into this matter so that the facts can be properly laid out and investigated by someone with powers to compel?6468Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Can I say in response to the honourable member for Bowman that, like a lot of Australians, there are some aspects of this case that, insofar as the allegations are to hand, have disturbed me, as I know they have disturbed honourable members on both sides of the House. I have asked the minister and, through him, his department, and after discussion with him we agreed to establish procedures to try to get to the bottom of the matter and to ascertain all the facts. We have appointed Mr Tony Ayres, a former head of the Department of Defence and somebody who held a high bureaucratic reputation in the eyes of both sides of politics. He was the head of the Department of Social Security under the Hawke government, the head of the Department of Defence under the Keating govern ment, and also head of Defence in the early years of the current government.I do not seek in any way to cover up anything that may have occurred. On the other hand, it is one of those cases where there are counter-assertions of fact. There are disputed claims being made about the circumstances of what could barely be called a termination at 8½ months. In the eyes of many people, that does amount to murder, whatever the circumstances are. I think that is something that people feel deeply about across the political divide. Because of the emotion that is properly attached to a case like this, I have asked that it be examined carefully. I am satisfied on the information available to me at present that the procedures I have put in place will get to the bottom of it. I have every confidence in Mr Ayres. I do not believe at present that a judicial inquiry is justified. It is important to have in mind a number of considerations obviously about the human rights of the lady in question. We have to get to the bottom of the circumstances of what happened in China as best we can. We should not make undue presumptions or levy undue criticisms at the Chinese authorities without having all of the facts in our possession, and I think it is too early to do that. We are trying to get to the bottom of it. I am serious about doing that, and I will keep the House informed.64686468Brough, Mal, MPMr BROUGH2K6LongmanLP10—My question is to the Prime Minister. Is the Prime Minister aware of the report on Australia's productivity performance released by the Productivity Commission this morning? Does this report deliver any messages on the need for further reform?6468Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I am aware of a report that was released early this morning under the title: The New Economy? A New Look at Australia's Productivity Performance . This is a truly landmark document in recording the transformation of the Australian economy. It is a document that will repay a very careful study by all Australians, particularly members of parliament, who are interested in Australia's economic future. It bears very heavily on the current debate about the need for further economic reform. The message from this document is that rewards belong to those countries that are courageous enough to undertake reforms and countries that are willing to undertake reforms will reap very significant dividends. The executive summary contains the following statement:Australia's productivity performance is now at an all-time high. Productivity growth is faster now than in the so-called `Golden Age' of growth around the 1960s.You do not get endorsements any stronger than that. There is a very, very strong message that, if you are willing to undertake reform, if you are prepared to embrace reform, you get dividends. There was a time when the Australian Labor Party was committed to economic reform. When the Labor Party was willing to undertake reforms when it was in government, it had the support of the coalition. But now that the tables are reversed, the Australian Labor Party seeks at every turn to obstruct, to delay, to deny, to retard and to prevent the further modernisation of the Australian economy.The reforms that have delivered this `better than golden age' productivity report by the Productivity Commission must be duplicated in future if we are to maintain the great improvement in the Australian economy. The estimates show that multifactor productivity growth has accelerated to an average of 2.4 per cent a year between 1993-94 and 1997-98 compared with a long-term average of 1.4 per cent a year. In other words, productivity has lifted from a long-term average of 1.4 per cent to a figure of 2.4 per cent. The report goes on to say this:. The acceleration has not come from a reduction in labour. In fact, the growth in hours worked over recent years is high by historical standards.. There is evidence—the report goes on to say—to support the notion of `the new economy' . . . The analysis presented in this paper shows the Australian economy to have taken a new growth path which has opened up possibilities for faster growth and more rapid improvements in living standards.I would have thought that every single member of this parliament would have embraced this report, would have said that this is a compliment to the commitment of the men and women of Australia to lifting the productivity of this country. It is a compliment to the men and women of Australia for having played their part in lifting the economic performance of this country. Output per hour is now 15 per cent higher than it would have been had Australia continued on the old growth path. Put another way, the growth that would have taken 13 years to achieve on the old growth path has been achieved in six years. The shift in Australia's growth path suggests that Australia has opened up new frontiers of growth possibilities and more rapid pay-offs in terms of contributions to average living standards.This report demonstrates that today's prosperity is a product of yesterday's reforms. It follows from that that tomorrow's productivity gains, tomorrow's prosperity, will be a product of today's reforms. The message in that is very clear: if you are not willing to reform the tax system, if you are not willing to further reform the labour market, if you are not willing to undertake other economic reforms, the gains illustrated in this report will not be won in the years ahead. As a consequence, those who delay and obstruct and deny those further reforms will be rightly condemned by future generations for failing the national interest.64696469Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Minister for Finance and Administration, representing the Treasurer. Minister, have you seen comments by Victorian Premier Jeff Kennett that your GST deal will be a compliance nightmare and that the cost of the new package will be extraordinary? Can you confirm that the Democrat deal will increase compliance costs for the four biggest banks by $120 million a year and for Coles Myer by an extra $33 million a year? Minister, if the cost to the big five alone exceeds your $100 million estimate by 50 per cent, when will we see the real cost to small business of this compliance nightmare? Isn't Coles Myer right when it says that the total compliance costs could equal the Y2K figure?6470Fahey, John, MPMr FAHEYHQ5MacarthurLPFinance and Administration10—I thank the honourable member for his question. I can say that the matters that I think he was referring to were raised in this House last week—certain comments by the Victorian Premier—and, as has been dealt with in this House by a number of members of the government, the Premier of Victoria will be the Premier of Victoria. But what I do want to say in respect of what the government's new tax package is about is that it is about taking off, getting rid of, Labor's iniquitous and inequitable wholesale sales tax. The cost of compliance, of course, has caused enormous difficulties to business, whether they be retailers like Coles Myer or any other sector of the business community in Australia.DT4CREANMr Crean—Mr Speaker, I raise a point of order. It goes to relevance. The question was: what is the total cost of compliance to the small businesses of this country of his tax nightmare?10000SPEAKERMr SPEAKER—The Deputy Leader of the Opposition will resume his seat. The Minister for Finance and Administration is referring to the cost of compliance, and is entirely in order, and I call him.HQ5Mr FAHEY—Thank you, Mr Speaker. I also can indicate, once again, to the House that the government's new tax system will get rid of those iniquitous taxes that were imposed by the states that caused enormous compliance costs to businesses throughout this nation. The new tax system will remove nine of those taxes—including bed taxes and stamp duty on share transactions—and, therefore, reduce the cost of doing business in this country. The House should note that the new tax system will provide enormous benefits to all Australians in the work force with genuine tax cuts—tax cuts, of course, which represent the biggest tax cuts that this nation has seen.We can see this opposition continue to try to hold on to the current system which has caused enormous difficulties to the economy, to business, in this country. They have no solutions, and that was stated, I noted, in something I saw overnight. The Leader of the Opposition said to his party meeting yesterday, `Let us focus on the government when it comes to tax. Let us not have the focus on Labor's solutions.' That is what he has told his party: `Let us not have the focus on Labor's solutions.' We on this side of the House all know why he does not want to focus on Labor' solutions—because they have no solutions.5I4McMULLANMr McMullan—Mr Speaker, my point of order is under standing order 145 of relevance, for two reasons: one, the minister is not answering the question and has not answered the question and, two, he is now referring to matters that are in no way related to the question. I ask you to call him to order.10000SPEAKERMr SPEAKER—The Manager of Opposition Business—RW5NELSONDr Nelson—Mr Speaker, I raise a point of order. I invite you to consider that the question is, in fact, hypothetical in the response that it is seeking. The minister in responding is providing an answer based on fact, but the question is clearly hypothetical.10000SPEAKERMr SPEAKER—The member for Bradfield will resume his seat. I will deal first with his point of order.8K6FITZGIBBONMr Fitzgibbon—There is nothing hypothetical about compliance.10000SPEAKERMr SPEAKER—The member for Hunter. I will deal first with his point of order, and that is: were the question deemed to be hypothetical I should have ruled it out of order before I called the minister and, secondly, it is true to say that the minister, while answering the question on compliance costs, has now moved off that specific area. I invite him to return to the question of compliance costs, though I thought he may have, in fact, concluded his answer.HQ5Mr FAHEY—Let me conclude by saying this: the new tax system that this government is introducing will bring enormous benefits to business. Labor can persist if they like with nitpicking; they can persist with knocking: but the take out of the Australian people is that the Labor Party are nothing but economics spivs.64706470Gambaro, Teresa, MPMs GAMBARO9K6PetrieLP10—My question is addressed to the Prime Minister. Prime Minister, what action has the government taken to reverse the policies of the previous govern ment that were adopted because the Keating government became, as is publicly reported, dominated by the pet subjects of well-heeled, middle-class advisers?6471Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Let me say in answer to the honourable member for Petrie that the government has taken plenty of action to reverse those policies. Every so often, Mr Speaker, you really enjoy eating breakfast—and today was a splendid example. If ever anybody was right on the money it was Martin this morning. He was right on the money when he quite rightly took his colleagues apart for having caved in to the pressure of self-centred sectional interests in the Australian community during the declining years of the Keating Labor government. Let me quote what the member for Batman, the former President of the ACTU, the spokesman on employment and other related matters on the front bench of the Australian Labor Party, had to say:. . . the closer we got to the end of that electoral term, I believe, in some instances we were taken over by a middle-class elite who in essence wanted to make some of those decisions but then wanted to pander to minority interests to try to build a coalition . . . What did happen was that in the latter years of the former Labor government they were run by the noisy minority interest groups of the Australian community. They were totally disinterested in the views of the mainstream of the Australian community and, as a consequence, as the member for Batman quite rightly pointed out, they lost contact with their base. That is nowhere better illustrated than in a number of important areas of economic and social policy. One of those policies relates to the question of job generation in the Australian community. One of the reasons why unemployment peaked at 11.2 per cent under the stewardship of the Leader of the Opposition as minister for employment, why it averaged 8.7 per cent while Labor was in office and why it is now, under the coalition, at a 10-year low, was that, when it came to resource development, the Labor Party caved in to what was an unreasonable environmental position—not a legitimate environmental position, but an unreasonable one. It abandoned tens of thousands of workers in re source industries by adopting a fashionable position. It has continued to undermine the efforts of this government to protect those industries and those workers.LS4FERGUSONMr Martin Ferguson—Mr Speaker, I rise on a point of order. I do not think the question went to employment; if it did, perhaps you should deal with the department of employment's leading indicator that has today gone down for the 11th straight month.10000SPEAKERMr SPEAKER—Order! The member for Batman knows that he is abusing the point of order and will resume his seat.ZD4Mr HOWARD—Martin, you are a statesman today; do not spoil it with that interjection on me. You have really put your finger on what you quite rightly say should be a very important debate within your party. I have got to say, speaking for the government, that we were very heartened to hear the member for Batman say this morning that `the Leader has called for a debate and I intend to be part of that debate.' I say to the honourable member for Batman that he spoke a great deal of commonsense when he said that the former Labor government were dominated by the noisy sectional interests, they lost contact with their working class base, they ignored the needs of ordinary, mainstream Australians and they basically were a party that was taken over by a trendy political point of view. I say that in all of these respects, Mr Speaker, the member for Batman was absolutely correct.I say in response to the member for Petrie that, since taking office, this government has sought at all times to govern for the mainstream of the Australian community. We have sought at all times to do a number of very important things. First and foremost, I am proud to say that we delivered in full and on time the wonderful $2 billion a year family tax initiative. That initiative was designed to help the battlers of Australia, the very people that the member for Batman knew had been abandoned by the party of which he is a member.We have moved to restore balance so far as resource development and caring for the environment is concerned. We agree with the frustration of many union leaders in states like Western Australia, who believe that the Labor Party—both in Western Australia and nationally—has abandoned the interests of workers so far as the forest industry is concerned.We believe in giving families effective choice. We do not believe—as the member for Batman said the Labor Party believed—in waving fingers at particular sections of the Australian community and deriding the choice of parents of young children to remain full time at home caring for those children while those children are young. I think the member for Batman quite rightly pointed out the fact that you need to adopt policies that give both mothers and fathers of children effective choice as to whether they should receive paid child care or the full-time child care of one or other of the parents.I applaud the courage of the member for Batman in being willing to take on those within his party who seek to hijack the Australian Labor Party to the narrow sectional interests with a very narrow view of what Australian society ought to be. I am proud of the fact that the government I lead has been able at all times to govern for the mainstream of the Australian community. This is not a government that is dictated to by the noisy interest groups. We are not owned by the trade union movement. We are not owned by the business community. We are not owned by any one section of the Australian community. As I look around me, I see the representatives of the great sweep of men and women of Australia. I see a party that represents every section of the Australian community—I see representatives of the workers; I see representatives of small business—and I am very proud of the fact that we have within our ranks a greater number of men and women who have had small business experience than any other government since Federation. In other words, we are for the mainstream of the Australian community.I wish the member for Batman good luck on what will be a long and bitter battle to restore the once great Australian Labor Party to its true working class base.Government members interjecting—10000SPEAKERMr SPEAKER—Members on my right will come to order.DT4CREANMr Crean—I wonder if the—10000SPEAKERMr SPEAKER—The Deputy Leader of the Opposition does not have the call. He has it now and I expect him to come straight to his question, unless it is a point of order he wishes to raise.64726472Crean, Simon, MPMr CREANDT4HothamALP00—I wonder if all concreters get it as well as the member for Leichhardt.10000SPEAKERMr SPEAKER—The Deputy Leader of the Opposition is defying the chair and will come straight to his question.DT4Mr CREAN—My question to the Minister for Finance and Administration, representing the Treasurer, follows his earlier answer. Can the minister confirm advice from the Treasury Secretary that the majority of state taxes that were promised to be abolished may now never be abolished? Is he also aware of proposals from Western Australia that:States . . . have full discretion in the timing of state tax abolition and . . . retain these taxes indefinitely if requiredTotal grants to the states grow in line with population and inflationThe Commonwealth . . . rationalise specific purpose payments by a combination of conversion into general revenue grants with no conditions attached and into general funding grants.What is the minister's response to these proposals?6472Fahey, John, MPMr FAHEYHQ5MacarthurLPFinance and Administration10—The answer to the first question—have I seen advice from the Secretary to the Treasury?—is no, I have not. I will have a look at that. But I also say this, and one should always put a rider when it comes to a question from the member for Hotham: do not take as being gospel the statements that are built into his question.DT4CREANMr Crean—Well, read the evidence given yesterday.HQ5Mr FAHEY—I will have a look and I will see. I did actually follow with some interest yesterday the estimates with regard to Treasury. I watched the Labor senators looking for glimmers of hope that might give them some sort of basis for the knocking that has been going on as an excuse for policy when it comes to the economics in this—DT4CREANMr Crean—Mr Speaker, I take a point of order. The question was simple: will the majority of state taxes remain on the never-never, as the Secretary to the Treasury said in the Senate estimates yesterday?10000SPEAKERMr SPEAKER—The Deputy Leader of the Opposition is raising a point of order on relevance, I presume. The Minister for Finance and Administration is dealing with the question of state taxes and advice from the Treasury and is relevant and has the call.HQ5Mr FAHEY—Thank you again, Mr Speaker. To move to the second question, which related to the states, what the government will deliver to the states in the new tax system is a growth tax. Labor opposes a growth tax for the states. That is what it comes down to. They oppose everything, of course, but they oppose a growth tax for the states. The Commonwealth has guaranteed the states that they will get no less than their entitlements under financial assistance grants. They will get that growth tax—something they never ever could have achieved under Labor. Labor was never interested in seeing that particular process work—something that the states have cried out for for many, many years. That is what will be delivered to the states under the government's new tax system.So Mr Speaker, as I have indicated, the Labor Party can continue to knock; they can continue to nitpick. The simple fact is they are not relevant when it comes to economic debate in this country. That irrelevance has been a deliberate decision, it seems, on the part of the Labor Party. The one thing we know about the Labor Party is that they have bought a one-way ticket to policy oblivion and they will stay there for a long time.64736473Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—My question is to the Minister for Education, Training and Youth Affairs. Can the minister advise the House of the government's policies which are providing quality choice in education for all young Australians? Is the minister aware of any comments on the government's policies, and what is his response to any alternatives?6473Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—I thank the member for La Trobe for his question. The government's policies for education are designed to ensure that every young Australian has access to a quality education, whether they are in government schools or non-government schools. I am aware of comments from the Australian Education Union and their mouthpiece, the member for Dobell, who speaks on behalf of the Australian Education Union, that the government's policies are in some way discriminating against students in government schools. Let me make several points about this and put the facts on the record. While the federal government provides only 15 per cent of the total direct funding for government schools, in every year of the Howard government funding for government schools through the Commonwealth budget has increased. This year it is 20 per cent more than it was when Labor was in power in 1996. In fact, government schools will see over the next funding period an increase of $1 billion in funding from the Commonwealth government—an additional $1 billion over the current four-year funding period.I was asked about alternatives. Of course, there is no education policy alternative from the Labor Party except the mouthed cliches from the member for Dobell, and there is going to be even less chance of seeing one now that the Labor Party is consumed in a massive internal policy debate. Friday is the big day when the member for Batman launches a new book which he describes as `a searing criticism of the middle-class trendies who dominated Labor Party policy making'. He is going to strike out on Friday at the chardonnay socialists in the Labor Party.I see from Michelle Grattan's—I am sure factual—column this morning in the Sydney Morning Herald that the member for Batman is concerned that the Keating government `became dominated by the pet subjects of well-heeled, middle-class advisers' who took the party away from its working-class roots. He is obviously thinking of people like the member for Perth, Mr Stephen Smith, and the member for Jagajaga, advisers to the Keating government, who undoubtedly foisted on that government these trendy, middle-class policies which took the Labor Party apart from its roots. And they have added some chardonnay socialists since then from the Democrats.What we are seeing now is a fight for the soul of the Labor Party, because what the member for Batman wants to do is to bring the Labor Party back to its traditional base. It has lost its working-class base to the coalition. He wants to fight back against members like the member for Werriwa, who wants to break the trade union connection. He is all for traditionalism, he is all for going back to the past of some of those fundamental values—and good luck to him.64746474Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister. Why, Prime Minister, when yesterday you were excusing the failure of Mr Entsch to properly disclose his full interests in Cape York Concrete Pty Ltd as simple inadvertence, did you fail to inform this House of his undisclosed full interests in two other companies: firstly, as a director and company secretary of Vervale Pty Ltd and, secondly, as director of Septennial Holdings Pty Ltd? Did you fail to inform the House of these undisclosed interests because you did not know about them or were you seeking to withhold crucial information about Mr Entsch's blatant and consistent failure to disclose the full nature of his relationships with private companies with which he is closely involved, as it would cast doubt on the supposed inadvertence of his failure to declare on Cape York Concrete?6474Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—The reason is that I was answering the question I was asked.Opposition members interjecting—10000SPEAKERMr SPEAKER—The member for Paterson, the member for Bruce, the member for Rankin. The House will come to order. The member for Burke has already drawn the attention of the Speaker.64746474Macfarlane, Ian, MPMr IAN MACFARLANEWN6GroomLP10—My question is addressed to the Deputy Prime Minister and Minister for Trade. Given the Singaporean and Malaysian governments' recent announcements to ban and recall a wide range of European food products due to a dioxin contamination fear, what initiatives has the Australian government taken to promote Australia's reputation for being a `clean and green' nation, and what opportunities now exist for Australian companies such as those in my electorate of Groom to further penetrate the South-East Asian markets?6474Fischer, Tim, MPMr TIM FISCHERDG4FarrerNP10—I thank the member for Groom for his question. As one who reads the Queensland Country Life editorials—as he does and many others do: the member for Dawson, the member for Wide Bay—let me make the point that I am delighted with the QCL editorial last week which said that the tax deal is the best thing for country Australia that there has been for a very long time.Both the member for Groom and the member for Forrest have raised with me recent developments with EU food products, particularly arising from the alleged outbreak of dioxin contamination of Belgian stockfeed. This is a very serious issue which has now reached a stage where many supermarket shelves in parts of Asia have been cleared of European goods which are in the categories listed as being at risk.I do not want to dance on the difficulties of a major trading partner and competitor, but I do want to point out that we now have a situation where Austrade has swung into action to connect the many extra demands and proper requests they are getting from supermarkets in Asia with Australian food suppliers—suppliers of clean food and fresh produce from Australia.This builds nicely on some recent breakthroughs including, in February, the launching of Australian chilled pork onto the Singapore market. That is going so well it is already worth, in a matter of just four months, several million dollars to Australian pork producers and to such companies as Watsonia in Western Australia and Bunge in the electorate of Farrer.Austrade is promoting opportunities for Australian companies in the food services sector in South-East Asia, working closely with the Supermarket to Asia strategy—Mr Kennedy and others—the Australian Dairy Corporation and the Australian Meat and Livestock Corporation. In conjunction with the Minister for Agriculture, Fisheries and Forestry, I am driving further progress to ensure the comprehensive promotion of high quality Australian food products throughout Asia.There are scheduled major trade exhibitions to promote Australian food products and services, including the food and hotel exhibition in Malaysia in September this year—and others to follow. We have a circumstance available to us to further expand our export effort and opportunities in the direction of Asia in a systematic way and, because we were not tied to the minority trendoid advice of the previous government, we are expanding our export efforts to every other part of the world as well. The diversification of our export effort has been markedly successful against the tide.I join with the Prime Minister in congratulating the member for Batman on his wonderful comments this day. The agony on the faces of the femocrats in the Labor Party was a joy to behold. You are invited to cross the floor.10000SPEAKERMr SPEAKER—The Deputy Prime Minister will resume his seat. His comments bear no relevance to the question.64756475Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister, and it follows his unexpected answer to the previous question. Prime Minister, do you recollect that I asked you yesterday:How can you claim the member for Leichhardt inadvertently failed to declare his directorship when it is clear the member has misled this House, the Australian people and you, and are you completely satisfied that there are no other directorships on his part to disclose?Do you recollect, Prime Minister, my raising a point of order—recorded again in Hansard —in which I said:The Prime Minister has not dealt at all with my question as to whether or not there are any other directorships he failed to disclose.So, Prime Minister, I ask you again: did you fail to inform the House of these undisclosed interests because you did not know about them or were you seeking to withhold crucial information about Mr Entsch's blatant and consistent failure to disclose the full nature of his relationships with private companies with which he is closely involved, as it would cast doubt on the supposed inadvertence of his failure on Cape York Concrete?Opposition members interjecting—6475Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—At no stage have I misled the House—10000SPEAKERMr SPEAKER—The Prime Minister—ZD4Mr HOWARD—and I repeat the answer I gave a moment ago.UU5HORNEMr Horne—You have been caught.10000SPEAKERMr SPEAKER—I warn the member for Paterson.Opposition members interjecting—10000SPEAKERMr SPEAKER—The member for Lowe! The member for Watson!UU5HORNEMr Horne—A point of order, Mr Speaker: that answer was given before the Prime Minister had the call. The speakers were not turned on and no-one in the House heard his answer.10000SPEAKERMr SPEAKER—The member for Paterson will resume his seat. The member for Paterson does not have a point of order per se but he does make the valid point that, because of the level of comment in the House, many may not have heard the Prime Minister's reply.UNKNOWNOpposition membersOpposition members—Get up again.10000SPEAKERMr SPEAKER—If members on my left, including the member for Prospect, actually want to hear the replies of members at the despatch box, they will maintain just a little more order so they can be heard.64756475Andrews, Kevin, MPMr ANDREWSHK5MenziesLP10—My question is addressed to the Minister for Community Services, representing the Minister for Family and Community Services. Minister, would you inform the House of the measures that have been put in place by this government to improve the wellbeing of Australian families?6475Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—May I thank the honourable member for Menzies for his question and recognise the very, very keen interest that he takes in family issues—indeed one of the leading advocates of families in this chamber. In fact, this has really been one of the trademarks of the coalition government—its commitment to families. Stronger families certainly mean a stronger society, a stronger Australia. Under the leadership of the Prime Minister this government has made a real commitment to families and improving their lot, contrasting sharply with the performance of the Labor Party during 13 years, which was so ably highlighted by the member for Batman earlier today.The very creation of the Department of Family and Community Services is a demonstration that this government is determined to focus policy outcomes on families and to build the sort of organisation at government level which delivers real outcomes to families. So there has been a range of new programs, like the partnerships against domestic violence, the Relate program, the family orientation of many of the support initiatives that have been undertaken, extra child-care places, the focus on early intervention to try and prevent family breakdown and to ensure that families are given every possible assistance to stay together whenever a crisis arises. All of those things are measures to assist families to become stronger.But, in addition to that, this government is addressing in a very serious way the issues of family income and in particular the decline in circumstances of single income families, a matter that was highlighted earlier in the week by the NATSEM study and highlighted again very effectively, I thought, this morning by the member for Batman. He was absolutely right when he pointed to the fact that Labor have turned their back on the working classes, have turned their back on the poorest single income families—the Norms of the tax debate sitting in their armchairs while it all goes by, sipping their beers, or, if the member for Batman is right, chardonnay these days—as they have moved towards their interest in the double income—the upwardly mobile families.The key thing of interest in the NATSEM study was the way in which family incomes under Labor had fallen by $24 a week. The single income families, the battlers—the sorts of people that Labor in the past had always said that they were standing up for—were the sorts of people that did poorly under Labor government. So, when we introduced our new tax package, it included specific measures to assist single income families. The new structure, from July 2000, will provide an extra $2½ billion of assistance for families, helping the people that the member for Batman is now expressing some interest in, the sorts of people that were neglected by his party when in government.In particular, single income families will benefit—those with children under five years, an increase of $350 a year—and that kind of increased assistance flows through into the tax cuts. Effectively, a single income family with a child under five will not pay tax on their first $13,000 worth of income—and they are real benefits to the battlers, real benefits to single income families to ensure that they are able to play their role in building stronger families. And again it contrasts so much with Labor. Labor's social security policy was a flimsy five pages in their policy document. Indeed they have lost their way; they have no idea where to provide the sorts of supports that families need. The light on the hill has become the dimmest of glimmers. Labor have lost their social conscience. It is up to this side of the House to deliver for Australian families and in particular single income families.64766476Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister. Prime Minister, doesn't the ministerial code explicitly warn against `the retention of a directorship in a company in which shareholdings extend beyond the minister's own family'? Isn't Mr Entsch in clear breach of this requirement? Isn't Cape York Concrete Pty Ltd precisely such a company, as indicated in the letter from the company's accountant which you tabled yesterday? Isn't Vervale Pty Ltd another such company involving, as it does, several foreign based shareholders and directors who are not members of Mr Entsch's family? What action are you going to take against Mr Entsch for this breach? If the answer is none, why are you condoning such a blatant breach of your code?6477Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I am satisfied on the information provided to me that he is not in breach of the code.Opposition members interjecting—10000SPEAKERMr SPEAKER—The member for Fraser, the Deputy Leader of the Opposition, the member for the Northern Territory, the member for Prospect and the member for Corio have become persistent interjectors and will exercise a little more constraint.Mr O'Keefe interjecting—10000SPEAKERMr SPEAKER—The member for Burke is warned.64776477Nehl, Garry, MPMr NEHLAE4CowperNP10—My question is addressed to the Minister for Immigration and Multicultural Affairs. Can the minister inform the House of the effect that manipulation and abuse of Australia's judicial system by failed asylum seekers are having on other court action taken by Australian residents? Isn't this yet more evidence that immediate action must be taken in Australia's national interest to remove people with no lawful right to be here?6477Ruddock, Philip, MPMr RUDDOCK0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—I thank the honourable member for Cowper for his question. He is obviously interested in this issue and very much aware of the implications—that our failure to address the judicial review issue in relation to asylum claims in particular can have a very deleterious effect not only on the people who are involved in these matters but also on the access of other Australians to our court system where they are entitled to expect they will receive expeditious treatment in relation to the matters that they are litigating.The fact is that a staggering 65 per cent of the Federal Court's administrative law case load is now made up of immigration matters. The bulk of these relate to failed asylum claims. In 1997-98 there were 1,045 applications to the Federal Court seeking judicial review on migration matters. This year there has already been 1,148 applications lodged. Tellingly, 47 per cent of applicants withdraw before the matter reaches the judge. They put their claim into the system and then walk away from it when it is at the door of the court.The fact is that this unmeritorious case load is clogging up the system and leading to very significant indirect costs being borne by the rest of the community. It is delaying Australian litigants. The Law Reform Commission recently undertook a study in relation to these matters. In relation to that, although immigration issues are seen as being less complex and involving less pre-hearing events and less hearing time than other cases, they nevertheless occupy on average 6.7 months before they are able to be dealt with and are obviously having an impact on the average duration of all other cases. The court is trying to expedite these matters, but it is having to do so with enormous difficulty.The former Labor government saw these as serious issues and introduced amendments to part 8 of the Migration Act to limit access to judicial review. The provisions in part 8 were recently reviewed by the Federal Court and upheld as being a valid exercise of power, and that was a very appropriate decision, I might say. The High Court had something to say when it looked at this issue in relation to the proposed judicial review changes that this government has in mind, that is, in relation to a privative clause.RH4KERRMr Kerr—It warned about a backlog of cases in the High Court.0J4Mr RUDDOCK—Yes, and I'll tell you about that, too.RH4KERRMr Kerr—It warned you couldn't have what you proposed.10000SPEAKERMr SPEAKER—The member for Denison!0J4Mr RUDDOCK—What the High Court had to say was that a privative clause would be constitutional. In the obiter dictum that was given, a privative clause would be constitutional. That has been one of the main arguments the advocates have tried to advance to you to change your approach on these matters. But the second point the court made is that at the moment with part 8 operational some people cannot pursue their claims before the Federal Court but they can access the High Court. The High Court was saying, `If you are going to stop cases coming to us that are unmeritorious and an abuse of process, you need to have provisions which operate in relation to both the High Court and the Federal Court in exactly the same way.' That is what the High Court was saying: `If you are going to stop us getting this case load, make sure the Federal Court is operating on the same basis.' By implication, they said that a privative clause would be constitutional and I think you are safe in drawing the conclusion that the High Court was saying that a privative clause is appropriate.64786478Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister. Prime Minister, yesterday you defended the member for Leichhardt's directorship of Cape York Concrete on the grounds that he:. . . plays no part in the day-to-day running of the company. This is entirely in the hands of his business partner . . .Prime Minister, didn't the member for Leichhardt also fail to declare his directorship of Vervale Pty Ltd? Can you assure the House that he also plays no part in the day-to-day running of that business? If so, what steps did you take to ascertain that?6478Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—In relation to all of those matters I have been informed by the member for Leichhardt in relation to this CYC company that he plays no part in the day-to-day affairs of that company. In relation to Vervale I have not received a specific assurance.DT4CREANMr Crean—Why not?ZD4Mr HOWARD—Hang on. There will be an opportunity later in the parliament for the member for Leichhardt to throw some light on that matter.64786478Hawker, David, MPMr HAWKER8H4WannonLP10—My question is directed to the Minister for the Arts and the Centenary of Federation. Can the minister update the House about the program of events for the Centenary of Federation in the year 2001, and what will Australians have to look forward to for the nation's 100th birthday?6478McGauran, Peter, MPMr McGAURANXH4GippslandNPArts and the Centenary of Federation10—I thank the honourable member for Wannon for his question. The Centenary of Federation in 2001 is a year full of promise. A large number of events, programs and projects are being planned by the National Council for the Centenary of Federation, a body established by all Australian governments to coordinate events and activities for the year. The year will start with a televised dawn ceremony at Australia's heart, Uluru. We will then be reminded of where our nationhood started with a parade through the streets of Sydney and a re-enactment of the Proclamation of Federation in Centennial Park.The Centenary will spotlight a whole range of important political events, such as the opening of the first parliament in Melbourne during May. It will recall times when Australians were called on to defend their nation, and it will celebrate Australian endeavour and much more. One of the highlights will be the opening of the new National Museum on Acton Peninsula here in Canberra in March, which will be the flagship of the Commonwealth's Centenary celebrations. We will commemorate the first crossing of our nation by rail—and there have been some strong proponents of that project within the government, namely, the Deputy Prime Minister. We will commemorate the founding of our national airline, Qantas, and there will be a week-long festival in Central Australia to celebrate traditional and contemporary indigenous culture.So it is a year that will be marked with dignity, and it will be remarkable in that we will educate Australians not only about our history but about what it means to be an Australian. It will incorporate our indigenous community, our diversity, our sporting heroes, our artists, our scientists, our youth, our cities and our bush. The Centenary of Federation is, I am sure all members will agree, a rare opportunity for us to share the pride we feel in the progress of our nation, to tell our own stories and to support and encourage all Australians to participate.In drawing to conclusion, I wish to pay tribute to one person who is immensely proud to be an Australian—ultra-marathon runner Pat Farmer. As many, if not all, members would recall, on 31 May Pat set out on a historic journey from Canberra to run around Australia for the Centenary of Federation. Pat is running an average of 70 kilometres a day over the next seven months to help spread the word of the Centenary of Federation. He will finish in Sydney on 1 January 2000 and will set a new record for running around our vast continent. Like Pat's once in a lifetime run, the Centenary of Federation is a unique opportunity for all Australians to declare and show their love for their country and plan our future with confidence.64796479Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister. Prime Minister, isn't it the case that the ministerial code precludes ministers and parliamentary secretaries from engaging in `any professional practice' or `in the daily work of any business'? Prime Minister, isn't it the case that the member for Leichhardt was actively involved in the daily work of Vervale Pty Ltd, including, as reported in the Courier-Mail of 25 February 1999, `extensive negotiations with the ANZ Bank over the sale of a $1.2 million cattle station owned by the company Hurricane Station near Laura on Cape York? Isn't Mr Entsch quoted in the Courier-Mail story as describing the ANZ Bank as `a pack of bastards' for seeking to sell the property? Isn't it also the case that the ANZ Bank considered him to be the person responsible for `resolving the matter in a sensible and negotiated fashion'? Finally, isn't it also the case that Mr Entsch personally signed an annual return for Vervale—which I now produce—in January this year, after he became a parliamentary secretary? Prime Minister, when will you sack Mr Entsch?6479Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—On the information available to me, the parliamentary secretary is not in breach of the guidelines. It is the case that he would have signed an annual return—that is the case. That does not, of itself, mean that he is in breach of the guidelines. It does not mean that he should no longer be a parliamentary secretary, because there is nothing in the guidelines which says that the directorships of private companies should be resigned. It depends entirely upon the activities of those private companies.It is the case that, as I indicated yesterday from the very beginning when these questions were raised, in completing his parliamentary return, and also the return to me, the parliamentary secretary in question did not, in relation to those companies of which he was a shareholder and simultaneously an office holder, record the fact that he was both.MG4LEEMr Lee—Did you ask him why?ZD4Mr HOWARD—Yes, I did. I did ask him why. In the explanation that he has given, and in the explanation that I understand he has now given to the Clerk of the House—and I will read out the explanation that he has given to the Clerk of the House; as is clearly going to be the case, the parliamentary secretary will have an opportunity later this day to say something personally about these matters—he said on the third page of the statement:I filled in the registered directorships of companies section, believing that this section related only to directorships and secretaryships but did not involve any ownership in the mentioned companies. Having already noted my shareholdings, I believed I was not required to make further mention of these companies.On further advice, I am now aware that I made an inadvertent error and I would like to correct my record. I am in fact a director of the three companies made mention of in the shareholdings in public and private companies sections, and these companies are Septennial Holdings, Vervale and Cape York Concrete. I am also the secretary of Vervale and of Cape York Concrete. The companies currently listed in the registered directorships of companies section of my statement are companies that I have no financial shareholdings in. These companies are Deugro Australia and Deugro Northern Territory.He goes on to say:These omissions were an honest oversight on my behalf and my declaration was completed in good faith and clearly with the intention of declaring all of my interests. I apologise for any inconvenience in relation to that.He went on to say:It should be emphasised that at all times I disclosed my financial and beneficial interest in these companies.As I said yesterday in answer to another question from the Leader of the Opposition, the whole purpose of these disclosures is to determine whether there is any conflict of interest. The thing that determines a conflict of interest is the financial or beneficial interests that somebody has in a company.What this man has done is to incorrectly complete his form, but in the process he has disclosed, on the information available to me, the beneficial and financial interests that he holds in these companies. Also in the course of yesterday's questioning and this morning's reporting, questions have arisen about the constitutional position of the member as a member of parliament. Reference has been made to section 44(v) of the Constitution and it has been suggested by the Labor Party that in some way he might be disqualified from sitting in this place. I have received, and propose to table, an opinion from the Acting Solicitor-General of Australia, Mr Henry Burmester QC—PE4BEAZLEYMr Beazley—Mr Speaker, on a point of order: we are finding it impossible to get answers to the questions we ask.10000SPEAKERMr SPEAKER—What is the point of order?PE4BEAZLEYMr Beazley—The point of order is relevance. The Prime Minister has a set of questions before him related to his knowledge of Mr Entsch's activities, which are a clear, blatant breach of his guidelines. He will not answer them, but he persists in trying to answer a question he has not been asked.10000SPEAKERMr SPEAKER—The Leader of the Opposition will resume his seat.Honourable members interjecting—10000SPEAKERMr SPEAKER—I will rule on the Leader of the Opposition's point of order when the House has come to order. I have had a seat in this House for 16 years and in those 16 years I have heard a great number of questions answered. That the Prime Minister chose to add to the answer that he was giving, to a question referring to the member for Leichhardt, seemed to me to be entirely appropriate and I invite him to continue.ZD4Mr HOWARD—I seek to table—Honourable members interjecting—4I4McLEAYMr Leo McLeay—Mr Speaker, my point of order—Honourable members interjecting—10000SPEAKERMr SPEAKER—The House is not being facilitated by the exchange between the Leader of the Opposition and the Prime Minister. The member for Watson has the call.4I4McLEAYMr Leo McLeay—My point of order is also on relevance. The Prime Minister was asked about his code of conduct, not section 44 of the Constitution. It is very hard to see how, if he is not willing to answer one question, he can answer one of his own choosing.10000SPEAKERMr SPEAKER—The Chief Opposition Whip will resume his seat. There is no way, as every member in this House knows, that what the Prime Minister is saying could be deemed to be no longer relevant to the question, and in fact it is entirely within the precedents that have been established in this House over the years. I call the Prime Minister.ZD4Mr HOWARD—The opinion from the Acting Solicitor-General, Mr Henry Burmester, dated today and which I table, says, amongst other things, that he was asked to advise on the application of section 44(v) to Mr Warren Entsch. In the course of the opinion—and I ask the members of the House to listen to this conclusion carefully because it goes to the heart of what is at issue—he records:In the present case, Mr Entsch, through the legal framework of a company, is essentially involved as a sleeping partner in a business operation in relation to which he has no day-to-day knowledge or practical control of the activities undertaken.Mr Burmester goes on to say:In my view, on the authority of the Webster case and on the basis of the facts provided, Mr Entsch is not disqualified under section 44(v) of the Constitution. This is because the agreement made between CYC and the Department of Defence is not the type of agreement that falls within section 44(v) and no pecuniary interest in the agreement arises from his financial exposure to the company or as a shareholder.That is an opinion that has been provided by the Acting Solicitor-General of Australia. It is the opinion of a man who has advised both sides of politics in relation to legal matters and those in the opposition who seek to deride that opinion are deriding the professional views of a man who has given very faithful advice to governments of both political persuasions. On the basis of that opinion, the arguments advanced by the Labor Party in relation to Mr Entsch's holding of seat in the parliament are baseless.5I4McMULLANMr McMullan—Mr Speaker, the Prime Minister quoted from two documents. He has tabled one and I ask that he table the other, that is, the statement by Mr Entsch.10000SPEAKERMr SPEAKER—Has the Prime Minister tabled the documents?ZD4HOWARDMr Howard—Yes.10000SPEAKERMr SPEAKER—I thank the Prime Minister.Miscellaneous6481648115:05:006481Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—I move:That this House censures the Prime Minister for his failure to uphold his Ministerial Code of Conduct in regard to the actions of the Parliamentary Secretary to the Minister for Industry, Science and Resources:(1) in failing to include in his Statement of Members' Interests his interests as Director and Company Secretary of Cape York Concrete Pty Ltd;(2) in failing to include in his Statement of Members' Interests his interests as Director and Company Secretary of Vervale Pty Ltd;(3) in engaging in the business of Vervale Pty Ltd, negotiating with the ANZ Bank while a Parliamentary Secretary over the sale of Hurricane Station on Cape York Peninsula;(4) in retaining a directorship in companies in which the shareholdings extend beyond his own family, in breach of the Prime Minister's Code of Conduct;(5) in being the beneficiary (through Cape York Concrete) of a business contract with the Australian Defence Force;(6) in being thereby in probable contravention of section 44(v ) of the Constitution which states that `Any person who . . . holds any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth . . . shall be incapable of sitting as a . . . member of the House of Representatives'; and (7) for blatantly misleading the House during Question Time today.In moving this motion, I am conscious of this fact and impelled to it because it was not necessarily our intention to move a censure motion here today. We sought to obtain information from the Prime Minister; what we got were lies. He started, in answer to the first question, a lie when he said that he had not been questioned yesterday on the matter of whether or not the member for Leichhardt had other company interests which he had failed to declare.The Prime Minister stood in this place before the people of Australia and said he answered the question he was asked. When you look at the question in the Hansard record of yesterday, you see amply clearly that he was asked a question on precisely that matter. And more of that misleading was evident when he got up just then and read from the information that was provided to him yesterday by the member for Leichhardt. We had some assumption that perhaps the member for Leichhardt had directly misled the Prime Minister in that regard and we find of course that the member for Leichhardt had not.So what does that mean? That means that the Prime Minister—the member for Leichhardt having informed the Prime Minister of those matters and having sought the defence of the Prime Minister in regard to an assumption that he is not somehow involved in the day-to-day affairs of the companies that he represents as a director and a secretary—made no inquiries of the member for Leichhardt, none whatsoever apparently, in regard to the activities of companies other than Cape York Concrete. He made no inquiries of him in regard to the operations of the company Vervale. Yet by a simple checking of the record in regard to Vervale—a simple checking process that we can engage in as the opposition without the capacity to question Mr Entsch directly, as the Prime Minister has the capacity to question Mr Entsch—we find that not only is Entsch up to his eyeballs in the day-to-day administration of this particular company, including tabling its company returns, but also he is actively, on behalf of his business partners, conducting negotiations with the ANZ Bank in such a public fashion that he feels constrained as a parliamentary secretary in this government to refer to them as a `bunch of bastards' in the process of that negotiation.What standards exist in this government? Let me read to you the standards that are supposed to exist, because what we have had here is a process of unbelievable sophistry, classing black as white and left as right, in the process of trying to crawfish, crawl, out of what has been held for many years as a pretty ordinary standard of conduct which is required and is pretty easily achieved. I quote from the Prime Minister's code of conduct, of which he was once proud, but which is now entirely honoured in the breach—not occasionally honoured in the breach, entirely honoured in the breach. The standards of conduct which Entsch fails repeatedly are these:Ministers (this and subsequent references to ministers should be read as including parliamentary secretaries) must not engage in any professional practice or in the daily work of any business. They must not accept retainers or income from personal exertion other than that laid down as their remuneration as ministers and parliamentarians.It goes on:Ministers are required to resign directorships in public companies and may retain directorships in private companies only if any such company operates, for example, a family farm, business or portfolio of investments, and if retention of the directorship is not likely to conflict with the minister's public duty.But then just in case this is insufficient guidance for somebody who finds themselves potentially in this situation:. . . a minister should question the retention of a directorship in a company in which share holdings extend beyond the minister's own family.Finally, it says:Ministers are required to divest themselves, or relinquish control, of all shares and similar interests in any company or business involved in the area of their portfolio responsibilities.So what we have here, as far as this individual, Entsch, is concerned and so far as the Prime Minister's protection is concerned, is a blatant breach of the ministerial code of conduct. I detect in that piece of grovelling to the Prime Minister, in that unexamined statement that Entsch apparently handed him yesterday, a bit of a mea culpa saying, `Sorry, when I picked up that shareholding register which asks for directors and any other interests which may bring you into a conflict of interest, it didn't seem to me that it would naturally suggest itself that I should so declare; because I have a shareholding in them, that would be a sufficient declaration.'If it was a sufficient declaration, why is it there? If it was sufficiently understood, why did you sign the fact that you were a director of two other companies? You managed to get those ones right. You got that absolutely correct, but then with this particular one you did not get it. Why didn't you? The simple reason why you did not is that, if you had declared it and anybody had looked at your activities on a day-to-day basis, a reasonable assumption would be made by an ordinary person—but not the Prime Minister, who is dead-set scared of sacking any of his backbench—that when you are declaring that you are a director or a company secretary you have day-to-day contact.What did that letter say, that letter which you produced in defence of yourself that was so gormlessly gobbled up by the Prime Minister yesterday and which is supposed to provide evidence that you are not involved in day-to-day contact? `We kept him on as company secretary because he is the easiest person to contact. We kept him on as company secretary because, if we had a few documents to sign, he was the easiest person to contact.' That clears you? That puts you right in it! And if the Prime Minister read it—and the Prime Minister says he has—it puts the Prime Minister right in it. A halfway commonsense interpretation of that is that any meaningful discussion about being involved in the day-to-day activities would surely entail a person being available in that regard.This is an outfit—in the case of concrete constructions—which is signing contracts with the Commonwealth. This is an outfit—and we have not yet had time to explore this but, since you are hanging around, you can bet we will—which got a contract in circumstances, no matter what guarantees the Minister for Defence might be offering, which have been described by Boral, an infinitely more reputable company than yours, as dodgy, to say the least. We know who the cowboys are when we compare Boral with your company. What Boral objects to is the fact that the spirit of the guidelines which require a delegate of the Minister for Defence to seek a competitive tender were not adhered to in your case and you got that contract. I would lay London to a brick that if it had not been you, if it had been Fred Nerk as the 50 per cent owner, company secretary and director of that outfit, if it had been Fred Nerk of Cairns whose signature was on the document and not `W. Entsch, Parliamentary Secretary and Member', the chances of that outfit getting a contract over Boral or getting itself engaged over Boral were somewhere between Buckley's and none.The circumstances in which you find yourself here, Prime Minister, are completely untenable. You have an argument from Henry Burmester about whether or not this might offend against the Webster judgment. Well, Mr Prime Minister, there is another High Court and a few other people taking a look at this, and it is a High Court which has taken probity issues more seriously than it did 20 or 30 years ago. So this one might well be tested. I bet your sweet bippy you are not in there with Henry. If you have to defend this one in the High Court, I bet you are not in there with Henry—who has put in the proposition now for you—to do it. You will be in there with a much higher priced array than Henry, because if you are not you are dead-set gone.What we actually have is rottenness from top to bottom in evasion, absolute evasion, of the obligation to properly declare. There is absolute incredibility in the suggestion that you would not understand what it is that you are declaring. There is a difference, Mr Entsch, between having to declare a shareholding and directorships and company secretaryships for a very good reason. There is a substantial possibility that the exercise merely of a shareholding does not constitute control—mind you, it is not much of a possi bility if it happens to be 50 per cent of them. But it is quite conceivable that at some point in time there will be a set of circumstances where you have 500 BHP shares, you are not a director, you declare them and you retain your position. As you understand, because you declared your directorship on at least two other occasions while evading these three, if you are a director and the company secretary and you have the accountant writing and saying that you are company secretary because you are around more often than the other partner to sign documents, there is a probability that you exercise control. And in exercising control you run into other problems that you have with the code of conduct—this pretty ordinary code of conduct, I have to say—and you get yourself into a situation where you compromise the fact that you are supposed to be operating as a parliamentary secretary or a minister on behalf of the people of Australia and not yourself and that you are supposed to be doing it in a disinterested way.The reason Boral are raising this sort of stuff, over the Prime Minister's objections, is that they do not think you are acting in a disinterested sort of way; they think that people are being influenced to go against the spirit of those guidelines by virtue of the fact that you are a parliamentary secretary. You would have thought that if you were going to get a couple of competitive tenders there would be some thought given to Boral. So you have to seek a few reasons as to why that was not so.But when it all boils down to it, let us go to the culpability of this Prime Minister. This Prime Minister evidently was advised of all these things. This Prime Minister has picked up Entsch's declaration and seen him declare his company directorships on a couple of occasions—while he failed to declare on three others. The fellow rocks in and says, `Prime Minister, really there is no collision course here—nothing as far as concrete is concerned.' You would have thought maybe that the Prime Minister would have had a slight argument with him on the concrete issue. It is pretty darned difficult to see what the Prime Minister sees in that letter that had to be sent. But you would have thought that, even if it was not him, the old Max Moore-Wilton—the superefficient superbureaucrat we have operating here who cannot find out things about his parliamentary secretaries that the opposition can find out about in 24 hours flat—might have said, `We'll take a bit of a look at Vervale, take a bit of a look at what that might be doing.' But there was no initiative as far as you were concerned.Why, Prime Minister? Because you wished to render yourself blind, deaf and dumb on this one. You decided from the outset you would not examine these circumstances on behalf of the people of this nation you are supposed to protect. What you decided was: `My parliamentary secretary is not going to go. I am going to defend him, no matter what. I do not want to inspect what is behind this. I want to mislead the House. I want to obfuscate in question time. I am going to defend you. I only have to last until the weekend and then the press will lose interest in this. They will be bored with it. We will lift the bat on this one and we will just let it pass, because there is only the poor old opposition out there to call for a bit of accountability and we can always blackguard them. So let us just skate through to the weekend and we will be able to survive on this one and not have to worry any more about it. These things too shall pass. You can tell the opposition that what they ought to be concerned about is the great economic issues of the day. You can tell the opposition that all you have to do is get up and ask us dorothy dixers every day. That is the job of the opposition.'What we find from this Prime Minister is that he has been caught out. He has been caught out because he needed to do that examination and he has not done it. What do we hear from him on his own view about what is truth:We want to assert the very simple principle that truth is absolute, truth is supreme, truth is never disposable in national political life.J.W. Howard. What a ripper! But I have got something even better on the subject of truth, honesty and integrity. Entsch hardly ever speaks in this place. Entsch is up there imposing on the people of Leichhardt a massive GST and not challenging the Prime Minister on any of that, while at the same time he is into a $175,000 contract. What did Entsch have to say on one of the few things he talked about?10000SPEAKERMr SPEAKER—The Leader of the Opposition will refer to the member by his seat.PE4Beazley, Kim, MPMr BEAZLEY—What did the member for Leichhardt have to say on the few things he talks about? One is the Charter of Budget Honesty.IK6LLOYDMr Lloyd—A point of order, Mr Speaker—10000SPEAKERMr SPEAKER—I have already dealt with the identity matter.PE4Beazley, Kim, MPMr BEAZLEY—He says this:I find it rather distasteful as an Australian that we as a government are being forced to enact legislation which in effect enshrines honesty as part of the political process. Honesty should be inherent in everything we do as representatives of the Australian people.He goes on in the same speech, this paragon of virtue, this man who understands so well the processes of government, to say:We in government have the intestinal fortitude to wear our accountability on our sleeve and to set the scene for the demise of political deception . . . I tell you what: setting the scene for the demise of political deception, Sport, starts with your resignation. That is where it starts. That would set the seal on the demise of political deception. That would set the seal on the demise of political deception about people who do not declare their interests properly and ask us to believe that they cannot comprehend a simple document that is put before them. That would seal the demise of political deception when it deals with Prime Ministers who get up and misrepresent the questions they are asked for a smart alec appeal to the backbench.He gets away with a lot with this Liberal-National Party backbench. There is a nefarious deal operating in this country. He gets up before them and he says, `Listen, if you object to what I am doing on the GST, forever hold your peace.' You would have thought there would have been a couple of them stand up and say, `Any questions.' But on the other hand there is this other side to the deal: `If you do not challenge me on this wretched, collapsing piece of public policy, I will not challenge you on probity, I will not challenge you on the standards. You can all keep your seats and have a contract with the Commonwealth. You can all keep your seats, you can keep your parliamentary secretaryships, and have business interests undeclared to the Australian people.'What we have got here are shonky, shoddy standards from a Prime Minister grown too easy with a lack of accountability in this place and an ability to obfuscate every single question he is asked here. What we have got here is a wet, worthless, weak government that cannot sustain the basic integrity that is required from anyone who would represent the Australian people. What we have got here is an outfit deeply deserving of censure and a Prime Minister deeply deserving of censure for his lack of diligence, his indolence as far as his supporters are concerned, his arrogance and his ignorance on these matters, and his absolute unwillingness to sack somebody in an obvious position of breach. (Time expired)10000SPEAKERMr SPEAKER—Is the motion seconded?5I4McMULLANMr McMullan—I second the motion and reserve my right to speak.15:27:006485Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Not surprisingly, we do not agree with the motion. I want to go through the various issues that have been raised by the Leader of the Opposition. I want to make it very plain that I have sat through many of these censure motions over a long period of time, and that was one of the wordiest, windiest and least effective I have heard for a very long time. Talk about a Leader of the Opposition being off the money. The Leader of the Opposition was well and truly off the money. We will also have an opportunity, when the member for Leichhardt participates in this debate, to hear from the member for Leichhardt regarding some of the quite baseless, unfair, untrue and totally exaggerated remarks that have been made by the Leader of the Opposition about the member for Leichhardt.I said during question time that one of the distinguishing features of the front and back benches of the government parties in this parliament is that we have within the parlia ment, not only on the front bench but also on the back bench, a larger number of men and women who have come from a small business background. One of the things that these debates illustrate very clearly is the total inability of members of the Australian Labor Party to understand the character and nature of operating a small business. If you run a party that is comprised overwhelmingly of trade union officials, Labor Party apparatchiks, teachers and bureaucrats, inevitably you are not going to have any acquaintance with issues relating to small business.If I may, I would like to come to the specific charges that were made by the Leader of the Opposition.Opposition members interjecting—10000SPEAKERMr SPEAKER—Order! The chair, as members would have noted, deliberately did not interrupt the Leader of the Opposition even when a point of order was called. I do not intend to interrupt the Prime Minister, but I expect him to be extended exactly the same courtesies as were extended to the Leader of the Opposition.ZD4Howard, John, MPMr HOWARD—Of the many claims that were made in the Leader of the Opposition's speech, none was more absurd than the claim he made that I deliberately misled the parliament in answering his first question on this subject. The reason I gave the answer I did is that I was answering the question I was asked. The Leader of the Opposition may not have liked the answer I gave to his question yesterday, but it is undeniably the case that the response I gave was the answer to that question. Therefore, any claim by the Leader of the Opposition that I have in some way misled the parliament is absolutely, tortuously and completely ridiculous.The essence of this matter is that the member for Leichhardt failed to disclose in his return of interest lodged both with the parliament and with me the fact that he was simultaneously an office holder in three companies in which he was a shareholder. That is the great crime that has been committed by the member for Leichhardt.WU5O'CONNORMr O'Connor—Well, what is the register there for?10000SPEAKERMr SPEAKER—I warn the member for Corio.ZD4Howard, John, MPMr HOWARD—I will come to the other allegations that have been made about the operation of the code, and I will come to the allegations that have been made about the defeating of the national interest. But that in essence is the great failure of the member for Leichhardt. It is the case that he did fail to do that, and that was acknowledged in the letter that he wrote to the Clerk, which I have tabled. It was also acknowledged in discussions that I have had with him over the last couple of days. Of course, that is a matter of regret; it is a matter of criticism. There has been a technical non-compliance with the terms of the return. But the question I have to ask myself and the question the parliament has to ask itself is whether the bare failure to record the existence of an office-holding in a company in which you have declared your financial interests constitutes sufficient grounds for removal as a parliamentary secretary. That is the issue that is before the parliament at the present time. There is no other substantive issue before the parliament at the present time.As I said in answer to questions that were asked of me yesterday, if in fact the member for Leichhardt had not disclosed his financial interests in the CYC company, or indeed the other companies, I believe the charge made by the Leader of the Opposition would have had substance. It would have been open to the Leader of the Opposition to fairly argue, and it would have been open to this parliament to fairly conclude, that the member for Leichhardt had set out to deceive the public, to deceive the Prime Minister and to deceive the Registrar of Members' Interests about the true nature of his financial interests. I say again that, if this debate is to have any substance, it has to be a debate about the true purpose and the true meaning of disclosures of members' interests. The purpose of disclosure is to determine whether there is any conflict of interest.What the member for Leichhardt did was to tell me and to tell the public that he had financial interests in these companies. You can laugh, you can sneer, you can hector and you can criticise. You can shout at somebody who made the error that the member for Leichhardt made, but it does not alter the fact that at no stage was he seeking to disguise the fact that he had a financial interest in these companies. The thing that really matters in affairs of business is the financial or beneficial interest that you have. The member for Leichhardt at no stage set out to disguise the fact that he had a financial interest in these matters.I now go to the charge, as alleged by the Leader of the Opposition, that the member for Leichhardt was in some way doing the national interest in the eye by his company winning the tender from the defence department in relation to this particular piece of work. It is very interesting that, in the Senate estimates last night, Rod Corey, the head of the Defence Estate Organisation, had the following to say—and this goes very directly and very authoritatively to the charge that the national interest has been affected, the charge made by the Leader of the Opposition—in answer to a question asked by one of the Labor senators:The officer, in exercising his delegation, made the judgment on the value for money of the bids or the relative prices that were available and made the judgment that Cape York Concrete provided the value for money.In other words, Corey was saying that the best bid in the national interest came from the Cape York Concrete company. As I understand the matter—and I have no doubt that the member for Leichhardt will have something to say about this later on when he participates in this debate—the Leader of the Opposition is arguing that the defence department should have settled for a higher bid. The reality, of course, is that it settled for a lower bid because it was in the interest of the Australian public that it should do so.The Leader of the Opposition has also quoted extensively from the ministerial guidelines. He seeks to rely on the paragraph in the ministerial guidelines which reads:Ministers are required to resign directorships in public companies—that is clearly not involved here—and may retain directorships in private companies only if any such company operates, for example, a family farm, business or portfolio of investments, and if retention of the directorship is not likely to conflict with the minister's public duty.I do not believe that the retention of these directorships has conflicted with his public duty. There has been no evidence presented by the Leader of the Opposition—and he had a quarter of an hour to do it—that the retention of this directorship interfered in any way with the operations of the public duty of the member for Leichhardt as parliamentary secretary to Senator Minchin. They have had two days to make that case, and they have totally failed to make it.The Leader of the Opposition spent a great deal of time defaming the member for Leichhardt, but at no stage did he undertake the responsibility that leaders of the opposition have in these sorts of debates to explain precisely where there has been a conflict with the minister's public duty. Let us remind ourselves again that the whole purpose of disclosure is to resolve the issue of conflict of interest. So I would have thought that, if the Leader of the Opposition was coming into this place and seeking to censure me and seeking to censure the government on the grounds of a conflict of interest, he would have gone first to the question of where the conflict of interest was. For 15 minutes we were treated to a windy diatribe about the character of the member for Leichhardt, but at no stage did we have any substantive argument. It is rather like waving tomato sauce around as a substitute for a taxation policy. When you move a censure in the parliament you are into the serious business of making a proper case, and you failed completely on the issue of public duty. That was your responsibility. So strike three against the Leader of the Opposition. The guidelines go on to say:. . . a minister should question the retention of a directorship in a company in which share holdings extend beyond the minister's own family).The member for Leichhardt will have something to say about the character of the companies in which there were other shareholdings beyond those of his own family. I believe, on the information that is available to me, he will comprehensively answer that particular question. That is the total extent of the application of the guidelines under the code of conduct to the behaviour of the member for Leichhardt.So we now have before us two central questions. We have before us the question of whether somebody should be sacked from a parliamentary secretaryship on the basis that he failed to disclose that he was a director and/or secretary of companies in which he was also simultaneously a shareholder, having fully disclosed those shareholdings. As I said yesterday and I repeat again today, although the action of the member is to be criticised—and has been criticised—I do not believe, on a fair assessment of the situation, that that represents grounds for getting rid of him.For heavens sake, if you can remain federal Treasurer of Australia having failed to put in your tax return for two years, why on earth would you sack the member for Leichhardt? That is the answer to the first question. As to the answer to the second question—and that is whether there has, in fact, been any conflict with the minister's public duty; and for `minister' read `parliamentary secretary'—at no stage has the Leader of the Opposition even sought to address that issue. I would have thought the Leader of the Opposition would have fully addressed that issue.There has been a very, very interesting turn in the debate. Today we are on the code of conduct; last night we were all about the Constitution. With earnest tones and grave, they were tramping the press gallery and they were saying, `It's the Constitution, mate. It's section 44. He is gone under section 44.' That is what it was all about last night. But now we are back onto the code of conduct. We are back onto the behaviour and the alleged lack of integrity of the member for Leichhardt. The reason for that is that the truth is there is no substantive case in relation to the Constitution.Despite all the trumpeting last night by the Leader of the Opposition and others that it was all about direct dealings with the Commonwealth, the reality is based on very authoritative legal advice provided by Henry Burmester on the basis of the legal authorities that are available. I warn the opposition not to allow their tribal hatred of the late Sir Garfield Barwick to blind them to the reality of his legal decision because, whatever you might say about him, that was a decision made by the then Chief Justice of the High Court of Australia. I tell you what, I would back his legal judgment against any of the tin-pot assertions of those opposite any day.The Leader of the Opposition had 20 minutes to establish a case. He failed to go to the central issue, and that is where there was a conflict of interest. He failed to establish a case for the removal of the minister on the basis that he had made an honest error in completing his return. He also demonstratedyet again that, in a week when the Australian public are interested in serious debate about matters of public policy, all the Labor Party can do is: in week one, wave lettuces and cans of tomato soup in parliament and in front of cameras and, in week two, denigrate the behaviour and the integrity of a man who is not only an outstanding parliamentary representative but a very successful small businessman and a very worthy representative of the people of Leichhardt, whom I believe he will long represent in the national parliament with very great effect. (Time expired)15:41:006488McMullan, Bob, MPMr McMULLAN5I4CanberraALP00—Don't you remember when this man was sworn in as Prime Minister and he said, `We are about lifting the standards'? Now I ask you this question: what is there left that you cannot do and still be within the code of conduct? I cannot think of a single thing. Perhaps if you broke into the Treasury and stole the money, but maybe that is not explicitly referred to in the code either. What we have had it reduced to—it is a development from Parer, it is a development from Prosser, it is a new stage—is it means that, unless there is an actual proven conflict of interest that has actually been carried out, there is no breach of the code. It was never meant to give the public confidence in its members of parliament that there was not even an appearance of conflict. That aspect was actually a myth. When the Prime Minister said it on all of those occasions, he did not mean it—just like he did not mean those answers he gave today when he said that he did not mislead the parliament.This is, in fact, the most serious question because—you have to remember this—if you listened to the Prime Minister's speech it was a very long defence of the member for Leichhardt, but the censure is of the Prime Minister. It is about his failure to act and his misleading of the House on several occasions. We heard today his answer to the question from the Leader of the Opposition. He said, `Why didn't I refer to those other directorships? Because I was answering the question I had been asked.' The problem was that the question he had been asked did ask him were there any other directorships. Perhaps the first time he answered the question he did not know so he misled inadvertently. So today we asked him again—a second question—`Now that we have advised you what the question was yesterday when we asked you twice were there any other directorships not disclosed, why did you fail to answer?' And he said, `Because I was answering the question I was asked.' Then he said it again in his speech. Three times he has denied the truth.UNKNOWNOpposition membersOpposition members—The cock crowed thrice!5I4McMullan, Bob, MPMr McMULLAN—Thank you very much. I would hate not to have a literary bunch behind me. But we found that, when you read it carefully, there was another deliberate attempt to misrepresent the situation to the House. I listened pretty carefully to the Prime Minister reading Mr Burmester's opinion. I might have missed him saying this, but I do not think he did. I think he read the paragraph before this and the paragraph after, but he missed this sentence. He did read about the approach of Chief Justice Barwick—whose views I hope to have some time to comment on before I finish—and he read the sentence after this, but he did not say,However, I note that in Sykes v. Cleary . . . the High Court was not as willing to read certain of the other paragraphs in section 44 as narrowly as Barwick read section 44(v) in Webster.That bit must not be relevant, now that the current High Court does not actually agree with the Chief Justice. He forgot to read that bit. You can mislead deliberately, you can mislead by omission, but you are still misleading. That is why that is important— that is why we cannot have any faith in this Prime Minister's word in this parliament; and that is pretty important to the people of Australia.Whatever other doubts they have about this Prime Minister, and the polls say they are very substantial doubts—only 48½ per cent of the people of Australia thought he should be the Prime Minister, and I would like to know how many think that today—but even those who voted for Kim Beazley to be Prime Minister want to know, now that John Howard is, that when he gives them information in public and particularly in parliament it is the truth, the whole truth and nothing but the truth. What we had was deliberate misleading and deliberate omission. The combined effect was to mislead. We have a lowering of standards, misleading and then an attempt to read down the problem so that it is only a small issue for him to answer. He continually talked about one proven event—the failure to disclose—because he thought that if he defeated that argument, he had defeated the charge.Let us go through what has occurred. There is a clear—three times—failure to disclose directorships and company secretaryships. Anybody who can read that form and not know that you are supposed to disclose your directorships and secretaryships is too dumb to be a parliamentary secretary and ought to be sacked. It is inconceivable; nobody in Australia could believe that. In all the other members of parliament we have, I assume, nobody else who has committed the same mistake, but if they have—7K6ENTSCHMr Entsch—You don't have any.5I4McMullan, Bob, MPMr McMULLAN—I have been a company secretary and a company director. I know exactly what is involved. But when I came into parliament I no longer was. I know what is involved and I know why that puts you right in it. Being a company secretary does not mean you have no involvement in the day-to-day operation of a company—or it should not, or you are in breach of the Corporations Act. Being a director and taking no interest should not mean you have no involvement in the day-to-day affairs of the company, or you are in serious breach of the Corporations Act and should be sacked. So your defence is a plea of guilty to another serious offence.That is one—a failure to disclose—and the second, if half the reason is right, is a breach of the Corporations Act. The third is that the code of conduct says you should not retain shares in private companies that go beyond your immediate family. Even yesterday it was clear that that was the case because of Cape York Concrete—which is not a family company; it is an actively operating company with other partners. But what we now know is not only that Vervale is an active company with other partners, international shareholders as well as Australians, but that the member for Leichhardt—the parliamentary secretary—is so actively involved in it that he is in the Courier-Mail attacking the ANZ Bank for decisions they have made about its operations. Do you think if he was Warren Entsch, owner of a small company, he would be in the newspaper getting that sort of a run? It was in the Courier-Mail, `Member of parliament criticises . . . ' on 25 February 1999. So there we are—just a passing interest in this $1.2 million block that he owns.There is a third important issue which has not been finalised yet but which has more to do with the nature of this contract. But, to say the very least, it is an unusual process. Let us have a look at what the so-called `Handy Hints for the Department of Defence Purchasing Officers' are. I wonder if the Prime Minister has actually spoken to anybody about this matter? Here he is saying: `What was wrong with the tender process?' What was wrong with the tender process is that there wasn't one; nobody called for a tender. Then he started saying, `They chose the lowest bid.' Of course they did, there was only one; they did not seek a second one. And is that a big secret? No, it is on the front page of the Sydney Morning Herald this morning.These handy hints for the Department of Defence tell people with a delegation how they might go about getting value for money for the Commonwealth. There is one which says, `Make effective use of competition in the marketplace.' The Minister for Defence said yesterday that he thought it was a terrific process. He has not read this either, but who would be surprised; he could not even get out a one-line answer yesterday without getting it wrong. Then it says, `Use negotiations with suppliers as a tool to clarify ambiguities and to achieve mutual interests.' Big negotiation; they rang him up and said, `Can you give us a price?' and he said, `Yes,' and he got the job. Tough negotiations those were. `Ensure that the terms and conditions are clear and concise and protect value for money.' Ring them up: `$300?—yes that's fine.' What about the fact that Boral could do it for less? `We did not ask them, so how could we know? `And develop numerous suppliers in order to encourage competition'—well, they are trying to drive out the competition.Mrs Irwin interjecting—10000SPEAKERMr SPEAKER—The member for Fowler!Mrs Irwin interjecting—10000SPEAKERMr SPEAKER—I warn the member for Fowler.5I4McMullan, Bob, MPMr McMULLAN—I think we just drove out a bit of the competition. There are those three, but there are two other grounds that are very important. One is the question as to whether the parliamentary secretary has a pecuniary interest in this matter—and the Prime Minister was incredibly tortured in his answer yesterday and skipped over it in his speech today. The Prime Minister said, `He does not get any income out of this company so he is okay.' Of course, Webster got out of it because he did get income, so which way is it that we are going to catch these people?The fact is that if you are a shareholder in a company which has a $175,000 contract and its value is increasing, then perhaps that is called a pecuniary interest. Your capital gain is going up. You can keep pouring the money in the top all the time you are a member of parliament—which may not be long—and you take it out when you leave. It is called a pecuniary interest. And I thought the Prime Minister said we did not know anything about running companies. We know that much. Everybody in Australia except the Prime Minister knows it, because he has never run a company either.I do not want to dwell too long on the constitutional issue, because my colleague the member for Barton is going to deal with that at great length, but even in Henry Burmester's opinion severe doubt is thrown upon the Barwick precedent in Webster. I would say two things about it. First, on the face of the facts, even if you accept Barwick's interpretation—which no living Australian would do—the facts of Entsch are significantly different. They are significantly different in a number of ways. What is supplied, the nature of the supply, the duration of the contract, the nature of the contract and the fact that it is of continuing duration, not occasional, are all significant differences which go to say that the Barwick test could well be met by Mr Entsch and would be met by any reasonable judge. What do the words of the Constitution say? They are not actually very complicated:Any person who—. . . . . . . . .has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth . . . shall be incapable of . . . sitting as a .. member of the House of Representatives.That is not very complicated. Sir Garfield was pretty good at the literal meaning of the words with regard to the tax act—which John Howard also failed to fix when he had the chance—but he was not quite so good at a literal reading of the Constitution. We had the chance to fix that and we will give you the chance to fix that very soon—don't you worry about that.We are in the circumstance here where we have serious and important matters before us. We have a graduation of this government's attitude to standards. Last term they lost seven. Everybody knows that is the height of carelessness—losing seven people on the front-bench. So they decided no more. In fact, after they had lost six they decided no more, and they clung to Geoff Prosser for weeks. Don't we all remember that? To those of you who are new, I can tell you it was great fun, and it is one of the reasons you are all here. The fact that they are going to cling to this fellow is one of the reasons we are going to have lots more people with us next time, because this is absolutely unacceptable. We had the Parer standard that he was not really getting a pecuniary interest from the multimillion dollar increase in value of his contract. We had the Prosser defence that he was not involved in the day-to-day business of the company. They both had a bit of a run on this occasion. There was the Parer defence, the Prosser defence and now we have the Barwick defence which I would call leaning on a weak reed.We have here a serious problem for the Australian people. They can see a government today that has said, `Nobody goes, no matter what. Open season on standards. This code means nothing. We'll tough it out because we have got a majority in the House of Representatives. We will make sure that we just vote it down. It doesn't matter what they do.' You can have a company in which your directorship is undisclosed, which is not a private or family company, which contracts with the Commonwealth in highly dubious circumstances and in probable breach of the Constitution. You can have all those things and it is still okay. And why is it so? Because the Prime Minister sets out deliberately not to find out anything that could put in jeopardy his capacity to deny in this House. That is why he misled the House today—deliberately, wilfully and repeatedly. It is a very serious matter. That is why he deserves the censure of this House: for failure of leadership, for lowering the standards of public administration in this country and for deliberately, wilfully and repeatedly misleading the House. It is why he should be censured. And it is why the member for Leichhardt should be sacked.15:57:006491Abbott, Tony MPMr ABBOTTEZ5WarringahLPEmployment Services10—The opposition are censuring the Prime Minister because the Prime Minister is standing by the Parliamentary Secretary to the Minister for Industry, Science and Resources. The Prime Minister is totally in the clear because the parliamentary secretary has done nothing to justify his dismissal. So much for the great campaign against the GST. We have seen today a sudden shift of focus from one of the great public policy issues of our time to a small business in Far North Queensland. This not only shows that the opposition's anti-GST campaign was not working but shows that the opposition has nothing whatsoever to say about any of the great issues of substance facing Australia.Last week we had the heir of Chifley and Curtin standing around outside this building waving around a can of tomato soup. This week we have the parliamentary scion of Moral Rearmament trying to hound out of this parliament an innocent man who has made an honest mistake. On the Cape York Concrete issue, the parliamentary secretary has made no decisions, he has exerted no influence and, quite possibly, he has made no profit. The Labor Party tried a series of stunts last week and now they are running a distraction on their distraction. They have taken off the front page tax reform, which at least people were interested in, and have put onto the front page a parliamentary secretary who, outside his electorate, is treated like a parliamentary secretary.Not only are members opposite questioning the ticker of the Leader of the Opposition but they are questioning his judgment, because on this issue he is as big, as noisy and about as useful as a Collins class submarine. He certainly is going to put the member for Leichhardt on page one, but no-one is interested in this issue except the chattering class people who have taken over the Labor Party, according to the member for Batman.These are the salient facts of the Cape York Concrete matter. The member for Leichhardt has put $14,000 into this business to help a friend. He is a nominal director of this company so that there is someone who can be contacted, if necessary, to sign documents. He took no part in running the business and since becoming a parliamentary secretary he has received no payment of any kind. As far as the contract with Cape York Concrete is concerned, the defence department was not aware that the parliamentary secretary was involved. The parliamentary secretary was not aware that a part-owned business was involved with the Department of Defence. The Department of Defence was convinced, however, that on the basis of previous dealings with the only other concrete supplier in that area, and on the basis of the published price lists of the other concrete supplier in the area, it was getting the best possible value for the taxpayer by dealing with Cape York Concrete. What members opposite are insisting is that the Australian taxpayer should have diddled itself—that the Australian taxpayer should have paid more for concrete.Members opposite are saying that the defence department should have known that the parliamentary secretary was involved, even though he plays no part in the business. They are saying that the parliamentary secretary should have known that a government entity was involved in this deal, even though he plays no part in the business. They are saying that the taxpayer should have paid more because a department that did not know a politician was involved might have been influenced by a politician who did not know a department was involved. The member for Leichhardt did not know he was dealing with the government, and the government did not know it was dealing with the member for Leichhardt, and members opposite are saying that taxpayers should have paid more to avoid this completely non-existent conflict of interest. Is it any wonder, if that is the rationale opposite, that the Leader of the Opposition ran up the federal debt of this country by $21 billion in the two years that he had stewardship of it.Of course the member for Leichhardt, the parliamentary secretary, should have disclosed his directorship. But he did disclose his shareholding, he did disclose his beneficial interest. He has done nothing whatsoever that is ethically wrong. Morally and ethically, this is not so much a storm in a teacup; it is a zephyr in a thimble. And yet, the opposition want to distract the attention of the national parliament with this when we are debating one of the great public policy issues of our time.We have seen today absolutely monumental double standards on the part of the Leader of the Opposition and his colleagues. The Leader of the Opposition stood by Brian Burke, who was a convicted thief. The Leader of the Opposition stood by the member for Fremantle, even though she was found by a royal commission to have lied. The Leader of the Opposition ignored the conflicts of interest in the case of the former Prime Minister, who was involved in a speculative and entrepreneurial joint venture which was critically dependent upon government approvals at every step of its progress. The Leader of the Opposition has ignored the conflicts of interest of the member for Watson—the federal parliament's second best-known cyclist in history, after Sir Hubert Opperman—who made more in one bicycle crash than Sir Hubert Opperman made in his whole career.What does the Leader of the Opposition really think about these matters? When former Senator Graham Richardson inadvertently failed to declare a directorship in a trade union-controlled radio station, the Leader of the Opposition said:I am not worried about that—slips that ministers make from time to time—I am not worried about that.He went on to say:Oh, look, inadvertent slips are totally reasonable and totally to be expected. It's not easy to necessarily have in place every single declaration or comprehension, necessarily, of what your family is doing or somebody else is doing. I completely accept that inadvertence is possible.'That is what he said to journalists. In this House, on the same subject, he said:Indeed, the inadvertent slips in this regard, as far as members on both sides of the House are concerned, have been quite frequent.Indeed, they have been quite frequent—probably too frequent for the government's good on this occasion, and certainly too frequent for comfort on this occasion. But the fact of the matter is that the Leader of the Opposition's motion should be judged by the standards that the Leader of the Opposition really believes that government should be held to. According to what the Leader of the Opposition really believes, inadvertent slips do not justify the dismissal of members of the Executive Council.There has been a more fundamental double standard. The Leader of the Opposition is guilty of a personal double standard, but the Australian Labor Party is guilty of an institutional double standard. Members opposite talk about conflict of interest and they talk about failure to declare—and yes, the parliamentary secretary should have declared his directorships. But this Australian Labor Party, which claims to be interested in the national interest of the Australian people, is interested in nothing but the interests of the trade union movement. Fifty-two per cent of frontbenchers opposite are former union officials, and 50 per cent of the 1998 intake of the Labor Party are former union officials. Twenty-eight per cent of the work force of this country belong to a trade union, and 100 per cent of ALP members opposite belong to trade unions. They have to because that is the rule of their party. On all the great policy issues of our time—on the GST, on junior pay, on industrial relations, on privatisation—the ALP is dictated to by the unions.Amidst all the high-pitched histrionics, amidst all the falsetto fulminations of the Leader of the Opposition today, he has ignored one salient fact: members opposite have failed to declare, and frontbenchers opposite have consistently failed to declare, the fact that they are members of trade unions. The shadow minister for science, the member for Bonython, has not declared his union membership. The shadow minister for regional development, the member for Dickson, has not declared her union membership; the member for Cunningham has not declared his union membership; and the member for Perth has not declared his union membership. And yet, all the time, these people are making decisions, presumably on subjects dealing with the union movement.The Leader of the Opposition must, if he is to be consistent, maintain the same standards for his frontbenchers as he is demanding of the government. Not surprisingly, the Leader of the Opposition has not done that because the parliamentary representative of the Miscellaneous Workers Union, the Leader of the Opposition, has himself failed to declare the fact that he is a union member. On the subject of conflicts of interest, I have a lot of time for the shadow Attorney-General, who is speaking next. The shadow Attorney-General is a fine man and no doubt he is a good lawyer—you do not get to be a partner in Turner Freeman without being a good lawyer. But surely, by the same standards that the Leader of the Opposition is requiring of frontbenchers opposite, that partnership should have been resigned. The fact is that one of the shabbiest episodes in Labor history was when the sainted Ben Chifley was accused by Jack Lang of capitalist usury, and all Ben Chifley was trying to do was to help the people of Bathurst, his friends.What is happening today is that members opposite are condemning the parliamentary secretary for doing the right thing by his friend and doing the right thing by his community in trying to keep these small businesses going. Why are members opposite after the parliamentary secretary? The fact is they are after the parliamentary secretary because he is what they were. The parliamentary secretary is a representative of the Australian working class. The parliamentary secretary is a man who has come up the hard way. The parliamentary secretary is a former professional crocodile shooter. He is a former professional drover. He has the kind of blue collar background that members opposite used to boast of. He has worked with his hands. There is not a single member opposite who has worked with his hands; we have many members like that. The parliamentary secretary is a prime example of that, and that is why members opposite hate him. He reminds them of what their party was like before their party ratted on the working class.What we are seeing this afternoon from members opposite is the revenge of the new class. It is the revenge of the apparatchiks, the revenge of the trade union officials, the revenge of the university educated mates. It is the revenge of the new class on a decent, ordinary Australian who has done himself proud and come up the hard way. It is ironic that this is happening on the very day that the member for Batman has exposed the philosophical and moral emptiness at the heart of the modern Labor Party. But there is another problem with the parliamentary secretary, the member for Leichhardt, as far as the Labor Party is concerned. That problem is that he has been successful. Because the member for Leichhardt has been a success, because he has done the right thing by himself and by his friends, because he has succeeded, they hate him—because the only working class person that they respect is a docile union member who simply puts his hands up when the union bosses say so.Members opposite have let themselves down. They have let the parliament down and, by running this pathetic and insubstantial censure motion, they have let the Australian people down. There are some big issues to be weighed by the parliament at this time. The biggest public policy issue in two decades, tax reform, is before this parliament and all they can do is engage in a useless, insubstantial witch-hunt against the member for Leichhardt. The Leader of the Opposition has no interest whatsoever in launching a High Court challenge—despite all his huffing and puffing and despite all his bluster—because he knows that the member for Leichhardt increased his vote substantially at the last election. He remembers the Lindsay by-election—the last time Labor tried this stunt. He knows that the law is against him, and on this issue the Leader of the Opposition has shown nothing but smelly, shabby flatulence.16:12:006494McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—I support the motion. Firstly, I should make the record clear. Before entering parliament I did as any halfway competent lawyer would do: I resigned my partnership in the legal firm that I was a partner of. Why? Precisely for this reason: I would not have any means of knowing if or when that partnership successfully tendered for Commonwealth work. That is the reason any halfway competent lawyer would do precisely as I did. So, with respect to the previous speaker, he was quite wrong and indeed proved precisely the point as to why I resigned.But, interestingly, in this debate the Prime Minister, knowing that his code of conduct cannot sensibly stand against what has happened here, has tried to get around it by a braces and bootstrap exercise by saying, `Well, look, we've got this advice from the Solicitor-General'—in a period of 24 hours or less than that—`saying that there's no breach of the Constitution.' But in effect the Prime Minister is saying, `Well, look, under my code of conduct I can accept the fact that a member of the executive has a pecuniary interest in a contract with the Public Service of the Commonwealth.' That is what he is saying. But, in so doing, he is effectively undermining the Constitution which sets our rights, the fundamental rights of Australians and indeed the fundamental obligations of us as their representatives.Yesterday I asked the Attorney-General whether he would refer this very important matter to the High Court for its determination. With the greatest respect to him, he quite simply did a Pontius Pilate—he washed his hands of the issue. But later in the afternoon the member for Leichhardt, presumably in some panic, raced off to the Acting Solicitor-General, and the Acting Solicitor-General has given his advice in that very short space of time. While I will be damning of that advice, the fact of the brevity of time that he had must be noted.Firstly, he bases his conclusions on a finding of fact that tribunals are required to make. He says:Mr Entsch has played no active role, however, in the day to day practical management of the company.With respect to Mr Burmester, that flies in the face of the evidence. I do not know whether he was provided with the letter from Lane Accounting, Mr Entsch's accountant, who said in their letter of 8 June which was tabled in the House yesterday:Warren G. Entsch was appointed Company Secretary, purely from a convenience point of view should documentation require his signature.Indeed, the letter went on to say that the other part owner was frequently uncontactable. If the member for Leichhardt does not have a role in the company, who is performing its functions? If you are going to sign important documents prescribed by law, of necessity you have to read them. If the Prime Minister's standards are that he is going to have, in his executive, people who just sign a document when it is put in front of them—`Oh, yeah, I'll sign that; I am just reading how my share register is going at the moment so I don't have time to read it. I'll sign it. Here you go, take it away'—it is a worrying sign for the community.A company secretary has a number of obligations, including the obligation to notify the Australian Securities and Investment Commission of the details of the officers of the companies, to lodge annual returns, to act as reporting officer and to attend and report to any meetings of creditors of the company. Indeed, under section 232 of the Corporations Law the company director has the fundamental obligation `to exercise the degree of care and diligence that a reasonable person in like position in a corporation would exercise.' What is diligence? The case law has determined that it is that directors are required to take reasonable steps to place themselves in a position to guide and monitor the management of the company.It is a fallacy to say, `My code does not apply if someone is cunning enough or foolish enough not to get a 1½-page letter from their accountant saying they play no part in the role of the management of the company.' What stupidity. Under the law any director of a company in performing their duties has an obligation to do many things including of course filing very important documentation.The advice goes on to quote the circumstances of the agreement between Cape York Concrete and the RAAF. The advice refers to a purchase being approved on 31 March of this year. Indeed the advice acknowledges that it was in respect of a purchase order. If one looks at the documentation which was tabled in the Senate estimates committee it is indeed obvious and evident that all the payments made—one for $72,000, one for $54,000, one for $39,600, one for $9,900; some $175,500 in total—were all paid in respect of the one purchase order, that is, the one transaction. That transaction lasted between 31 March and the final delivery date, this date of payment, 24 May 1999. It was a contract to deliver sand and cement to the Scherger Air Force base and there to provide the services of a mixer. The sand and cement was mixed with the gravel at the Air Force base and the service provided by the company was to mix it before it was laid.So it is fundamentally different from the facts of the case that Mr Burmester then goes on to rely on. That was the case of Webster where Chief Justice Barwick held that there was a series of one-off transactions, that is, the placing of orders for timber over the telephone and the delivery of those orders. As Mr Burmester notes, Chief Justice Barwick found that they were in the nature of casual or transient transactions. His Honour specifically distinguished that position from what he called `an executory contract'—that is a contract where something remains to be done by the contractor. So at any time between 30 March 1999 and 24 May 1999 we are entitled to ask: what remained to be done under the contract? Clearly, a lot needed to be done under the contract, including the delivery and mixing of the cement. And that is the end of the story.It is all over, red rover, because section 45 of the Constitution says that if a member of the House of Representatives becomes subject to any of the disabilities mentioned in section 44(v) then his place shall `thereupon become vacant'. So the event has already occurred. The member for Leichhardt's place has already become vacant because there was an ongoing contractual obligation between 30 March and 24 May. That is the end of the story. It is over.In respect of reliance on Webster's case by Mr Burmester, Mr Burmester continually notes throughout the advice the criticism that Webster's case has come under. Well may he criticise the advice because of the fact that Chief Justice Barwick was approached at the directions hearings before the case was heard and declined applications—indeed declined an application by the Attorney-General of the day—to refer the case to the full bench of the High Court. He sat as a single judge in the Court of Disputed Returns. If you read the case, not one authority after 1692 is a relied upon. Not one authority which is less than 300 years old is relied upon.I have gone through the issue of whether there was a casual or transient contract and clearly that is a fundamental point of distinction. In analysing the case Mr Burmester knows that an extremely narrow approach was adopted by Chief Justice Barwick. Specifically, the other issue he relied upon was where Chief Justice Barwick said by way of obiter dictum—by way of throwaway lines—that a mere shareholding in a company may not necessarily result in there being a direct or indirect pecuniary interest.But Mr Burmester does not refer to the second part of section 44(v), which excludes from the test a person `in common with the other members of an incorporated company consisting of more than 25 persons'. So, by definition, it specifically includes within the operation of the section a company which has less than 25 persons. In the case of the member for Leichhardt, there were two persons—two part owners. In the Webster case, Senator Webster was one of nine shareholders. In the Webster case, Senator Webster was remunerated by way of a fixed salary and an entitlement to a car. That salary continued irrespective of the profitability of the company.It is fanciful in the extreme to suggest that the member for Leichhardt received no pecuniary advantage from the contracts successfully won by Cape York Concrete. What else was he doing as a shareholder? What else was he doing as a director? Indeed, the fact that he was not drawing a salary suggests that the only way he would benefit from that activity—and any sane human being would presumably only do it if there was a benefit—would be if the value of the shareholding went up and he had the prospect of receiving dividends. Those dividends, that profitability of the shareholding, was necessarily dependent upon that company successfully receiving contracts. The fact that the company received a contract worth some $175,500 had to be to the benefit of the company and, accordingly, it had to be to the benefit of the member for Leichhardt. Even if it minimised his loss, he still received a pecuniary advantage.These facts just were not considered by Mr Burmester in his advice. Indeed, if you read his advice, he notes the significant criticism that the decision of Chief Justice Barwick has come under, in particular that shareholder question. He then goes on, prefacing the remainder of his advice with this phrase:If being a shareholder is not a direct interest in accordance with the decision . . . He is extremely cautious in relying upon the decision of Webster. Indeed, he says specifically:However, I note that in Sykes and Cleary—a 1992 decision of the High Court—the High Court was not as willing to read certain of the other paragraphs in s44 as narrowly as Barwick CJ read s44(v) in Webster.He goes on—again underlining his words with caution, and this time with red lights glowing beside the underlining—to say:Nevertheless, Webster is the only directly relevant decision on s44(v) and one is justified in accepting it as relevant authority despite the criticisms it may have received.Criticisms it has indeed received. One only had to listen to AM today. The constitutional expert Professor Tony Blackshield was strong in his condemnation of the logic in Webster's case. George Williams, a prominent academic and barrister in the constitutional area, was also strong in his condemnation of the logic in Webster's case.If it is the case that the member for Leichhardt or the members opposite are relying on the authority of Webster's case to get them out of trouble, they have much to worry about for two significant reasons in addition to the reasons I have already gone through. The first reason is that we are talking about a contract which lasted in excess of five weeks with a continuing obligation under it for $175,500. The final reason why they have reason to be concerned is that Chief Justice Barwick is no more—he is deceased—and no sensible judge will decide accordingly.Honourable members interjecting—10000SPEAKERMr SPEAKER—Order! By any standard, the performance of members on both sides of the House is not the performance one should expect from federal members of the parliament. The member for Leichhardt is entitled to be heard and extended the same courtesies as was the member for Barton. The question is that the motion be agreed to. I call the member for Leichhardt.16:27:006496Entsch, Warren, MPMr ENTSCH7K6LeichhardtLP10—Thank you, Mr Speaker. I rise before you today because of allegations made in this place against me by the Leader of the Opposition and other members of the opposition frontbench.I will not lower myself to the same sewer rat standards and verbal diarrhoea of the opposition leader and those on the other side. These allegations assume my failure to declare my interests and roles in the company Cape York Concrete Pty Ltd and others—an assumption which has no basis. There was also a suggestion that I may have improperly been involved in the awarding of a Commonwealth government Defence contract to Cape York Concrete. Let me make it very clear that why I am standing here defending myself against these scurrilous allegations today is that Labor is alleging that I have somehow gained or benefited through impropriety on my behalf. They are dead wrong, and have proven yet again how willing they are to sacrifice the truth in order to get themselves on the 6 o'clock news.My only crime has been to help a mate by offering security to assist him in establishing a business from which I have received no dividends, no distribution and no in-kind assistance—in fact no remuneration whatsoever. I put up my own family home as collateral to assist my friend in establishing this business. It gave him a start he needed, and that has been the full extent of my involvement in that business ever since. People in this place might think that this is a generous thing to do, but I say it is the right thing to do and I have no regrets whatsoever about doing it. I would like to say from the outset the allegations raised by the opposition are false, and I deny absolutely any suggestion of impropriety in my declaration of interest or dealings involving my private affairs.Let me deal first with the allegation that I in some way deliberately misled the Prime Minister, the parliament and the Australian people as to my statement of members' interests. It is clear from my statement to the Clerk and the Prime Minister that I have set out—in a way easy to see and available for public scrutiny—all my shareholdings in private companies and other interests. On this issue, I am guilty only of an inaccurate assumption. In completing the statement of members' interests and supplementary statement for parliamentary secretaries and ministers, I responded to question 1 on the front page of both documents by recording my interest in Septennial Holdings Pty Ltd, Vervale Pty Ltd and Cape York Concrete Pty Ltd. This was based on the question asking of my shareholding in public and private companies. My declaration was based on the assumption that my shareholding in these private companies would include my roles as company director and/or secretary.That the opposition has clung so desperately to this nonsense is an indictment of its complete lack of understanding of the private sector. Anybody in business knows that if you own half a company and you declare that you own half a company you cannot be any more open and honest about your interests in that company. On page 3 of the statement of interests, I assumed that the question concerning registered directorships of companies related only and specifically to directorships without ownership, and I completed that section accordingly. It was only when this matter was raised yesterday in the House, and on seeking further clarification, that I was advised it would have been more appropriate to include my shareholdings recorded in question 1, again in question 4—in effect duplicating the information. This is very transparent and was an honest error of assumption.Regarding the opposition's allegations that I may have been involved in some impropriety regarding the awarding of a Department of Defence contract, again this is absolute nonsense. For the record, I assisted in the establishment of Cape York Concrete Pty Ltd in November 1997—this was almost a year before my appointment as a parliamentary secretary—to help a personal friend, Robin Buchan, acquire a mobile concrete batching plant. Robin had been a master concreter for over 20 years and, while he enjoyed an excellent reputation, he was experiencing ongoing difficulties in purchasing concrete from a monopoly concrete supplier in the region and was seriously concerned about his long-term viability. He raised his concerns with me, showing me details of a mobile batching plant that he believed would give him the opportunity to be far more self-sufficient and put him in a position to provide a much better, more fairly priced product to the local community.Unfortunately, he did not have sufficient collateral to be able to purchase the machine in his own right. As a friend, I was in a position to assist by providing personal security for him to facilitate the loan. I made it very clear from the outset that I was far too busy in my job as a local member to be involved in any way in the company, and I was particularly insistent that I had absolutely no role in any contractual procurements as I felt that my position could be used to an unfair advantage. This is entirely consistent with the very specific instructions I issued to my accountant—to establish the company on the basis that I would have absolutely no involvement in the day-to-day running of that business. To this day I have fulfilled my promise to the letter of not being involved, and both Robin and his partner, Sandi Mulley, have respected my position by at no time asking me to compromise that position.Let me make it very clear that it is solely through their sheer hard work and honesty that they have built up this business from nothing to what it is today. Prior to April this year, I am advised that Cape York Concrete Pty Ltd had nevercontracted to the Department of Defence or any other Commonwealth government department. All of the work had been sourced from the local business community. Robin Buchan has been doing work in his own right for the defence department at Scherger RAAF Base for the past six years and I am advised that he was approached in about mid-March by a representative of the defence department in Townsville to submit a price on a job at the Scherger RAAF Base. I understand this invitation was due to the fact that he had been highly recommended by the RAAF because of his previous high standard of contractual and consultancy work at the base and around the district.I stress that the approach was made to Robin Buchan as an individual, not as Cape York Concrete—and it was a business decision by Robin and Sandi to submit a price through Cape York Concrete. This decision was made without prior consultation with me and completely without my knowledge, as was always the case with the company's business. In fact, the first I became aware of this agreement was when Sandi Mulley contacted me in late April 1999 after the purchase order had been negotiated and finalised. Sandi was upset that a local Weipa Boral concrete representative had made allegations that Rob's and Sandi's association with me had played some part in their securing the purchase order.My reaction was to dismiss the allegations as absolute nonsense, comfortable in the knowledge that I believed I had made a full, open and honest disclosure of my shareholdings in the parliament. Sandi's call—and I stress this—was made well after the purchase order had been secured. To this day, I am still totally unaware of the terms or details of the agreement. With this in mind, I reassured Sandi that the allegation of impropriety certainly had no basis and suggested she treat it as malicious gossip from a competitor and continue running her business as usual. I gave no further thought to the matter. My only other involvement in this matter was yesterday when I was advised that Senator Faulkner, in the Defence estimates, had raised concerns suggesting impropriety by me. Once again, what complete rubbish. It is obvious to me, and I believe to the Australian public, that the ALP have no tax or policy issues of substance to raise and so they resort to low mud-slinging.I pride myself on being a man of honesty and integrity who does not hesitate to help a friend in need. This gesture was done out of friendship, with no consideration for personal gain. At this point, I would like to acknowledge the strong support of the Prime Minister and my colleagues on this issue. Once again, I want to reinforce the fact I have received no benefit, financial or in kind, through my involvement with Cape York Concrete. However, having said that, I have received immense personal satisfaction in seeing Robin and Sandi realise their dream. I should also point out that the residents of Weipa and Cape York have benefited immensely from the competition that Cape York Concrete has provided.There was also an issue raised today regarding my involvement in two other companies. Septennial Holdings is a company operated by me and my wife with two directors and it is the business that I have operated through the consultancies that I had long before I came into this House. It was established, from memory, in 1988 or 1987. The company is sitting there and is not being operated at this point. Vervale is a company that holds as its assets one cattle property. Again, it was established in 1989, from memory. The directors are me and my wife and two Japanese friends and partners I have had all these years.Mr Albanese interjecting—7K6Entsch, Warren, MPMr ENTSCH—You may criticise the contribution of the Japanese in this country, but I can assure you that they are very good business partners and honest and honourable people. I appreciate my association with them.Since coming into this place, I have attempted to sell the property and have had it on the market for three or four years. Unfortunately, some of the business that was brought in by those on the other side has made it very difficult to sell pastoral properties. As a consequence, the property has been sitting there while we try to sell it.The reference that you made to the bank was criticism of the bank on a difficulty that we were having regarding a particular sale that unfortunately failed. The property has been sitting with a caretaker for the last three or four years. It has not been operating. We are continuing to endeavour to sell it. That is the only interest that Vervale has. There has been no active trading, no active business whatsoever in Vervale. For those economic and business Einsteins on the other side, when you have an asset in a company, you cannot wind up the company until you dispose of that asset. That is exactly what we are trying to do.When I entered the political arena some four years ago, I felt that my successful career in the private sector was instrumental in my ability to relate to and understand the needs of my constituency. I am very proud of the representation that I have afforded the constituents of Leichhardt. I look forward to continuing to represent them in a way that they have never ever had before because of the incompetent Labor Party representatives they had in the past. Unlike the Australian Labor Party—whose only membership requirement, it would seem, is to be a complete and utter failure in every other facet of life outside of politics—my government is proud of its ability to attract men and women whose ambitions in life reach beyond that of the career unionists and politicians we see so frequently over there on the other side.The tragedy in this whole affair is that the pack of babbling hyenas on the other side are so quick to dive into the sewer with their gutter tactics in a futile attempt to conceal their total lack of policy direction. I can assure you, Mr Speaker, the majority of the Australian people are not going to be fooled by this diversion and will continue to hold the Labor Party in the contempt they justly deserve.Question put: That the motion (Mr Beazley's) be agreed to. The House divided. [4.46 p.m.](Mr Speaker—Mr Neil Andrew) Ayes . . . . . . . . . . . . . . . . 62 Noes . . . . . . . . . . . . . . . . 74 —— Majority . . . . . . . . . . . . 13 ——Question so resolved in the negative.Voting details are recorded in the Votes and Proceedings.ZD4HOWARDMr Howard—Mr Speaker, I ask that further questions be placed on the Notice Paper .Personal Explanations649916:51:006499Abbott, Tony MPMr ABBOTTEZ5WarringahLPEmployment Services10—Mr Speaker, I seek your indulgence for a moment.10000SPEAKERMr SPEAKER—Indulgence extended.EZ5Abbott, Tony MPMr ABBOTT—I fear I may have inadvertently misled the House. A few moments ago I suggested that the shadow Attorney-General had not resigned from a partnership in a law firm. His declaration registers a consultancy with a law firm, which I presume he has not resigned. I apologise to the shadow Attorney.10000SPEAKERMr SPEAKER—I will extend a similar facility to the member for Barton, if he wishes to access it.16:51:006500McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—I am indebted to the minister for that apology. I appreciate the record being corrected.Ministerial Statements6500650016:53:006500Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—by leave—I would like to take this opportunity to outline, for the information of honourable members, a number of positive recent developments in the Bougainville peace process and the government's reaction to these developments.One of the great achievements of the Howard government is the role it has played, with our friends in New Zealand, to help bring peace to Bougainville. We have worked tirelessly with members of this House and the Australian people to help create an environment on the island where people can once again feel safe and where they can put a decade of tragic and bloody conflict behind them—a conflict in which approximately three times as many people died in 10 years than died in over 30 years of conflict in Northern Ireland. Given the level of Australia's commitment to the peace process, it is timely for the government to place on record its views on recent developments in the peace process and Australia's role—past, present and future—in Bougainville's rehabilitation.Although there will always be day-to-day problems and crises along the path towards a lasting peace, it is worth reflecting just how far the parties have come in barely two years since the peace process started. There has been no fighting during that time. Bougainvilleans are now going about their daily lives without fear and are travelling more widely on the island. The Bougainville economy is showing the first tentative signs of activity.That such considerable progress has been made is in large part a tribute to the commitment and flexibility personally demonstrated by Papua New Guinea's Prime Minister, Bill Skate, as well as his government, most notably the Minister for State, Sam Akoitai. It is also a tribute to all the leaders of Bougainville and, most particularly, to all Bougainvilleans. It is their peace process. They have wanted it, they have made it and they have nurtured it. Without their desire for the fighting to end and for their lives to return to normal, without their goodwill, patience and energy, none of this would have happened.It is now slightly over a year since I had the privilege of witnessing the signing of the Arawa Ceasefire Agreement on 30 April 1998. That agreement, which followed the landmark agreement signed by the leaders of all parties at Lincoln University in New Zealand in January 1998 (and I also had the privilege of being in Lincoln for this), established for the first time on Bougainville a `permanent and irrevocable ceasefire'. It was a deeply moving experience to see former enemies dedicating themselves to reconciliation and the pursuit of a negotiated settlement on Bougainville.I am pleased to report that this strong support for the peace process has continued since the ceasefire. Indeed, recent months have seen fresh impetus in the process. The most important development has been the formation, on 26 May, of the Bougainville People's Congress, an interim advisory body to represent Bougainvilleans in discussions with the Papua New Guinea government on future arrangements for the island, leading ultimately to full elections for a Bougainville Reconciliation Government. The BPC's formation followed the signing in April in New Zealand of the Matakana and Okataina Understanding by most PNG and Bougainvillean leaders. New Zealand's initiative to bring the parties together in a neutral environment was a welcome step and a crucial catalyst in producing the understanding that served to clarify the status and the method of formation of the BPC.The BPC, whose members represent the main regions, factions and community groups active on Bougainville, has voted to make Joseph Kabui its inaugural President. Five seats have been left vacant for rebel leader Francis Ona's group, which will allow him to join the process at any stage. I again urge him to do so. Given the interim nature of the BPC, no international observers were present for the election, selection and appointment process that led to its formation. The Peace Monitoring Group, led by Australia, was of course able to observe the process and indeed was impressed by the peaceful manner in which it was conducted.The BPC's first task will be to consider a package of proposals on Bougainville's political future. Australia is assisting with this process by funding advisers to the parties to explore some of the options. In view of the terrible history of conflict, negotiations on the package might take some time, although the BPC plans to present the package to the PNG government by 21 June. But, given the goodwill shown to date by all the parties and their determination to find a way forward, I hope that the negotiations will be productive.Although progress has been good, the peace process still faces significant and complex challenges. One major issue is disarmament or `weapons disposal'. All parties agree on the urgent need for this but they hold differing views on how it should be approached. The parties recently agreed that the United Nations would be tasked with drafting a plan for weapons disposal. It is possible that the United Nations will also be involved in giving practical assistance and advice. Australia has not been approached in this regard but would, of course, consider any reasonable request for assistance in this vital area.Another challenge is the restoration of a police, legal and judicial system on the island. There is a strong need for a viable police presence on Bougainville. Last year, Australia helped to train 30 auxiliary police but budgetary problems in Papua New Guinea prevented their effective deployment. Currently Australia, New Zealand and Papua New Guinea are discussing details of a joint project for training up to 200 auxiliary police.The disagreement between the PNG government and opposition about next steps in the process, including legal challenges to the provincial government arrangements set in place earlier this year, does remain a problem. The support of most PNG parliamentarians will be needed to pass legislation enabling the establishment of a fully elected Bougainville Reconciliation Government when the national parliament resumes in July. Late last year the failure to pass such legislation seriously disrupted the peace process, so I urge politicians in Port Moresby to put aside their differences and work together to achieve this goal.Australia is not a party to the peace process and recognises the importance of the parties achieving their own solution to their differences. But we have worked very hard, together with New Zealand, for a negotiated peace on Bougainville. Since the current peace process began in July 1997, Australia has played an increasingly active role. In particular, we remain willing to support the peace process through our contribution to the Peace Monitoring Group, facilitating meetings between the parties and through an extensive program of development assistance. Our commitment will not waiver.The Peace Monitoring Group, made up of defence and civilian personnel from Australia, Fiji, New Zealand and Vanuatu, has been present on Bougainville since the Arawa cease-fire. Its predecessor, the Truce Monitoring Group, in which Australia also participated had been active on Bougainville from November 1997 until the cease-fire. At present, there are 250 Australians in the Peace Monitoring Group, including ADF personnel and civilian monitors, together with 10 Fijians, 30 New Zealanders and 15 Ni-Vanuatu. The PMG is headed by an Australian and the chief negotiator position—the senior civilian in the PMG—is also filled by an Australian.The presence of the PMG gives Bougainvilleans the confidence to take the peace process forward. It has been welcomed almost universally across the island. Its multinational character, its neutrality and the fact that its members are unarmed have been vital to its success. As well as monitoring the cease-fire and promoting reconciliation and negotiation, the PMG performs a useful role in disseminating information about the peace process.From the outset, the government agreed that the PMG should not become a permanent fixture on the island. This is well understood by Bougainvilleans and also by the Papua New Guinea government. Given positive developments in the peace process, the government plans to discuss shortly with its PMG partners a strategy for the phased reduction in the PMG and its eventual withdrawal. In making any reductions, we will be careful not to jeopardise the considerable gains already made. Numbers will not be reduced too quickly, and changes will only be undertaken following close consultation between all the relevant players.Australia's substantial aid program is a key element of our support for the peace process. The program is large, visible and effective. It gives direct and immediate support to the peace process but also follows a longer term strategy of assisting the development of social and physical infrastructure necessary for the people of Bougainville to rebuild their lives and return the province to normalcy.We have already completed, or are about to complete, major infrastructure projects in the north, including schools and a hospital. In December 1998, I was delighted to be able to open both the new hospital and the upgraded airstrip in Buka. Our focus on the north was originally dictated by security concerns, but I am pleased to say that the improved situation in Bougainville has allowed us to implement smaller community based activities over most of the island. We have been able to do this because of the Bougainvilleans' strong desire for peace and their willingness to ensure a secure environment. Clearly, that commitment must continue if we are to deliver programs throughout the entire province.To date approximately $45 million has been spent, and projects worth $40 million are currently under implementation or are soon to begin. Our program has focused on health, education and basic infrastructure as priority sectors for assistance.To those who have been there, the desire of Bougainvilleans to participate actively in the rebuilding of their province is obvious and inspiring. Our aid program within our overall bilateral aid arrangement with Papua New Guinea reflects the priorities set by Bougainvilleans themselves, and the results of our joint efforts are becoming apparent, with several hundred communities, including those in very remote areas, receiving assistance with small-scale economic, health and education initiatives.Through the Red Cross we have delivered some 30,000 family kits and 500 medical kits to meet the most basic needs of Bougainville families. Our assistance has seen over 200 primary school classrooms and first aid posts rebuilt, using labour and bush materials provided by the local communities themselves. Through our support of committed Australian and local NGOs, we have addressed more than people's immediate physical needs by providing trauma counselling, conflict resolution and trust building activities.Reconstruction is proving to be a major source of employment for Bougainvilleans. Over 4,500 people have already been employed on various Australian funded projects, and this number will grow as more substantial projects are initiated. That is a very important factor to consider in a province where most young men have known only war for the last decade. At long last, conflict and destruction are making way for creation and construction.Clearly, Australia cannot hope to meet all the substantial and long-term needs of the Bougainville people and, of course, the main responsibility for the delivery of services to the island rests with the Papua New Guinea government. We are, of course, pleased to help with the planning and administrative capacity of the fledgling provincial administration, encouraging a partnership between the national and provincial authorities and working alongside both administrations in their efforts to re-establish basic services throughout Bougainville. We continue to encourage the involvement of other donors and work with them in a collegiate approach to local problems. Australia is making a major contribution to Bougainville's rehabilitation and to the maintenance of peace on the island. Australian assistance is appreciated, and I think we can be proud of our contribution.I am sure all members join me in welcoming the positive progress so far achieved in the Bougainville peace process and in wishing all those involved well for the future. I am equally sure that all members join me in congratulating those Australians who have so far made such a major contribution to the pursuit of peace in the province. We can be justly proud of their efforts. We are determined to see the process through to completion. Mr Speaker, I present a copy of my ministerial statement.17:06:006503Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—by leave—I am pleased to have this opportunity to respond briefly to the minister's statement today about the Bougainville peace process. Members of the House may recall that the parliament last discussed the question of Bougainville on 31 March, when the interim report of the Joint Standing Committee on Foreign Affairs, Defence and Trade on the committee's recent visit to the island was tabled. The joint standing committee has long maintained a close interest in the Bougainville conflict. The most recent visit by members of the committee to the island was led by the members for Fadden and Calwell, and it resulted in another very valuable report. It was pointed out in the course of debate on 31 March that the Minister for Foreign Affairs had not made any ministerial statement on the Bougainville peace process. The minister has obliged the House today, and many of his remarks clearly enjoy the bipartisan support of all members of this parliament.As honourable members will be aware, the origins of the Bougainville conflict can be traced back to at least the early 1960s, when Australian prospectors began to focus their efforts in the vicinity of what became known as the Panguna copper mine. The mine itself was established by Bougainville Copper Ltd, a subsidiary of CRA, and commenced operations in 1972. Two years later, in 1974, the Bougainville Copper Agreement was signed, with much resentment on the part of Bougainville landowners. It was a resentment bred of an insensitive approach on the part of Australian negotiators who demonstrated little, if any, understanding of the concerns of the local land-holders. There certainly is an enduring lesson in this for major resource projects where we see an imposition on the rights and welfare of indigenous peoples. Unless the rights and interests of local communities are protected and accepted as being of vital importance at the outset of a project, it is all too easy to sow the seeds of protracted legal, political and sometimes violent conflict.The Panguna landowners, led by Francis Ona, commenced a campaign to close the BCL mine in 1987. They sought K10 billion in compensation for land alienation and environmental damage, a 50 per cent share in the mine profits and greater environmental protection. Violence erupted in January 1989. The PNG government first brought in riot police, then the PNG Defence Force. The mine was closed, and a state of emergency declared. What followed was an appalling tale of violence, murder and mayhem by the Bougainville Revolutionary Army, by the PNG Defence Force and by endemic local conflict between a variety of Bougainvillean groups.As Sean Dorney commented in his book The Sandline Affair, `For almost a decade, the people of Bougainville seemed to be on a mission of self-destruction.' For much of that time, Bougainville was largely closed to the outside world. Media coverage in Australia and elsewhere was at best very patchy. It should have been much better, because over eight years this conflict on Australia's doorstep may have claimed as many as 10,000 lives—or more, as the minister says—from a population of some 160,000. To put that in context, over 30 years 3,000 lives were lost as a result of the conflict in Northern Ireland.Many thousands of Bougainvilleans have been displaced from their homes and forced to live in government care centres. A generation of Bougainvillean children have received no education, and the war has cost the PNG Defence Force and Bougainville an estimated $2.5 billion. Along the way, there has been an almost total destruction of that province's political, economic and social infrastructure. Restoration of basic communications and reconstruction of health, education and other essential services are huge tasks which will take many years and require considerable ongoing aid. As the minister notes today, much progress has been made in resolving this conflict. Aside from the terrible cost of the conflict, coupled with the progressive exhaustion of the combatants, the termination of the Sandline mercenary project clearly provided a crucial circuit breaker and created the possibility of real progress toward a settlement.The situation on the ground has now vastly improved. When the Joint Standing Committee on Foreign Affairs, Defence and Trade visited Bougainville in March this year, they found the province relatively calm. Although there have been isolated killings, there has been no major fighting now for almost two years. A little more than a year has now passed since the signing of the Arawa Cease-Fire Agreement on 30 April. The daily lives of Bougainvilleans are slowly returning to normal. The peace process is allowing freedom of movement for Bougainvilleans to be considerably improved. These are tremendous achievements. As the minister rightly says, they are fundamentally the achievements of the Bougainvilleans themselves. It is indeed their peace process. They are the people who have made it work. Of course, there is still a long way to go. The interim report of the joint standing committee makes some pertinent general points when it says:To keep the peace process moving forward requires all parties to maintain close and constant dialogue, to avoid misunderstandings and disruption of the peace plans. This is difficult in the current climate, where the communications infrastructure is poor and the parties only meet on an issue by issue basis . . . Major issues remain to be resolved, and the political leaders inside and outside PNG consider that solving them will involve painstaking efforts from all parties over a lengthy period. Crucial to the achievement of a lasting peace are issues relating to Bougainville's ultimate place within PNG, phased withdrawal of central government troops, and the role of external participants, including the UN, in supporting the peace. Poor com munications infrastructure continues to have an adverse impact on progress with the negotiations.That is a quote from the report of the joint standing committee. In this context, very careful consideration must be given to the future of the Peace Monitoring Group. As the minister notes, while not a permanent fixture, it has been the presence of the PMG which has given Bougainvilleans the confidence to take the peace process forward. The minister has today indicated that the government intends to open discussions on a strategy for the phased reduction in the PMG and its eventual withdrawal. The opposition welcomes his assurances that care will be taken not to jeopardise the gains already made and that the numbers will not be reduced too quickly and only following close consultation with all the key players. For our part, notwithstanding the significant expense and possibility of other more demanding peacekeeping commitments, we urge caution before any major reduction in the PMG—especially while the peace process still faces major challenges, including the issue of disarmament.The Minister for Foreign Affairs has also spoken of Australia's aid effort in Bougainville. It is widely recognised that there has been a great need to repair the immense damage wrought to Bougainville's facilities and infrastructure. It is vital to deliver a real peace dividend for the former combatants and to assist them in the transition to normal life and in overcoming the psychological traumas they have experienced. There is a need to ensure not only a return of law and order but also the opportunity for the economy to function again. Australia will spend more than $100 million over five years in Bougainville to the end of financial year 2002-03. It is a very substantial commitment. It is entirely appropriate, and it enjoys the wholehearted support of the opposition.I note that in the course of his remarks the minister paid tribute to the PNG Prime Minister, Bill Skate, and his government. I would like to join him in doing so, for there is no doubt that Prime Minister Skate has made very positive personal efforts to keep the peace process moving along.I also note the minister's brief references to the role of our New Zealand friends. Here I must say I do not think he does full justice to Foreign Minister Don McKinnon's tremendous contribution to the peace process. There is no doubt that after he was reappointed foreign minister in 1996, Don McKinnon decided that Bougainville would be one of New Zealand's major foreign policy priorities. He set about making contact with all the key groups. He very generously offered New Zealand's assistance as a neutral player with no historical baggage in relation to the conflict.The result of McKinnon's deft diplomacy was the historic meeting at Burnham Army Camp near Christchurch in July 1997, which committed the Bougainvillean factions to a peaceful settlement and put in place a truce to last until the end of January 1998. Australia, of course, facilitated the meeting by transporting delegates, using RAAF and civilian aircraft. A second Burnham meeting was held in October 1997. The successful outcomes gained at these two meetings laid the groundwork for the agreement signed at Chirstchurch's Lincoln University in January 1998, and ultimately to the irrevocable cease-fire agreement signed at Arawa on 30 April last year.These were tremendous achievements for New Zealand diplomacy, and for Don McKinnon personally. Only last month, McKinnon convened a further meeting between key Bougainvillean leaders and the PNG government at Rotorua. There is always a fair amount of diplomatic rivalry across the Tasman, but I an sure that the foreign minister would not hesitate to join me today in paying personal tribute to his New Zealand counterpart.4G4DOWNERMr Downer—Mr Speaker, I certainly pay tribute to Don.Motion (by Mr Downer) proposed:That the House take note of the paper.Debate (on motion by Mr Brereton) adjourned. Matters of Public Importance6505650510000SPEAKERMr SPEAKER— I have received a letter from the Leader of the Opposition proposing that a definite matter of public importance be submitted to the House for discussion, namely:The need for the Prime Minister to uphold the Ministerial code of conduct.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—17:17:006505Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—It was the Uriah Heep's defence—XH4McGAURANMr McGauran—Mr Speaker—10000SPEAKERMr SPEAKER—The Acting Manager of Government Business.PE4Beazley, Kim, MPMr BEAZLEY—He should have jumped in more quickly than that, Mr Speaker. Uriah Heep's defence: `I was only doing it for a little mate—10000SPEAKERMr SPEAKER—The Leader of the Opposition will resume his seat.Motion (by Mr McGauran) agreed to:That the business of the day be called on.Committees65056505650517:17:006505Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—On behalf of the Joint Committee of Pubic Accounts and Audit, I present the following committee report entitled Report 368: Review of audit report No. 34, 1997-98, New Submarine Project, Department of Defence .Ordered that the report be printed.OT4Charles, Bob, MPMr CHARLES—by leave—Report 368 informs the parliament of the committee's examination of aspects of the Auditor-General's report on the Collins submarine project. I propose to highlight those aspects of the submarine project about which the committee has most concern.The committee held three public hearings in 1998 and 1999 to take evidence on the submarine project. In April this year, members of the committee went to the Australian Submarine Corporation's premises at Port Pirie to inspect the facilities and the Collins submarine, Dechaineux. At the invitation of the Australian Submarine Corporation I took the opportunity on 28 and 29 April this year to sail on board boat four, the Dechaineux. I spoke at length with the submarine's officers, crew and ASC personnel. I want to say that it was an absolutely fabulous experience and one of the greatest experiences of my life to drive a $740 million machine underwater.While not all of my colleagues will agree with me, much of what I have seen and heard during this inquiry and on my inspection supports the contention that the Collins class submarine, built largely in Australia and with over 70 per cent Australian industry involvement, is one of the country's great technological achievements. However, the expectation that the superior Collins submarines would by now have taken up the capability of the paid-off Oberons has not been realised. Instead, Navy is confronted with a submarine fleet reduced from six operational Oberon class submarines to one operational Oberon class submarine, and a far greater reduction in operational capacity than the reduction anticipated by Defence at the start of the project. This has resulted in significant training difficulties for Navy because it has to provide training over an extended period to run two capabilities, the Oberons and the Collins, side by side. Having only one fully operational submarine has added to the training problems. The delays in delivery of software, the continuing need for rectification of defects and completion of contractor sea trials are affecting submarine force structure and morale.Technical difficulties have been experienced with the software used to integrate the combat systems functions. The combat system does not function as an integrated system, resulting in the submarine's current combat system capability falling below planned capability. The submarines have a number of as yet unresolved design and systems problems, and while there is optimism that these will be overcome, the Commonwealth remains exposed to significant areas of risk as long as the submarines remain less than fully operational.Despite Defence's assurances that there will be no ongoing additional costs to the Commonwealth because of the fixed price nature of the submarine project contract, it will be difficult to distinguish with certainty between what additional costs to taxpayers may result from design and engineering shortfalls and what are legitimate reconfiguration costs to meet new Defence requirements.The audit report on the submarine project criticised aspects of the project office's management of quality assurance issues and project progress monitoring. The audit report also expressed concern about the expenditure of over 95 per cent of the project funds, when a substantial proportion of outstanding commitments remained to be fulfilled under the contract.It is clear to the committee that the risks in this project have not been handled as well as they might have been, and that the number of defects, particularly in the first two submarines, is evidence of this. Substantial risk still attaches to the submarine's combat system. While it has been assured that the remaining funds should be sufficient for the satisfactory completion of the project, the committee considers that ongoing schedule changes require more frequent review to reverify that schedule and cost outcomes can be met.The committee considers that continued surveillance by Defence of the estimated cost to complete, and the payment of funds only on earned value, are critical to the outcome of this and other Defence projects. The committee considers the fact that the operational submarine squadron consists of one ageing Oberon is a poor reflection on Defence's management of the submarine project and its force strategy planning. The fact that Defence has not yet accepted any Collins submarines into naval service highlights the unrealistic nature of Defence's initial expectation that it would by now have had five operational Collins submarines. Defence's very modest contingency plans for delivery delays have led the committee to recommend that realistic allowances for contingency be made in delivery schedules for major Department of Defence projects.The committee did not investigate in its hearing the issue of through-life support for the submarines. However, the committee notes that many submarine support issues remain undetermined and recommends that the government urgently address the issue of through-life support for the Collins submarines. Detailed comments have been made in the report about the unsatisfactory nature of Defence evidence in relation to Defence payment to ASC's broker of $2.4 million for insurance services. The report also addresses the issue of access to contractor premises by the Auditor-General. The committee is aware that some agencies may seek refuge in the reduced accountability that can occur when the services are outsourced to the private sector and are not as cooperative as they might be in assisting the Auditor-General to access contractors' information and records. In the view of the JCPAA, such access is essential to proper management of government contracts and the successful audit of contract outcomes, and the committee has recommended accordingly.May I conclude by thanking on behalf of the committee those people who contributed their time and expertise to the committee's review hearings. I am also indebted to my colleagues on the committee who have dedicated much time and effort to reviewing the Auditor-General's report. I would like to thank the members of the secretariat who were involved in the inquiry: Dr Margot Kerley, the committee secretary; Ms Jennifer Hughson; and Ms Tiana Gray. I commend the report to the House.17:25:006507Cox, David, MPMr COX83UKingstonALP00—by leave—The launch of the fifth Collins class submarine HMAS Sheean earlier this year should be followed by the launches of three more boats, not just the one presently planned. The premature winding down of the submarine program is a lost opportunity to greatly enhance Australia's naval capability at minimal cost. The government's failure to have determined where refits will be under taken means much of the industry capability to support them, which was built up over the construction period, may also be wasted. The contract with the Australian Submarine Corporation was for six boats with the option of a further two. Most serious strategic analysts recognised then, as they do now, that the two extra submarines were the best option in terms of capability and cost for enhancing Australia's naval force. The arithmetic is that, with the time out for maintenance and steaming between bases at Stirling and Sydney and likely operational areas, an extra two submarines mean a disproportionately greater increase in continuous availability of boats on patrol.Our modern diesel submarines, because they are so hard to detect and so capable of sinking enemy shipping, offer Australia the most credible deterrent against an enemy contemplating invasion or threatening our vital shipping lanes. Submarines have other important generic uses, including inserting special forces and intelligence collection. The Collins class has been built with the potential, though not yet the capability, to fire cruise missiles should Australia ever need to acquire them. For $5 billion, the Collins class submarines are a sophisticated platform which can be upgraded to meet emerging defence needs over the next 30 years. The Minister for Defence says the government is considering scaling back Navy and Air Force fleets early next century and that `Some hard decisions are going to have to be made.'One of the answers to this dilemma is two more submarines. They would provide a more credible and effective defence capability with far lower vulnerability and cost than some of the high priced surface combatants that are also on Navy's shopping list. The government needs to consider whether, given the advances in submarine technology over the 15 years since the Collins was designed, additional boats should incorporate modifications to take advantage of the opportunities that those advances might provide. That would of course be at the expense of some of the economies of total commonality of type. Regrettably the opportunity has already been lost for the cheapest option—a continuous production run of eight boats.The government's failure to determine arrangements for through-life support and therefore to get full value from the investment in human and physical capital built up during the program is an indicator of its lack of focus and clarity of objectives. Instead, impetus has been lost because the government has failed to come squarely to terms with the bad press that has accompanied every landmark defence acquisition since the F111. The Navy bears some responsibility for this bad press. There is obviously some ambivalence within parts of Navy, even tension, towards the submarine project from those with a preoccupation with surface combatants. Navy's culture also makes it difficult for it to deal with media issues when things are running less than perfectly smoothly. Navy culture does not lend itself to ready admissions of problems, either externally or internally, and that tends to widen the gap between public perceptions and official comment.Now the Collins class submarines are the subject not only of this inquiry by the Joint Committee of Public Accounts and Audit but also of a second one commissioned by the Minister for Defence and being undertaken by former BHP chief executive John Prescott and former head of British military acquisitions Malcolm McIntosh. I have no reason not to expect that the Prescott and McIntosh inquiry will find similar things to the JCPAA. The first set of issues relate to teething problems. Submarines are as technically complex to design and build as a fighter aircraft. But, while a new aircraft's production may be preceded by several prototypes, submarines are so expensive that you have to get the first version right. That means modifications and rework to fix design and manufacturing faults.Over the 15-year life of a major project defence planners change their mind about what is required. Those changes have to be incorporated into the project. Let us look at some of the problems in this category that have or are being solved. Weld problems with some of the hull sections—those built in Sweden, not Australia—had to be reworked. There are now no outstanding issues as to capability to dive to contracted depth or hull life span. Some propulsion system problems are also being rectified. Suggestions that the submarines have not met the requirements on noise are unfounded. They are as silent as specified in the contract. Defence is now exploring the potential to enhance that deadly stealth.The second set of issues applies to all Defence contracts at the leading edge of technology. Defence planners have to predict, years in advance, where emerging technologies are headed. Sometimes solutions emerge which are better than the original concept. In other cases, what was predicted might not be totally achievable, and modified solutions have to be found. That was the case with the integrated combat system originally proposed for the Collins. No submarine operated by any navy today has achieved the full level of integration first contemplated. What Collins will have, with some modifications currently being worked out between Navy and the contractor, is a combat system with somewhat different architecture but with capabilities similar to those originally planned. With the continued rapid advances in computer technology, they will be upgraded continuously over the course of their life.The issue that has not been adequately dealt with by the JCPAA is through—life support. I hope that Prescott and McIntosh address this thoroughly and give the government adequate guidance on how to maximise the value of the industry capability this project created.17:30:006508Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—by leave—The Collins class submarine project is a massive endeavour in terms of its expenditure, its complexity and its potential contribution to Australia's defence. Its significance for Australia's defence is underscored by the fact that the Defence Corporate Plan 1996-2000 states that the introduction of the Collins class submarines into service is a key strategy in achieving Defence's foremost objectives of making the ADF capable of defeating any attack which could be credibly mounted against Australia. Unfortunately, the JCPAA report identified a number of significant shortcomings in the project. The strategic consequence of these shortcomings in the project and its management is a gap in Australia's defence posture at a time of uncertainty and change in the immediate strategic environment.On the evidence before the committee, the scenario was for a smooth handover from Oberon to Collins, given that the agreed scheduled delivery matched the progressive decommissioning of our six Oberons. It is now transparent that this has not happened. Events set in train back in 1987 mean that today, midway through 1999, not only does Australia lack the submarine capacity that it has already paid for, but our defence capacity has indeed been diminished from what was provided by the Oberon fleet over the past two decades. To put it bluntly, the first Collins submarine was due to be fully operational by 1996 and, by the current year, we were due to have five new submarines deployed to full capacity. And what do we have? We have none that are fully operational. It will be, on Navy estimates, a further three years at least before the six Collins submarines will be in a state of full operational capacity.It was never intended that Australia's operational submarine fleet would fall below three; the fact is that today it is one: the Oberon class HMAS Otama. In hard terms, we have spent $5 billion in the process and yet have only a single 20-year-old boat in readiness—a boat that was intended to have been pensioned off. Indeed, as the committee was told, in the event of a problem with the Otama, we have not a single submarine which is at the level defined by Navy as that required to deploy in a wartime operational situation. The head of the inquiry launched into the project, Sir Malcolm McIntosh, commented recently: `It is barely enough for the submarine to go to sea safely, and you certainly couldn't possibly go to war in it.' Australia now lacks an effective submarine force and is presented with a strategic gap.The unintended consequences flowing from the problems with the Collins project are significant. No amount of bureaucratic obfuscation should be permitted to hide the fact that one of the most disconcerting aspects of the hearings was the need to cut through Defence's damage control and bureaucratic mantras—and I do appreciate my honourable friend's comments about naval culture. Too often, Defence's responses were not transparent and straightforward.Commonsense dictates that the pursuit of leading edge technology needs to be supported with high quality risk management. This did not happen. The project pursued the former but the latter was not achieved. It is now too late to turn back the clock. What has happened has happened, but the problems do need to be recognised, deficiencies do need to be remedied, and it is still not too late to learn.The committee's report and its recommendations seek to establish a clearer picture of what went wrong, why and how in future it could be avoided. The recommendations, in their entirety, address this, especially recommendation No. 6. These recommendations represent an opportunity to ensure that appropriate procedures are put in place for the future. It is important, as recommendation No. 6 provides, that realistic allowances be made for contingencies and delivery schedules for major Department of Defence projects and changeovers in platform types.In a positive sense, it is to be sincerely hoped that very real and tangible lessons have been learned from the Collins experience. I would like to thank my colleagues on the committee, the committee secretariat and, in particular, Jennifer Hughson and Tiana Gray for their work in producing a very substantial report.17:35:006509Griffin, Alan, MPMr GRIFFINVU5BruceALP00—by leave—I will be very brief, because I note there is an agreement to keep this debate to a maximum of 20 minutes. In the spirit of that agreement, I will endeavour to limit my comments.I would like to recommend this report to the parliament as being a report which goes through, in some detail, a range of the issues around the Collins class submarine project. This project has occupied the time of the then JCPA—some years ago—and now the JCPAA with respect to the developments around this particular submarine system. Previous speak ers have outlined to varying degrees a range of the problems associated with the Collins class. I will limit my comments to several points.The first point is that there is no doubt that when you look to developing a capability such as this, there is going to be a range of difficulties. Certainly the complexity of major defence platforms, particularly with respect to computer systems and other aspects, means that it is a difficult thing to do on time and it is a difficult thing to do just right. However, having said that, and noting the very serious problems for Defence and contractors with respect to the implementation of something such as this, it would be remiss of me not to say that, as a member of the JCPAA of some six years, I do get sick and tired of having Defence hauled before us in a situation where there have been, in my view, on occasions, greater problems than there should have been around the question of the implementation of major projects. It is an ongoing and continuous thing, and that is why I would urge those interested to note the recommendations the committee has made with respect to the need for Defence to plan properly into the future. Although I know, as I said, this is a particularly complex program to introduce.The comments by the member for Kingston with respect to the need to look to the future are very important in the context of the submarine program. We have, through this program, developed a very significant capability at the ASC and we do need to look at how we can maintain that in Australia and develop it into the future, not only in terms of our strategic defence capability—in which I think there is certainly a role for it to play—but also in terms of an industrial base, which is something we need to continue to develop and foster particularly in Adelaide.I would like to thank the members of the committee for the work that they have done and also the secretariat for once again delivering in what can be difficult circumstances and a moveable feast. I look forward to also seeing the results of the Prescott committee with respect to its findings and I hope that we can be in a situation—and I am confident that we can—where the difficulties that currently exist and that were outlined earlier will be resolved and we will have a first-rate submarine force available for the defence of the nation.6510Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—I move:That the House take note of the report.I seek leave to continue my remarks later.Leave granted; debate adjourned.Bills6510r8246510Debate resumed.17:39:006510Hollis, Colin, MPMr HOLLISDH4ThrosbyALP00—I am pleased to resume my contribution on the Stevedoring Levy (Collection) Amendment Bill 1999 . We have before the parliament another piece of proposed legislation that at the moment, unfortunately, does not add up. The parliament is being asked to approve additional expenditure of $100 million, but the government refuses to spell out precisely what the finance is for and to whom it will be particularly directed. The government knows that its involvement in manufacturing a dispute on the waterfront last year has not delivered the reforms it said it would. The action that the government took last year in deliberately going out and manufacturing a dispute will be to its everlasting shame, and the members opposite have had their words—straight from the script—publicly recorded in Hansard .And where is the former minister responsible for transport and waterfront matters today? Out of the country on a jolly in Geneva heading, I understand, a delegation to the International Labour Organisation. Hopefully the minister will learn that the way to go about trade union reform is not to let loose balaclavaed goons armed with baseball bats and savage dogs. That is not the way a civilised society goes about reform of any sort, let alone trade union reform. The ILO is a favourite target of the government, at each opportunity rebuked, ridiculed and abused.The questions that the opposition asked today are about public accountability and the government being open to public scrutiny—and surely that is what government, especially good government, is supposed to be about. We will not allow the government to escape from its previous involvement in conspiracy and illegal activity, and threatening the livelihood of workers and their families. We will not allow a repeat of the blatant abuse of Commonwealth power and we will not allow a repeat of the blatant misuse of taxpayers' funds in seeking reports. This is why the opposition will not finally say today that this proposed legislation is up to scratch. We have very serious doubts about it. That is why this proposed legislation will be put before a Senate committee for further examination, assessment and scrutiny.There are far too many unanswered questions and the government refuses to ensure that they are answered. What is the real intent behind this amendment to the Stevedoring Levy (Collection) Act? Why do we need to approve an extra $100 million and what is the real purpose of this funding? Until these questions are satisfactorily answered and resolved, the government simply does not deserve the assumption of trust. After all, we know the real record and that record, as far as we on this side are concerned, is not good. As the opposition spokesperson on these matters said, we will not delay passage of this legislation but we will expect it to go before a Senate committee. We will be looking there for answers to the searching and serious questions. We want to know what the $100 million is for and we reserve the right to change our view. As I said, we have not ticked off on this one, we have not given it the final seal of approval; we await the result of that searching inquiry by the Senate. Then, and only then, will we finally let the government know our position on this important piece of legislation.17:43:006511Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Stevedoring Levy (Collection) Amendment Bill 1999 increases the appropriation cap contained in the Stevedoring Levy (Collection) Act from $250 million to $350 million to meet the higher than expected cost of redundancies. The government's intention is that the rate of the levy will not change. It is in fact $6 per vehicle and $12 per container. Instead the government is proposing that the period of collection of the levy will be extended to meet the appropriation increase.My interest in this bill arises from having been approached earlier this year by one of my constituents—a Glenroy resident, Mr Ron Kelly—who worked for Strang Stevedores until just before Christmas 1998. After 17 years on the docks, Mr Kelly, along with five other employees, was offered and accepted a redundancy package as part of the restructure program agreed to following the docks dispute of 1998, of which this bill is an amendment because—as I indicated before—the cost of redundancies has been higher than expected. Mr Kelly experienced problems, and before coming to these I want to remind the House of statements made by the Minister for Employment, Workplace Relations and Small Business, Peter Reith, in his second reading speech to the original bill back in April last year. He said:The intention is that MIFCo's operation should be administratively simple, while protecting the Commonwealth's interests, so as to ensure payments are made to redundant employees speedily, providing a deed of release is signed.The minister went on to say:In other words, those stevedoring employees who are made redundant will have made available to them arrangements to ensure payment of their full and very generous benefits accruing on redundancy.It was apparently Minister Reith's intention that the funds be administratively simple, pay out speedily and be for stevedoring employees who were made redundant. No doubt Ron Kelly and the other waterfront workers who took redundancy packages thought it would move speedily given all the trouble the minister and Chris Corrigan were going to in order to achieve what they described as reform. But this turned out not to be the case.On 25 October 1998 four foremen and one waterside worker accepted packages from Strang Stevedores. On 24 December 1998 Ron Kelly and another supervisor also accepted packages from Strang Stevedores. They were told they would have to wait six weeks for payment to be processed. For Ron that would have meant mid-February. Ron waited and then waited some more and eventually called my office seeking my assistance. The amount of money involved was quite significant—$110,000.I wrote to the Company Secretary of the Maritime Industry Finance Company Ltd—MIFCo—Linda Addison, and I pointed out to her that Ron Kelly had finished work prior to Christmas but neither he nor the other employees who finished with Strang at the same time had been paid their redundancy entitlements, and yet they had been told that their redundancy payments would be processed within six weeks. That six weeks had turned by now into five months, which was clearly unacceptable for Mr Kelly and the other employees who had accepted those redundancy packages in good faith and should not be expected to experience financial hardship as a result of delays, whether bureaucratically or politically motivated by a government department. I said to her:It has been suggested to me that there may be an issue concerning the eligibility of some former employees for those payments. To point out the obvious, any dispute regarding this eligibility should not be used as an excuse to avoid paying those employees who clearly are entitled to this payment.I pointed out that Mr Kelly and the other employees would not be entitled to interest for the period that had elapsed and that accepting a MIFCo package was supposed to limit their employment opportunities for a specified period of time. I asked that she investigate this matter as a matter of urgency with a view to providing Mr Kelly and the other employees with the redundancy payments to which they were entitled at the earliest possible opportunity.I did a little more than that. I released my letter to the media and it attracted some interest. It then attracted some attention from MIFCo. At that time I took a somewhat harsh view of the government and said:The Liberal Party seems to have the view that where waterside workers are concerned, anything goes, and have treated these men with utter contempt—the cheque's been `in the mail' for five months now. These men took the Government funded redundancy packages in good faith, and they deserve better.MIFCo then acted very smartly to deal with the application made by Mr Kelly and some others. I received a reply from Linda Addison of MIFCo a few days later pointing out the terms under which MIFCo provides assistance in relation to redundancy related payments. She said:MIFCo has no authority to enter into negotiations with an employer . . . unless and until MIFCo has been authorised by the Minister for Transport and Regional Services to enter into those negotiations . . . She also pointed out that the terminations of employment effected by Strang Stevedores in December 1998 were not at the behest of MIFCo. She said:At the time the employment of those employees was terminated MIFCo had received no authorisation from the Commonwealth to enter into negotiation with Strang Stevedores . . . This happened later when:The Minister for Transport and Regional Services wrote to MIFCo on 9 February 1999 authorising MIFCo to determine the redundancy payments payable concerning the employees of Strang Stevedores.She went on to say:The Board of MIFCo met on 11 May to further consider the Strang redundancies and resolved to provide, by 21 May 1999 at the latest for Mr Kelly and the other Strang employees whose employment was terminated in December 1998.This was good news for Mr Kelly and it led to him being provided with the redundancy payment to which he was entitled and for which he had had to wait for far too long.One other interesting matter in Ms Addison's letter to me was that she pointed out that companies receiving funding assistance from MIFCo would have to reimburse that redundancy money if the redundant employee were to be employed or otherwise retained by that company or any related body corporate in any capacity within 12 months of receiving a redundancy related payment. The point of that is that, if you get the redundancy payment, you should not go back onto the waterfront for at least 12 months.Initially I believed that MIFCo were entirely to blame for the delay in getting Mr Kelly and the other members of the AMOU their redundancy entitlements. But as I investigated further I discovered there was more to this issue than simply some government bungling and ineptitude. In fact, it turns out that a number of Strang senior managers have made application for MIFCo money. We were told that the reason this stevedoring levy had to be imposed was to give us waterfront reform and that waterfront reform meant breaking the MUA—breaking the union stranglehold on the wharves.But some of the Strang applications for MIFCo money have come from men who are not MUA members or even members of the Marine Officers Union. Indeed, they are not members of any union at all. They include Mr Philip Walsh, a director and operations manager. I am told he is Robert Strang's 2IC—second in command. He is seeking a redundancy payout. They include men in the next line of management down—the logistics manager, Mr Peter Bowyer; the maintenance manager, Mr Ron Baker; and the occupational health and safety manager, Mr Wayne Humphries. Mr Humphries received what is known as a WIRA package then came back to the waterfront two years later to work for Strang.To be fair to MIFCo, I think that to some extent they have smelled a rat and are not comfortable with handing out redundancy packages to the company's management, and that that is why some of these matters have not yet been resolved. But I understand that these managers have been offered one week for every year of service, and that raises some pretty basic questions about the operation of MIFCo and the stevedoring industry levy. First, what safeguards are there to stop bosses putting their hands up for a piece of the redundancy pie? Who will be redundant next? Chris Corrigan? Second, what safeguards are there to stop people taking a redundancy package on Friday and walking back through the waterfront door on Monday? Indeed, my constituent Ron Kelly tells me he was made just such an offer. He was told he could have a new job at the waterfront working for a company called Philmar. The name comes from Philip and Maureen Walsh; the same Philip Walsh who applied for a MIFCo redundancy.But it gets worse. I understand that, while plans to establish the Philmar company were aborted, a number of Strang Stevedoring employees got redundancy packages—a couple in excess of $100,000—and never left the waterfront. Instead of working for Strang Stevedoring, they went to work for R.W. Strang Pty Ltd. They included the son of Robert Strang—Robert Strang Jr. We do not have Minister Reith here, or Minister Anderson, who is supposed to be administering this fund, but I would welcome someone on the government side opposite telling me just how the cause of waterfront world best practice is served by paying out a redundancy package to someone who does not even leave the waterfront—and the son of a waterfront company owner at that. I also want to know just what other safeguards MIFCo has in place to assess claims. I am informed that Mr Roman Neubacher who, like Mr Humphries was previously paid out under WIRA, returned to Strang as a part-time supervisor and has received a MIFCo package. On what basis are part-time or casual employees, with no guarantee of work into the future, awarded redundancy packages? We have a situation where people are putting up their hands for redundancy payments with no intention of actually leaving the waterfront.The government says waterfront reform is about making Australian exports more competitive and giving Australian consumers cheaper products. But, instead, what we see happening here is an industry levy—which of course makes exports less competitive and products dearer—potentially being used to put the icing on the cake for waterfront company managers engaged in a merry-go-round, a revolving door. Where is Minister Reith, who so assiduously roots out unsavoury work practices on the waterfront? We all remember the minister's waterfront `rort of the day' during question time each day last year. Where are you now, Minister, while all this is going on? We on this side of the House always knew what this exercise was all about: it was about smashing a union, smashing the MUA. It was never genuinely about waterfront reform and trying to look after exporters or consumers.The stevedoring levy money must be used to fund genuine waterfront redundancies; it should not be used as some revolving door for company managers. As other speakers have mentioned, it is the intention of the opposition to refer this legislation to a Senate committee where these matters can be considered in detail. But, frankly, I think these matters are so serious that they require investigation by the Australian Federal Police. The government's legislation last year—the Stevedoring Levy (Collection) Act—talked about the minister being able to authorise payments in connection with qualifying redundancies. If you look at the definition of `qualifying redundancy', it talks about `termination on the ground of redundancy of the employment of a person doing stevedoring work'. You cannot suggest that somebody who is at work on Friday on a particular salary and who comes back on Monday on a different salary has genuinely been made redundant. So there are a whole host of reasons for having this matter considered in detail by the Senate committee.As the member for Dickson, who led for the opposition on this matter, pointed out, we had evidence before the Senate Rural and Regional Affairs and Transport Legislation Committee indicating that the current estimate of the total payout for redundancies was of the order of $195 million. That committee was told that that amount of $195 million would cover all applications for funding for redundancies received by the Commonwealth. So the department is saying on the one hand, `This is all going to cost $195 million,' yet the government comes into the House with a piece of legislation and says, `Well, in fact, the $250 million we allocated isn't enough and we need a further $100 million.' It is a matter of the greatest interest to the opposition as to what activities will cost this additional $100 million. There is no indication in the budget papers where this money might be spent, so our question is: where is the accountability and the transparency for the public or the stevedoring industry in an arrangement that increases the amount to be raised by a levy on industry and then does not give any indication of where the extra funds are going?This whole issue has a most unsatisfactory history. It was deeply divisive in this com munity. I think that most of us will remember for a long time the spectre of the balaclavas and the guard dogs which introduced a new, unhappy and unsavoury chapter to Australian politics and started to divide us as a nation. It is entirely regrettable that we witnessed those scenes last year. But it is even more regrettable if this government is unable to realise any of the benefits that it claimed would emerge from this whole process of waterfront reform and we see a situation where the productivity increases do not emerge, where the costs for exporters or consumers in the Australian domestic market do not come down and where funds are misused. From the point of view of the opposition, we are determined to ensure that this will not happen, and therefore we intend to subject this legislation to detailed scrutiny in the Senate. As other speakers have indicated, we do not intend to oppose it here, but it is certainly our intention that it receive proper scrutiny and that the government is properly accountable for the spending of this money.18:00:006514O'Keefe, Neil, MPMr O'KEEFECE4BurkeALP00—I think it is very apposite for us to use this opportunity in this debate to review some of what has taken place in waterfront reform, particularly two years down the track from the exercise carried out by the government with the Patrick workers. I think it is appropriate—in following up on the points that Mr Thomson, the member for Wills, has just made—to note that here we have the government talking in terms of having already levied $250 million and now needing another $100 million, while the department is saying that the total amount required is $195 million. So we have got something in the order of $100 million plus to be accounted for and, if that order of funds is raised in levies, there is $100 million worth of charges going through the waterfront system not being complained about—and I emphasise again, not being complained about—by the very people who championed the cause of waterfront reform in the way that they put it through.We have not heard a squeak from the National Farmers Federation, who were the founders of the insane P&C Stevedores company exercise, about the fact that some body is paying these levies and no-one is getting any benefit. We have not heard a word from the minister about the failed P&C Stevedores company, and those people are now talking about taking out an unfair dismissal claim, or something, against the government. We are still waiting to hear about the exercise that Mr Tanner has drawn attention to—the documents and the statements relating to Mr Corrigan himself and what appear, on the surface of things, to have been false statements made under oath. There are lots of things to be followed through and it is appropriate to talk about those things in the context of this legislation, even though we are supporting passage—it is going under scrutiny in the Senate committee process.It is appropriate to talk about what has been an extremely shonky exercise that now looks even shonkier and all those things will, one way or another, be flushed out in the other place in the committee process. But what took my interest, more than anything, were reports in the media this week about two things. One is that it has been announced as a great victory for waterfront reform that the crane rate at Melbourne is now 18.9 containers per hour—up one unit on the average prior to the disputes in Melbourne. So all this has been about lifting the crane rate by one unit. The other thing I thought was most interesting was the improved profitability of the Lang Corporation and its subsidiary, Patrick. They have shown a turnaround in profitability of something in the order of $40 million in the last 12 months of trading.At the very outset of that failed waterfront fiasco, one of the questions which was to be asked—and was asked—was that, even if anything was achieved, what would be passed on to the consumer? What would be passed on to the user of the system? The absolute fact of it is that nothing has been passed on to the consumer. In fact, whatever profits have been made out of this exercise have either been paid out in redundancy payments to waterside workers who have exited the industry or been pocketed by Patrick. And yet we do not hear a word—neither from Mr Reith about productivity on the waterfront nor from the people who thought all this disruption in Australia was so unnecessary.Just in case people have forgotten, I want to reiterate a couple of points as they particularly relate to Melbourne, because we are moving into an election in Victoria and the Victorian government was every bit as much a supporter of this failed waterfront fiasco as anyone on that side of the parliament here. The workers at Patrick, just prior to the night the gates were locked, had entered into an enterprise bargain with their employer, Patrick, and it included weekly productivity bonuses for any week in which those workers exceeded the targets that had been agreed to under the enterprise agreement.It is of interest to note that in the 42 weeks from the signing of the agreement leading up to the locking of the doors—the evening that the balaclava clad security guards and their dogs were moved in—those employees received the productivity bonuses for 38 of the 42 weeks. All of that, up to that point, was a continuation of a reform process put in place by the previous Labor government which saw numbers on the waterfront fall from 10,300 in 1989 to 3,700 by 1996, when we lost office. That period of seven years saw time lost through accidents fall by 88 per cent, an increase in the container crane rate of 50 per cent and improvements in the cost of bulk cargo handling—acknowledged particularly by the wheat industry—of 65 per cent.Nobody in the Labor government said at the time of the commencement of that process that work did not need to be done. Of course, work needed to be done, and via a process of waterfront reform 75 to 80 per cent of the task had been achieved before John Howard's government came to office. Then, after coming to office, away we went on what I call the failed waterfront fiasco. Now, 12 months down the road, we have very clear evidence that those words are apposite. We still have issues hanging around from the illegal acts of government ministers. We have had a settlement out of the High Court where the judges sat looking at this conduct and what was supposed to be a quick half-day exercise in the High Court, to knock it over and move it back to another process, finished up for days in the High Court as the justices themselves became aware of the bizarre conduct that had been going on between Corrigan and Reith, the government, the NFF and the banks, all to get the MUA.Now we see no improvement in the container crane rate—hardly any improvement; this is in Melbourne—not because of anything to do with the men working the system but purely to do with the nature of cargoes that come to Melbourne and the nature of the shipping that comes through the port. We have certainly seen Lang Patrick increase its profitability but not a cracker being passed on to the user or to the consumer, and neither was there ever going to be.Mr Deputy Speaker, let me give you an interesting piece of information which I got just after the outbreak of this dispute. I went to companies using the Melbourne waterfront and found that the average cost of sending a container through Victoria to Asia, up to Singapore, was $2,000. That $2,000 per container included picking the container up at the factory 300 kilometres from the port of Melbourne, transporting it to the port, having the stevedores load the container off the truck, storing it and then putting it onto a ship, shipping the container up to Singapore, unloading it up there and transporting it to the user—a door-to-door service, $2,000.Built into that door-to-door service was the Melbourne stevedoring charge. That stevedoring charge was between $70 and $100 in the total bill, depending on what your bulk rates were and on what sort of deal you had with the stevedoring companies. Even if you had managed to halve the cost of stevedoring on the Melbourne ports, the saving was in the order of $30 per container on the going rate in a container carrying 20 tonnes of produce or goods. If you translate that to SPC cans of tomatoes—500 gram cans, 20 tonnes, 40,000 cans—you are talking in the order of one-fifth of a cent per can. And here were these fools running around promising farmers, for instance, that they were going to get one-fifth of a cent more for the tomatoes that were in the can, or promising the consumer that they were going to get one-fifth of a cent off the price of the can of tomatoes in the supermar kets. The people who fell for it were even more foolish, including the people who went to work for P&C Stevedores.I think it is appropriate for this legislation to be referred to the Senate committee so that in analysing whether or not these increased levies can be justified we find out where the missing $100 million is. Also, it is appropriate that all these things be looked at so that we find out who are the people who really profited from this failed waterfront fiasco which split Australia and so divisively affected relations between so many people. Who, apart from Corrigan, Lang Patrick and their shareholders, apart from people in the government's own circle who are obviously in the know about this $100 million that is missing, has gained any benefit from doing this to Australia? I think you will find the answer is that they are pretty hard to find.We are comfortable with passage of this levy legislation, but we are taking the opportunity to look at this whole fiasco a year down the road and say that, compared with what was achieved in a proper, negotiated and consultative process, this has been a blight on the performance of the Australian government and a blight on our industrial relations maturity. It ought to be seen as such and on this side of the House will continue to be seen as such.18:14:006516McMullan, Bob, MPMr McMULLAN5I4CanberraALP00—I rise to support the remarks made by the shadow minister for transport and my other colleagues with regard to the Stevedoring Levy (Collection) Amendment Bill 1999 —including those remarks made so well by you, Mr Acting Deputy Speaker Hollis. I support the case that, before the parliament finishes dealing with this legislation, it will need an effective scrutiny and the only way that scrutiny is going to occur is by a Senate committee examining the matter. I will speak broadly to why I support that case in a moment or two.What I want to say also in relation to this matter—and it is very closely related to the history that leads to this bill and the circumstances that surround it—is that, when a government acts or fails to act, when it acts in one area and does not act in another, it is a clear indication of the priorities of a government. It is an indication of what it thinks is important. It has a number of matters before it. It chooses to bring one on for action and not act on another. It chooses to proceed in one and be dilatory in another.We have seen this government being embarrassing in its haste with regard to these matters. On the night of the mass sackings of waterside workers, within minutes it was in here with a bill saying, `This is how we are going to fund sacking all these people. The sum of $250 million is enough to do that and, if $250 is not enough, we will come back with some more.' But we find workers all around Australia losing their jobs and tens of millions of dollars of their entitlements. We saw reported only yesterday in the Sydney Morning Herald that a group of miners at Oakdale Colliery, west of Camden, were not sacked because they had done anything wrong, not even sacked because they were in conflict with the government's industrial relations objectives and therefore part of some government corporate conspiracy, but sacked because the company found the mine was no longer viable. On that front, it is not even the company's fault. But what did the miners find? They found that their entitlements of $6.3 million are not being funded. These people have a right—there is a legal obligation by the company to these people—and the company has spent their money somewhere else. In my view, it is crystal clear that this company has stolen those people's money and spent it for some other purpose. It had a legal obligation to provide and it has not.This is not unique. I do not know the individuals associated with this company. In most of the instances that I have been associated with in regard to this matter—not all but most—the companies thought they were doing the right thing, because they thought if they spent the money they could keep the company going. They have no right to do that. They are borrowing these workers' money without consulting them and they are spending it in the company. So I do not particularly single out the directors and management of this company for criticism. I would need to know more before I said that they had been singular in their misbehaviour, as I think, for example, Patrick was in the way in which it went about depriving people of their legal rights—it is an issue I would like to refer to in a moment—and as I think, for example, Ashanti was, because everybody knew that it had simply entered into a corporate device to avoid paying the legal entitlements. It had the money; it simply entered into a corporate structure to avoid it. And there have been other examples of that. That is not the case here. It was not the case in the disturbing circumstances at the mine in Goulburn.Nevertheless, this is an issue we have been raising with the government since long before the sacking of the waterside workers. We raised it before the Cobar issue arose. The member for Prospect, to her great credit, was the first to raise it. In the last term of the parliament, as shadow minister for industrial relations I joined with her—she introduced one private member's bill; I introduced another—to address two different aspects of this matter. And in this parliament the member for Prospect and the new shadow minister for industrial relations, the member for Brisbane, have introduced private members' bills to deal with this matter. And what has the government done? Nothing.This involves thousands of workers, but most of the circumstances where this occurs do not get any publicity. The example that was first raised with me by the member for Prospect was never in the newspapers. These people just suffered quietly, but they nonetheless lost and the lives of many people were destroyed. The government knows. It may not have known before then, although it should have, but it knows now. It has known for much longer than it has been dealing with this matter that this is an issue that needs to be dealt with and it knows there are proven ways of dealing with it. It is not as if Australia is the only country in the world where this issue rises. Other countries have grappled with it and resolved it in different ways. And we can learn from their experience. States in the United States have dealt with it, not by a federal scheme but by individual states, in ways that we could emulate. And the government has done nothing.It is a very interesting indication of priority. The sum of $100 million can be found by levies on this industry to achieve a political purpose for the government; not one cent can be found to assist all the workers who are losing their legal entitlements. Nobody alleges that any of these people—take these workers at Oakdale—have done anything wrong or that they were on strike or that they have been working inefficiently or that they have been derelict in their duty. They simply came up from mining one night and were told, `Sorry, it's all over.'Overnight one man lost $98,000. This is the entire retirement nest egg of one of these workers. For many people, this is the end of their expectations. They felt, first of all, that they had a secure job, but everybody knows that, as society changes, secure jobs may be harder to find. They thought that if their job was not secure their rights and entitlements were. As one of the workers, a 44-year-old worker with three children, was quoted as saying in the Sydney Morning Herald:What am I supposed to do? With my entitlement money I could have paid off the mortgage, maybe bought a truck, got into business on my own.Without it, as another man on the night shift said, `We are history.'These people have been robbed. It is happening time and again. It has gone on for too long, but now nobody can any longer pretend we do not know it is happening. It has been raised significantly in the parliament, very effectively by the Cobar workers, very effectively by meatworkers at Grafton and persistently and effectively by the member for Prospect, with the support of the entire parliamentary Labor Party and in particular the member for Brisbane. We have said to the government, `We have proposed two solutions to different parts of this problem. They will work, but we do not pretend they are the only solutions.' If the government got back and said, `No, we don't agree with your solution, let's solve it this way,' that would be terrific. We might argue about the best way to do it, but it would be terrific. We would be pleased to facilitate the passage of any step to assist in this matter, but we have got nothing.Yet we have this bill where nobody says why we need this extra $100 million. It says it is for unforeseen extra costs for redundancies, but everybody associated with the industry says that, as far as they know, the $250 million will fund the redundancies. We will find out in the Senate committee, and I will be very interested to hear why all the people who should know disagree with the government. But I cannot say unequivocally that it is wrong; we will wait to see the evidence. Nothing has been put forward that reassures people who work in the industry—nor, to the extent I have been able to get information about it, management and companies engaged in the industry—that this money is needed for any of the ordinary purposes which were originally outlined in the purposes of the bill.So we are apprehensive. We are apprehensive that the history of this matter gives nobody comfort or encouragement to believe that you should trust this minister and this government with the right to rip more money out of companies operating in this industry, including some who may not wish to take advantage of the scheme and may not wish to enter into redundancies. That was the worst thing about the original scheme. It was saying to companies who had worked effectively and efficiently in cooperation with their work force, `Here is a tax you have to pay to fund the activities of people who cannot work effectively and efficiently with their work force.' It said to Sealand—and to others, but they were the biggest example—that, notwithstanding that they had achieved significant reforms cooperatively, that they wished to continue to achieve those reforms cooperatively and that they felt no need of access to the redundancy package, to this sort of assistance, they had to pay a levy because Patricks could not achieve or did not seek to achieve the same reform in the same process. I think it is a combination of `could not' and `did not seek to'.It was, firstly, the product of appallingly incompetent management by Mr Corrigan, appallingly incompetent incapacity to work with his work force to achieve change, as other people in the industry had been able to do. He thought he was still running a merchant bank and he suddenly found he was dealing with an organised and strong work force who stood up for their rights. He found that difficult and uncomfortable and he was unable to cope with it. As a consequence, he was ripe for the conspiracy that the government sought and into which it entered, which has been outlined so effectively by my colleagues. I have not been able to listen to all, but I heard particularly the member for Melbourne and you, Mr Deputy Speaker Hollis. I know that others spoke on it as well, outlining those circumstances. I therefore will not take the time of the House just reiterating things that have been said, but it is those circumstances that mean that nobody has confidence in this minister and in his word on this or, as indicated correctly by Senator Harradine, on anything else.This is not an industry rescue package. If someone said, `Here is an emergency piece of legislation. We need to bring in a levy to raise $100 million to save the futures of these workers'—for example, those people who work at Oakdale Colliery in Camden—and said, `We will come to the rescue of these people, this is an emergency,' everyone would be prepared to look for ways in which they could facilitate this. People would say, `That is a purpose we all know has to be done. It might not be the perfect measure. It might only be an interim measure, and we can't just go on making these interim measures, so let's look for a long-term solution.' Everybody would want to facilitate it because that is an objective that you would think everybody knows is desirable, although it does not seem to have sunk in with the government yet. It will not move one inch to deal with that matter. But what the government is doing here is saying, `Let's provide to collect more of a levy on every container and vehicle that is loaded or unloaded in Australia, and let's disburse that money to help companies which are trying to sack other people.'Why do we need an extra $100 million? The minister's second reading speech said it is to meet the greater than anticipated cost of redundancies. Amazing. Nobody seems to believe that is true. During a response to the Senate Rural and Regional Affairs and Transport Legislation Committee in relation to the estimates only last week, the committee was told in answer to a question from Senator O'Brien that the total redundancy costs will be in the order of $195 million. We do not have any reason to doubt that those officers were telling the truth when they gave Senator O'Brien that advice and that information. So why is it that here we have an enthusiastic burst of levying of charges, raising $100 million to solve an undefined problem, while we get studied inactivity about a crisis in the lives of working people arising all too frequently in workplaces around Australia? It happens particularly in the mining industry and the meat industry but not only there. The first case that the member for Prospect raised was in fact in the manufacturing sector.We have a circumstance here where everybody's understanding is that there is more than enough in the kitty to pay for the existing redundancies. People in the industry say they have no idea what the extra $100 million might be for, and some of the company representatives are saying they are also puzzled. We hope it does not wind up being used to fund the government's defence in the FOI Federal Court case. We particularly want to make sure that does not happen. We would also be interested to know when the Department of Finance and Administration is going to put in its statement of risk, the contingency with regard to some of the court cases that are being pursued in this matter. I endorse the remarks of my colleagues and express our profound and deep reservations about the direction in which the government is going on this and what it says about its priorities, but support the decision to allow the passage of the bill through this House so that it can be properly scrutinised in the Senate committee.18:31:006519Scott, Bruce, MPMr BRUCE SCOTTYT4MaranoaNPVeterans' Affairs; Minister Assisting the Minister for Defence10—On this `Wear Wool' Wednesday, I acknowledge the great contribution of our wool industry in this country. Of course, we now also see wool product moving across our wharves to export destinations a little more cheaply than it would have a few years ago. I thank the opposition for allowing the fairly speedy passage of the Stevedoring Levy (Collection) Amendment Bill 1999 through the House. I thank members on both sides of the House for their contributions to this bill.The Stevedoring Levy (Collection) Amendment Bill 1999 increases the amount which may be appropriated under section 18 of the Stevedoring Levy (Collection) Act 1998 from $250 million to $350 million. The government has listened with interest to the statements of some of the members opposite concerning this bill. The increase in the appropriation is to cover the additional cost of redundancies and the additional cost of financing associated with that extra redundancy cost.I feel it is necessary at this stage to address the real misunderstandings that appear to be held by members opposite. I hope they will understand after the bill's passage tonight. As members opposite are aware, MIFCo has estimated that $195 million will be required to meet the cost of redundancies. This is up from the original figure of $148 million. MIFCo is negotiating a loan to cover that amount of principal. Contrary to the assertions of the member for Melbourne, the interest rates which the banks have offered MIFCo have not been falling. The current estimated interest cost for borrowing $195 million over the term of the loan until 2010 is more than $100 million. The total additional cost of redundancies and extra interest is therefore estimated to be in excess of $100 million, and that is why the government seeks an additional $100 million for the appropriation.The government remains committed to its path of stevedoring reforms, and the need for an increase in the appropriation under the act reflects the success of this reform. The increased appropriation will allow the government to continue to meet the cost of those redundancies and other worthwhile reforms, the financing costs associated with the Maritime Industry Finance Company's borrowings and administrative costs connected with the levy.Let us not lose sight of the fact that MIFCo does not currently have sufficient funds to meet the greater than expected demand for redundancies. The additional funding will be used to meet the cost of voluntary—I repeat, voluntary—redundancies that will be unnecessarily delayed if this bill is obstructed. There can be no justification for such a delay. I call on the members opposite to support the bill, ensure the speedy passage of this legislation and give effect of law to this bill. I commend the bill to the House.I would like to make one other brief comment, Mr Deputy Speaker. As Queensland warms up tonight to take on the Blues, I know we are going to see a great game from the Maroons to seal the State of Origin tonight.Question resolved in the affirmative.Bill read a second time.Message from the Governor-General recommending appropriation announced.6520Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Bruce Scott) read a third time.Bills6520r7476520Debate resumed from 11 March, on motion by Mr Hockey:That the bill be now read a second time.18:36:006520Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Taxation Laws Amendment Bill (No. 5) 1999 contains a couple of different items. The first of those involves sales tax exemption for what are called `exempt entities'. The bill proposes to tighten the sales tax law to remove the current blanket exemption that applies to items for use in properties owned or leased to tax exempt bodies—for example, state governments, charities, foreign governments, et cetera—and, instead, only allow the exemption where the tax-exempt person actually uses the property. In addition, certain types of property will completely lose the right to an exemption, including shops and shopping centres, hotels, casinos and apartment blocks. A windfall sales tax exemption currently arises where businesses which are ordinarily subject to sales tax are conducted on property owned by a tax-exempt person. This provides an unfair advantage to such businesses at the expense of the Commonwealth and of their competitors.This bill proposes to limit the exemption to circumstances where the tax-exempt body itself—and not a private sector commercial interest—will benefit from the exemption. This move is supported in principle by Labor. However, the effect of the proposal applies to existing contracts in circumstances where the developer may be hit with a new tax liability but will not, apparently, be able to pass it on. The bill proposes that the new sales tax liability will apply to any dealing on or after 2 April 1998 unless the goods were acquired on or before 2 April 1998, which is the date that the original legislation dealing with this matter was introduced into the House. The proposal, as drafted, may result in some unfair outcomes, especially on low margin fixed price contracts such as those relating to some Olympics projects, where the developer will have to pay the tax but not be able to pass on the cost to the owner of the infrastructure.The original legislation which the government introduced last year would also have impacted upon private infrastructure projects—for example, tunnels, roads and the like—which are conducted on public land. The government claims to have addressed this in its new and revised bill. Relevant industry stakeholders are still awaiting legal advice on the new provisions. The Australian Council of Infrastructure Development Ltd, as the industry peak body, and other members of the construction industry and the accounting profession have advised that they would like this legislation to be referred to the Senate Economics Legislation Committee to enable close scrutiny of the new proposals. Labor supports this process and will be seeking to ensure examination of the new proposals in the Senate committee.Another item that this legislation deals with concerns arrangements treated as a sale and loan, and limited recourse debt. The objective of the proposals is to prevent taxpayers obtaining deductions for capital expenditures in excess of their actual outlays. This situation can arise where the balance of a debt which has financed the expenditure is not paid and the financier can recover only a specific asset on the termination of the finance agreement. The types of financing arrangements covered are hire purchase, instalment financing and non-recourse debt. The provisions are highly complex and have been quite controversial with the accounting, legal and construction industries.An earlier iteration of the provisions was referred to the Senate Economics Legislation Committee, and the new bill has indeed been modified to take some of these concerns into account. Industry representatives have indicated that they wish the provisions to again be referred so that the new provisions can be explored closely. In principle, the legislation is supported by Labor as it is aimed at ensuring that taxpayers do not receive windfalls simply due to the type of financing undertaken. However, it is important that legitimate transactions do not suffer from overzealous drafting—for example, under the provisions as originally framed in last year's bill, all refinancing of debt on a gas pipeline would have been effectively taxed at the company tax rate. This would have apparently made such projects uneconomic. So we intend to support the bill, but I do wish now to move a second reading amendment. I move:That all words after "That" be omitted with a view to substituting the following words:"whilst not declining to give the bill a second reading, the House notes that:(1) the proposals as originally introduced have already been modified because of the actions of Labor in referring them to the Senate;(2) the construction and infrastructure industries are still concerned about the potential impact of the legislation on their industries;(3) the legislation needs further consultation with relevant stakeholders;(4) the government has not achieved real tax reform in Australia, it has merely agreed to introduce an unfair GST;(5) the new Howard/Lees GST will involve a massive tax mix switch which will hurt families, which is directly contrary to the balloted policy of the Australian Democrats;(6) the Howard/Lees deal will actually increase the tax on food in Australia; (7) hardworking people will now face a GST on top of state indirect taxes on bank accounts; and(8) the amended tax package is still unfair and will also damage the environment".We see the further process of this second reading amendment as necessary to avoid any of the collateral damage that would otherwise occur through a poorly drafted bill. I repeat that Labor does not oppose the principles that the government says are being addressed by this bill; we are simply keen to ensure that the infrastructure industry is not unfairly treated by unintended taxation consequences. As an example of that, we have just in the last day or two received correspondence from the Fallon Group expressing concern at the impact of this legislation—and the amendments in it—on building subcontractors. In the correspondence that the opposition has received it is suggested:The amendments will impose a liability on building sub-contractors, but only for the period between the commencement of the Bill to the time of the passage of the Act. This liability—according to our correspondence—will be greater than the tax that would otherwise be paid in the same circumstances after the passage of the legislation. The penalty arises because amendments will increase the tax from the price paid by the subcontractor's supplier to the price paid by the subcontractor. Under the proposed amendments the subcontractor will have to pay tax on the retail margin.They also wanted to point out:. . . the ATO publicly stated that they did not know whether or not the amendments would be reintroduced.They expressed concern that there will be some injustices arising from the amendment:The problem with the amendment applying retrospectively is that it will impose a great hardship on sub-contractors who will have to bear the brunt of the unaccounted for sales tax. Surely penalising the sub-contractors does not come within the ambit of stated policy aims of preventing large commercial developers from exploiting an unfair advantage.They say:Sub-contractors who have purchased goods between 2 April 1998 and the present time will undoubtedly have obtained the relevant goods tax free as was the understanding of the law at that time. So they are raising a number of issues which we believe should be the subject of more detailed consideration, and we do intend to pursue these issues before the bill goes through the parliament completely.One of the contracts that will be impacted on by all this is the Citylink project in Melbourne, and I think it is perhaps appropriate to make some observations about that. For example, there has been a report today that Transurban Citylink have confirmed yet another delay in the opening of Melbourne's new $2 billion tollway. They now say that it will operate later this month. This means that the opening of Citylink has been delayed on four occasions. It was originally scheduled to open in April. It was then postponed until early May, then late May. Last month it was postponed until early June. Today we hear it has been postponed yet again. The RACV has stated that there have been too many delays and it has joined with the state opposition in Victoria in calling for Transurban to consider opening part of the road for free until the official opening, to give motorists the opportunity to familiarise themselves with the tollway.I think it is a bit more serious than that, frankly. We have a situation now where 260,000 motorists have handed over $13 million in fees to Transurban for a product which they cannot use. They have purchased the E-tags, they have put the money into the Transurban accounts, and yet they are unable to use Citylink; so they are being ripped off. I have a further concern that the extent of these delays is such that the Citylink may not open before the Victorian state election. It seems to me that Premier Kennett is running dead in relation to this issue of the opening of Citylink, because he would prefer that people not have to pay these tolls until after the state election is over. I certainly think that Citylink ought to open before the Premier does anything in the way of a cut-and-run election in the state of Victoria.There are a number of problems that have arisen with Citylink and the delays in its opening, but I think it ought to be noted that the road itself is complete. I understand that the extension of the Tullamarine freeway and what is referred to as the Bolte Bridge are complete. There is no excuse for what is a multibillion dollar asset being used as a museum piece. There is no physical reason for not allowing motorists to use it. My query is: why is there a barrier there? Why are Victorian motorists being locked out from using this asset? We are told that it is a great asset for Victorians, that it is going to reduce our travel times, that it is going to reduce motor vehicle pollution because vehicles will travel faster, and so on. If that is the case, then let us use this asset.I have also taken up with the Minister for Transport and Regional Services some issues arising from the tax breaks given to Citylink by this government. Earlier this year, a breathless Deputy Prime Minister declared his support for the electronic tolling technology used in the Citylink project. This was no mere moral support. In declaring that the federal government would approve a tax rebate under the Infrastructure Borrowings Tax Offset Scheme for both the $113 million Exhibition Street extension of the project and the electronic E-tags, he paved the way for a federal taxpayer subsidy of up to $12.5 million for this project. That is in addition to the state government taxpayer subsidies to the Citylink project. At the time, the Deputy Prime Minister said that by getting aboard the Citylink project the federal government was laying down the groundwork for developing a national standard in what is known as `intelligent transport systems'.But what have we seen since then? We have seen Transurban giving advice to the Australian Stock Exchange that it has now taken control of customer service operations, including the management of opening toll accounts and E-tag distributions, from its contractors—TransLink Operations, TLO.0V5SLIPPERMr Slipper—Mr Deputy Speaker, I rise on a point of order. I am reluctant to interrupt my friend as he is proceeding with his address but, while the bill does have a fairly wide title insofar as it does refer to a bill for an act to amend the law relating to taxation and for related purposes, I would think the extension of the debate to Citylink is way beyond the ambit of even that wide title. I would ask you to bring the shadow minister back to the matter in hand.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hollis)—As you say, it was for related purposes. Also, as I understand it, the member for Wills is speaking to the amendment that he moved.Mr Slipper interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—It is a fairly wide amendment, so the member for Wills is in order.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Indeed, it is the case that the legislation before the House will impact on projects such as Citylink which are not yet completed. It is precisely these sorts of projects—where private infrastructure is being built on public land—where the sales tax issues are being changed as a result of this amendment. It is my view that a discussion of this project is entirely in order against that background.I have written to the minister for transport pointing out to him the fact that Transurban has advised the Stock Exchange that it has taken over the customer service operations, effectively sacking the company which was engaged in the E-tag distribution. I have also pointed out to him the number of occasions on which the deadline for the opening of the Citylink project has not been achieved, and that Transurban is unable to nominate an exact opening date. I have also drawn to the minister's attention reports that lawyers acting for a company that runs the Citylink customer call centre, Data Connection, have executed a Federal Court order enabling them to raid a property in search of documents concerning the internal workings of the company.I am most concerned that the implementation of the E-tag technology has become a debacle, with an estimated 260,000 motorists having handed over $13 million in fees to Transurban but they have not had access to the Citylink project. It is my view that it is necessary for the federal government to step in and satisfy itself that either the E-tag technology problems have been resolved and that Citylink will open very shortly, or indeed to withdraw the federal government's taxpayer subsidy for this project.The E-tag distribution process has been a disaster. There was a recent meeting of residents in the Strathmore part of my electorate. They reported significant confusion about the cost of the E-tags, E-tag holders' rights and legal responsibilities, and concern about the length of time taken to receive refunds for cancelled E-tags. One resident has been waiting six weeks for a refund. There has also been aggressive telemarketing of E-tags. Two residents were told, `You must buy an E-tag,' and that if one used the day pass more than six times each subsequent use of Citylink would incur a $100 fine plus processing costs. The federal government really has an obligation to get itself involved with this process.The other part of the federal government's provision of infrastructure tax breaks to Citylink involves the environmental side. When the Acting Prime Minister made that statement in January indicating that approval for a tax rebate under the Infrastructure Borrowings Tax Offset Scheme would be given to the Citylink extension project, I put a question on notice to the Minister for Transport and Regional Services asking him whether this project required an environmental assessment, whether it has been conducted, and what form of assessment was going to be used. The minister responded, `Yes, it does require an environmental assessment'. He said:The Citylink Extension proposal was designated by my Department . . . under the Commonwealth Environment Protection (Impact of Proposals) Act . . . The Department of the Environment and Heritage, which administers that legislation, is currently seeking details from the proponent regarding the proposal and the level of environmental assessment undertaken by the Victorian Government. On receipt of this information the need for further environmental assessment under the Act will then be considered.That is simply not good enough. The vast majority of this project is completed. The Exhibition Street extension is in the process of being built. To say `We do not know what form of environmental assessment we are going to undertake and we are still talking with the Victorian government about it' is laughable. And yet there are major environmental concerns that arise from the project.To give one example, it is my advice that the project involves what are referred to as `wet tunnels' rather than dry ones and that the water tables have risen in this area and that Transurban and the company constructing the Citylink have had to lower the water tables by pumping and that that in turn may affect commercial and residential buildings in Richmond. It could indeed cause buildings to crack. I think these are the sorts of things that the Commonwealth government ought to be investigating with a proper environmental assessment rather than saying, `Well, we're still working on it and we haven't decided what form of environmental assessment we are going to undertake.'In addition, I have recently been made aware that Transurban Citylink have resorted to direct door-to-door sales of the whizzbang E-tags, so this is yet another sign that the E-tags are not travelling too well and that they have decided that they need to engage in door-to-door selling to persuade Victorian residents that it is worth paying these tolls to use the Citylink. I am quite concerned about what Citylink and people who are doing door-to-door selling on their behalf might be saying to residents. I have invited people who are affected by this and who are doorknocked to contact my office and indicate just exactly what it is they are being told by those who would have them purchase E-tags.One of the reasons the E-tags have struggled is that people have decided they do not represent value for money. But that has not in any sense been due to the failure on the part of the RACV and Transurban to market them aggressively. One of my constituents, William Jacomb, has written to the ACCC making a complaint of deceptive advertising by the RACV and Citylink concerning the Citylink E-tags. The point that he makes in his complaint to the ACCC is that the time savings being quoted, both by Citylink in its advertising and the RACV in the February edition of Royalauto, are deceptive and misleading for a number of reasons. First, the route used to calculate the pre-Citylink time was not the quickest and most practical route.For example, he talks about travelling from Dandenong to Melbourne airport and the fact that the RACV proposed that motorists would presently go via Mount Alexander Road. He makes the obvious point that very few motorists in their right mind would use Mount Alexander Road. Using that route, the RACV has suggested that it would take 87 minutes to get from Dandenong to Melbourne airport but that once Citylink comes in it would take only 39 minutes. For those who are less acquainted with Melbourne transport conditions, I can assure the House that, as this route goes pretty much past my door, under just about any circumstances you can comfortably make that trip in less than 75 minutes. I would also suggest that the promotion of getting from Dandenong to Melbourne airport in 39 minutes once Citylink opens is optimistic in the extreme. In the words of Darryl from The Castle, they'd be dreaming if they believed that that was possible.William Jacomb also points out that the model used by the RACV is one which was supplied to it by Citylink and not independently developed by it. Yet Citylink in its advertising claims that the modelling was done by RACV and hence independent. But it is done on the basis of a model that they themselves provided. Mr Jacomb also points out that Citylink is not providing any guarantee on the basis of the times that they claim. Ordinarily if there is advertising and you purchase a product and there is something wrong with it you are able to return it and get your money back. In the case of E-tags, not only do you not get your money back but you get charged $25 each year whether you use the E-tag or not. So he makes some quite important points in his complaint to the ACCC about the operation of the E-tags.Another of my constituents, Mr John Odgers, has also been pursuing some issues to do with Citylink. I have to say that I am blessed in my electorate with extraordinarily active and public spirited citizens. Mr Peter Allen, who lives just outside my electorate, put in a complaint to the Administrative Appeals Tribunal—as I did—against the infrastructure tax bonds. Mr Allen's complaint has been found to have standing; that is to say, he has the capacity to continue with his objection. That complaint is still being heard and considered. Mr Odgers has drawn to my attention a report in the Financial Review which indicates that Transurban is taking an interest in the privatisation of Victoria's trams. The article states:Another player, the so-called "triple T" consortium made up of French transport operators Transroute and Transdev together with Australian engineering group Transfield, scaled back its involvement and is now expected to bid for only one of the five businesses, Yarra Trams.Bidding for one business may be all very well, but my understanding of Yarra Trams is that it includes, for instance, the No. 70 route, which runs along Batman Avenue to Wattle Park, along Swan Street and Riversdale Road, and that would effectively be a competitor to the Monash part of Citylink. So, if Yarra Trams were owned by Transfield, I think this would raise quite serious conflict and competition issues, and Mr Odgers has expressed that concern to me. In my view, Minister Anderson should respond to my letter and intervene to get the E-tag process and the Citylink project back on track. If he cannot do this, he should not be approving the infrastructure tax break for this project.Before I conclude, I will mention that concern has been expressed by residents not only about all the issues I have raised concerning the tolls but about the quality of the western part of Citylink and the section that runs through Melbourne's north-western suburbs. Residents are concerned with how unsightly and ugly the noise walls are and how little effort has been put into giving Victorians and residents in the north-western suburbs a quality road. One resident suggested that even issues of safety and convenience have been neglected. Apparently the crossover bridges were supposed to have both pedestrian crossings and a cycle path but, as a cost-cutting measure, the crossovers at his end have neither of those facilities. That is indicative of the way in which residents on my side of town have been treated. In the meantime, the Kennett government and Transurban should open the western link and the Bolte bridge for motorists to drive on. Never mind the tolls. Before Jeff Kennett came along, roads were for people to use—not money making ventures. The road is sitting there and we have been locked out of it for months, and it is time we were allowed to use it.As I indicated, we have moved an amendment designed to represent our concerns regarding this bill. It is our intention, however, not to oppose the passage of the bill once our amendment has been considered.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Is the amendment seconded?83VEMERSONMr Emerson—I second the amendment and reserve my right to speak at a later time.19:03:006526Cadman, Alan, MPMr CADMANSD4MitchellLP10—The Taxation Laws Amendment Bill (No. 5) 1999 contains two basic measures. The first measure is to ensure that the sales tax exemption of goods placed in properties owned or leased by always exempt persons or foreign governments is only available for the purchase of goods acquired for their own use. The second measure is to treat certain hire purchase agreements as sale and loan agreements for income tax purposes to ensure that excessive tax benefits are not obtained. It sounds pretty dry to the average citizen, but the previous speaker was able to embellish the debate to a point where we were into urban transport systems in Victoria and the operation of some ticketing processes—and he managed to drop onto the end of his speech a reference to his amendment about the goods and services tax. It seems to me that every aspect of taxation is available for the House to debate tonight. You will be pleased to hear, Mr Deputy Speaker, that I intend to confine myself to the legislation.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—I must say to the member for Mitchell that that will be a pleasant change, but I listened very carefully to the member for Wills, and I noted his references to several footpaths, bus stops and other things. But it does say `for related purposes'.SD4Cadman, Alan, MPMr CADMAN—To begin with, I think we need to establish the range of purposes of this bill, because the House will be aware that it is the government's intention to remove the wholesale sales tax on 1 July next year. These measures would appear to be somewhat irrelevant changes to sales tax legislation in light of an upcoming abandonment of the wholesale sales tax system altogether. However, the revenue loss that has been detected by the government is significant, and the flow-on effect over a period of two or three years is sufficient to justify the government's decision to proceed with these amendments. Sales tax revenues are very significant in Australia, amounting on a state by state basis—if one looks at the whole range—to a total in 1996-97 of about $13 billion, which indicates a total growth factor in the range of 30 to 44 per cent. So the sales tax growth factor has been significant.Mr Slipper interjecting—SD4Cadman, Alan, MPMr CADMAN—And that was due, of course, as my colleague said, to budgets introduced by the Labor Party, which secretively increased the sales tax collections to this huge amount.It is very interesting to note the trade groups across which sales tax is paid. If one takes them into account and looks at the percentages collected from various areas, one would have to look at household appliances/parts; domestic and office supplies; printing; motor vehicles and motor vehicle parts; tyres, tubes and retreads; oils and greases; and aerated waters and cordials. Soaps, detergents and disinfectants comprise the bulk of the income. We are dealing tonight with amendments that affect the building industry and it is very interesting, in the analysis of the trade group from which sales tax is collected, to note that the building trades groups are a significant contributor to the total revenue received from sales tax. Whether it be furniture or add-on parts of the total collection, it is very significant that the building trades supply—Mr Laurie Ferguson interjecting—SD4Cadman, Alan, MPMr CADMAN—And your father would be very interested also in these areas, I would point out to the honourable member—or he would have been at one time.The wholesale sales tax has been identified as a problem area for collection by the government in the most recent Economic Round Up from the Commonwealth Treasury—that is, the summer 1998 publication—and there are a number of articles on various taxes and processes. On page 23 of the publication, the wholesale sales tax is dealt with. It is interesting to note that in one of the leading items in the articles in that official Economic Round Up—`Problems of the wholesale sales tax'—it is said:The WST tax has five fundamental flaws. First, the tax is levied on a narrow base. Second, the tax is levied at multiple rates. Third, the tax is levied at the wholesale level. Fourth, the tax is complex and administratively cumbersome. Fifth, the tax imposes an arbitrary and hidden tax on business, including exports.Nothing could be clearer than the Treasury's own statement on the difficulties of the wholesale sales tax when one looks at the amendments that are needed to this legislation. Because the simple situation and simple explanation is that there are certain entities in Australia that are free of wholesale sales tax.Some of those are entities such as foreign missions and the representatives of foreign governments. I will elaborate on the process a little later on, but a foreign government representative owning a block of land or premises in Australia can decide to redevelop the site. They are exempt from wholesale sales tax themselves and their building contractors can claim, in fact, apart from the embassy or consulate levels, a sales tax exemption for the total building. And all the building materials going into those premises have been, in the past, exempt from sales tax. It is a claim that is completely unwarranted and unjustified, and the government here is plugging that loophole.So the problems of the complexity of wholesale sales tax are exemplified in this legislation. Here is a classic example where with wholesale sales tax an exemption has been given, been picked up by some head builder, run down through the contractors and all of the subcontractors and the exemption on all the building supplies for that major redevelopment of a site—in the city or somewhere or other—is such that there has been a large loss of wholesale sales tax. Nothing could be a greater advocate for the changes that the government is bringing about—the implementation of a goods and services tax and the very legislation we are dealing with here tonight—because it just shows the complexity and hopelessness of continuing with the broken-down, ramshackle system we currently have.Furthermore, in order to look at the complexity of wholesale sales tax, the compliance cost per taxpayer on small, medium and large businesses is a factor that really needs to be noted by the House. I have background information on wholesale sales tax, and I refer the House to the publication of the Australian Taxation Office entitled Taxpayer costs of compliance. In that publication on page 52 the compliance cost per taxpayer is allocated to medium, large and small businesses. The taxpayer cost for small businesses for the implementation of the wholesale sales tax is something like $1,200 per business. For a medium business it is $4,900, but for a large business they actually make a profit out of the process of administering taxation because they are able to gain all the benefits and all of the deductions available. So these sorts of taxes hit small businesses more than large ones.The `Compliance cost by type of tax' is also an interesting feature and in the examination by the tax office the capital gains tax came in behind the income taxes in cost and complexity. The fringe benefits tax is third and of course fourth is the wholesale sales tax. That is a little misleading. In fact, if one looks at the percentage of costs by tax type, the wholesale sales tax in fact ranks third. Income tax is first, there is PAYE tax and then wholesale sales tax—in compliance cost—comes in third. So it is no wonder the government is scrapping it, it is no wonder the difficulties have arisen that we are looking at tonight.I refer to an examination of wholesale sales tax in the report Improving tax compliance in the cash economy: compliance costs—reducing the complexity of the tax system for the building industry. This publication, again by the Australian Taxation Office, says:Whilst many small business operators accept the need to pay their share of fair tax, they see the system as too complex in terms of the number of taxes, the uncertainty of law and the frequency of changes. For these reasons they want simplicity and certainty in relation to taxation. That is in regard to the cash payments that bedevil tax avoidance. This report from the ATO identifies a number of areas where the building and construction industry, which is the one we are dealing with in this legislation, is encouraged into the cash economy.The legislation itself identifies the types of property which are affected by the change in the wholesale sales tax. They include shops, shopping centres, hotels, casinos and apartment blocks. The date of effect of this legislation is 2 April 1998. It was properly notified to the parliament by the Treasurer at that time so people are forced to comply from 2 April 1998. The proposal was announced in the House of Representatives on that day. The revenue gains are said to be $10 million in that year of introduction and $50 million in the current year. Because of the delays in the progress of the legislation through the House and the obstructive nature of the Senate, we will be a year behind, so the estimates would be $10 million in this year, I suspect, and $50 million in the coming year. That will be the revenue that will be saved. It is substantial and needs to be done.The private sector projects benefiting from the exemption have been identified as the building of residential apartments by private consortia, the refurbishment of shopping centres, the building and refurbishment of private sports facilities and the fitout of major hotels and casinos. You can see that the advantages to a consortia entering into an arrangement with an exempt person are very considerable. A wide range of entities can be exempt persons. They can be state governments, local governments or foreign representatives. There is a huge range of people whom it is possible to get into a development project to gain the advantage of a wholesale sales tax free status and then that benefit will flow on to the constructing company. Those benefits have been claimed wrongly and this government is closing a loophole.It is a very sensible piece of legislation. I do not think there has been any criticism of it that I know of, although no doubt the building companies will not want to proceed on the basis that they claim it is retrospective. It is not retrospective. I have looked at it carefully. The announcement was made on 2 April 1998, `From this day certain things will happen; the legislation will start as from this day.' Everybody in the industry was aware; there can be no grounds whatsoever for them wanting to claim that there is retrospectivity.As for head contractors passing down costs to subcontractors, that happens all the time and I think it is a shameful process. The head contractors will now say, `There is an unexpected cost here. We can't bear it; the subcontractors will bear it.' That happens on building sites when there are changes in costs. I think that the Trade Practices Act ought to allow subcontractors in those circumstances to put a joint case that that is unfair treatment and that the subcontractors ought to be able to do a deal to split these costs with the prime contractors. That will not happen. There will be whinges from subcontractors, but it is not this government's fault. It is the head contractors' fault and their unwillingness to negotiate with the proprietor or to absorb some of the costs themselves. That is the trouble here.The second part of this legislation I will deal with more briefly, but it is somewhat more interesting and more complex. It relates to the government's decision to amend tax law to rectify an anomaly in the capital allowance provisions of income tax law in relation to property acquired under hire purchase or limited recourse finance. It sounds a real mouthful when you look at it like that, but they are the concessions that the government has previously given and is now seeking to change and rectify.Refering to the Bills Digest, the legislation involves, under a new proposed division 243, a change in the way in which the existing law is dealt with. The best way to explain this to the House is with an example. Plant is purchased for $10,000 under a hire purchase agreement and repossessed for non-payment after two years. If at that time the plant has been depreciated for tax purposes by $7,000 but the taxpayer has paid only $4,000 for the hire purchase agreement, then he should not have gained the advantage of claiming the total amount as a tax deduction. The difference between the amount that is actually paid and the amount that has been claimed is the matter that is being rectified by this legislation.There has been a lot of consultation about this matter. The industry has indicated that it is concerned about some of the changes and I have had the benefit of discussions with Mr Denis O'Neill of the Australian Council for Infrastructure Development and Dr David Lynch. The International Banks and Securities Association have proposed 12 changes they want to see examined. The government will look at them. The government has moved a long way to rectify some other problems previously identified and it is very important for us as a government to make sure infrastructure programs are properly funded, properly dealt with and fairly taxed because we need to encourage the programs. But to allow people to get a break and to get away with stuff they should not get away with is wrong. I want to commend the government for the changes it is making here.In conclusion, I completely and absolutely reject the concept that the goods and services tax is not a proper process for Australia. It will allow tax cuts for all Australians. It will allow a better regime for all Aussies. I commend the government for moving ahead with foresight and courage on this issue.Debate (on motion by Mr Emerson) adjourned.Adjournment6529Motion (by Mr Slipper) proposed:That the House do now adjourn.652919:22:006529Crosio, Janice, MPMrs CROSIO7T4ProspectALP00—Last Sunday at 11 a.m. in Sydney's west, in an area joining my electorate but in the electorate of the member for Fowler, was a great day for the Croatian Australians—the opening of their nursing home, the Cardinal Stepinac Nursing Home. When one looks at the home one realises the hard work and the expertise that have gone into it. I want to place on record our appreciation, and my appreciation in particular, to Father Marion, to Sister Teresa, to Matt Semalic and to all of those people that have worked so hard in raising the finances to make the project the success it is.But tonight I particularly want to raise the fact that the nursing home was opened by the Prime Minister of Australia. I pay a compliment: it is the first time we have had a Prime Minister acknowledge and recognise the work of the Croatian Australians and what they have been able to achieve within our community. But, more importantly, it gave the Prime Minister an opportunity to see first-hand what can happen if governments of the day are able to provide capital funding at the very beginning of a project to enable a group to utilise that capital funding and raise finances for the project. In this particular case, the $1.2 million grant was granted by the previous government, and after that the community itself raised nearly $3 million to complete this project. It is absolutely fantastic. The group has been raising money since the late seventies when they decided to build a church to acknowledge their community. After building the church, they build a hostel—again, with a seeding grant of $1.2 million from the previous Labor government—and that hostel has been full from the time they first opened the door. The group then had a dream to go to the second stage—that is, to provide this nursing home.I raise this matter tonight because time and time again since this government came in in 1996 I have raised in this House the benefit communities get from the provision of grants such as the $1 million grant to this community organisation. The communities naturally have the ability to raise the finances and to build these nursing homes, bringing so much more to the community than the government can provide. I am sorry to say that that is no longer happening. The grants were first provided in 1987, and I went back in the records to see what happened with the increase in capital funding to encourage the expansion of hostels and nursing homes and to develop special programs in our ethnic communities and for our Aborigines, our dementia sufferers and our aged people on disability allowances. With the change in 1987, a number of other clauses applied to residential care for the aged. I think this particular project shows that a lot more can be done if the government is a little more generous in the beginning.I raise this matter too because another group is working very hard in my own community—the South-West Italo-Australian Association, known as SWIAA. In fact, a number of members on the government benches have been to their various fundraising occasions. They have got five acres of land and they are desperately trying to raise money to build the first stage of a nursing home. Of course, their difficulty is in getting that first capital grant because the grants are no longer available. Unfortunately, time and time again I have had to say to them, in repeated representations, that the government no longer provides that type of funding up-front and that the rest of the community has got to try to work together to raise the money.I think the opening last Sunday gave the Prime Minister the opportunity to see first-hand that communities can work well together and that they can achieve. But, more importantly, a lot of our communities are now taking on board the fact that their populations that have come from overseas are getting older. As people get older they have a tendency to revert to their mother language. As we know, a lot of our older residents came from overseas in the last 30, 40 or 50 years, and naturally they need care where they can also be understood. That is one of the objectives of the Croatian Australians within my community, and they have done very well.Unfortunately, unless the government becomes a little bit more generous, we are not going to see much more of this happening, particularly in south-west Sydney where there is a crying need. Our population is getting older. We are now seeing more and more people in need of nursing home beds. The beds are not there, they are not available. More importantly, although my electorate and the electorate of Fowler are the largest multicultural electorates in Australia, it seems that assistance is not coming forward to allow our communities to become united and have a common purpose and goal in building facilities to look after our aged parents or loved ones. I believe that this is something at which the government of the day has got to look more closely. For every dollar that is spent there is a return of $10 to $12. That is certainly money well spent. As I said, in this particular case, in return for the $1 million invested, we have a project costing in the vicinity of $3.8 million. We know that the nursing home will be cared for and that the people in it will be well looked after. I congratulate all of those concerned with it. I particularly give my personal congratulations to that wonderful committee who have worked so hard in raising that finance.653019:27:006530Gash, Joanna, MPMrs GASHAK6GilmoreLP10—I rise today to speak about a new prime minister, a Mr Howard, who has been elected to his position as a leader by his peers and who will lead his community with great vision, great care, an unerring sense of responsibility for fairness and equality and a passion for sport, maths, English and recess. Of course, I am speaking of Mr Simon Howard, the new prime minister of the Shoalhaven Heads Public School who, along with prime minister Katie Dawes, will lead the student parliament for 1999. And what an exciting induction ceremony it was. I was invited to assist in the ceremony. The whole school was there, as were teachers, parents, grandparents, aunts and uncles and brothers and sisters. Local leaders of the community were also there. How proud we were to hear the words of prime minister Howard that the student parliament is about teamwork. If I may, I would like to use prime minister Howard's analogy: `The Olympic organisers plan for the Olympic torch to be carried right round Australia. If one person had to do it all by himself, it would probably never arrive. With lots of people joining together in a relay team to carry the torch it will get to Sydney and be on time. The more we work together as a team the more good things we will achieve.'The campaign for the student parliament is no walk in the park, nor is it a shoe-in for any of the candidates. It is a fully-fledged campaign trail with how-to-vote cards, posters, campaign slogans and policy speeches to public forums. The elections follow real government election procedures and students from kindergarten through to year 6 vote using the preferential system. And they actually understand how it works!The cabinet includes Mr and Madam Prime Minister, leader and deputy leader of the opposition and ministers for bike safety, media, canteen, sport, library, safety and health, environment, functions and education. Each minister has a committee of six, and roles and responsibilities are determined by the students with help from the staff.The student parliament provides an important opportunity for students to develop their understanding of responsible citizenship and democracy while learning how to contribute to the betterment of their school. I was very honoured to be invited to participate in the induction ceremony of the student parliament of Shoalhaven Heads Public School. It is a real credit to the students elected and particularly to the staff who have put so much energy and effort into ensuring that their students have a real understanding of the processes of government and of the importance of democracy.They are a model for students and schools throughout Australia and I urge all members of this House to consider the establishment of student parliaments at their local schools. For with their knowledge and understanding, the students of Shoalhaven Heads Public School parliament will come to their tasks without the predetermined judgments and opinions of our local, state and federal parliamentarians. By the same token, their constituents will not have the same cynicism towards politicians as do the majority of the Australian voters. Indeed, the members of this House could learn a thing or two from the student parliament of Shoalhaven Heads Public School.In closing, I would like to read part of the speech of the student prime minister, Katie Dawes, which contains a strong message for our whole community:I would like to start by thanking you for showing faith in me by electing me as our school Prime Minister. I will do my best to act honourably and make you all proud. I would like to give a special thank you to my teachers who have always encour aged me to do my best and reach for my goals. My family have always helped and believed in me in every way. I love them all. Just remember, unless I am eaten by a shark or squashed by an elephant, I will be here for you every day, not just as your Prime Minister but also as your friend.To Mr Bill Hodgson, principal of the school; Mrs Martin, the coordinator of the school parliament; the staff, students and parents: I salute you! You are promoting what Australians are all about: freedom of choice and freedom of speech and the understanding to use them wisely. How proud I am to be your local member. I look forward to the day when one or more of you will be standing in your place in the parliament of Australia.653119:31:006531Mossfield, Frank, MPMr MOSSFIELDMK6GreenwayALP00—I rise today to praise the work of Mission Employment, an organisation that has had 20 years experience of providing employment opportunities for people throughout Australia. Mission Employment offers around 120 programs to assist job seekers. It takes special interest in those with barriers to employment, such as the long-term unemployed and mature age workers. In Australia's current uncertain employment climate, labour market programs are an important part of all governments' policies. It is reassuring to know there are organisations available that are ready to respond to government calls to implement their labour market programs. I was closely involved in a number of these programs during the term of the previous Labor government, such as skill share programs, traineeships and new work opportunities.I know that the two Mission Employment branches, in my electorate, at Seven Hills and Blacktown were also heavily involved in the delivery of a number of these programs. Mission Employment now has an involvement in delivering this government's labour market programs. It has 90 centres throughout Australia, employing more than 400 staff who help 40,000 job seekers each year. The range of services provided by Mission Employment are training job seekers in job search skills and intensive assistance for long-term unemployed; assisting job seekers to set up small businesses through the New Enterprise Incentive Scheme; and providing general ongoing programs which provide skills, vocational training and work experience to job seekers throughout Australia.While we, on this side of the House, have some criticisms of this government's Work for the Dole program—namely, we think the title sends the wrong message to job seekers and the scheme does not provide for skill training—the Work for the Dole scheme does contain some elements which were contained in the Labor government's employment programs. One is that it allows community groups to seek assistance in developing useful community projects. It is worth noting that one of the major recreational centres in Western Sydney, Nurragingy Reserve, had its commencement in one of the Whitlam government's early labour market programs: the RED Scheme.Nurragingy Reserve is now a great place to relax and offers many attractions and facilities for family outings. It is used by thousands of people every week and, with the added beautification and special gardens projects, it is also used for many weddings, with the receptions being held in the excellent reception building on the reserve. So the roll of organisations delivering labour market programs not only services the community in providing assistance to job seekers, it also provides the opportunity for regions to develop their natural attractions. Another group within my electorate, that I have referred to on previous occasions, is the Workplace at Blacktown. This great little organisation, which has been around for many years, has been serving the local community through a variety of programs, including the excellent SkillShare program.The Workplace now administers the Job Placement Employment and Training program—JPET—and they have a fine record of achievement. I am pleased to say they have been funded for another year of service. This small group of dedicated workers handles not only the number of clients demanded of them by their contract with the government, but up to double that number to provide a needy service. This program is designed to assist young people who are homeless or at risk of becoming homeless, with the priority being given to 15- and 16-year-olds.I would like to compliment the staff of Mission Employment at Seven Hills and Blacktown and the staff of the Workplace for the wonderful work they are performing for the job seekers and needy youth in western Sydney. I would particularly like to mention Roslyn Rajasingam, Centre Manager at Seven Hills; Jan Pastuck, Centre Manager at Blacktown; and Roger Mahey, Executive Officer of the Workplace at Blacktown.653219:36:006532Lloyd, Jim, MPMr LLOYDIK6RobertsonLP10—Following on from the words of the Minister for the Arts and the Centenary of Federation, Peter McGauran, today in question time, I would like to make some comments tonight on a remarkable Australian: Pat Farmer. He embarked on his 14,500 kilometre run around Australia on Monday, 31 May from Canberra to celebrate the Centenary of Federation. This is quite an amazing feat he is undertaking. Pat and his late wife, Lisa, were inspired to undertake the journey after hearing the story of Donald Mackay's bicycle ride around the Australian continent in 1900, a symbolic journey to mark the forthcoming Federation between the six colonies. If he completes the run in less than 217 days, Pat Farmer will break the record for running around the perimeter of mainland Australia, set in 1983 by Ron Grant. He will also be including, for the first time, Tasmania in that run, so he will be setting a new benchmark.I had the opportunity to meet Pat Farmer when he arrived in Gosford on Friday, 4 June, having run from Sydney. He is a truly remarkable Australian, someone who is very proud of his country and very proud of the opportunities that this country provides, particularly for young people. I think it is important that we take stock of what he is actually doing. I passed him in my car on the way from the airport on that particular day. To think that he was running on one day from Sydney to Gosford, some 73 kilometres, was an achievement in itself. I am sure that most members in this House, myself included, could not even contemplate running such a distance in one day. When you look at his itinerary, which I have in front of me here and shows the stops on every single day up until 1 January 2000, it is just unbelievable to see the feat that he is taking on. I urge every member of parliament and every member of the Australian community to find out when Pat Farmer is coming through their area, to support him and his team in any way they can and to celebrate what he is achieving.When he arrived at the Gosford Council chambers, he made a speech in front of me and the mayor, Chris Holstein, who was there to give him a civic reception. It was a short speech—I could forgive him for that, having just run from Sydney—but it was very significant. He was saying that he feels he is just an average Australian who is reaching out to other average Australians to show that you can achieve remarkable feats simply by putting one step in front of the other, which is exactly what he is doing. He recalled the day that he left Canberra and the fact that the Prime Minister walked about 400 metres down the road, mingled with the crowd, had a cup of tea, grabbed a muffin off the table and then proceeded with the official part of the function. He said that in most other countries in the world leaders would have to have bulletproof cars and would not be able to mingle with the crowd. That was very significant.He said that in this country our leaders can still move around relatively freely and without fear from the actions that they have taken while in government. I think that is very important. He realised that we have a great nation and wanted to send the message to young people, particularly those who have not been overseas, to see other countries and the difficulties in many of those countries, to see what a great country we have here, what a great system of democracy we have and the wonderful opportunities that this great country offers everyone, particularly young people. I congratulate Pat Farmer on being a truly remarkable Australian and setting a wonderful example for all Australians. I urge every Australian to get behind his run and to support him in what he is doing.653319:40:006533Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—At a time when the major banks have a major credibility problem as a result of the large profits they gain and increasing fees, one of the major banks has given a slap in the face to the communities of Thomastown and Lalor East in my electorate. Honourable members might ask: which bank? That's right: the Commonwealth Bank. A little over two weeks ago they announced the closure towards the end of this month of the Lalor Plaza branch of the Commonwealth Bank.Often we hear in the parliament the effect that branch closures have, and quite rightly the closure of branches in remote and rural areas is highlighted. I would like to put to you, Mr Speaker, that this is just as crucial in metropolitan areas. The Lalor Plaza branch operates in a shopping centre that has a supermarket and a number of specialty shops and is the only bank branch running at present. What are the consumers of that shopping centre offered as an alternative? One of the offers in the letter announcing the closure was:As well we will continue to offer face to face banking at our Lalor Plaza Postal Agency.I thought I was a fairly assiduous local member and I was scratching my head to try to work out where the Lalor Plaza postal agency actually was. I regret to say that I had overlooked that the Lalor Plaza postal agency is a subagency contained within the local chemist. So here we are going to have the local Commonwealth Bank subagency and a subagency of the Lalor postal agency within the chemist. Already the proprietor of the chemist is concerned by the long queues that will be caused by customers having to come into their shop to do banking over and above what they already do as a service outside banking hours.Also the bank claims that customers have moved towards such features as telephone banking, EFTPOS at service stations and the like. To many of the people who were clients at the Lalor Plaza branch—the elderly, those who have English as their second language—these alternatives are very difficult. They are things which they have rejected. They are people who like the face-to-face confrontation and service that they can have at their local bank. Anybody who has gone to a bank branch would know the long queues that confront all consumers of banking services. Many of the people in those queues are older Australians. It is simply not good enough for the banks to impose upon clients the types of services that they wish to see the clients use. They should have a better understanding of their clients' requirements.The closure at this Lalor Plaza shopping centre will have a devastating effect on the nature of the shopping centre. Many of those people who would have gone to this branch for their banking will have to go to other shopping centres some four to five kilometres away to do their banking. One might expect that, once they go to those other shopping centres, they will do their other shopping there. Already local residents have indicated their disgust at this decision.I must pay tribute to one individual, Linda Weston, who has arranged a petition, and on Monday of this week a petition with 725 signatures was presented to this parliament. I have already put in for presentation on the next Monday another petition with over 300 signatures. As Linda said in setting up the petition, she hoped that it would make the big people listen to the little people.That is what it is all about. This branch is important because it was seen to be part of the community. The individuals that make that community deserve to have the type of service that a community of this ilk can provide. I hope that, slowly but surely, by the formation of more community banks and by the greater success of local credit unions, the major banks will be made to understand that that is what their customers expect. They expect a service provision that caters for their needs. They expect not to have imposed upon them the type of banking services that they do not really want. That is what is integral in this case: the customers are being forced into a situation which they have already rejected; they are being forced away from a service they are comfortable with.653419:45:006534Draper, Trish, MPMrs DRAPER0L6MakinLP10—Last week I spoke in this place about several articles written in the Australian by Jane Mills and George Millar in relation to violence in films and whether prudence or the laissez-faire anything goes approach is more appropriate for entertainment on our televisions, in films, video and music. Mr Speaker, I would like to take this opportunity to express my appreciation of your extraordinary capacity for patience and tolerance in listening to all of the speeches I have made on this issue on behalf of my constituents in my electorate of Makin, as I know you have heard me speak on these issues many times previously in this House.Once again I express my utter dismay at the ever-pervasive violence which is becoming almost a natural part of everyday living in our society. I refer to Mr Scott Gilroy's murder in front of 100 people in Oxford Street—100 people who clapped and cheered while a man was kicked and bashed to death. Why? We as a society are now starting to reap what we have sown with the anything goes attitude. My heart and my thoughts go out to Colin and Christine Gilroy and their families and friends who have had to come to terms with the appalling and disgusting way in which their son died so publicly—with no-one in the crowd with the decency or humanity to intervene and stop these outrageous sick bullies in the course of their destructive actions in killing a fellow human being, with a crowd of vultures cheering them on. It is a pity we do not have video evidence of the crowd. They should also be charged as accessories to murder.As you would be aware, Mr Speaker, recently I have been the target of malicious attacks by journalists in relation to my call for the censorship rating of the film Lolita to be reviewed. This film is about a violent, sexually abusive relationship between a sick paedophile—a 45-year-old stepfather—and a 14-year-old stepdaughter who has no choice in the matter. But according to some in the media, this is okay; the film is just a sweet, innocent love story full of moral teachings. As members of the federal parliament we need to now make a stand, to set some standards in relation to the portrayal of the abuse of our children—whether that portrayal is through the promotion of paedophiles' ideals or violence being portrayed as okay for entertainment. As I said earlier, what we sow as a society we reap. In the short time left to me, I would like to quote from an article titled `Lolita denies the reality of abuse'. It was published in the Green Left weekly on 21 April and it is by Zanny Begg. It says:The film's problem is not that it depicts the sexual abuse of young people (a depressingly common feature of our society) but the manner in which it does so.. . . . . . . . .The story is narrated by Humbert. This forces the audience to see the unfolding relationship from his perspective. This device allows Lyne to sexualise almost every moment that Lolita graces the screen. Through Humbert's eyes, we watch water from the sprinkler soak Lolita's dress. As she undresses, the camera focuses on her legs, her red lipstick, objectifying every part of the adolescent Lolita. By constructing the film in this manner Lyne attempts to draw the audience into Humbert's world.The shocking part about Lolita is the manner in which the film tries to make the viewer identify with Humbert. Irons plays the part with such sensitivity and pathos, you almost believe his claim to `love' Lolita.. . . . . . . . .But of course any notion of consent is exploded by the reality of Lolita's life. When her mother is run over by a car, Humbert becomes her sole guardian. There are more frequent incidents of violence as Humbert struggles to keep Lolita under his control. One of the most horrifying scenes is where Lolita barters sex for a $1 raise in her pocket money. There is absolutely nothing consensual about Humbert and Lolita's relationship and the film's ambivalence on this is unjustifiable.. . . . . . . . .What a new version of Lolita might have more usefully examined is the impact of paedophilia on those who suffer from it. Twisting Lolita's crush on Humbert into `consent' denies the reality of her rape. Humbert raped Lolita, held her captive and abused her—there is nothing ambiguous about that.653519:50:006535Emerson, Craig, MPMr EMERSON83VRankinALP00—I want to express my alarm to the parliament about the rising inequality in Australia and, in doing so, I want to focus particularly on Logan City, much of which is in my electorate of Rankin. I will do that against the background of what I consider to be a very important study on rising inequality which has been done by Professor Bob Gregory and Boyd Hunter. It was released in April 1995. I quote a couple of sections from it:Since the early 1970s income inequality among individuals has been growing in most OECD countries.. . . . . . . . .Neighbourhoods of urban poverty may be increasing at the same time that high income neighbourhoods are becoming more common.. . . . . . . . .We suggest that it may be increasingly true to say that one half of Australia does not know how the other half lives and that this is not a good thing.. . . . . . . . .. . . if economic disadvantage is being concentrated in particular neighbourhoods then these neighbourhoods may be developing their own pathologies which generate more poverty and produce further increases in inequality through time.The reality is that there has been a widening of inequality in Australia over the last 30 years. Contributing to that have been three major surges in unemployment—in 1974, in 1982, and again in the early 1990s. The unemployment rate, having risen dramatically in each of these episodes, has taken a very long time to go back towards previous levels and in fact has not recovered to previous levels, such that the unemployment rate in the 1960s was around two per cent and it is now around 7½ to eight per cent.In my own electorate of Rankin, in the suburbs of Kingston and Woodridge, the unemployment rate is consistently above 20 per cent. Research that has been conducted has been able to trace this back to one fundamental factor, and that is education. It is lack of access to education that is depriving children from lower income families of opportunity, particularly in the information age, to improve their lifetime prospects and their employability. I am very concerned at the inadequacy of funding, particularly for government schools in the electorate of Rankin and more broadly around Australia. The schools at Kingston, Woodridge and Mabel Park are desperately in need of extra funding.I have talked to them, and this is what they could do with extra funding. We have found, through research that has been undertaken here in Australia and overseas, that early intervention programs are highly effective in increasing the education attainment levels of children and, therefore, their employability and their lifetime prospects. Literacy and numeracy programs are incredibly important but so too are programs of a parenting nature. There is now a positive parenting program operating within Logan City. It has only just been established, and already people are queuing up to utilise the services. The idea is to provide a more nurturing environment at home in families that are struggling a bit, and to provide an environment where children can learn—learn even before they start school, that is, in their preschool days.What I would like to see is increased funding specifically for those programs: for early intervention programs in literacy and numeracy and for positive parenting programs. I consider that the Commonwealth has a genuine role to assist those sorts of schools in my electorate of Rankin in Logan City and around the rest of Australia. I am concerned, finally, that the government, under the new tax package that it is proposing, will be abolishing the financial assistance grants from 1 July 2000. They are an important component of funding for government schools and there are no guarantees whatsoever that after the transition period specific purpose payments will be retained by the Commonwealth. Those specific purpose payments are used on things like positive parenting programs and literacy and numeracy programs. I hope with all my heart that we are able to maintain at least those programs and get a very substantial boost in funding for schools in the electorate of Rankin.653619:55:006536Barresi, Phil, MPMr BARRESIZJ6DeakinLP10—There have been many notable political stories during this 20th century, but perhaps none more courageous and inspiring than that of Nelson Rolihlahla Mandela. This week, the Governor-General announced that President Mandela has been appointed an honorary companion in the Order of Australia, recognised for his commitment to Australia-South Africa relations, his role as a world statesman and the personal sacrifice he made working towards peace and reconciliation in his country.Let us remember that just 10 years ago Nelson Mandela was still in prison, where he had been since 1962, a victim of racist paranoia that accompanied the vile system of apartheid that had operated since 1949. In April 1964, at the trial at which he was sentenced to life imprisonment for sabotage, Mandela said:During my lifetime I have dedicated myself to the struggle of the African people. I have fought against white domination, and I have fought against black domination. I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal which I hope to live for and to achieve. But, if needs be, it is an ideal for which I am prepared to die.Incredibly, Mandela never viewed himself as a victim, despite the injustices done to him personally and to millions of his fellow countrymen. `Any man or institution that tries to rob me of my dignity will lose,' Mandela wrote from prison. After negotiating his own release, Mandela's wisdom, integrity and vision brought about the republic's first democratic elections and his selection as President. In his inaugural speech, Mandela said:The task at hand will not be easy. But you have mandated us to change South Africa from a country in which the majority lived with little hope, to one in which they can live and work with dignity, with a sense of self-esteem and confidence in the future . . . This needs unity of purpose. It needs action. It requires us all to work together to bring an end to division, an end to suspicion and build a nation united in our diversity.Words do not speak as loudly as actions, and I am sure there were, quite understandably, very many whites who refused to take Mandela at face value and feared for their futures. Those fears proved misplaced. The subsequent setting up of the Truth and Reconciliation Commission, which allowed hundreds of South Africans to seek amnesty through the full confession of their previous crimes, further brought down the barriers that had long divided the people and fuelled mistrust.Nelson Mandela has ensured his greatness because he chose to reach out to those who have previously been his tormentors. He has used the power of office to unite his people, not to further divide them. His undeniable humility complements the courage he has shown in standing up to injustice. The critics who believe that Mandela is overrated miss the point. Whatever his shortcomings as South Africa's leader and whatever teething problems the new nation has, they pale into insignificance when compared with the symbolism of his long struggle against the odds and his attempts to bring unity to a nation where none had previously existed. Who could ever forget the footage of Mandela at the last Rugby World Cup, proudly wearing the jersey of South Africa that had previously been a symbol of white oppression? The French existentialist Albert Camus once wrote:When you have once seen the glow of happiness on the face of a beloved person, you know that a man can have no vocation but to awaken that light on the faces surrounding him.Who else but Mandela springs to mind when we think of that quote? Camus also observed that `one man's chains imply that we are all enslaved.' Perhaps no man in living memory is a better example of this than Nelson Mandela. As he leaves the office of President and hands over the affairs of state to younger Africans, the memory of his struggle and his integrity will live on, helping to build a stronger new nation.All of us here aspire to make a difference—initially in our own community and in a bigger sense our nation. Unlike Mandela, few of us will be remembered for that contribution beyond our term in office. But if we can walk away with our integrity intact, with goodness of character, perhaps we too can share a modicum of the respect that is accorded the great Nelson Rolihlahla Mandela.20:00:006537House adjourned at 8.00 p.m.Notices6537The following notices were given:Mr Charles to move:That the House of Representatives supports the proposal of Tidal Power Australia for a tidal energy station at Doctors Creek, Derby, WA, to supply the electric power needs of Derby, Fitzroy Crossing, Western Metals and Broome in an environmentally sensitive manner with true renewable and non-polluting energy.Mr Laurie Ferguson to move:That this House:(1) acknowledges the success of post war immigration policy but in doing so recognises the importance of maintaining integrity in the immigration system due to the massive contribution new settlers have made to Australia in the past and will continue to make in the future;(2) applauds the endeavours of successive governments to maintain the integrity of the immigration system by stopping illegal migrants and seeking to prevent employers employing illegal workers by requiring an employer to request proof of work rights from prospective employees;(3) views with the utmost concern the activities of people smugglers, who take money from people trying to enter Australia illegally, knowing that the people will be detained and sent back with nothing to show for their money;(4) supports the need to return people who have no legal rights to be in Australia whilst continuing to honour the nation's international protection of refugee obligations;(5) welcomes the bipartisan manner in which the Parliament facilitated the temporary safe haven given in Australia to Kosovars; and(6) rejects any suggestion that there will be an amnesty for illegals coming to Australia and reaffirms the commitment of the Australian Parliament to prosecute to the fullest those in any way engaged in people smuggling.Mr Williams to present a bill for an act to alter the Constitution to establish the Commonwealth of Australia as a republic with a President chosen by a two-thirds majority of the members of the Commonwealth Parliament.Mr Williams to present a bill for an act to establish a Committee to invite and consider nominations for appointment as President of the Commonwealth of Australia, and for related purposes.Mrs Bronwyn Bishop to present a bill for an act to amend the Aged Care Act 1997 and other Acts, and for related purposes.Mr Costello to present a bill for an act to amend the States Grants (General Purposes) Act 1994, and for related purposes.Mr Fahey 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: Refurbishment of 4 Treasury Place, Melbourne.1999-06-09Mr DEPUTY SPEAKER(Mr Nehl) took the chair at 9.40 a.m.Statements by Members653965396539Ripoll, Bernie, MPMr RIPOLL83EOxleyALP00—I would like to draw to the attention of the House the recent visit of two very important human rights activists in Australia—the visit of Mr Duc Ngyen Ngoc, General Secretary of the Free Vietnam Alliance based in Paris, France, and more recently the visit of Professor Doan Viet Hoat, exiled from Vietnam and now living in the USA. Mr Duc of the Free Vietnam Alliance has been instrumental in the fight for justice and the international campaign for human rights in Vietnam. His trip to Australia was to speak on the topic of `Tasks to implement stage 1 of the democratisation of Vietnam'. Professor Doan, exiled to the USA, spent 19 years in a Vietnamese prison for his political views and stand on human rights. He is the recipient of the Robert F. Kennedy Human Rights Award 1995 and the Golden Pen of Freedom Award 1998.It is impossible for us in this place to really appreciate or understand the sacrifices made by these individuals and their communities in the struggle for basic human rights and democracy. But the struggle of the Vietnamese people is no different to the fight faced by many other people around the world. It is about political freedom, freedom of speech and the media, religious freedom and, most importantly, it is about their dignity. While we have a responsibility and a duty to speak out against the violation of these rights, the actions we take in this place are never enough, nor will they ever compare with the sacrifices made by these people to change governments and attitudes.In my electorate of Oxley there is a large Vietnamese community centred around the suburbs of Durack, Inala, Goodna and Darra. They have come to Australia as immigrants with the same aspirations as ours. They want opportunity, they want a better future for their families, they want access to education, they want a job for their kids, and they want freedom from persecution. But while most have come to this country as immigrants, many have also come here as refugees. They are in great need of our support. They are in general need of government assistance and access to education and language courses, and they are in need of our understanding.Over the last few months there has been more than the usual focus on refugees because of the situation in Kosovo. Australians in that time have demonstrated generosity and lived up to our international reputation as a compassionate society. We have shown the rest of the world that actions speak louder than words, that the actions we take locally are felt internationally.I would like to take this opportunity to thank and congratulate both Mr Duc of the Free Vietnam Alliance and Professor Doan on their visit to Australia and, in particular, their visit to the electorate of Oxley. Their visit to Australia gives hope for change in other parts of the world. I would also like to congratulate the Vietnamese community for their efforts in organising these events. It now remains up to us in this place to more than just speak about human rights and have that reflected in our policies and our treatment of visitors and refugees alike.65406540Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—Last Monday I joined with the Minister for Financial Services and Regulation, Joe Hockey, and also the Snowy Mountains Authority Commissioner, Vin Good, at the Mint here in Canberra to launch a new set of coins to mark the 50th anniversary of the Snowy Mountains Scheme. There are two most superb coins. One depicts an alpine lake and the other one depicts a tunnel in construction—the alpine lake, one of the many lakes that was formed as part of that Snowy scheme, and the tunnel in construction, one of the many tunnels of many, many kilometres of tunnels that were constructed as part of that scheme. It was a great way to recognise the 50th anniversary of the Snowy Mountains Scheme, which occurs this year.The Snowy scheme is probably the engineering icon in Australia's history and is still recognised today, 50 years after its commencement, as being way in front of many engineering feats in the world. The technology used was way ahead of its time. I think the other significant aspect of the Snowy scheme was the way in which it brought so many different nationalities to Australia who have now contributed so much not only to the Snowy Mountains area, where many of them have remained, but all over Australia as many of them have moved to other regions following the Snowy scheme.This coin launch was a part of the 50th anniversary activities, which will go on right throughout the year—from photographic exhibitions right through to the World Fly Fishing Championships, which will take place in the Snowy Mountains in my electorate later this year. Some superb events will occur. Probably the highlight will be on the weekend of 16 and 17 October. The 16th will be the Adaminaby Race Day, which is a very important meeting for the year. The picnic races at Adaminaby will be specifically on that weekend to highlight the 50th anniversary. That night there will be the Thiess Ultimate Power Dinner, which will be held in the Tumut 2 Power Station Machine Hall. It will be quite an exciting dinner. The Prime Minister has agreed to come to that dinner and I know Tim Fischer, who is a great advocate of the Snowy scheme, will also be there.Then on the Sunday there will be the ultimate BBQ and reunion on the shores of Lake Jindabyne. We are trying to encourage as many workers from all over Australia who participated in the Snowy scheme to return to Jindabyne for that weekend and participate in that great BBQ, which will be held on the banks of Lake Jindabyne on 17 October. It is a great scheme. It has done so much for Australia—clean power, water for irrigation and engineering excellence. It will be a great year of celebrations. (Time expired)65406540Griffin, Alan, MPMr GRIFFINVU5BruceALP00—I would like to consider on the record today some information regarding the implications for the tax package as currently negotiated with respect to a particular health care product, a product by the name of Ostelin. I would like to read on to the record an extract from a letter from Boots Healthcare to the Treasurer regarding this particular issue. It states:We now write regarding Ostelin, which is a Vitamin D supplement. We note that folate supplements are to be classified as GST-free on the basis that this Vitamin B product is considered to be a "public health good", along with sunscreens.It is well known that folate taken during pregnancy can prevent the development of neural tube syndrome. By the same token, Ostelin has been registered on the Australian Register of Therapeutic Goods as an approved treatment for Vitamin D deficiency. It has been established that it can reduce hip and other non- vertebral fractures when given the adequate supplemental calcium in subjects deficient of Vitamin D, such as the housebound, immobilised and institutionalised elderly population, or in subjects diagnosed with Vitamin D deficiency due to malnutrition and/or malabsorption.The 1996 Consensus Statement on the Prevention and Management of Osteoporosis says this:"Recent studies from a number of countries have demonstrated that Vitamin D deficiency is common in the institutionalised elderly due to poor sunlight exposure. Correction of this deficiency reduces hip and other non-vertebral fractures. Avoiding vitamin D deficiency in this at-risk group is an important part of providing care for the elderly".Clearly, Ostelin stands in the same relationship to the treatment of many elderly people as folate does in the case of unborn children. It is hard to see how the one can be characterised as for "public health" and the other not.Moreover, there is surely a public policy interest in doing anything that will help reduce the cost of aged care, not to mention the significant improvement in older persons' quality of life if they can stay healthy. Placing a 10% tax on Ostelin, which is now exempt from Wholesale Sales Tax, can only act contrary to these public health policy objectives.We therefore urge the Commonwealth Government to reconsider the deal reached with the Democrats and to add Ostelin to the list of "public health goods" which should be recommended to the Ministerial Council as GST-free.I think this particular example highlights a real problem in this area. The Democrats' position in earlier amendments proposed to the ANTS package was to say that all products registered under the ARTG, the Australian Register of Therapeutic Goods, should be GST free on the basis that there was a recognised therapeutic value to the actual usage of those goods. Following the negotiations between Senator Lees and the Prime Minister, we now have a dog's breakfast in relation to the treatment of particular types of health care goods. In a situation where there is not an awful lot of rhyme or reason apparent in these circumstances, the government ought to reconsider this issue very seriously. (Time expired)65416541Forrest, John, MPMr FORRESTNV5MalleeNP10—I would like to draw the attention of the House to the Rio Tinto Australian Science Olympiads. This wonderful program to promote excellence in science is sponsored by Rio Tinto, and they should be commended for their support. The International Science Olympiads in particular are regarded as being the Olympic Games for science students—mental gymnastics.This year, the tenth International Biology Olympiad will be held in Uppsala, Sweden, from 4 to 11 July. It is a real thrill to announce that a student from my electorate of Mallee will be representing Australia at this symposium. My student's name is Catherine Wilson from St Joseph's College in Mildura. I am very proud to say that she is the only student from rural Australia to represent Australia at this particular symposium. Catherine is one of 19 Australian students who will be representing our country this year; this puts her up with the nation's best science students. Last year some 16,000 secondary school students throughout Australia took part in Rio Tinto's Australian Biology, Chemistry, Mathematics and Physics Olympiad programs throughout Australia, of which Catherine was one. To follow through and succeed in selection to represent us in Sweden is a real credit to her.There are four teams to represent Australia at other symposiums this year. The first is the Biology Olympiad, which I have mentioned, in Sweden; the second is the 30th International Physics Olympiad in Italy from 18 to 26 July; the third is the 31st International Chemistry Olympiad in Thailand from 4 to 11 July; and the other is the 40th International Mathematics Olympiad in Romania from 13 to 22 July.Rio Tinto should be congratulated for sponsoring such an extensive program. It is a wonderful example of industry fostering leadership in science. To each of the 19 young Australians spread across Australia in each of those four teams, I would like to offer my congratulations and encouragement. In particular, to Catherine I offer my special support. I will be presenting a memorial blazer to her on Wednesday of next week in Mildura.Catherine is a young, active year-12 student, a delight to talk to. I share her excitement at the prospect of representing us all in Sweden. She is active in debating, is well advanced in piano and hopes to study biomedicine at Melbourne or Monash university after finishing her year-12 studies this year. How she fits so much into her busy study schedule is amazing—incredible, indeed. This year she participated in the National Youth Science Forum, and last year she was a delegate to the Australian New Zealand Association for the Advancement of Science. She also has an interest in drama and last year won the `Best Youth Play' at the Mildura one-act play festival. Catherine is one of those young Australians who is an inspiration to talk to. She gives us great confidence that our nation's future is in good hands.65426542Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—The Victorian government's recent inquiry into the ABC was probably prompted by the Victorian Premier's visceral dislike of ABC interviewers, learnt during a decade in opposition. On balance, however, the inquiry's finding that the ABC is too concentrated in Sydney has merit. Something may be true even if the Premier of Victoria says it is true—as his recent statements on the GST evidence.An independent government supported broadcaster has existed since the early 1930s. The ABC has contributed to the development of a distinctly Australian culture, whether through the dulcet tones of Alan McGillvray and his pencil tapping on a table or cutting edge drama like Phoenix, Janus and Seachange, all produced in Melbourne. The ABC current affairs programs Lateline, the 7.30 Report, AM and PM do great credit to the national broadcaster. From a parochial Australian perspective, I do not think I have ever seen a program as fine as that produced by Chris Masters on Four Corners concerning the World War II defence of the Kokoda Track by the civilian militia, especially by the heroes of the Victorian 39th Battalion.In a recent report of the Economic Development Committee of the Victorian parliament, both coalition and Labor members of the Victorian parliament condemned the continuing trend to centralise ABC facilities, jobs and production in Sydney. Already many other national arts bodies are located in Sydney—NIDA, the Australia Council and the Film and Television School. Like most Australians, I like Sydney—but like many other Australians from other states, I am unhappy about being treated like a `Mexican' by the ABC.As Robin Usher, the Arts Editor of the Age, argued:. . . the Victorian report's finding that ABC management failed to provide future figures on the corporation's staffing and swamped the inquiry with irrelevant information, while claiming it supported decentralisation. Existing staffing numbers show more than half the corporation's staff are in Sydney—only 16 per cent are located in Victoria—The ABC's tactic only added to a long-term perception that it operates without a clear business plan, a view which is reinforced by the appointment of Andrea Stretton . . . and the taking away of the arts program from Melbourne last year. Production means jobs. The Ripponlea studios of the ABC and the Southbank headquarters of the ABC are both within the boundaries of my electorate. Many of the dedicated staff who work there in those places live in Melbourne Ports, my electorate. Their futures and the future of any artist or artisan who works in television depends on the continuing presence in Victoria of the major national broadcaster. I would urge the ABC to consider carefully this report and to understand that support for it exists on all sides of politics not only in the Victorian parliament but also in the federal parliament.65436543Worth, Trish, MPMs WORTH8V5AdelaideLP10—It has been drawn to my attention that the member for Batman is calling for the Australian Labor Party to return to its blue-collar working base and be less concerned about middle class yuppies. One must question whether this is just a feel-good line, or will it translate to the ALP supporting the government tax reform package in the Senate?The government tax reform package will be so good for Australia, including blue-collar workers, their children and their parents. Blue-collar workers have home mortgage loans; interest rates are now lower than at any time for more than 30 years. This has been achieved through sound economic management and keeping inflation rates down.Blue-collar workers may have pensioner parents. With this package, pension allowances and benefits will be increased by four per cent on 1 July 2000. Also, compensation arrangements to pensioners will be revised to ensure that the full four per cent compensation is paid on top of the existing legislative requirement to maintain pensions at no less than 25 per cent of male total average weekly earnings. So the four per cent increase will be treated as a pension supplement and will be indexed to maintain its real value.Blue-collar workers' families will benefit. The rate of family allowance for those aged 18 and over is to be increased to $50 per fortnight and eligibility is to be extended to cover dependent students aged up to 25 years. Those earning under $60,000 per year will enjoy the biggest tax cuts in Australia's history. Those cuts will give them more spending power and an increase in jobs and generally will benefit those communities in which blue-collar workers live. I have been amazed at the rhetoric from the Australian Labor Party being concerned, supposedly, for these people and yet doing nothing to support them in real terms.The changes and support for companies that are exporting will also increase job opportunities for the children of blue-collar workers. I thoroughly enjoy standing up for and supporting the blue-collar workers in my electorate. I hope that I will be doing so for a long time into the future. I am sure that, when they enjoy the benefits that come through this tax reform package, that will be the case. I call on my colleagues on the other side to get where the rhetoric of the member for Batman is and get right into supporting those blue-collar workers, their families and their parents and do just what is good for Australia.Mr DEPUTY SPEAKER (Mr Nehl) —In accordance with standing order 75A, the time for members' statements has concluded.Bills6543r8076543Debate resumed from 7 June, on motion by Mr Costello:That the bill be now read a second time. 09:58:006544Sawford, Rod, MPMr SAWFORD3J4Port AdelaideALP00—This is a budget that celebrates the introduction of a new tax, the introduction of accrual accounting and really not much else. This probably explains the glum looks, the lack of humour, the earnest seriousness and the perfunctory behaviour of a government going nowhere in particular. It probably also explains the increasingly glum feeling of marginal seat members on the government side.But, sadly, this budget fails the people in three areas of primary responsibility of government: education, jobs and health care. It also demonstrates a fairly shameful bias towards the well off at the expense of the vast majority of average Australians. The government appears not to understand that it is incumbent upon it to govern in the interests of all Australians—not just its favoured elites. Take education, for instance: 70 per cent of all secondary students are in state schools, and 30 per cent in private schools; in primary schools, it is 75 per cent in government schools, 25 per cent in private. I do not have a problem with Commonwealth assistance to needy private schools, but how can it be fair to basically abandon public education?For the past 10 years the trend, as we know, has been from public to private. But in South Australia this year that trend is reversing. This year some 1,800 students have gone from private to public. No-one with a sense of history in this country ought to be surprised this is happening. With the current economic climate continuing, the trend in South Australia will spread to other states. It has always been so. It will be so again.In health care, how can it be fair that the budget allocates another huge chunk of public resources—almost $2 billion worth—to propping up the private health industry at the expense of the public system relied on by the vast majority of people? In the all-important area of jobs, how can it be fair that the budget provides no serious funding to assist the plight of the jobless when the surplus was built on the back of massive cuts to Labor skills and job programs? Furthermore, there is no evidence in this budget that the government recognises that it is responsible for the development of national infrastructure. Its role in investing in the physical and human capital of the nation is crucial to the nation's ongoing economic performance and to the wellbeing of future generations. Yet where is the money for visionary projects like rail infrastructure, especially the Alice Springs-Darwin rail line? We still cannot get our cerebral brains around that.Where is the money for roads and bridges, in particular the long awaited third river crossing in Port Adelaide? That bridge is crucial to the development of an efficient port—the most efficient port in Australia and one of the most efficient in the world, something which this government claims to seek—yet it has been the subject of empty promise after empty promise. Where is the money to clean up our waterways? The Port River in my electorate is in desperate need of funds for a major clean-up, but there is nothing in this budget for projects like this which are in the long-term national interest.What about money for basic things like sewerage infrastructure and refuse disposal? In my electorate there is an ongoing problem with the West Lakes Treatment Works and proposals for its relocation. People in the eastern end of my electorate have had to put up with the stench and the wind-blown rubbish from the Wingfield dump for far too long. These are the issues for ordinary people—bread and butter issues, livelihood issues, environmental issues—that have a direct impact on people's lives. Why hasn't the government committed funds from the massive surplus towards fixing problems such as these rather than pouring money into the coffers of private health providers?We heard this morning that the people at St Vincent's Hospital are saying that they are not getting the money. It is a world-famous private hospital. They are not getting the money. They are going broke. Where is the money, some $2 billion worth, going? Why is the government giving billions of dollars through tax cuts to big business and the well off rather than investing in the future of the country? This budget gives no indication that the government has any sense at all of its responsibilities in this area. Its goals are entirely short term. It simply wants to introduce a new tax. We have had people celebrating the introduction of accrual accounting and actually saying so in this House. Really! Has someone put something in the water in this place?Is it a fairer tax? No. It is a tax which gives big tax breaks to those on the highest incomes and slugs low income earners and pensioners. Is it a tax that will generate a more efficient economy? No. But what it will generate is a massive black economy, as countries with a GST will testify. Is it a tax that will generate jobs, especially for the long-term unemployed, the numbers of which are increasing dramatically? No. Even the advocates of the GST are not silly enough to make that claim. Is it a tax that will have any bearing at all on our health care system or educational opportunities for young people? Will it serve to advance the national infrastructure? Again, the answer to each question is no. It is simply a new tax. It is simply another way for the government to raise its revenues. But, of course, we have accrual accounting.The proposed GST which the government has attempted to pass off as a budget has been most strongly supported by the big business lobby. Does anyone believe that big business would support to the tune of many millions of dollars—I think it is billions of dollars really—the imposition of a new tax which would not be significantly in their favour? Some corporate leaders may talk in lofty terms—in fact some political leaders do—about the new tax being in the national interest but, for the big business sector, the term `national interest' is interchangeable with, and we all know it, `less tax'.For those who would doubt that, I challenge anyone to provide one instance of big business in this country acting under the impulse of anything other than self-interest. Make no mistake: under the GST, big business will pay less tax. Everybody knows just how good they are at what they euphemistically call `tax minimisation'. The rate of tax per dollar paid by big business is falling and is already just a fraction of that paid by the average Australian worker. With a GST, they will pay even less. The flip side, of course, is that the average worker will now have to pay even more to make up the shortfall.The government has no sense of fair play at all. A government of a nation has a much greater responsibility than just to spend public resources trying to satiate a corporate sector that cannot be satiated. It has the responsibility to build a nation. It has the responsibility to ensure that all sectors of the community pay a fair rate of taxation in accordance with their capacity to pay and also, I suppose, the capacity of governments to collect. It has a responsibility to spend the revenue raised in a manner that is balanced and fair and pays special regard to areas of greatest disadvantage. Instead, this government, as evidenced by the budget, has shunned these responsibilities in favour of sectional interests.What is this government's view of the world, and what does this budget tell us about that? For example, what does its lavish spending on private health and private schools compared to its parsimonious attitude to public hospitals and public schools mean? Is it simply favouring those sectors from which it believes it derives its strongest political support, or do they have a longer term plan to run down the public sector in health and education in order to bludgeon people into the private sector? The latter is clearly the case with respect to the health sector. The measures in this budget in support of the private health care industry are nothing but a crude attempt to scare people into buying insurance that they cannot afford and do not want.This is the health minister's fourth attempt in four years to pass off his ideologically driven view of the world as far as health policy is concerned. So far, he has spent approaching $2 billion of taxpayers' money and achieved very little, except no doubt the everlasting gratitude of the private health funds into whose coffers that public money disappeared—not the client, not the GP, not the hospitals, but the private health fund.This policy has not an ounce of fairness about it nor an ounce of sense. To threaten people with higher premiums for the rest of their lives unless they take out private health insurance within a prescribed time frame takes absolutely no account whatsoever of a range of personal circumstances, not least of all disposable income. It might come as quite a shock to some members of the government, and especially to the minister's set, that not everyone can afford private health insurance, even if they want it. Let us get this straight: the minister's new plan has the notion of punishment at its core. He wants to take the rod to those who do not join up within the prescribed time by making them pay higher premiums for the rest of their lives. At the same time he is going to run down public hospitals so those who do not join the private health funds will receive an ever-decreasing standard of care. And this is from the party that trumpets free choice.The government's attitude to education is equally unbalanced and unresolved. They appear not to understand the importance of education as an investment in this nation's future. While the government claim that the diesel fuel rebate for farmers and miners is an investment in future production, and you cannot argue with that, they appear to be unable to see education as something worth investing in—that is, they manage to grasp the notion of investment in tangible things like wheat crops and mining leases but they seem to be unable to grasp the relatively intangible notion that people are worth investing in.Yet, of course, we all know that it is people who make wealth. It is not the seeds you put in the ground or the ore you take from the ground. The seed and the ore were there a long time before people worked out how to make wealth from them. It should be remembered that one of the first acts of this government was to slash $2.7 billion out of the education sector. They must be one of the only governments in the developed world to have done this in recent times. That is a pretty clear sign of the government's archaic view of the world.Put aside for the moment the more subtle notion of education as a right for all people, as an essential ingredient in a civilised society, as the building block of a nation, a clever country, and so on. Understanding abstract notions like this seems a little too much for the current minister we have. I do not even ask him to do that because I do not think he can. I simply ask that this government, this minister, consider the economic consequences of ignoring investment in education and training. To spell it out in purely economic terms: better schools, better TAFEs and better universities produce better people and better graduates. Those better people and those better graduates will be better able to make the discoveries, develop the research and build a more innovative society—that is, they will create wealth. They will create the wealth for the jobs.Never before has it been so important to make that investment in a highly competitive world. We desperately need to maintain the target of becoming the clever country, because the consequences of failure are great. There is enormous competition among nations, and future wealth depends upon our ability to match it with the best. There will be no sympathy for this country in the developed world unless we get off our backsides and start doing something, start using the space between our ears called the grey matter. This minister and this government as a whole should understand that there is a return on investment in people and that that return can be measured in tangible ways if it has to be. Its yield is a stronger economy, greater wealth and a positive sense of national wellbeing.Sadly, the government appears unable to grasp even this. Consider these facts: the small increase in education funding—you know, the 20 per cent correction in this budget—goes almost exclusively to the private sector, with state school students being virtually ignored. Public education is out of favour—a majority of people; scholarships for bright children from disadvantaged backgrounds to undertake tertiary studies have been withdrawn—a miserable $6 million. The disadvantaged are out of favour. Investment in research in innovation will be lower this year than it was during Labor's last year office, and dramatically lower in terms of the percentage of GDP—innovation is out of favour. There is less money for university teaching and no growth funding for TAFE. Investment in education in 1996 was 2.06 per cent of GDP. It is now down to 1.6 per cent of GDP. That is a massive cut of 22.3 per cent—not smart.As if to underline the lack of thinking, the lack of sense of national purpose, the budget attempts to make something out of the return of the Youth Allowance—a return in part, that is. The Youth Allowance provided valuable assistance to families on low and middle incomes. The new maximum amount of $18.75 is a fraction of what was taken away from these families. And what about jobs? There is nothing at all in this budget for the 700,000 people who are actually registered as unemployed, many of them living in near poverty. The government trumpets that it has a $5 billion surplus, but it should never be forgotten where that surplus came from: it came from the pockets of ordinary, hardworking Australian men and women. This budget is in surplus because the government has in four budgets over three years abdicated its responsibilities to provide adequate services in a range of areas, including health, education, child care, aged care, job creation and social welfare, and it includes three years of bracket creep, as someone pointed out yesterday.For example, one of the government's first acts in coming to office was to cancel Labor's $2 billion training and employment programs, which assisted those who were out of work to get back into the work force. A result has been an increase in the number of long-term unemployed and virtually no impact on the unemployment rate. There are now 700,000 people unemployed—that is, on the actual list, but there are more than that. People who want a job cannot find a job. It is a national disgrace; it is a national shame. When you add the number of people who are underemployed and the ones who have simply given up, you get a figure of around two million people not realising their potential. This is simply a human tragedy and economic inefficiency at its greatest.Is the government prepared to seek to help these people? Not at all. There is nothing in the budget for them, not a bean, unless you count the Work for the Dole scheme, which again has at its very core the concept of blame and punishment and which, compared with Labor's previous schemes, has a far inferior success rate in the development of real skills and the generation of jobs. No training, no skills, no job—that is what has happened. It is not as though the economy cannot afford to provide assistance to those in greatest need. The world economy is growing strongly, and the Australian economy, on the back of the hard decisions taken by previous Labor governments and in tune with the world economy, is ticking along pretty smoothly.There is a huge budget surplus. Is it asking for too much that a little of the national wealth be put aside to assist those who need some assistance? Is it too much to ask for genuine skills training schemes that recognise the needs of the jobless without blaming them for their predicament? For the 700,000 Australians wanting to work but unable to find work, and for the people numbering towards two million who are underemployed but unable to find enough work, to be subjected to the personal constraints that living on a lesser income brings is a matter of national shame at any time, but far more so in the relatively good economic times that are enjoyed now by so many people in this country. But the government cannot find the compassion, the goodwill, to assist those in greatest need. They will come back and punish all of us in some way, in those ugly ways, which those people will find.I would ask that at least they try to see this massive pool of dislodged and marginalised people as a massive waste of human resources. If they cannot find the compassion, I ask that they see the problem in purely economic terms. After all, I really do not mind what the motivation is; I would just like to see this government make a genuine attempt to make sure that everybody in this nation is included and has an opportunity to learn the skills they need to get the work they seek. We would have a far more efficient economy if we did that.The government has set for its target an unemployment rate of around 7½ per cent. It seems to me that this figure was arrived at by working out what the rate would be in a year's time if it did, as it plans to do, virtually nothing to help the jobless back into work. It then attempts to make a virtue out of the target. That is a very simple little trick, but one that will not amuse many of the 700,000 unemployed, the 700,000 underemployed, the 700,000 who have just given up, or all the others who are no longer counted in the government's statistics. The black economy will grow. There will be more people in that, and there will be no taxation revenue from that economy. It seems that one of the government's strategies is to force more and more people to take options that none of us would support. It is a great shame for those who choose to withdraw from the search for work and choose alternative antisocial activity, but the greater shame is having a government that encourages that withdrawal.In summation, this government has presented nothing more than a Clayton's budget in preparation for a new tax being passed in the Senate a little later in the month. Improvements for people? They do not amount to very much. Improvements for the environment? There is not too much there. Improvements to infrastructure? There is very little there. No matter what you examine—health, education, welfare, aged care, child care—mediocrity reigns supreme. But, of course, we could celebrate the introduction of accrual accounting, and who would be surprised that we have nothing more to celebrate than that.10:18:006548Vale, Danna, MPMrs VALEVK6HughesLP10—It gives me great pride to rise to speak in this debate on the Appropriation Bill (No. 1) 1999-2000 and to be here as part of the Howard coalition government as the member for Hughes. Even as one who holds the social concerns of our Australian communities very dear to her heart, it gives me great pride to note the outstanding performance of the Australian economy as revealed in the national account figures for the March quarter last week. I say this because, without a strong economic base, no government can do very much for those of its citizens who are in need of social welfare support and special assistance. When the economy is weak and in decline, it is those on the lowest levels of our society who suffer the most. They have no buffer and are the most vulnerable. Good economic policy and good social policy go hand in hand, but good economic policy leads the way and dictates the kind and quality of social welfare we can provide for our most vulnerable citizens.It is to the better welfare of all Australians that we can rejoice at the robust health of our economy. As many of us are now aware, last week the national account showed that our GDP grew by 1.1 per cent, and a very strong 4.8 per cent for the year. This is an exceptional result because it is the first time in our history that we have had six consecutive quarters of growth at one per cent or above. The Reserve Bank Bulletin of May 1999 reported:This combination of strong growth and exceptionally low inflation is quite unlike the experience of the preceding 30 years. That such a performance has been maintained, almost two years after the Asian crisis first broke in Thailand, is indicative of the extent to which the Australian economy's underlying strength and resilience have been proved over time.This sustained solid economic performance is singularly attributable to the strength of the Howard coalition government's economic policies. Astute tough-minded decisions by the government have not only provided an effective defence for Australia in the face of the international crisis but have also given many Australians real wage increases and greater purchasing power because of our low interest rates and low inflation. It has given those of our fellow Australians on social welfare greater assurance and security.All Australians can be justifiably proud and confident of our present position in world affairs. After 13 years of Labor's economic dithering and mismanagement, the tough intellectual fortitude of the Howard coalition has successfully pursued a sound macro-economic policy and ongoing structural reforms in the face of sustained and unrelenting Labor opposition. The May national account figures continue to reflect our excellent economic performance in the face of the continued international financial recession.Significantly, the measures put in place by our government included four very important coalition initiatives. One is an agreement on monetary policy that was signed by the Treasurer and the Governor of the Reserve Bank. Another is the Charter of Budget Honesty, a revolutionary piece of legislation to ensure that, in future, government accounts will be open and transparent and will lock in good fiscal policy. It should be noted that this legislation has been recognised by the International Monetary Fund as a world-class initiative. Another important measure is the coalition's commitment to reduce the $10 billion deficit that was Labor's legacy to the Australian people when it lost office in 1996. The coalition was determined to bring the Australian economy into surplus, and this year, in the Howard coalition budget of 1999, we have delivered a budget that not only is fair and responsible but also has included a $5.4 billion surplus. Another important measure is the government's debt reduction program. Since 1996 the coalition has paid of $24 billion of Labor's $96 billion debt.No Australian wants to leave a debt to their children and grandchildren. The repayment of Labor's $96 billion debt is vital for our future. When the national debt is repaid, there will be greater resources available for the greater benefit of all members of our Australian community—better education, better health care, higher living standards and a more predictable future for us all. Paying off our debt does not mean we simply survive as a nation; we are doing that now. To be debt free means more than that. It means that we prevail. It means that we have greater options and greater choices. We will be able to govern from a position of economic and political strength and be in a position of considerable regional influence.There are two important matters I wish to refer to in this debate, and both refer to government expenditure in one way or another: one is university expenditure, and the other is our commitment to the environment. Firstly, I applaud our government's commitment to education and especially our real support for vocational education and training. During the Labor years the value of vocational training and the relevance of trade apprenticeships and traineeships were ignored in the great push for a free university education for all. Many schoolchildren and their parents were given the loaded message of `no degree, no job'. This is arrant nonsense, of course. There were and are sound opportunities for those young people who wish to undertake vocational training, and the government's excellent results in the increased number of apprenticeships and traineeships—reaching more than 200,000 in April this year—provide evidence of the need, the suitability and the relevance of government policy in this area.Although Labor initially strongly supported free university education for everyone, the reality was that young people from the lower socioeconomic sectors still did not access this opportunity. As a matter of fact, the best system for encouraging students at university level was the Commonwealth Scholarship Scheme, which was strongly supported by Prime Minister Sir Robert Menzies in the 1950s, and continued until Gough Whitlam's Labor government took office in 1972.I would like to address this House today as an Australian citizen who—like our Prime Minister, like the Leader of the Opposition; indeed, like so many others in the parliament—is a privileged child of the Menzies era. We are privileged because the extraordinary educational bounty that Menzies bequeathed to Australia has enabled us, in turn, to serve our country. I want to congratulate the Treasurer for his breadth of vision in the budget, when he declared that we must `build a culture that will bring forth new pioneers in the new century, who will advance the frontiers of knowledge just like their predecessors'. We are making a good beginning by doubling the health research budget, but I respectfully urge that we let it be just that—the beginning of a deeper and more meaningful renaissance in our best universities.At the very end of this century, we can still look back to the previous century and find lessons of lasting value. It was 150 years ago, in 1849, in a famously controversial speech, that a remarkable colonial statesman by the name of William Charles Wentworth informed the New South Wales Legislative Council of his audacious and ambitious plan to establish the University of Sydney, an institution whose potential greatness he never doubted. Sadly, I must today bring to the attention of this House that financial problems now threaten Wentworth's great legacy and the creative soul of our finest universities. Wentworth was to be followed by other great Australian statesmen who also saw that Australia's future lay in the excellence of our universities.It was Prime Minister John Curtin who envisaged the formation of the Australian National University and the Commonwealth Scholarship Scheme. But it was Prime Minister Sir Robert Menzies who financed them beyond Labor's wildest dreams, and it is my generation that has reaped the benefits. Sir Robert hardly had a reputation as a spendthrift; Scottish parsimony was more his style. Yet, at a time when this country was barely emerging from post-war rations and restrictions on domestic building, Sir Robert embarked on one of the most ambitious spending plans on university education that Australia has ever known. By vastly expanding the Commonwealth Scholarship Scheme he enabled a generation of able school leavers to attend university, whatever their family background. There are members in this House today who hold university degrees solely because of this scheme.By lavishing funds on the nascent postgraduate Australian National University, Sir Robert enabled that university's research schools to compete with the best universities in the world and by 1963 the ANU's Professor Sir Jack Eccles had won the Nobel Prize for Medicine. Indeed, the ANU rapidly acquired a world reputation for the national and international contributions of its scientific and Asian research schools but, most importantly, when Prime Minister Menzies introduced Commonwealth postgraduate scholarships, he powerfully enriched the intellectual capital of Australia. Sir Robert Menzies wanted to be remembered for his support and enthusiasm for the universities of his country. Apt indeed it is that our Prime Minister now sits at his desk.It seems to me, and I have concerns, that this valuable intellectual heritage may now be under threat. There is no longer a proper incentive, including a financial incentive, to attain the highest academic achievements in the most demanding and difficult faculties in our universities. Australians should treasure our most able academics and researchers every bit as much as we treasure our great sports heroes. It would surely be one of the greatest long-term tragedies of the Australian millennium if support for the Olympic infrastructure were to be at the expense of support for infrastructure for no less a vital cause, and that is our great universities.University operating grants have been eroded in recent decades, and academic salaries have dramatically lost ground. If the senior professors at our greatest academic institutions can barely earn more than their recent best students, can we seriously hope to maintain a long-term excellence in Australian higher education? If these same academics can themselves earn much higher academic salaries overseas, why would the very best people stay here in Australia, especially if the research support is too low and the infrastructure demoralising? If class sizes are huge and classes are anonymous because they have to be to get more government funding, or if library facilities are inadequate or indifferent, will overseas students continue to come here?We live in a technological age. Our regional competitors, such as Hong Kong and South Korea, are now rapidly investing in university science. If Australia loses the technical abilities to create its own intellectual property, all Australians will pay more for living in this high-tech era. Encouraging universities to form strategic alliances in the corporate world has proved successful in some faculties, yet basic science and classics departments, which underpin a civilised society, are under particular threat because they cannot always claim immediate relevance sufficient to attract the corporate dollar. Rather, theirs is a long-term mission. We should never forget that it was Sydney university's Professor Gerald Room and Professor Treweek who, in the basic subjects of mathematics and classical Greek respectively, together broke the Japanese codes during World War II.The University of Sydney, the oldest university in Australia, has the same number of students as the University of California but receives only one-quarter of its operating funds. Thanks to the 19th century bequest of Thomas Fisher, a one-time Pitt Street bootmaker, Sydney university has one of the finest national library resources in the country, yet the Fisher Library's total budget is now less than that of the University of Toronto's acquisition budget. Across Australia, library acquisition budgets have been severely constrained. I have real concerns that our great universities, which previous generations have nurtured and cared for, are now under considerable threat. It seems to me that right now our top research universities need a Menzies sized injection of funds. Our government has successfully encouraged overseas students, and tertiary education is one of our major export earners. We are attracting increasing numbers from the United States and from South-East Asia. We are building long-term national friendships at many levels. We cannot expect to continue to attract top fee-paying students from overseas if we cannot provide top quality education and offer top quality remuneration for our first-rank academics.Few, if any, statesmen have left a greater mark on this country than in their several times did Wentworth, Curtin and Menzies—three men of no common political persuasion—yet historically they stand together united in a magnificent common purpose. Each shared the vision splendid of Australia advancing into the future powered by the sheer quality of its higher education and the excellence of its intellectual reach. They did not shrink from the cost. They did not spend on higher education; they invested in it with vigour and purpose. Their controversial investment in our future paid off in spades. For this reason I encourage, I urge, I implore our government to see fit to use the assurance of our vibrant outstanding economic success as a grand opportunity to continue to invest in this fine tradition of scholarly statesmanship and patronage of our great universities.Finally and briefly, a good word must be said to record my enthusiastic congratulations to the Howard coalition government and support for its excellent package for the environment outlined in this budget. This can rightly be called the clean green budget of 1999. This has to be the best environment package of any government in living memory, and I am astounded at the relative silence from the environmental lobby in any effort to register some appreciation to the coalition government for our clear and determined $700 million commitment. The measures for the environment set out in this budget have been extensively augmented by the agreement with the Leader of the Australian Democrats, Senator Meg Lees. Our government has committed a further $1 billion to improve the environment through a focus on urban air quality and greenhouse gas emissions. This 1999 Appropriation Bill should go down as the green budget. I think the Leader of the Democrats put it in a nutshell when she said at a press conference on 28 May 1999:The Democrats have won more in 13 hours of talks with the Howard Government than they did in 13 years under the Labor Government . . .The agreement of the Democrats represents the largest and most comprehensive effort in history to reduce air pollution in Australia and promote the development of environmentally friendly alternatives.This is an excellent budget on all aspects for the future of the people of Australia. Our future lies in a strong, robust economy, a thriving green and clean environment and the harvest of intellectual capital home grown in our great universities.We have well and truly achieved the first two, and I warmly encourage and wishfully urge our coalition government to turn up the light on the legacy of knowledge left by our founding fathers, to lead us into the dawn of the new millennium and herald a brilliant Australian academic renaissance.10:32:006552Kerr, Duncan, MPMr KERRRH4DenisonALP00—The budget and these appropriation bills have left the Australian community reeling, but nowhere more so than in the area of the arts. Today I want to make a few comments for the record in relation to that issue.When the government introduced its budget, it disappointed the hopes of those in the arts industry that it would include within the budget measures to ameliorate the impact of their proposed GST. I do not think anyone in the community who has taken any interest in this matter, including government members, disputes that the arts sector is going to be seriously affected by the introduction of a GST. Indeed, the Australia Council—the government's own prime advisory body—commissioned reports by KPMG and Econtech to assess the impact of a GST. In undisputed evidence that went before the Senate committee, it was established that a GST will result in the loss of thousands of jobs in the arts and related industries, see some performing arts companies go to the wall, increase the cost of books by over seven per cent, erode Australia's reputation for a domestic publishing industry and damage Australian publication of books, reduce book sales with serious consequences for literacy, increase the cost of theatre tickets by around five per cent plus, reduce the income of visual artists and craft producers and effectively reduce the value of funding from the Australia Council by about eight per cent.Australian governments hitherto have always acknowledged that our own distinctively Australian art and culture needs support. Hopes that that would be recognised in the budget were dashed on budget night. What is surprising in the eyes of many in the arts community, however, is that, when negotiations occurred between the government and first Senator Harradine and later the Democrats, there was no serious effort to face up to what is going to be this devastation that will flow through to such an important and hitherto vibrant sector of our economy.The arts do not simply give us a voice and a way of seeing ourselves and allowing us to enjoy our spare time and have pleasure in our recreation; they also represent a very significant and growing sector of employment in Australia which has been successfully building a national and international reputation for excellence.Why I say that we were surprised that this issue was not addressed is that the Democrats had, from the commencement of their political assessment of a potential GST, made it plain that they recognised the damage that would flow through to the arts and had set their face against allowing that to happen. When the Democrats launched their election campaign on 21 September last year, the leader, Meg Lees, said:Democrat senators and lead candidates have all pledged that we will not at any time support the new tax on food or on books.The Democrats had expressed to all sectors of the arts community that they would ensure that they would protect that sector from what was a known adverse impact. They committed themselves to review a GST impost on arts organisations. In discussions with organisations like the National Association of Visual Arts they made plain that they would not facilitate the passage of legislation which would have the undisputed consequences that would occur. Of course, we know now that the Democrats have agreed to pass the GST legislation without any measures which go to effectively ameliorating the impact on the arts. There has been a clear failure to honour that pre-election pledge to protect the arts.All that was said in relation to the arts was that, as part of the Nugent inquiry, there would be a review of measures which might be necessary to address some of the adverse consequences of this decision and a package of measures designed to pay financial assistance to Australian publishers. Let us take each of those issues separately. Firstly, the Nugent inquiry is an inquiry into major arts organisations. It was not established to look at the plethora of small and medium arts organisations or indeed the work of individual artists, craftspersons, musicians and the thousands of people who are involved in associated areas.Those small to medium organisations have always struggled, and individuals who have been involved in the making of artwork have always been specially and advantageously treated by the present taxation arrangements. For example, visual artists who presently acquire framing materials, paint materials and the like for the production of artworks can receive those free of sales tax. It makes plain and evident commonsense that, if you introduce a GST without compensatory measures, costs to those artists increase and their capacity to compete effectively and to sustain their art practice is reduced. This is a repeated story right across the field.The Nugent inquiry is not going to do anything for the vast bulk of people who are involved in the arts in Australia. If it does recommend any changes, it will be with regard to the funding of major arts organisations. That is not unimportant because, again, there was undisputed evidence before the Senate committee that, without a compensatory package, a number of the major arts organisations would cease to trade at a profit. That would mean that we would lose some of the companies which have become synonymous with the vibrancy of our cultural life. But we must remember that those arts companies that the Nugent inquiry is looking at are, effectively, so far as the arts are concerned, the big end of town. They are the large arts companies.It is a matter of some irony that, during the last election, the coalition placed advertisements in New South Wales exploiting a community sentiment that the Labor Party was associated with the elite arts. That was a cheap and malicious piece of advertising which has been disowned by the Minister for Communications, Information Technology and the Arts and the Minister for the Arts and the Centenary of Federation, each of whom say sonorously that they did not know of that proposed campaign and did not endorse it.Plainly, however, there was a willingness during the election campaign for the down and dirty hard men of the Liberal Party to seek to take advantage from a perception that Labor had favoured what they called the elite in the arts. It is ironic that now the only group that potentially can receive any compensation out of the measures that the government has agreed to are the major arts organisations that are subject to the review the Nugent inquiry is carrying out.The small to medium companies, the individual art entrepreneurs that make up the vast bulk of those practising in the arts in Australia and community arts organisations—and community arts organisations are usually the forgotten section of the arts—all of those people, the organisations, the interests and the jobs that are represented, will not get any consideration. Their costs will go up. Their audiences will decline. Their ticket prices will have to increase. Many will cease to exist and join the number of companies which have had to close during the period when this government itself imposed stringencies in terms of the funding it made available through the Australia Council.But what has happened to date will be a minor inconvenience compared to the loss of vibrancy in the arts sector that will be experienced henceforth. That is a very serious matter. There is anger amongst those who practise in the arts or who are part of the committed audience of the arts that this has been allowed to happen, and it is virtually unanimous.Secondly, in the arrangements the Democrats and the government have made, they have betrayed one of the clearest commitments that was given by the Democrats prior to the last election with respect to taxation on books. Books are not simply part of the arts; they are also significant in terms of literacy and education. Before the recent arrangement whereby the Democrats essentially became a coalition party with the government, the Democrat leader, Meg Lees, was prepared to join community campaigning against a tax on books.Senator Lees was pictured in newspaper articles, together with a number of prominent Australian writers and representatives of arts organisations, stating that education could not be regarded as being tax free so long as a tax was imposed on the prime requirement of education—books. Unfortunately, we have seen a betrayal of not only that commitment but students and their families as the Democrats caved in to the Howard government's GST on books, school uniforms, private tuition, software, public transport and student union fees.All of those increased costs will hit students and their families, but Meg Lees not only does not seem to care but is prepared to abandon what was the most explicit of commitments not only delivered in her election speech benchmarking the tests that the Democrats would apply to any proposed tax reform measures but also repeated after the election in public advertisements and campaigns. She joined with groups like the Australian Association of Authors and the Australian Publishers Association in condemning the thought of imposing a tax on books.There was a lot of merit in the Democrats resisting a tax on books. Even where a GST has been applied in other countries, books have been almost universally excluded. In most other OECD countries with a similar system to the GST, books are zero rated or taxed at a lower level, recognising their importance within the community. A tax on books is cultural barbarism. The money now offered to support the book publishing sector is, at best, a third-rate half-measure. I do not think anyone disputes that. There has really been no defence of that measure in terms of how it will deal with the situation which will see book prices rise. Book prices are expected to rise about eight per cent. If book prices rise about eight per cent, international experience is that sales fall by the proportionate amount—an eight per cent increase in price leads to an approximate eight per cent decrease in sales.But, most importantly, it also coincides with a period when Australian publishing is facing very significant competition from online publishing and the production and sale of materials overseas. So what was beginning to develop as a very thriving, strong local industry is likely to be undermined by cost pressure with a flood of cheaper imports. Imports can be purchased online, many of which will no doubt evade the application of the goods and services tax. This is not an acceptable outcome.The Australia Council is caught up in the middle of this. The Australia Council made submissions to the Senate inquiry setting out the devastating impact that the arts would face, but of course the Australia Council cannot be as political as we can be in this debate. It is the government body charged with responsibility for providing grants advice and funding to artists and art organisations in the community. It discharged that responsibility by providing professional and accurate advice to the Senate committee, advice which has not been disputed.Most recently, on 20 May, it sent out an information bulletin advising its membership that the council is still meeting, identifying major areas of importance in relation to taxation and the arts, exploring the status of grants in relation to the GST, developing specific art form models and case studies on how the new tax system will impact, et cetera. Once these models and information become public, it will simply confirm what we already know—that there is going to be a major shake-out in Australia's cultural industries.There are still, of course, unanswered questions. The Australia Council does not know how the grants that are provided to art organisations will be dealt with in relation to the GST. One would have thought that a fundamental question of that nature would have been resolved a long time ago, but it is very plain that the arts are a low priority for this government. Indeed, regrettable as it seems, it appears that the government may believe that there are votes in not supporting the arts, that there is actually some community resentment directed towards those who are leaders in our cultural industries. So if you play along with that you do not suffer any adverse electoral consequences by being prepared to be indifferent to the future of the arts in Australia.If that is the case, I think it is a wrong assessment of the Australian community. The Australian community is proud of the cultural renaissance we have seen over the last 20 years. But remember where we came from: 20 years ago, we had a country which was bereft of the kind of information, entertainment and cultural activity that we now are the beneficiaries of. We did not have an Australian film industry until Barry Jones and Phillip Adams persuaded the Whitlam government to get behind the renaissance of the film industry. We really did not have a publishing industry until it took off over the last 20 years. Our visual arts have had individual artists with strength, but the vigour and depth of that market has only come recently. The recent commitment and growth that has been occurring in a whole range of areas—dance, music, cross cultural performances such as the Bangarra Dance Theatre working with The Australian Ballet—is something to be proud of. If we lose that, Australia will be a much lesser place—and we are set to lose much of it.10:52:006556Hull, Kay, MPMrs HULL83ORiverinaNP10—Since being elected to the very privileged position of member for Riverina, in the past eight months I have welcomed the funding of many improvements provided by this government that has assisted my electorate in times of great difficulty. For far too long the road system west of the Great Dividing Range has been neglected. It is gratifying now to see that this government is redressing this imbalance.The Newell Highway is a major inland tourism and freight route between Melbourne and Brisbane and is a vital connector in the national highway network. It passes directly through the centre of West Wyalong and it is its lifeblood. The allocation of $1.2 million to improve the first 3.3 kilometres of a nine-kilometre flood damaged section was very warmly welcomed by the West Wyalong community, along with a $500,000 road service rehabilitation of the main street. West Wyalong is at the base of my electorate and it is forgotten most times. However, it is my intention to ensure that this wonderful community is allowed to prosper in a very difficult economic climate.In addition, works were undertaken in and around Narrandera on the Newell Highway and Sturt Highway. The sum of $1.6 million was allocated to rehabilitation of surfaces and much needed turning bays, and essential work was undertaken to remove spans of railway viaduct so that high vehicles did not hit them. There was $2.7 million allocated to the Sturt Highway, including $500,000 for a much needed roundabout at the intersection of Kooringal Road and the Sturt Highway in Wagga Wagga. This roundabout will greatly improve the safety of the residents and the highway traffic.It was a great occasion when around 350 people joined the Minister for Transport and Regional Services, John Anderson, for a promotional launch of the Kidman Way. This project was commenced by National Party member the Hon. John Sharp in his capacity as Minister for Transport. The project has had up to $21 million spent on it to date. It opens a direct freight route from the Riverina food bowl to Darwin and to Asia. It provides infrastructure support and greatly assists regional tourism. The commitment to regional and remote Australia was warmly applauded when the minister announced that the Howard-Fischer government was diverting 90 per cent of direct Commonwealth road funding away from metropolitan Australia and into the country. This is long overdue.Telecommunications are vital for industry to be able to compete and to allow for equity in education and employment. Hence, the announcement that the government will amend the universal service obligation to provide a digital data service of at least 64 kilobits per second to all Australians on demand was a great relief. The ability to have a high-speed Internet service, regardless of location, is critical to the success of rural industries. For those remote areas currently unable to access a 64-kilobit-per-second ISDN service, a satellite downlink service with a 50 per cent subsidy for the cost of the receiving equipment will mean that people in rural and remote areas will be able to download data from the web at the same speed as those users in the city. This is of great benefit to kids in rural areas, who are trying to achieve an education that is part-way equivalent to that of children in the city.The inability to access SBS in my electorate has generated many constituent visits to my office. The demand for SBS service is strong in much of my electorate, for example, in Junee and Griffith. This service was promised by the Labor government back in 1982. In anticipation of this commitment, donations were raised to establish a rebroadcast facility to service part of the Griffith community. The Griffith City Council has continued to commit itself to the support of local SBS TV by paying for general operating costs. I doubt that there would be another region in rural New South Wales that could boast the multicultural diversity of the Griffith region. However, it is only now, through the proposed sale of the additional 16 per cent of Telstra, that my electorate will receive an expansion of SBS services—something that is very common in most other areas. This is just another abandoned promise to rural areas by the former Labor government. However, it is my hope now that the Minister for Communications, Information Technology and the Arts will honour this commitment to my electorate, regardless of the status of Telstra.Provision of quality child care in rural and regional areas is critical in helping parents balance the demands of work and family whilst dealing with the tyranny of distance, little or no public transport and a great lack of infrastructure. I applaud this government for providing some assistance in the past few months in this area. Recently I announced essential child-care funding, with 90 new outside school hours places in Narrandera, 26 full-time child-care places in Hay, 20 places in Hillston, 40 places in Junee, 20 places in Wagga Wagga and five vacation care places in Leeton. There were capital upgrading grants also for Griffith child care and Wagga Wagga child care. Schools were also winners, with St Francis de Sales Regional College at Leeton receiving in excess of $708,000 for construction of new buildings, and St Joseph's Primary School in Wagga Wagga receiving almost $67,000 for building upgrades.It was with great excitement that I was able to announce $5.6 million for capital works at Kapooka—the home of the soldier—for induction training facilities associated with Army Reserve recruit training alongside Regular Army training. This announcement above all gave the city of Wagga Wagga a giant confidence boost at a time when financial institutions are hesitant to fund home loans because of the uncertainty of the future of the defence forces in the city.Research and development was assisted with a $1 million grant to the rice growers cooperative in Leeton. This project is to use novel, commercially viable technology to manufacture value added products from rice hulls and recycled polymer waste. This $1 million grant will add to the contribution that rice growers already make to employment in the Riverina. They currently employ around 1,150 people in Leeton, increasing to 1,350 people throughout the region. They generate $45 million to $50 million in direct wages into Leeton and around $75 million in wages into the region. Rice growers are an industry of excellence. In terms of value adding, they are the absolute masters. Everything that is exported from rice growers has provided local jobs, added to the local economy and the regional economy, and benefited Australia. This grant will only enhance those benefits and complete those benefits of export.The Regional Assistance Program funding grants of almost $255,000 were of great assistance in attempting to solve the very critical skilled labour shortage we currently face in Riverina, along with many other great regional initiatives developed in conjunction with the area consultative committee. They are performing great deeds in order to resurrect those areas in regional Riverina that have been impacted upon over many years.The government's Rural Plan initiative demonstrates our commitment to work beside rural and regional communities and industries who want to seize the available opportunities in the Riverina. The Rural Plan offers small communities the opportunity to set their own goals and develop the capacity and the strategy to enable them to achieve them.The Riverina citrus growers are also being assisted to develop management practices to ensure that they are competitive internationally under the Citrus Market Development Program. The launch of the rural transaction centres' first round of funding created great interest in the Riverina, with the prospect of the return of basic services such as personal banking, phone, fax, post and Medicare Easyclaim into smaller rural towns and villages. This typifies this government's commitment to redress these inadequacies in rural Australia, and I applaud this government for its initiative.I now look forward to the benefits that the 1999-2000 budget will bring to the Riverina. This budget contains numerous facets that will indeed benefit us. It is a particularly region friendly budget. It will certainly not solve all of the problems that we face; however, it does something that Labor in its 13 years of rule never ever did—from the heart, it recognises that these problems do exist and that strategies need to be actioned in order to relieve the plight of rural and regional Australia.In an article in the Sydney Morning Herald on 7 June headed `Heart ripped out of country towns', it was quoted that the 12 postcode areas with the lowest personal income are all in the country and the five highest are all in the city—in Sydney, in fact, including western Sydney. Yet the moment the Labor Party gets a chance, it sticks the boot even further into our country people and opts to abolish a country seat in New South Wales in preference to establishing another seat in western Sydney, one of those areas with high incomes. This move put up by Labor in the submissions on the redistribution in New South Wales makes it totally unrealistic for any member to adequately service their country constituents. I guess that is true to form on Labor's past track record in country issues: `Don't service country people. Just abolish a seat, pick up another one in Sydney and service them. Don't worry about country people; they don't need servicing.'This blue book titled Regional Australia: Meeting the Challenges has many markers in it. Each page contains descriptions of benefits for rural and regional areas and my Riverina electorate. One of the major issues is most definitely health. With the New South Wales Labor government responsible for a rapidly decaying system, extended waiting lists and critical nurse shortages, this government's budget has paid particular attention to redressing this crisis by delivering great health initiatives in the establishment of a rural clinical school in Wagga Wagga. This $13.2 million will establish a link with existing educational and health resources, such as universities and hospitals. It is part of an overall policy designed to ultimately redress the shortage of medical practitioners in rural and remote areas.Further training for those remote nurses will support first-line emergency care courses in remote locations. It will enable nurses to better assist victims of emergencies and trauma who are remote from modern lifesaving equipment and backup emergency transport. This will be particularly welcome in areas in my electorate such as Hay and Hillston.The provision of $1 million each year for the next four years to provide medical students from rural areas with scholarships to meet their accommodation and other support costs while studying will dovetail very well with the initiative of the rural clinical school. Complementing the scholarships is the $2.5 million Rural Undergraduate Steering Committee Program, with the key objective being to introduce fundamental cultural change in medical schools so that rural practice is seen as a positive career path. In addition, this government has commenced the Rural and Remote General Practice Program. This $65 million over four years is intended to improve the recruitment, attraction and retention of GPs in rural and remote areas and thereby increase access to primary medical services for rural and remote residents.And there is more in this blue booklet. This government will provide around $43 million over four years to implement an election commitment for the provision of retention payments for long serving rural GPs. Retention payments will provide an additional incentive for doctors to continue to practice in rural and remote areas. This funding will assist communities to hold on to their long established GPs. This little blue booklet also describes the provision of an additional $7.5 million for the defence base at Kapooka in Wagga Wagga. Assistance will be provided for the Road Safety Black Spot Program, the Food and Fibre Chains Program and much, much more.In my maiden speech I declared that, on travelling around my electorate during the campaign, the most urgent issue was undoubtedly health. In the state election held in March, the most urgent issue was undoubtedly health. I stand here today extremely proud to be part of this government. I congratulate the Minister for Health and Aged Care and the Minister for Transport and Regional Services for taking the time to do a regional tour to see first-hand the problems we are facing in rural and regional areas and then to present a budget that will put in place the mechanisms to begin addressing the problems that for so long have been ignored. Unlike the state government in New South Wales, which currently has hospital bed closures due to the critical shortage of available nurses and hospital waiting lists longer than they have ever been, the federal government is prepared to try to address these problems.This government is about restoring rural and regional areas' sense of belonging. It is letting them know that we are listening and that we value the existence of rural and regional Australia. We will not decide to just look after Sydney seats; we will look after country areas because they are valuable in the formula of progress. It appears the message is now very clear: for Australia to prosper we must nurture our regions and we must nurture our producers. We must not let them fall into decay as they did under 13 years of Labor rule. I applaud this government for the real effort that it is making and for the real effort it will continue to make.11:08:006559Sercombe, Bob,MPMr SERCOMBEQK6MaribyrnongALP00—When it comes to the real national priorities of jobs, national savings and innovation, this government has missed the mark in this budget. The government has been obsessed with that dog's breakfast of a tax, the GST. Many of the budget assumptions are already falling apart as that particular tax—the government's obsession—continues to erode them. The budget was premised on the assumption that the GST would pass with no compensation additional to that which was originally announced. That assumption has clearly now gone. No-one in the Australian community really believes that, if the GST legislation were to pass, the GST rate would not increase in the future. No-one believes that the compensation package will last. No-one believes, ultimately, that the food exemptions will last.The GST package now involves a permanent fiscal loss, starting at around $6 billion in 2000-01 and rising to $9 billion in 2002-03. What has been gained by this erosion of the fiscal surplus? Not innovation and not building infrastructure but rather a quite unfair tax. Judging by the biography of Ronald Reagan's Treasurer, even the extremely conservative Reagan Administration in the United States thought the GST was an unfair tax. It says:It is inequitable because the poor pay the same percentage of tax on what they purchase as the rich . . . It tends to create a big, expensive bureaucracy to watch over it . . . It is almost always represented as a short-term solution to a shortfall in revenue . . . It is also inflationary.On that theme, today's Financial Review reports that the Treasury Secretary, Mr Evans, conceded yesterday at Senate estimates that the GST could lead to higher interest rates. Really, so many of the assumptions on which this budget is based are unsatisfactory. The Victorian Premier, Mr Kennett—scarcely an ideological bedfellow of this side of politics—has raised the spectre of the alarming cost burden for business which could fuel inflation with the GST.Many other aspects of the budget are unsatisfactory. Terry McCrann, an economics commentator for the Melbourne Herald Sun—and once again a person who is scarcely identified with the Labor side of politics—in an article on 1 June headed `Beware the claw of bracket creep', said:John Howard is dead wrong. Bracket creep is going to get worse under his new tax scales.Even worse, it is going to hit hardest those very "battlers" taking home between $330 and $730 or so a week.This makes his and Peter Costello's betrayal of the great mass of middle Australia that much more distasteful.He goes on to discuss that in some detail. I refer honourable members to McCrann's article on the impact of the GST and why it really is a disaster for Australia.In government, Labor certainly had a substantial track record of income tax reform. The tax scales were reduced seven times. Those reforms and changes gave back substantially more to the Australian taxpayer than simply bracket creep. Labor is committed to addressing tax through our family tax credits policy which will deliver more for low and middle income families than the government's package. Our proposed measures involve only 40 per cent of the government's original GST package cuts to the surplus, and our proposal would add 10c to every dollar of income most people earned—from the first dollar earned.Tax credits are a sensible response to unemployment. They will encourage the move from the welfare sector to work by widening the gap between welfare payments and after-tax wages and will take pressure off wages by increasing family incomes. By way of illustration of the impact of this policy in action, whilst on our side of politics we welcome the living wage increase of $12, it is worth noting that, after adjusting that increase for taxation effects and changes to social security, for a single income family on about $23,500, it will mean only $1.74 extra in disposable income. Under our tax credits proposal, the after-tax and after social security effects would produce $45 per week for that same family. Under the current social security and tax arrangements, that would be equivalent to about $120-odd a week.Jobs are the most important priority for national life at the present time. The government has built its surplus by undermining many of the fundamental drivers of economic growth in its earlier budgets. Those drivers are education, training, research and development, and technological innovation. Those areas were savagely slashed in the first couple of budgets of this government. The government is now planning to compound the problem by running down most of the surplus by discretionary outlays that favour consumption rather than innovation.The rate of employment growth has been lower than it should have been and the work force participation rate is drifting down. Saul Eslake, Chief Economist of the ANZ Bank, was quoted recently as saying:The decline in measured unemployment since late last year has been driven largely by the decline in the participation rate rather than by employment growth.In describing the labour market at present, I would add to his comment the increasing casualisation of work. Only 43 per cent of jobs created during the time of this government have been full-time jobs, as distinct from 60 per cent during Labor's last three years.We also note the absence of appropriate measures to address supply side issues in the labour market. There have been massive cuts to labour market training programs over the last three years. That is alarming in terms of the long-term prospects for our economy and for jobs growth. Over the last seven years, average economic growth in Australia has been about 4¼ per cent per annum. On average, it was certainly higher under Labor than under the conservatives. In the last three years of Labor government, some 18,000 jobs were created per month, whereas under this particular government only 12,000 jobs are being created per month. It is certainly worth noting that under Labor the participation rate in the work force continued to rise. That is not the case with the present labour market.The government has disregarded the quality of growth, letting intellectual and physical capital slide through its policy approach. As I said, it has disregarded skills development as a fundamental driver of economic growth. The government has also paid less attention than it ought to the regional dimensions of unemployment. The government has allowed growth to be sustained by consumption rather than by investment or net exports. It has attacked the driving forces of quality economic growth and jobs growth—education, research and development, and technological innovation.Australia needs initiatives to encourage start-up and venture capital through changes to allow capital gains tax exemptions to US pension funds in partnership with Australian investors. There is almost nothing in this budget about attracting venture capital to Australia. Australia needs to lift the cap on and widen the definition of infrastructure for the purposes of access to the infrastructure rebate, particularly for regional development.However, in terms of its priorities, Australia needs to pay great attention to the need to reverse the decline in household savings and the increase in household debt. In March 1996, the household savings ratio was 5.9 per cent. It is now only 0.8 per cent—an all-time low in Australian history. During the same time, household debt has increased from 74 per cent of gross disposable income to 90 per cent—another all-time high. Consumption-led growth on a higher leveraged household sector is simply not sustainable as a basis for economic growth into the future. The answer to this debt trap is a renewed attack on unemployment and through superannuation initiatives. Superannuation requires a balance of incentive and compulsion which recognises the need to introduce some flexibility for people contributing to superannuation through limited access for purposes such as education and training during their lives.The government has no strategy to achieve higher savings, no strategy for foreign debt and no strategy for dealing with the widening and increasingly alarming current account deficit. It has no strategy for Australia to maintain its education and innovation strength—to be the clever country. After three years of cuts to education, training and innovation we have an alarming situation. Commonwealth government investment in education, training and research has dropped from three per cent of GDP in 1995-96 to 2.4 per cent in 2000-01.Commonwealth investment in science and innovation has dropped from 0.75 per cent of GDP in 1995-96 to 0.61 per cent in 1999-2000. Cuts to the R&D concession from 150 per cent to 125 per cent have had a significant effect on our capacity to sustain economic growth into the future. Business expenditure on R&D has fallen 7.4 per cent in the 1996-97 financial year. That is the first fall in 20 years. Australian Bureau of Statistics estimates for 1997-98 indicate a further eight per cent fall in that year.On business research and development, Australia has dropped to 19th of 24 OECD countries in science and innovation expenditure. The Productivity Commissioner has noted that the present 125 per cent R&D tax concession provides little incentive for start-up companies and was paid to projects which would have been undertaken anyway. The government has cut science funding across the board. Department of Industry, Science and Resources research funding is down by six per cent, along with operating grants to universities and research organisations. Even in the one area that the government highlighted in its budget, biotechnology, we found that the budget was not so much about actual investment but about the mechanism to regulate the industry. Certainly this is an important consideration but it is hardly the substance of the matter.In summary, the budget really is disappointing. It fails to provide a strategic vision for Australia's future, sustained higher levels of growth and jobs growth and, consequently, is a budget of missed opportunities. It is a budget that alarmingly, I believe, ignores the fundamentals for sustained growth and development of Australia into its future.I also want to take the opportunity in this speech on the budget to talk about an area where I believe very significant opportunities will arise for Australia if we act quickly. During April and May I visited the Balkans region, which of course has attracted very considerable attention throughout the world because of the crisis in Kosovo at the present time. I visited Macedonia and Bulgaria, as well as Turkey and Greece, during that period. Australia right throughout that region does enjoy a very high degree of credibility. That region is the original home of a very significant number of people and families who have now made Australia their home and who have contributed greatly to our economy and our society. I think there is quite a strong sense of identification with Australia. Australia is recognised as having very considerable skills in relation to infrastructure projects in difficult terrains and in difficult circumstances. Very importantly, in the eyes of many of the governments of that region, Australia does not carry some of the political baggage that perhaps Western Europeans and North Americans carry.In the future when hopefully, sooner rather than later, peace is restored to that region, there will be massive reconstruction tasks required for the region—absolutely massive—on a scale probably approaching some aspects of the Marshall Plan in Western Europe of the post Second World War period. If the Western world generally does not seriously address the need for fundamental economic reconstruction in that region, it will fail dramatically, after events of recent times, to address some of the fundamental and root causes of problems in the region, which will go on and on into the future. We are aware that this region, during the course of this century, has contributed massively to destabilisation of world politics. Fundamentally, the West has an obligation to embark on a major reconstruction program in the region once the current political and military crisis is over. Australia ought to be, in light of its very considerable strengths and reputation in the region, positioning itself to take advantage of those opportunities when they arise.The government has agreed in the budget—and we welcome it on our side, as we have called for it for quite some time—to establish an embassy in Zagreb, Croatia. I note we are also very belatedly opening a trade office in Bucharest in Romania. But much more needs to be done. Certainly during my visit, particularly to Bulgaria, which is not at this stage a significant trading partner of Australia, there were quite critical remarks made by Bulgarian officials at a fairly senior level about the absence of attention they believe they receive from Australian officials to their overtures to look for areas for more intensive economic dialogue and economic cooperation.The opportunities are there. We do not carry the political baggage of a great many other countries in the region. We also have a very high degree of credibility. I believe that there are massive opportunities for Australian business and for Australian skills in the reconstruction process of that region if we can get the government to agree sooner rather than later—and, I would hope, rapidly—to the establishment of a unit, presumably within the Department of Foreign Affairs and Trade but maybe elsewhere, to look at coordinating information to Australian business and to liaise with governments of the region and with governments of the Western world, including the United States and other people in NATO. This unit will position us for the opportunities that will arise when inevitably peace is restored and a process of reconstruction of the region can occur. I take this opportunity to strongly urge the government to pursue that matter with some vigour.11:26:006563Baird, Bruce, MPMr BAIRDMP6CookLP10—It is my pleasure to rise to speak on the budget. There is no doubt that the government deserves congratulations, particularly the Treasurer and the Prime Minister, for putting together what is an outstanding budget. If we look at the context in which this budget has been framed, it really highlights the very strength of the budget. Firstly, the whole region in which we find ourselves placed, the South-East Asian area, has been through the most dramatic downturn in its economic performance over the last 2½ to three years. In fact, of all the countries in South-East Asia, the only country which has positive growth is China; the others either have negative growth or are in recession. Our largest trading partners, countries such as Japan and Korea, have experienced a substantial downturn. Countries such as Korea, Thailand, Malaysia and Indonesia, which are major contributors in terms of the Australian economy, have been in a free fall situation.Given the fact that our major trading partners are experiencing such a significant downturn, the performance in terms of this budget on two levels is outstanding. I think the first factor is that we have a surplus budget. This is the third in three years. It contrasts with the last five years of the Labor government where we found that some $80 billion in deficits was rung up. People may ask: why does it matter in terms of having a deficit budget? This $80 billion means that future generations will have to pay for the levels of government assistance and government payments that occur today. That is why we on this side of the House are very proud of the government producing a surplus for the third time, a surplus of $5.4 billion. That is the first criterion for which the government should be congratulated—the budget is in surplus. We are paying our way. We are repaying the debt that was established by the Labor Party over the previous decade. The fact that we have $80 billion of debt is not insignificant.I think the second factor is the growth of the Australian economy. There is no doubt the Australian economy has been one of the star performers in the world economy. In fact, in terms of its growth rate over the past 12 months, it is outperforming the USA. Our 4½ per cent growth rate singles us out as the best performing economy in the whole of the Western world. The projection for the period of the budget is four per cent and the projection for next year is 3½ per cent. That is particularly impressive given the performance of our major trading partners, the other countries in South-East Asia.You have to ask: why is that the situation? Why has the economy been growing so much? Is it just a fact that the private sector is investing or is it because of some fundamental decisions that this government has made? The answer is, yes, the private sector has been investing and that is a reflection of their confidence in the current government and it is also a reflection of moving to a budget surplus situation, of repaying the debt, of contracting out and of using the Telstra proceeds to pay off our debt in the past. It is impressive. If you go out into the private sector, they will tell you about the confidence that is there. A lot of it is how people perceive the economy to be growing.There is no doubt, as the Prime Minister has said and other commentators have said, we stand poised for another golden period in terms of growth. Even today's Sydney Morning Herald talked about the incredible growth we have had over the past number of years. The Prime Minister has said that people talk about the fifties but we are experiencing today growth like Australia has never seen before. For that we—from both sides of the House and Australians all—should be very pleased and proud, particularly of the steps the government has taken to put the economy on a firm footing so that we can take advantage of that, so that our economy can move forward and we can, in comparison with other world economies, stand proud of what has been achieved.In terms of the actual framework of the budget itself, it is clear to see that the election commitments that were made at the last election were all delivered. I think that is pretty impressive, as we cast our minds back to times before. The previous Labor government promised before the election that they were going to deliver tax cuts that were l-a-w law. Instead of being l-a-w law, the tax cuts were totally ignored once they got into government. We have seen not only federally but also in New South Wales that Labor are great at breaking promises. This particular budget actually fulfils the promise. Perhaps this is going to be the new era when we see political parties at election time delivering on their promises. In fact, the previous Labor government, as we know, instead of reducing taxes put up wholesale sales tax by quite a significant amount.In terms of the basic parameters, we delivered on election commitments and we established an economic framework which is going to assist many young families. In my own electorate we have seen this most incredible situation. We have a budget in which we have the economic context of the lowest inflation rate for 30 years, the lowest interest rate for 30 years and the lowest employment rate for 10 years. In my own electorate of Cook it is quite impressive. I had the advantage of having the Treasurer come to my electorate two weeks ago for a very successful function. We were talking to him about the unemployment rate in the electorate. Mr Deputy Speaker Quick, I draw to your attention that the unemployment rate in my electorate is now 2.1 per cent.Mr Sercombe interjecting—MP6Baird, Bruce, MPMr BAIRD—It was the government that did an outstanding job for which the electors of Cook are very pleased. We are delighted with the fact that we have such a low unemployment rate—2.1 per cent, amongst the most impressive in the whole of the country, an outstanding performance. In December 1997 it was three per cent. Then it went up to 3.9 per cent. In March 1998 it went down to 3.1 per cent. In September 1998 it went down to 2.7 per cent. Now it is down to 2.1 per cent. That is an impressive performance. The people of Cook are delighted with this government, as we have seen by the way in which they voted at the last election.The budget also included increased services to rural Australia. It built the national education and research capacity facilities even further. It wanted to keep Australia strong in terms of keeping mortgage rates down. In my electorate mortgage payments are a significant part of the costs for many young families that are paying off their homes. Having the interest rates so low is a great plus because they will not see the rampant inflation that they saw during those heady days of Labor when interest rates rose to 19 per cent. It is boom time for investment in housing in the Sutherland shire, particularly in my electorate. There is very strong movement for people to own their own home, to buy apartments, et cetera. Anybody who wants to come to Cronulla can see evidence of that. The people of the Sutherland shire and the people of Cook recognise what is happening with the economy.The budget is not simply a matter of economic growth and economic parameters; it is also about human factors, the human dimensions of a caring government. It is particularly interesting to note that the level of family assistance has risen quite significantly in this budget. Introduced in this budget has been an amount of $2½ billion in extra family assistance each year. Associated with the introduction of the new tax system, from 1 July next year, over two million Australian families will qualify for additional assistance—at least $140 per child; and in a one-income family with a dependent child under five, $490 per child.In the health and medical area, great assistance has been given to people to encourage them to stay in the private health system. This will relieve the pressure which currently exists on the government health system. Also, the one-third rebate that applies is an important step in achieving lower premiums for those who currently are members of health funds and it will enable older Australians to join health funds over the next 12 months and receive those lower premiums also.This is a government that is concerned also with older Australians. Having a number of nursing homes in the electorate of Cook, we are very pleased that the budget provides funding of $228 million for an enhanced primary care package to encourage greater self-reliance and assist people to stay in their own homes and manage their own conditions. Also, a significant additional amount has been made available to help prevent injuries to elderly people from falls. An amount of $82 million has been allocated to provide respite care for those who look after elderly people and those who suffer with dementia and other cognitive and behavioural problems.There is also an additional $210 million for people with hearing difficulties, and a further 67,000 Australians will be assisted each year as a result of this program. I had the pleasure of opening an excellent government hearing centre in Hurstville. Undoubtedly, that centre will enjoy the enhanced funding which will allow more and more older Australians to participate in such a program.This is a budget going not only to economic parameters but to welfare in the form of assistance to the aged and assistance to families. As a government, we believe that one of our primary responsibilities is to put families high on the agenda—and I am sure that you would hold this belief too, Mr Deputy Speaker. We are concerned with keeping families together, with providing the right assistance to those in our community who are bringing up young families. We are concerned with making sure that they get the necessary additional assistance—and I am very proud of the fact that this budget does deliver to families.Also, this budget assists roads. Roads may not have the glamour of some other areas in terms of portfolio but, nevertheless, they are an essential part of the economic infrastructure of our country. The fact that the government has allocated an additional $195 million over four years to upgrade the national highways system is significant. The upgrading of our highways will mean fewer deaths, improved travel conditions and lower costs for those trucking companies who use them. Bridges will be upgraded also. In particular, this will mean an improvement in safety standards on our roads. That initiative will be well received in all areas of the country—and not the least in my electorate.An area in which I was involved before coming into parliament was tourism. The budget this year has allocated an additional amount for tourism. Some $90 million is being provided, first of all, for the Australian Tourist Commission, which is important in promoting the country offshore. But appearing for the first time is assistance in the amount of $8 million for domestic tourism. In the past, in this place, parliaments and governments of different persuasions have only seen themselves as being responsible for international tourism, attracting international visitors to this country. But over the past few years, while tourism in the form of Australians going offshore has increased between eight and nine per cent a year, our domestic tourism has been declining at a rate of one to two per cent. People are using their frequent flier points; they are going to Bali, to Phuket and off to the USA. As a result, Australian domestic tourism suffers.So in this budget for the first time a domestic tourism committee is being established. An amount of $8 million is being provided this year, with other state governments assisting by putting in a similar amount. In this way, we will have a focus on the Australian tourism industry which will enable us to find out what the problems are, what we need to do to stimulate people to think of staying in their own country. This provides jobs. There are more jobs provided in the Australian tourism industry than in any other industry in the country. Tourism is the second largest provider of foreign exchange earnings. These initiatives are important in that they show the breadth in which the government has expanded its assistance overall.In my electorate home mortgages are important, as I have mentioned. Interest rates are now at the lowest levels they have been in 30 years, as I also mentioned before. The average Australian family with a mortgage is saving over $320 a month as a result of interest rates falling under this government. This is good news for the some 8,500 families currently paying off their homes in Cook. Considering the median local rate of home loan repayments is just over $1,000 a month, that puts my electorate in the top nine per cent of Australian electorates. Keeping mortgage rates low is particularly important to home buyers in our region. This means that more young Australians can buy homes and more families can pay the mortgage to keep their homes. Good economic policy is good family policy.Then, as I have mentioned, there are the jobs. There are the low unemployment rates we have in the Cook area; the fact that the government is providing additional funding of $3.6 billion for employment assistance to boost employment growth; the fact that it is providing up to 860,000 places in employment assistance for unemployed people in each of those three years.For job seekers generally, there is Job Network. Job matching service placements will increase to 345,000 to 400,000. Job Network, Jobsearch, training assistance will rise to 90,000. Job seekers with entrepreneurial ideas will be assisted. The highly disadvantaged job seekers will have further assistance. Long-term unemployed access will continue with intensive assistance. For young people, the highly successful Work for the Dole scheme is being extended. That has been a successful program. Councils and other groups are putting in recommendations, and the Work for the Dole scheme is being implemented in my electorate.This budget is not only about economic parameters and assistance to families in terms of home mortgage rates, et cetera, it is also about being sensitive to the environment. In the Cook electorate we are blessed with a wonderful environment that includes incredible waterways and beaches, and we are very sensitive in terms of the environment. The initiatives to protect our urban environment and oceans are key elements of the environment portfolio budget allocation of $164 million. That allocation is very pleasing to see. It will complement the provision of a further $250 million in additional funding for the Natural Heritage Trust—and that will be significant.Over the next six years, investment in health and medical research will increase by $614 million. All of these things are important for people in the electorate of Cook. The issue of crime, for example, is a significant one in my electorate. Like other areas around Australia, we are seeing a growing crime problem, especially when dealing with a transient population. One segment of Cronulla has a quite transient population, and the number of young offenders continues to rise. So I am particularly pleased that the funding for the young offenders pilot program, targeting young people who are at risk of offending in the community, has been increased substantially and will be extended overall.In response to factors that contribute to crime, a further $9 million of assistance is being given to families to prevent marriage and family breakdowns; additional funding of $11.4 million over four years will be given to community based services to support families coping with illicit drug use; and more assistance will be given to carers of people with disabilities and respite carers, as I have mentioned.There is the issue of homelessness in our city. It is always a blight on any community to have a number of homeless people in the area. An allocation of some $60 million will go to fund some 100 services in the private sector; $25 million will go to the partnership against domestic violence initiative; and $7 million is earmarked to extend the Supported Accommodation Assistance Program. Also, there is the issue of education. An additional amount of $77.7 million is being allocated to strengthen the teaching profession, in assistance to the Catholic school system and for the issue of assistance to smaller independent schools.All these measures show that this budget, right across the board, places the government in a strong position in terms of the strength of the economy, especially when compared with our neighbours and the rest of the OECD countries. With assistance being given right across the board to families in terms of lower mortgage rates, hospital and medical care and assistance to schools, it is an outstanding budget—and for all this to have been done with a $5½ million surplus is an outstanding achievement.11:46:006568Cox, David, MPMr COX83UKingstonALP00—The budget has been accompanied by a certain amount of hyperbole from the Treasurer and the rest of the government about both economic growth and the surplus. However, I think it is appropriate here to sound a cautionary note. The first sentence of statement No. 1, fiscal strategy in budget paper No. 1, says that `the 1999-2000 budget demonstrates the government's commitment to maintain the budget in surplus while Australia's economic growth prospects remain sound'. The key word is `while'—while Australia's economic growth prospects remain sound. There are two fundamental questions here: the first, how robust is Australia's economic outlook; and the second, how solid are the current forecasts of revenue?Australia is operating presently with a current account deficit of around six per cent. A large contributing factor is the high level of domestic demand which is sustaining a higher than expected growth performance. A current account deficit of more than six per cent has only occurred three times before in Australia's economic history. The first time was in 1986 and resulted in a currency crisis. The second time was in 1989-90; that was corrected with monetary policy, which resulted in a recession. The third time was at the beginning of 1995; that was, however, controlled without crisis by intelligent use of both fiscal and monetary policy. Let us hope that this high current account deficit can be moderated without crisis.It is certainly the case, as was demonstrated in 1995, that, as a result of the economic reforms of the last Labor government, Australia is much less vulnerable to external shocks than was previously the case. However, personally, I still find it hard to be sanguine about a six per cent plus current account deficit after those experiences. To me, it implies a significant degree of risk that there could be a rapid market response with implications for the real economy and, flowing from that, the fiscal balance. The question of what `while economic growth remains sound' means depends on whether and how far economic outcomes diverge either up or down from the budget forecasts.One of the reasons for the early election last year was that the government was, at the time the election was called, much more concerned about the outlook for growth this year than it seems to be now. Nevertheless, the government has forecast a slowing in the rate of economic growth to three per cent, and that means there will be little or no progress in reducing the unemployment rate. Most worrying is the fact that the government is not forecasting any major improvement in the current account deficit, so it will remain a significant threat and a constraint on future growth.To the extent that our outlook for growth is positive, it is predicated on an assumption that the world economy will be picking up in 2000, and that will result in some improvement in Australia's terms of trade. Statement No. 2 on the economic outlook contains a section specifically dealing with the uncertainties. Weighed against doubts about the sustainability of recovery in East Asia and Japan is the possibility that the US could continue to exceed expectations.Of course, US economic performance may not continue to exceed expectations. Treasury admit that the downside risk is a worsening of the current account deficit should the world economy not pick up. Treasury have failed to contemplate the effect on domestic activity of any increase in interest rates which may be necessary if the current account deficit—either the one we have at the moment or a larger one—results in a requirement to adjust monetary policy. Treasury are already expecting a decrease in the household demand, a decrease in domestic demand and a reduction in business investment. The downside risk is for greater contraction in activity and employment and a lower fiscal balance than the relatively benign set of forecasts presented in the budget suggests.That high current account deficit means this is not a good time to be loosening fiscal policy in the manner prescribed by the renegotiated ANTS package. The consequence of that is that people on high incomes will have a large lift in their disposable incomes and will be spending much more of that on imports. The surplus will be consumed more rapidly and the Treasurer may find himself looking at a much less robust fiscal outcome.On the other hand, we must also look at the upside risks. If growth is stronger than expected, particularly if a contributing factor is higher than expected United States economic growth and even a monetary tightening there, which would be combined with the impact of the government's loosening of fiscal policy with its raid on the surplus and some additional inflationary pressure, including from the GST, then pressure on the current account deficit will be higher than would otherwise have been the case and the monetary authorities may decide that interest rates have to go up. This concern was raised in a Senate estimates committee last night by the Secretary to the Treasury. If that monetary tightening came to pass, it would impact on growth and on the fiscal position in the projected period.In his post-budget Australian Business Economists speech, the Secretary to the Treasury, Ted Evans, said:In recent years, we have not been asking monetary policy to address the current account problem. Rather, emphasis has been appropriately put on the role of fiscal policy—the generator of budget surpluses and contributor to national savings—to do that job, leaving monetary policy free to concentrate on its objective of maintaining low inflation without undue constraint on growth.This is a very desirable balance in the use of monetary and fiscal policies which may hold part of the answer to our longstanding current account concern; it is also part of the framework which underlies the judgments on medium term growth potential.The simultaneous achievement of sustainable CAD outcomes and low and stable inflation would be put at risk by a complacent attitude to the use of fiscal surpluses. A breakdown in the performance of one policy inevitably compromises the other.My fear is that the complacent attitude to the use of fiscal surpluses is exactly what we are about to see with the dramatic loosening of fiscal policy provided by the Howard government's so-called A New Tax System. If fiscal policy is the chosen instrument to control the current account, then why is the Howard government contemplating a large fiscal loosening through its tax package when the current account deficit is already at an historically high level? The second question is: how large is the surplus on which this fiscal loosening is being built?Let us look at how the Treasurer got his $5.4 billion surplus. The first thing I noticed was that there has been a 43.2 per cent increase in dividends from government business enterprises. That is an increase of $1.8 billion in one year. After all the privatisations, there are not very many of these assets left. So there are only two major sources of revenue—Telstra and the Reserve Bank of Australia. The estimates of their dividends contained in the budget are determined prospectively by the government after some discussion with the Chief Executive Officer and the Governor. When there is a 43.2 per cent increase in the dividends in one year, it is justifiable to question whether those discussions have not been conducted with a view to achieving some cosmetic budgetary objective.Telstra is such a strong organisation that it would probably cope with this kind of extra demand, particularly if it sees the prospect of losing the Commonwealth fairly shortly from its share register. Similarly, the Reserve Bank is a large and profitable organisation. But even it cannot provide a continuous source of above average dividends except by running down the nation's foreign exchange reserves. There is obviously a finite limit to that. Paradoxically, in those years when the value of the Australian dollar drops, there is a short-term fiscal benefit. That is because foreign currency reserves which have been sold were valued in the balance sheet at their buying price—a smaller number of Australian dollars than their selling price. Because of the devaluation, a larger number of Australian dollars and therefore a larger profit is booked which can be used to pay a higher dividend and improve the fiscal balance.The 43.2 per cent increase in dividends from government business enterprises amounts to about $1.8 billion. Taking that $1.8 billion off the fiscal balance of $5.4 billion leaves $3.6 billion. That is a very modest improvement on the estimated 1998-99 fiscal balance of $3.1 billion. There are always extraordinary items in any budget or set of financial statements, but I am making a case here that suggests that there has not been much, if any, real growth in the size of the surplus. With the large fiscal loosening provided by the ANTS package, the fiscal surplus is projected to rise to $7.2 billion in 2000-01. However, the underlying cash surplus next year is projected to be only $3.1 billion. The principal reason for that discrepancy is the bringing forward of the pay-as-you-go system under accrual accounting, although the tax is paid in subsequent years. That suggests that after the introduction of the ANTS package the government will not be left with much latitude as far as the surplus is concerned.The consolidated financial statements issued in March 1999 for the year ended 30 June 1998 show a less dramatic fiscal miracle than the Treasurer has been claiming these last three years. The operating results before abnormals, starting with Labor's last budget year of 1995-96, were a little over minus $4 billion. The Treasurer's first budget for 1996-97 resulted in an operating result of about minus $2.5 billion. His second in 1997-98 resulted in his first positive operating result of about $1.5 billion. In his post-budget speech to the Australian Business Economists, the Secretary to the Treasury, Ted Evans, put this in some historical perspective. He said:Looking at Chart 1, which shows the underlying cash balance over a long period, we see that surpluses stretch out into the projection period. We should keep in mind, however, that of the six years of surplus there shown, only one is currently behind us. The 1999-2000 surplus we could take as being reasonably assured, but beyond that we are talking about mere projections, subject to all of the uncertainties of the world economy. Taking the 1999-2000 surplus as being `in the bag', the cumulative surplus over the three years would amount to 1.5 per cent of annual GDP. The scale of that might be assessed against the surpluses in the late 1980s, our last period of fiscal consolidation. On that earlier occasion, the cumulative surplus over the first three years amounted to 4.1 per cent of annual GDP—well over twice that achieved in the latest round.The Secretary to the Treasury is not the only person sounding this warning. Access Economics' Budget Monitor released in May says:A champagne economy (rather than policy-driven increases in tax rates or bases) is handing the Treasury rising revenues on a platter. However, it is at times like this that clients should remember that the revenue bonanza of the moment is rather more cyclical than structural. What the upswing of the current business cycle has delivered to the Budget may be swept away just as easily in the next downswing of the business cycle.For the record, Access Economics' estimate of the structural underlying budget cash surplus for 1998-99 is only $221 million and is only $584 million for 1999-2000 on a no policy change basis. Revenues and projected surpluses are quite vulnerable to any slowing in economic activity. The original A New Tax System had a negative effect on fiscal balance of almost $5 billion. To that must now be added the further loosening resulting from the Howard government's agreement with the Democrats, at least a further $1.4 billion. In my view, there are risks which need to be considered after eight years of continuous economic growth when loosening fiscal policy to such a significant degree.I was pleased to see that today's release by the Productivity Commission of a research paper on Australia's productivity performance notes that multi-factor productivity averaged 2.4 per cent a year in the period 1993-94 to 1997-98. This represented a significant step up from the 1964-65 to 1997-98 period average of 1.4 per cent. It is not a coincidence that this jump occurred given the significant micro-economic reforms undertaken by Labor since the mid-1980s. As the report notes, there is likely to be some, and possibly major, dividend from reform. Our solid growth performance since 1991-92 is a direct result of the major reforms Labor put in place. As the Reserve Bank Governor noted on 11 March:In Australia's case, these micro-economic influences have been quite important, not just in explaining lower inflation, but also in explaining the economy's growth and resilience in the face of external contraction. Among the changes made have been:. to sustainably lower tariffs;. to deregulate financial markets;. to introduce a more stringent regime for competition policy;. to privatise a lot of public utilities; and. to introduce a good deal more flexibility into wage bargaining.The recent Hong Kong-Shanghai Banking Corporation report The new Australian economy also comments that much of the resilience of the economy is due to reform over the past 15 years. The report states:The product of 15 years of rigorous economic reform, the transformation has allowed Australia to not only withstand recession in two-thirds of its export markets, but maintain through the nineties one of the highest growth rates in the OECD.The boundaries of the electorate of Kingston currently coincide very closely with the McLaren Vale wine region. South Australia accounts for half the nation's wine production. It is therefore a matter of great concern to both my electorate and my state that the Howard government proposes to increase the tax on wine. In its new tax system package, the government said:Wine, and beverages consisting primarily of wine, will become subject to a Wine Equalisation Tax to replace the difference between the current 41 per cent wholesale sales tax and the proposed GST. The Wine Equalisation Tax will be levied at such a rate that the price of a four-litre cask of wine need only increase by the estimated general price increase associated with indirect tax reform; ie 1.9 per cent. The concessional tax treatment of cask wine will therefore be preserved.No further details were given. The industry was horrified to discover after the election that what the government had in mind meant a significant increase in the tax on wine. The Howard government has set the WET rate at 29 per cent whereas a general increase in the price of wine of 1.9 per cent implies a rate of 24½ per cent. The difference is how Treasury and the Winemakers Federation of Australia calculated the effect of the GST on margins.I understand that Treasury has since admitted that the Winemakers Federation's calculations are right but are refusing to say so in writing. The difference between the higher and lower WET rates according to research commissioned by the Winemakers Federation is additional tax on the industry of $147 million and a loss of 500 jobs in regional Australia. Pro rata, that is 250 jobs in South Australia and 25 jobs in McLaren Vale. The other problem raised by WET in the GST is that the GST will go to states while WET will go to the Commonwealth, both for general revenue purposes.This changes the current arrangements where a proportion of the current 41 per cent wholesale sales tax on wine, which is collected by the Commonwealth, is collected on behalf of the states to replace the state liquor franchise fees which were struck down by the High Court as an excise. The states are currently handing back a 15 per cent wholesale sales tax rebate on cellar door sales to replace the exemption on liquor franchise fees they previously gave cellar door sales. It seems likely under the new arrangements that the states will quickly say that the GST is their source of general revenue and they will not be much interested in giving a rebate on the WET tax since it is a Commonwealth tax and they are getting none of the revenue.The Howard government's policy makes no provision to allow for the cost of running cellar door sales which are so important to underpin the viability of many small wineries. These small wineries are a large part of the attraction for wine tourism which is boosting regional economies. To complicate matters, small wineries, particularly in Tasmania and Margaret River, have for some years been pressing for a volumetric tax regime. This would give a tax advantage to their premium wines but, unfortunately, at the expense of the overwhelming majority of the industry, which is based on the production of quality value wines. The domestic demand for those quality value wines underpins the investment on which the recent success of the wine industry is based.A volumetric tax regime could do far more damage to the industry as a whole than the general increase in the tax on wine, which is the current policy of the Howard government. I have been pursuing these issues on behalf of my electorate, South Australia and the wine industry more generally. I organised a meeting in Adelaide between a full spectrum of local winemakers, ranging from the smallest to the largest multinationals, and the Leader of the Opposition to talk about the WET rate, cellar door sales and the question of volumetric versus ad valorem taxation. Kim Beazley had some things to say to them which have proved very useful to the industry in this debate, and they are worth recording here. He said:Looking after SA industry requires vision and commitment from both Federal and State governments.But I think the Hippocratic oath is also important here—and I mean the bit that says "First, do no harm".One of the critical issues for South Australia, having half the national wine industry, is the Government's proposed additional tax on wine.The WET is not a wine equalisation tax, it is a wine increase tax.In the context of a GST, if it were an equalisation tax it would be set at 24.5% not 29%.Labor's aim is still to defeat the GST.I interpolate here that this was the day and the meeting was the time that Kim Beazley and I found out that Senator Harradine would vote against the GST. To go on with what Kim said at the meeting:Our strategy is not to try and make amendments at the margin but to leave the package in its present unacceptable form so that the pressure for its defeat will be maximised.We have however made one exception and that is to move amendments to provide an exemption from the WET for cellar door sales of $100,000.We believe small wineries need and deserve that help. Volumetric taxation has also been raised by the small wineries, particularly in Tasmania and Margaret River in the context of the current debate.Volumetric taxation is a separate issue to the WET.We intend to keep it separate.We will not be contemplating volumetric amendments to the WET bills.Instead we have established a process within the Labor Caucus to examine all of the arguments for volumetric taxation as well as other wine tax issues.We will be consulting widely.We want to make sure we can offer the industry the best possible wine tax regime and the sort of certainty and stability that the very large amounts of recent investment and increasing international competition demand.As a result of what Kim was told at that meeting, he agreed to look at raising the level of Labor's proposed cellar door exemption, and we are currently working through that issue. But his comments, in general, had the intended affect. They have united the Australian wine industry in a campaign on two issues: reducing the government's proposed WET rate and obtaining an acceptable exemption for cellar door sales. I was pleased last week to chair a meeting between the Winemakers Federation of Australia, led by Brian Croser and Ian Sutton, with delegates from peak bodies in all states, including Tasmania and Western Australia, and all the members of Labor's frontbench whose portfolios touch on issues relating to the wine industry. They of course are Simon Crean, Gavin O'Connor, Joel Fitzgibbon, Bob McMullan and Cheryl Kernot. I am quite sure that, as a result of those discussions, Labor will successfully pursue this issue on behalf of the wine industry.12:06:006573Wakelin, Barry, MPMr WAKELINHV5GreyLP10—The Appropriation Bill (No. 1) 1999-2000 , Appropriation Bill (No. 2) 1999-2000 and Appropriation (Parliamentary Departments) Bill 1999-2000 were introduced in the House on 11 May 1999 and are fairly satisfactory documents, I think, from the point of view of the majority of Australians. I do particularly welcome the surplus. There is all sorts of speculation that you can mount when you see a figure of $5.4 billion, but in terms of the Commonwealth revenue, the Commonwealth turnover, if you like, it is a figure of somewhere around three per cent. A balanced budget brings a general discipline to our economy. The advantages of having a more disciplined economy are very apparent to most Australians—that is, we have the lowest interest rates that I can remember in my working life and certainly that the majority of Australians in their adult lives would have only dreamed about a few short years ago.From that comes a more confident business environment and greater employment opportunities, and that is happening. The evidence is there and, even as recently as today, we have had suggestions from certain advocates or pundits that our unemployment rate is heading below seven per cent in the foreseeable future. We know that our unemployment rate is now back to the levels of the early 1990s. That was the time when I seem to remember someone saying something about `the recession we had to have'. Hopefully, the recovery we had to have is now occurring, and will continue to occur.From the perspective of the electorate of Grey, can I just put into the Hansard a record of some fairly positive things that have happened in the last 18 months. We have a wine industry—which was the topic of the latter part of the speech of the member for Kingston—which, I think, is breaking all sorts of records, whether they are in export or domestic consumption or whether they are in plantings. Some people worry about that, possibly with some justification; nevertheless, there is an absolute boom in this industry. I have the Clare Valley in my electorate, as the member for Kingston has McLaren Vale in his electorate, and when you look at the unemployment rates, which we could have only dreamed about a very short time ago, they are virtually down to zero unemployment. They are talking in terms of, perhaps, two to three per cent.The Olympic Dam expansion, which shows the diversity of the electorate of Grey, is a $3 billion project. I think it is $3.5 billion in total; certainly the expansion is around $1.8 billion or $1.9 billion. It is drawing to a conclusion now and I think it was the largest private infrastructure project in Australia in the last 18 months. I understand that the focus of infrastructure will now be on the Sydney Olympics. We have the Gawler craton, an exciting new area for development, with Commonwealth and state ministers announcing recently further development and discussion of infrastructure needs for that exciting, prospective area. The Minister for Industry, Science and Resources announced very recently a major project facilitation for the prospective magnesium project near Port Augusta. If it comes into production, it will generate something like 700 jobs in the project building stage and 300 permanent jobs, which is very welcome for that part of the world.In these last few weeks BHP at Whyalla has brought on line, ahead of time, its new billet production. In terms of the balance of steel production in Australia, it has significantly strengthened Whyalla's position in relation to its stability, making it less reliant on exports, so that is quite welcome. Part of the overall long-term planning of BHP is the National Rail contract which will generate in excess of a billion dollars worth of freight coming out of Whyalla over the next decade. The Alice Springs to Darwin railway is looking very positive, with some announcements expected from the Premier of South Australia in the not too distant future.Turning to agriculture and reasonable seasons, we have the farm management deposit scheme—one of the things that I have often spoken about in this place. It is not very sexy, not very exciting, from most Australians' perspective, but it offers the incentive and ability to put something away, in times of plenty—and I must be very careful when I use the word `plenty' in relation to agriculture—in times when things are a little stronger, for those inevitable times when we know it is going to get tougher. The government has strengthened those farm management deposits and that is very welcome.Aquaculture is a very exciting industry. I have a little headline here from the Channel 4 news of 8 June talking about strong job opportunities. It says that `the Eyre Peninsula is now the best place to find a job'. It is a long time since we have heard that about the Eyre Peninsula. The news item said:According to statistics released in the regional development task force report, Eyre Peninsula now has—too high, but, nevertheless—an 8.1 % unemployment rate, this compares more than favourably with the 10.2% of 1992 . . . Business leaders believe the steady growth in employment is due to the diverse range of industries on Eyre Peninsula. "It really is an environment of confidence at the moment, and that's something we need to be very mindful of and make sure it continues", said the Eyre Regional Development Board Executive Officer, Ian Nightingale.I have mentioned aquaculture in this context, which underlies a lot of this confidence. Some of the government programs I will touch on are, certainly, the Regional Telecommunications Infrastructure program, the Rail Reform Transition program and the Natural Heritage Trust. These all feed into, particularly, regional electorates like Grey and have fostered, encouraged and improved that sense of confidence. Tourism is very much there. We have whale viewing at the Head of the Bight, and I would invite all members to consider that on their next trip to South Australia. It is very popular, and I think we are getting up to 100 whales there during the season. It is quite remarkable and all due credit goes to the state government for its investment in the infrastructure there and its linkage with the Aboriginal people.I have a couple of stop press items on the general improving situation in South Australia. The ETSA lease agreement, thanks to Mr Crothers, is very welcome. As the Premier said a few days ago, perhaps at last we can lay to rest that legacy of the State Bank. I think I should respond to the member for Kingston in relation to the wine industry and the issue of the Treasury agreeing with the industry's figures. I am not sure just which set of figures people are using here, because it has been a little confusing in the last week or two with these numbers. By my own calculations, in terms of the 29 per cent WET and the 10 per cent GST impact, I come up with a fairly modest increase if you do not take into account the lower production costs, once a GST or tax reform comes in, because of the washing out of the old wholesale sales tax costs on production. So I find a slight drop in retail price, once you take into account that washing out of the production costs under the old indirect tax system. Be that as it may, no doubt it will continue to be a point of debate, and I am asking the industry to advise me further on that matter.That leads me into the issue of tax reform generally. I would trust that we can move forward and that the whole issue on the agreement with the Democrats can be consummated in the next fortnight or so and that, in terms of the whole environment of confidence of which these appropriation bills form the basis, we might move forward to the next stage of strengthening this economy from a relatively strong base.A few electorate issues: it is very welcome to see the Port Augusta call centre. From January 2000, Centrelink will establish two new rural specific call centres, at Maryborough and Port Augusta, to provide a tailored service to some of Centrelink's customers in rural and regional Australia. The jobs outcome is expected to be in the vicinity of 50 jobs, which will be very welcome in Port Augusta. The whole range of new services, which I will not dwell on, is a fairly significant step forward for regional Australia, and particularly for Port Augusta, in terms of service through Centrelink.Overall, South Australia's share of the $1.6 billion for general road funding is $128 million. A number of highways will get their share of that. We have 2,750 kilometres of national highway in South Australia. A significant part of that goes through Grey, and we will receive nearly $62 million in the year 1999-2000. We acknowledge here that, in addition to goods transported between Western Australia and the eastern states, South Australian exports have grown almost 50 per cent in the past six years on latest estimates. It is important that the freight roads supporting this effort be built to serve the anticipated traffic demand. That, on all projections, will only increase, so it is very important to keep that infrastructure there and growing.More than 40 per cent of South Australian companies are involved in export activities, compared with 13 per cent nationally. They include emerging rural based export industries on the Eyre Peninsula, Spencer Gulf and the mid-north. Blackspots is an important focus program. The state government received $38.76 million in contributions to upgrade state arterial and rural roads, while the South Australian councils will receive $21.34 million for local roads next financial year. In relation to the Port Wakefield-Port Augusta road, additional passing lanes will be constructed over a three-year period, starting later this year, which is quite important for people travelling on that road. This work will cost $6 million, and a further $7.5 million will be spent on shoulder sealing along this section. Heavy vehicles comprise up to half the traffic stream on the Port Augusta-Ceduna road. The width of the 6.2-metre sealed road is not considered to be enough for the B-doubles and it will be widened to eight metres between Lincoln Gap and Penong at a total cost of $37.5 million over the next few years.There are a couple of important initiatives in education. They are not big initiatives, but they are important steps forward in this whole issue of access for regional education. One of them is the student financial supplement loan and the lifting of the assets test to allow access to that. We expect about 1,400 families to be better off. One very important one which is particularly dear to my heart is the extension of the definition of `independent employment' used under the family actual means test to include young people employed by their families. Under changes to the Youth Allowance family actual means test, the definition of `independent employment' will include employment in a family's business or farm. Consequently, up to $6,000 a year derived from a sibling's income will not be included as spending and saving under the FAMT. That is quite an important item.There is increased funding under the Assistance for Isolated Children Scheme—or AIC scheme—which, as those people who are affected will be aware, is already in place. We have increased the basic boarding allowance component of the AIC scheme from $2,900 to $3,500 and it will be adjusted for future inflation. That has been applicable since January 1999, as I understand it. Further, the maximum level of funding available under both the basic and additional boarding allowance will be increased to $4,377 for both primary and secondary students. That is an important step forward for the general issue of regional education.Emergency funding of $253,000 for school-term hostels is useful. Most Australians probably would not be aware of the efforts that regional people have to make to get an education—and why should they, as it is not necessarily a focus in their lives. Regional people need hostels so they can utilise secondary schooling in particular, and also universities, away from home. Hostels are necessary for people living in regional Australia to have secondary schooling and university access. Secondary schools just do not exist in much of regional Australia.There is quite a useful boost to regional health funding. We have provided $171 million over the next four years for a range of specific measures. As far as helping rural communities, it is good to see the eternal issue of attracting and retaining GPs being dealt with. It is good to see the establishment of regional medical schools with a focus on regional practice at James Cook University and Wagga Wagga. Many believe this is the basis of trying to encourage greater interest, particularly from GPs, in regional practice. There is $1 million to provide medical students from rural areas with scholarships to meet their accommodation and other support costs while studying. This scheme could support up to 100 scholarships per annum, and the rural work force agencies are in an ideal position to administer it.There is further training for remote area nurses. For many generations, nurses have been the backbone of the medical services. At times when doctors were not available, nurses were there, 24 hours a day in many instances, looking after the health of regional people. This measure will provide $308,000 over four years and ongoing support for first-line emergency care courses for remote area nurses, thereby fulfilling our election commitment. This funding will enable the provision of better assistance to victims of emergencies and traumas in remote locations, and it will be met from within existing appropriations.XU5LIEBERMANMr Lieberman—You are very well briefed on that.HV5Wakelin, Barry, MPMr WAKELIN—Yes, as my wife is a nurse who is actively involved, she makes sure that I am. There is $559,000 to upgrade the bush crisis line. Thirty regional health service centres will be created. We are also taking care of rural women's needs. Women living in rural and remote areas will benefit from the federal government's election commitment to improve access to female GPs. As many have heard, the budget will provide $8.2 million over four years for a fly-in, fly-out female GP service through the Flying Doctor Service. The government is strengthening support for women with breast cancer and it has increased services for older people. There will be 100 extra aged care beds in regional health service centres at a total cost of $2 million over four years. That is very welcome.Simplifying aged care planning is an issue that comes over my desk regularly. We are getting pretty complex in the way we expect people to respond to and report on aged care planning. General capital funding assistance in rural Australia for aged care facilities will provide access to at least $130 million per year. That is for capital investment after four years for aged care facilities that offer good quality buildings and care. I think that is the total, but I would have to check. The expanded Medicare Easyclaim facilities initiative is an ongoing issue. The enhanced primary care package will have a beneficial impact on Australian rural and remote areas.I will finish off on health issues. I am really delighted with the initiative of allocating geographic provider numbers in consultation with the states. Although it is not a particular line item through the appropriation bill, I think it has been very much welcomed across all of regional Australia in terms of cooperation with the states. On the immigration issue, the entry requirement for doctors has been lowered by 25 points to encourage doctors to come here. We cannot get enough Australian doctors to go out into the regions and, therefore, our only alternative is to encourage people from overseas to come in. I give due credit to the Minister for Transport and Regional Services, John Anderson, and the Minister for Health and Aged Care, Michael Wooldridge, for freeing that up in the way they have, in cooperation with the states. I am looking forward to seeing an improvement in that area in a relatively short time. If we waited for our GPs to finish training in our traditional Australian system, we would still be a decade out, with no guarantees.There are some useful initiatives in Aboriginal affairs. Time is going to prevent me from going into great detail on that issue, but we cannot overlook our Aboriginal people. Many of them live in regional areas. We are very much looking to improve their general welfare. There is a huge challenge there. A lot of work still has to be done, but it must be done in cooperation and partnership with Aboriginal people and with the states.12:25:006577Wilkie, Kim, MPMr WILKIE84GSwanALP00—I rise to speak on Appropriation Bill (No. 1) 1999-2000 and, specifically, to reply to the Treasurer's 1999 budget speech. In this address I seek to highlight a number of deficiencies on two levels: firstly, the impact that the budget will have on my electorate of Swan; and, secondly, a number of concerns with the overall strategy of the budget.Principally, we must recognise that, compared with many nations in other regions, our country is very fortunate. We are blessed with an abundance of resources and much natural talent. Ultimately, however, we have to appreciate that for there to be continued prosperity, all must share in that prosperity. This budget does not achieve that vision. The problem is that, whilst many of the headline rates might seem advantageous, these indices paint a deceptive picture of the plight of many in our community. I believe that many Australians are not able to share in the benefits of the economy.These citizens are lagging behind others who have access to higher education, communications, and adequately funded schools. All this, despite the Treasurer's promise that set us up to enter the next century much as we entered this one, `a world leader in living standards, prosperous, free, and with all the potential of a dynamic young nation.' For many in my electorate, things have been particularly tough. According to the data of the Australian Bureau of Statistics, the average wage is less than $300 a week and, by official accounts, there are over 2,000 long-term unemployed. The Treasurer delivered the budget with such excitement that the nation might mistakenly have believed that something dramatic had been achieved. What was delivered was more of the same.There was little evidence of bold policy or of the strategy needed to take us into the 21st century. It did little to reverse the draconian slash and burn of the previous years. If I were unemployed, a supporter of public health, or wanted my children to have the opportunity of attending university, I would not be displaying such excitement. Constituents of Swan, along with many people in the nation, are suffering what many social commentators are calling `a social deficit'. It is a deficit that Labor tried hard to address in its years in office. We did so by dedication to the funding of education and health. Labor established a firm commitment to social programs—but not the Howard government. Despite huge revenue driven surpluses, it is a budget of narrow vision from an uncaring government and from mean-spirited leaders in pursuit of a bottom line rather than decent levels of community service.Given the growth in the economy and the associated revenue produced by this growth, more enlightened citizens have to ponder the logic of the reductions in the last two budgets. The 1999-2000 surplus of $5.4 billion will be $3.8 billion higher than at the mid-year Treasury review. So the Treasurer's surplus is essentially revenue driven. Revenue has risen by almost $20 billion since this government came to power. Even if there were a public sector deficit, then the Labor Party would have reduced it without reducing support for ordinary Australians, students, the disabled, the aged and the unemployed.Other concerns include the claim that the 1999 budget keeps $1.2 billion worth of election promises. I hate to remind the parliament that about $1.8 billion of non-core promises were broken in earlier budgets. In fact, if I recall, about $2.7 billion was lopped from education, over $1 billion from unemployment programs, and over $1.9 billion from health. These are from core programs and do not even include other worthwhile and important items such as industry support and research and development.At a time when we need to boost the economy, all our trade and industry programs have been cut. The coalition has cut $1.5 billion over three years from trade and industry development programs. This means that Australia will lose some $4.5 billion of import replacement and export expansion opportunities. By the year 2001, it is estimated that some 80,000 jobs will have been lost. To illustrate the impact on constituents in Swan, I have been reviewing recent information from the Melbourne Institute. The institute did a lot of work on how reductions in public expenditure have impacted on households. Guess what? The conclusions they drew were that that the cuts in the last two budgets cost the average Australian household $8 a week.Even more disturbing was that for families living on less than $400 a week—and I remind the House that that is a fair proportion of the electorate of Swan—the cuts set them back $15 a week. The next and most obvious question is: how are they going to cope in the new GST environment? ACOSS documents already point to further hardship for these people. In fact, if we add a possible $6 to $10 effect of the GST to the costs of the family, this will mean that someone living in Swan, possibly supporting children, could be $25 a week worse off than in 1996.Many people in the community are gifted with more intelligence than this government gives them credit for. Many have asked why this anguish is necessary. An objective analysis illustrates what absolute absurdity was told to the population suffering reductions in social expenditure. Even the most cursory analysis of public sector economics shows that Australia does not have a public sector debt problem. In fact, Australia has the fourth lowest level of government net debt as a percentage of GDP in the OECD. Our debt level, as a percentage of GDP, is 40 per cent of that of the UK and 28 per cent of that of European Union countries.Furthermore, the government estimates the Australian assets to liability situation as a debt of $64 billion, which equates to about 12 per cent of GDP. By international standards, we would not only have met the Maasterich treaty criteria, but also would have been the leading qualifier for integration. I find it quite extraordinary that a projected surplus of $5.4 billion this year, climbing to $12 billion in three years, could be contemplated when many elderly residents in nursing homes have to wait two years to get a dental appointment. I think that is woeful.Also, 85 per cent of calls to Centrelink are not being answered. If I recall the statistics, over 1.2 million calls per month were at one stage not being answered. It becomes even more distressing when we know that well over half the welfare agencies surveyed by St Vincent de Paul have reported growing demand for basic family support. As many have illustrated over the last three years, economic liberalism impacts on other areas. Unemployment is anticipated to remain at 7.75 per cent for the next 18 months. Disturbingly, I cannot see one policy in this budget that does anything to address this problem.Furthermore, Treasury forecasts project that in the next three years economic growth will decline to three per cent. Where will that leave those who have been left on the outside looking in? Surely Treasury forecasts of declining unemployment rates by a princely one quarter of a per cent are optimistic given the prospect of reduced rates of growth. The only remedy this government is willing to undertake is to let wages fall for the lowest paid and poorly protected. What they are failing to realise is that the majority of the population are not big earners. As stated previously, the median wage is less than $30,000 a year.We are told that labour market reform will fix it. But it will not, especially when the reform is akin to large burly characters with savage dogs patrolling the workplace. It is a terrible vision for the future. Notwithstanding other scientific data, the most recent OECD Economic Outlook summarises the most recent research on this issue and demonstrates quite clearly that cutting minimum wages and lowering employee protection does not provide more jobs.The budget's short-termism is highlighted in its approach to education and investment. Even Mr Howard's new partner in tax, the Leader of the Democrats, agrees when she stated:Modern economic theory and prominent economists like Paul Romer, Paul Krugman, Lester Thurow and Robert Reich, map out the policies that governments should follow to maximise economic opportunities in a global economy. They are education, training, research and development and spending on infrastructure. These are the keys to jobs growth. A transcript of a doorstop from the Leader of the Opposition most appropriately sums up how I feel about the budget. Mr Beazley stated:In terms of increase available for Research and Development in various areas, they still have not come up to the levels that they inherited when they left office. In terms of GDP it's fallen from 0.8 percent when we were in office to .65 percent and it's heading down. Our calculations are that in four years it will reach the lowest level its ever been historically, that is public investment in Research and Development. And in Education they have not remotely approached filling the 2.7 billion dollar hole that they created. This is not a budget about a knowledge based economy.I have concerns not only about the nation's future due to the downsizing of the educational sector but also that it has had an impact in my electorate. At Curtin University more students than ever before are paying for their postgraduate programs up-front. They are doing it tough because of the reductions in federal funding. More students have to repay HECS at an accelerated and higher rate. Students and academics have to do more with less. Lectures are now overcrowded, many with little seating as classes have been rationalised. Courses now take longer due to reductions in lecture times. My electorate has a high proportion of students in the area. In fact, well over 12 per cent of the electorate attend TAFE or university on a full- or part-time basis. When $2.7 billion is ripped out of the sector, then obviously it has immediate results.As if the unemployed had not suffered enough by the gutting of employment programs, then along comes the spectre of the new GST. Without a doubt the worst failing of this budget is its failure to address unemployment. The unemployed have paid the price of the government's fiscal restraint policies. Indeed, as was said at the time, the surplus was the result of the deficit in the lives of millions of ordinary Australians. For too long we have heard about the so-called social dividend that never eventuates. I suspect the Federal Liberal Party has taken a leaf out of Premier Court's book. The unemployed and those disadvantaged in a civilised society must be beneficiaries of prosperity. We know they are not.I must also indicate at this point that many in my electorate have been noticing a decline in the services available to them. I have mentioned the excessive waiting period for Centrelink calls, but the list of reductions and the impact they have had goes on. It is not surprising. It will be recalled that 5,000 Centrelink staff were to be shed last year. Yet again there is more slashing of public sector jobs. Now we see another 2,000 going. This is in addition to the 28,000 public sector jobs abolished in the first three years of this government. Incredibly, Centrelink is the big loser, with 900 more jobs to go. That is on top of the 5,000 already slashed from this agency in previous years. Slashing jobs will do nothing for the already appalling levels of service available to Centrelink clients.The major social security initiative in this budget was the great youth allowance concession, granting the 41,000 families who lost up to $80 a week just $19 a week in extra family payments. But this miserly concession will be made available only if the Senate passes the government's tax reform package. I can report that we have lost 16 Centrelink staff in Swan in the last year alone. This is on top of a cut of eight staff when they closed the Medicare offices there. I understand that further reductions in staff are to occur in Western Australia in the Taxation Office based in Swan. In fact, information that I have at hand suggests that we will lose over 300 staff from the state. This piece of economic sabotage will cut a neat $15 million from the state product. By any measure, not only is the state a loser, but the taxpayer will again have services reduced, and those most in need of services, who should have been the first beneficiaries of any surplus, face more hardship.Western Australia has been severely handicapped by not only reductions in the level of staff but also transfers of staff to other areas. So much for devolution. According to the Community and Public Sector Union, approximately 37 per cent of staff positions have been lost or transferred. This figure is five per cent higher than the national average. If the trend continues, Western Australia will be considered a region economy.We might not get an effective Centrelink and there might be over 2,000 long-term unemployed in the area, but we get the Work for the Dole scheme. What I find a little odd is that, by government figures, 32 per cent of participants in the Work for the Dole scheme get jobs following participation. Given this government's penchant for outcomes and efficiency, let us compare the results of Work for the Dole with other employment programs that were dismantled. For example, Work for the Dole becomes even more of a joke when you appreciate that the Jobstart program under the previous government had a 60 per cent success rate. That is right: 60 per cent as opposed to 34 per cent. But it all makes sense when we consider that issue of broken promises. We can now add the youth allowance to the list of $1.8 billion worth of broken promises, all under the umbrella of Mr Howard's guarantee in 1995 that he would not undermine the social safety net—you know, that relaxed and comfortable nation that we were going to become. In 1997-98 alone, over 160,000 people were removed from the social security system. I wonder what stage of relaxation or comfort they were in.The extent of the public health debate has been well documented. This budget reflects the Howard government's continuing effort to recast the universal health care system, in the words of ACOSS, as `welfare'. The Labor Party retains the vision of Medicare as an efficient and effective general provider of quality health care for all. Contrast this with the nonsense that has been bandied around in this House by the government in the last two years. By default, what this administration is doing is creating a two-tier medical system. It is underfunding the public system and transferring that revenue directly into the hands of the private insurers. The $2 billion per annum subsidy to inefficient private providers now has the added notoriety of ushering in increases of up to six per cent in premiums that are three times the official consumer price index rate to private companies. I will not dwell further on the new private health insurance initiatives other than to say that I guess that the $2 billion injection did not work and yet such an ineffective outcome will be continued. The 13,000 elderly citizens in my electorate will be thrilled by this piece of policy brilliance.As for primary and secondary education, I welcome the increased funding for literacy and numeracy programs, languages and teachers' professional development. However, considering the needs of our younger generation, this government must not think that a one-off increase in the funding rate will be sufficient to allow all our children a first-rate education. Indeed, I question why additional funding is provided to the 30 per cent of students in non-government schools. This equates to over $560 million over four years, when nothing is given to the seriously underfunded public school system. The next time I receive a fax from the Lathlain Primary School about the lack of facilities or the need for new computers, I will seek answers as to why some might be disadvantaged. The fact is that all schools should have received an increase in funding. I do not begrudge the private schools getting increased funding, but I believe we should have passed that on to the government schools as well.Of course, all the excitement of the budget for this government was short lived. For the community, of course, there was no excitement. Facing little opportunity and no employment options, many ordinary Australians are right to question why billions of dollars were ripped out of the economy, why the precious core public sector is unable to proceed in little more than a caretaker mode and why health, education and social security have been riven. Australians have a right to expect more than this from the government. They have a right to know why their children might not get into university or TAFE, and how they can support themselves if they do. They have a right to expect that those who bore the pain of economic reform will be the first to share the gains. Those people, like those in my electorate of Swan, need progressive government with ideas for the future, not a stern Victorian, small-minded government for the wealthy.In the beginning of this address I spoke of the lack of vision or strategy in this government that will project this nation into the new millennium. What this nation needs is a budget sponsoring research, training and enterprise. It needs a Treasurer who is prepared to invest in the nation's education and health systems. We need real policies that will address the problem of unemployment. We need to address the decline in support and the level of staffing in the public sector. I fear instead that we have an accounting surplus which will continue to damage ordinary Australians.12:44:006582Lieberman, Lou, MPMr LIEBERMANXU5IndiLP10—It is a pleasure to speak in support of Appropriation Bill (No. 1) 1999-2000 . In what is now a little over three years of the Howard-Fischer coalition government, it is good to be able to reflect on the performance of the government—it is only right that that should happen—and also to see what the outcomes have been of the government's policies. Unlike the previous speaker from the Labor Party, I think we can point to some very positive and very important strategies designed to increase the opportunities for all Australians, especially young Australians.Remember that just three years ago, after 13 years of Labor, this country was facing record unemployment, particularly in regional Australia—and I represent part of regional Australia—where unemployment was particularly bad among young people. It was a country with one of the highest rates of youth suicide—sadly, statistics from regional Australia are worse than those from metropolitan Australia; there was a decline in investment; a serious decline in small business confidence; and a very serious decline in savings—savings below the levels of past years. We also remember that just three years ago, after 13 years of Labor, we were witnessing a dramatic cycle of high interest rates and high inflation, all of which were eroding the confidence, wellbeing and future of Australians, especially senior citizens and those trying to provide for their retirement without having to rely totally on the welfare system.The Labor government spent more than the tax revenue it was taking in—running the country on credit card overdraft. In the last year of the Labor government there was a $10.3 billion deficit. That is money spent after taking taxes from Australians. Notwithstanding taking more from the taxpayer, after having increased taxes virtually every year in the 13 years it was in government, Labor was still unable to meet the debts and obligations of this country—the pensions, the health costs, the defence costs and all of the other important costs—and went into overdraft and credit card debt.We also remember that, just 39 months ago, Labor—after 13 years in government—had no strategy at all to tackle the very serious problems in Australia that needed to be tackled to enhance our prospects to make this country more able to compete so that we could win more trade and build more jobs and investment. I refer to the waterfront reforms. We had disgraceful performance levels—some of the worse container movement records per hour compared with any other country—despite the previous government having spent millions and millions of dollars in providing so-called restructure benefits so that they would get more productivity. The Labor government failed to address industrial reforms in its 13 years. It failed to look at why people did not want to invest and why small business did not want to take risks and create jobs. Nothing at all was done about that. Labor closed their eyes. As well, the transport system—both rail and road—was deteriorating and Labor did not have a strategy to look at that. There are many other aspects that I will not comment on further.This appropriation and budget debate gives me the opportunity to summarise, in stark contrast, some of this government's achievements, due to its courageous approach to taking decisions, some of them very difficult and not taken easily. It is not easy to try to reprioritise spending from taxpayers' funding, but you have to do it and you have to address issues. You cannot live beyond your means and continue to charge to Bankcard the recurrent costs of running government pensions and the like. You have to pay for them out of your revenue. You cannot borrow and charge them to Bankcard.We can now proudly report that the Australian economy is performing very well. In the face of very difficult international financial problems, particularly in Asia, we are regarded as the miracle economy by other countries in the world. We achieved that because we had the guts to make a responsible agreement on monetary policy, signed by the Treasurer and the Governor of the Reserve Bank. We adopted a Charter of Budget Honesty designed to make the government accounts transparent and were able to lock in good fiscal policy. That policy is now recognised by the international body, the IMF, as a world-class piece of legislation, one that should be emulated by other countries.We have reversed the $10 billion deficit that the Labor Party charged to the credit card, and we have now been able to go into surplus. That has increased the opportunity for the economy to keep costs down, to keep inflation down and to keep interest levels at a low rate. We have embarked on a financial program to reduce debt because the previous 13 years of Labor government put us into record debt levels. Indeed, over the first three years of the Howard-Fischer coalition government, we were able to pay $24 billion of the $96 billion debt the Labor Party left us with. There is still a huge amount of debt to go, but that is not a bad report in the first three years. Labor has made every effort along the way over the last three years to block, stop and delay every one of those measures. We know now that there are delays in the Senate on taxation reform and on the sale of a further 16 per cent of Telstra, robbing Australians of the opportunity to further reduce Commonwealth debt and to put money into infrastructure programs.I will comment briefly on the new tax system that we campaigned for. We went to the people. We took risks. We lost some of our colleagues in campaigning for tax reform. We knew we had to do it. We knew that the time had come, that Australia, this great nation, could not be left with a 1930s clapped-out, worn-out tax system—one riddled with inequities and anomalies. We had to do it, and we knew that we were taking risks in doing it. We won the election. We won more seats in the House of Representatives, the people's house in Australia, than any other party and we were able to form a government, despite losing some of our members. We acknowledge the fact that the debate was very difficult for Australians to grapple with. We thank those voters in Australia who did have the confidence and the guts to see that what we were trying to do was worth trying to achieve.Having got that election result, we are now trying to introduce into the tax system the things that we see are so important to Australia's future—for example, a $12 billion reduction in income tax. At the moment, 80 per cent of Australian taxpayers, the battlers of Australia, are paying near the top marginal rate. So we propose to reduce their rate of tax to no more than 30 per cent for incomes of up to $50,000. We propose to introduce a $2 billion family taxation benefit which will be in addition to the $12 billion of income tax cuts. We are locking in the GST rate at 10 per cent. We want the system to start in July 2000. It is important that the broader based tax system of Australia be available so we can start to build and restore confidence in investment levels in Australia and be accountable to governments of the future for our performance based on a more equitable tax system.We are involved in a $3 billion crackdown on the black economy, and I think the tax reform will assist in many ways in that regard. We are putting in place a much more sensible Commonwealth-state financial system. I was a former member and minister of a state parliament, and one of the reasons I was motivated to come to this parliament was I wanted to assist in rejigging the Commonwealth-state financial arrangements which have not been efficient and have not been good. I have not been proud of the parade of premiers annually coming into and out of Canberra with various theatrics and the like because of the problems with the Commonwealth-state financial arrangements.We are going to reduce some taxes. We are going to abolish taxes such as wholesale sales tax. Remarkably, to this day Labor still wants to keep in Australia the system of wholesale sales tax, despite the overwhelming evidence from so many independent people of its inequities. The Labor Party wants to keep it and, in its questions in the House, pretends to highlight some of the complexities of the tax reform agreement between the coalition and the Democrats. There are some difficulties in that. I concede that, but for the Labor Party to get up in the way that it has to try to demonstrate how concerned it is about that and at the same time argue by default for the continuation of the wholesale sales tax system with all of its anomalies is quite extraordinary. It is to the Labor Party's eternal discredit that that should be happening. We are abolishing taxes on bank accounts, some stamp duties, bed taxes—WU5O'CONNORMr O'Connor—But when?XU5Lieberman, Lou, MPMr LIEBERMAN—It is all set out. If you did not know that, where have you been in the last two weeks?10000DEPUTY SPEAKERMadam DEPUTY SPEAKER (Hon. J.A. Crosio)—Order! The honourable member for Corio will have his opportunity to speak and the honourable member for Indi will address the chair.XU5Lieberman, Lou, MPMr LIEBERMAN—Rather than just make my commentary on those areas of reform which the Labor Party are bitterly opposed to, I will say that even yesterday they apparently made an extraordinary decision in the caucus—and it is widely reported—to change their tack upon tax. They propose in the next two or three weeks to frustrate the reforms and to continue to try to demolish, destroy, stop and reverse the decisions that have been made. An editorial in the Border Mail , a local regional newspaper published in my area, on Wednesday, 9 June 1999 was headed `Politics of spite', and it said:While the Federal Government and the Australian Democrats work together to try to achieve genuine tax reform, the Opposition continues with its head-in-the-sand tactics.The Opposition's approach to tax reform has all the hallmarks of the schoolyard bully.Beaten in the fight that mattered most of all—the latest federal election—Mr Beazley and his colleagues have petulantly sulked their way through one of the most important periods in Australia's history. Labor, unable to accept the reality that it did not win the election, has pursued a policy of spite rather than responsibility.If Australians expect a change of heart from Mr Beazley and his colleagues, it seems they will be waiting a long time.It appears Mr Beazley has adopted the strategy of using the approaching Senate vote on the GST to try to maximise political damage to the Government and the Democrats.. . . . . . . . .Mr Beazley reportedly told a Labor caucus meeting yesterday the first objective was still to do whatever Labor could to defeat the GST legislation.The second objective was to make those responsible for the GST, or the modified GST, pay the maximum political penalty for what they were about to introduce.Mr Beazley apparently told the meeting Labor would roll back as much of the GST as possible if it won the next election.He also appealed to Labor MPs to keep the focus on those responsible for the tax, and not Labor solutions.Mr Beazley's tactics are nonsense.They reek of a leader and his party obsessed with power rather than accepting the need for tax reform.If it was not tax reform, the same tactics would apply to some other issue.Criticism and harassment are legitimate tactics of any Opposition. But a responsibility to constructively participate in issues of national interest overrides such tactics.Mr Beazley claims to have solutions to Australia's taxation system, but has so far refused to disseminate those solutions, apparently in fear that the Government might pinch them.The Opposition's role should be one acting in the interests of the people it represents. At the end of the day, Australian electors are smart enough to give credit where credit is due.By pursuing such childish, churlish tactics Mr Beazley and his colleagues are not helping the political process, they are not helping the people of Australia and most certainly they are not helping their own credibility.Opposition under Mr Beazley is destructive and lacking leadership. That is sad, and bad, for Australia.I seek leave to table the editorial for honourable members to read.Leave granted.XU5Lieberman, Lou, MPMr LIEBERMAN—Thank you, and my colleague has been kind enough to accept it as a man, right between the eyes! I would also like to just briefly say in my last couple of minutes that the job is not yet done. We are embarking on reform which should have been undertaken many years ago and which, after 36 months of coalition government, has already benefited the economy immensely and helped us withstand the problems from the Asian crisis and the world economic crisis. It is amazing that we have been able to do that, and I pay tribute to Australians for their fortitude in handling those very difficult circumstances.If we get the tax reform through, get it bedded in by 1 July next year and pass on the tax benefits and the other things that are included in the package, we will then be in a position to go into the new millennium and be able to go forward with the other great and exciting challenges and strategies that we as a nation should be working together to achieve. If we do them well, the outcome will mean that our kids will have a decent future, a very exciting future—one with great prospects and one that will increase our ability to improve services in health, education and the like. It is only by having a prosperous economy and nation that you can afford to do some of the things that my friend the member for Swan, who spoke previously, would like to see addressed in the society in which we live. You have to have the wherewithal to do it. To do that, you have to encourage investment.Business tax is the next stage of reform, small business tax particularly. I want to encourage the Treasurer and the Prime Minister to continue to examine these areas, to consult and to look at the benefits that would come from a major review of capital gains tax, for example, which is a very big disincentive. We have made reforms to capital gains so far as a government, but a lot more can be done. If we do it well enough, it will increase the amount of risk taking by small business and investment. The outcome of that is more jobs, more jobs for young Australians particularly.What about the people in Australia aged 40-plus? Too many of them have lost their jobs over the last decade or so. They want to continue to contribute and do not want to be reliant totally on welfare. What about them? What about the Aboriginal people of Australia? What about their wanting to achieve self-sufficiency and get off welfare but finding it increasingly difficult? Surely to God we have a responsibility to have the courage to implement the reforms in tax and in the areas of the waterfront, industrial relations, Commonwealth-state legislation, R&D and the like to achieve these things.In regional Australia, where I come from, we are able to do a lot on behalf of Australia to benefit Australia's economy and also to help our own region address the problems of unemployment and lost opportunities. We in Australia need a tax system that will reduce the cost of transporting our goods, which our tax reforms will do, so we can get our exports to the wharves, out of Australia and into the competitive markets overseas at a lower cost. Our tax reform will reduce the cost of taxation on exports by about $4 billion—an incredibly important sum of money.My constituents have the ability to produce value added crops and value added goods from their farms—wine and other products—to earn valuable income for Australia and to reduce the trade deficit. We need a system that will enhance that and will complement it. It is not a matter of party politics; it is a matter of being absolutely honest with yourself and realising that governments do not in fact create permanent jobs.The major jobs of any nation worth its salt come from enterprise and from people willing to pursue a dream—a dream that they can create an activity, produce goods and provide services with pride, quality and reliability and at the same time generate jobs for their fellow citizens. It is a part of you as a nation. The role of government is to facilitate that. We all know that there is overwhelming evidence that tax reform and some of the reforms I have mentioned are absolutely integral to tackling those things and restoring confidence in business investment.Coming from small business myself, I can tell you it is an awesome thing to go to your bank to borrow money to expand your business. In signing the third mortgage on your house or whatever it is and the guarantees, getting your wife to sign the guarantees and, if your kids are involved, getting them to sign them as well, you know what you are actually doing. If you make the wrong decisions and it does not work out, you are putting them in jeopardy, but you still do it. It is human nature to want to do things if you are encouraged to believe in yourself and in what you can do if you do well. This country, I lament, is very bad at one thing: it does not encourage its achievers enough, unlike countries such as America that are proud of their achievers. When are we going to stop knocking our achievers? (Time expired)13:04:006587O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—This is a very important budget because it will set the scene for Australia beyond the year 2000. I am afraid to say that it is not the real budget; it is a budget based on deception and false assumptions. These deceptions and false assumptions were pointed out very eloquently by the shadow Treasurer in his first response to the budget recently brought down by the government. The economic strategy of this budget is reliant on the passage of the GST, it is reliant on the full sale of Telstra and it is heavily reliant on consumption expenditure. Those three pillars on which this budget is based may not stand up over time.I was very interested in the comments that were made by the previous speaker, the member for Indi, on the justification for this budget that has been presented by the government. I am somewhat astounded at the claims that the coalition makes for the economic performance of Australia today, and the fact that it has weathered the economic storm and the Asian economic downturn. The coalition has been so critical of Labor's performance in the 13 years in which it was in government. But if we take an objective look at the Australian economy, we see that the foundations of the economic performance that we have today were not laid by the coalition, they were laid in the 13 hard slog years which Labor had to sort out the economic mess left to it by the coalition. We are very proud of the achievements of Labor over those 13 years.It was a momentous task to restructure the Australian economy. Labor was left with rust bucket industries and ramshackle industrial structures because of years of coalition neglect and because of the coalition running away from important decisions that needed to be taken to position Australia in the latter half of the 20th century. We did that, and we did it at considerable political cost. It really gets my goat when I come into this chamber and hear coalition members bleating about the lost souls from the last parliament, how they courageously brought forward this program of so-called tax reform and paid heavy political prices for it. We know all about political prices. We paid them here in the Labor Party for the tough decisions and the hard decisions that were made. They were decisions that came at a political cost, but we knew that they were in the national interest. So we don't want to be preached to by members of the coalition about taking hard decisions in the national interest. We can take hard decisions in the national interest, but let me tell you: this tax reform and the budget that we have before us are not hard decisions in the national interest, because this GST and this so-called tax reform package are blatantly not in the national interest.If you go to the fundamentals of economic performance in the 13 years of Labor government you will see that we refocused the Australian economy on the need to get into the export ring and become part of the globalised economy. We knew we had no choice, and there were tough decisions that were made. We were left with an industrial structure that was inward looking. In 13 years, we completely turned it around; we restructured it and changed its culture. That is what has enabled Australia to weather the Asian economic downturn. We deregulated the financial sector, and for our own constituencies that was a very hard decision that we took, but we took it in the national interest. It has been that very flexibility and the high prudential quality of our financial system that has enabled us to weather this Asian economic crisis.I do not need to repeat the list of micro-economic reforms that were instituted by Labor governments that only bear fruit not at the point at which those reforms are introduced but in the following five to 10 years. The coalition comes onto the floor of this chamber and starts claiming credit for weathering the Asian economic crisis after it has for years squandered the growth legacy we left it and after it has instituted a massive downturn in Australia's research and development capacity. Now the coalition comes to us with what amounts to fiscal vandalism: the squandering of the surplus in mindless pursuit of the GST. I say this to members of the coalition: do not come to us talking about how wonderfully you have managed the Australian economy to withstand the rigours of the Asian economic downturn and the world economic crisis.I was very interested to hear the member for Indi comment about debt in Australia. It is a very interesting notion, this notion of debt. In the figure that was floated about, I wonder whether the coalition members put in the legacy of Liberal debt. I wonder whether that amount includes the Liberal debt that was incurred in the period between 1975 and 1983: after Labor left power in 1975 and before we came to power in 1983. I have in mind the dollar equivalent in current dollars of the $25 billion deficit that John Howard left the Labor Party, along with a ramshackle economy, in 1983. I think it is incumbent on the coalition when they quote the debt figure to tell us whether they are including the debt that was left to Labor by their Prime Minister when he was Treasurer of this country.The coalition has an obsession with debt. It is waved in front of the Australian people as some sort of horrible event that is going to burden us for generations. Where do you think that debt goes? When the Liberal Party incurs a debt from the cost of a bridge, a road, a school or a fighter plane, is that somehow a good debt; but when a Labor government incurs a similar debt, then is it a bad debt? Is there a farm, a business or a household in Australia that has not invested in its productive capacity through the medium of debt? This is a nonsense. It is a political ploy. I am not arguing here that one does not keep an eye on the manner in which national governments incur debt. But I say to those opposite: don't come onto the floor of the House and preach to us about a $10 billion debt when your ex-Treasurer, the current Prime Minister, incurred a $25 billion debt. Where do you get off? Where does the hypocrisy cease in this debate?I turn to the issue of tax reform. Those opposite come onto the floor of this House and portray the last 13 years as if nothing happened in the tax reform area. I will keep reminding them of what happened in that area. We were left with taxation scales in a ramshackle state. We made seven changes to Liberal tax scales that were burdening households and businesses in this country. We reformed a taxation system that was haemorrhaging because of Liberal neglect and because of rorting that was taking place in the system. The Treasurer of the day would not take any action on that because he was at risk of offending his Liberal Party mates in Western Australia. We all know about that infamous bottom of the harbour scheme and we all know who was responsible for it and whose neglect it was, and that cost the Australian taxpayer in excess of $2 billion. If you want to ramp up that in current dollar terms, you will find that it is a staggering neglect from the man who now occupies the prime ministership of this country. We had high marginal rates of taxation and we had high rates of company tax. Those were Liberal taxes that Labor had to reform.So those opposite should not tell us anything about tax reform. Don't come into this chamber with a run-down 1960s tax, with only half the task done and with a massive deception being perpetrated on the Australian economy. Your Prime Minister said that he would `never ever' introduce it and your Treasurer said that if you exempted food from it, it would be a `dog's breakfast'. They are not my words, they are your own Treasurer's words. This is supposed to be tax reform?Let me tell you why we oppose this Liberal so-called tax reform. We oppose it because it is fundamentally unfair. This is the most inequitable set of proposals that an Australian government has ever put before the Australian people. This Liberal so-called reform massively transfers wealth from low income earners to high income earners. Your own Treasurer said about his own taxation proposal that if food were exempted from it, it would be a `dog's breakfast' of a tax. It would be `Nightmare on Main Street'. What about the theatrics on the floor of the chamber: the one-liners delivered for the press, the gazing up to the gallery and the arrogant smirk on the face? We now have, compliments of the new coalition in this country—the Liberal Party, the National Party and the Democrats—a `dog's breakfast' of a taxation system and a `Nightmare on Main Street'. It is not only a `Nightmare on Main Street'; it is a nightmare down in rural and regional Australia. The greatest deception is being perpetrated in that sector, and I will come to that.What is most insidious about this taxation package as it now stands and as it is now embodied in this budget document? It has been demonstrated in the Senate inquiry process that the compensation package is totally inadequate. The fundamental deception is that the Prime Minister gave an undertaking before the last election that no one taxpayer would be worse off. We put his tax reform claims under scrutiny. We did not take the Prime Minister's or the Treasurer's word for it, and we found that the compensation measures were horribly inadequate. But worse than this, the budget squanders a hard-earned surplus, a surplus that was created off the back of massive cuts to community organisations throughout the length and breadth of Australia.We somewhat resent it when the Treasurer comes onto the floor of the parliament and puts to us the proposition that the Labor Party do not like high growth, that we do not like low interest rates or low inflation, that we do not like good export performance. Just think of the logic of that. Why wouldn't Labor support high growth when we left the coalition with four years of growth in excess of four per cent? I ask those opposite to reflect on that. Why wouldn't Labor support a low inflation regime? After all, we broke the back of it and we handed the coalition an inflation regime in this country that has underpinned the economic performance of its past three years in government. That is the reality of the position, and the fallacy of the argument that you mount on the floor of this House. Why wouldn't Labor support a tax reform proposal designed to improve export performance? We gave the coalition an economy in which economic and export performance had been ramped up to the point where job growth and sustained economic growth were coming off the back of that. So I think there is much to argue about with the member for Indi and other coalition members who come into this House masquerading this budget and this so-called tax reform as real tax reform.This budget is a lexicon of broken promises. Central to the budget strategy is a tax about which the Prime Minister himself said, `I will never ever introduce it.' You must remember that critical promise to the Australian people: `I will never introduce this tax,' yet he has and it forms the basis of the budget we are debating on the floor of the House today.The second broken promise is a good one as well! The budget is based on a tax about which the Prime Minister said, quite dishonestly, that after its introduction no-one would be worse off. We have pointed out in the Senate inquiry process that when the tax reform proposal which underpins this budget has been subjected to real scrutiny, it has been found that most people are going to be worse off.This budget is based on the full sale of Telstra, yet it was a promise by the Deputy Prime Minister and indeed the Prime Minister that they would never do it, that they would never sell down 100 per cent of Telstra without a proper inquiry process. Another betrayal of the bush.We are not alone in opposing this budget and the measures that are contained in it. We now find that the dog's breakfast, the Nightmare on Main Street, as the Treasurer called the tax reform package that underpins the budget, is opposed by groups that previously supported, or were prepared to entertain with the government, the prospect of a goods and services tax and a review of business taxation.We now have ACOSS saying that this is a rotten package. If it is rotten at the core on the fundamental underpinnings, then the superstructure is rotten also. We have the Australian Society of Certified Practising Accountants and green groups saying that the fundamental underpinnings of this are shonky. We have a political wind sniffer in Victoria who has read the polls. He read them before the Treasurer started to go cold on it and then he was hauled over the coals by the Prime Minister and told to get back into bed with the Democrats.IJ4SNOWDONMr Snowdon—So have Court and Cowan.WU5O'Connor, Gavan, MPMr O'CONNOR—The dominoes are starting to fall. But down in Victoria, the man who delivered great wholehearted support to the Prime Minister on this great quest, on this crusade—the 10th crusade for taxation reform—has now said, `It's obscene. Get rid of it. Go back to square one.' This is the very proposal that underpins your budget and the budget we are debating today. That is not a Labor Premier saying that.IJ4SNOWDONMr Snowdon—Two premiers.WU5O'Connor, Gavan, MPMr O'CONNOR—We have two premiers and the Treasurer saying, `It's a dog's breakfast. It's a Nightmare on Main Street.' Well, why do you persist with it? Why do you persist with something that is fundamentally unfair? This great quest for economic and taxation reform is based on deceit. It is based on a deception—a deception by the Prime Minister that he would never, ever introduce it; a deception by the Prime Minister that he would never sell Telstra; a deception by the Prime Minister that no-one would be worse off by the introduction of this so-called tax reform.Down on the farm, many people have put their faith in the coalition, but they are now waking up to the reality. The farmers of this nation are small business people. That is the reality. And the Liberal Treasurer, that smug lawyer from Melbourne, and the Liberal lawyer from Sydney want to turn every farmer in the length and breadth of this country into tax collectors. Some achievement!The compliance costs for those small businesses are going to be huge. You are going to foist on the farmers of this country an inflationary tax reform in your terms. You and I know that, fundamentally, when the economy starts to slow if this tax is introduced, at the end of the day the farmers will suffer and so will the exporters. Don't kid me: watch the Landline program on Sunday, because the exporters said that there were no real gains to rural exporters from the New Zealand GST. (Time expired)Sitting suspended from 1.24 p.m. to 4.35 p.m.16:35:006590Prosser, Geoff, MPMr PROSSERRI4ForrestLP10—This government's responsible economic management is impressive. Amidst the turmoil of our region, Australia's economy is growing faster than the economies of Europe, faster than the economies of the developed world and faster than the United States. Even more impressive is the fact that we have managed to grow our economy while keeping inflation in check—Australia's inflation rate is lower today than it has been for 30 years. We have also kept interest rates down to their lowest level in three decades, saving the average Australian family with a mortgage $320 per month. We have also repaid some $24 billion of Labor's debt, and we have outlined plans for the Commonwealth government to become debt free by 2003. As a result of the government's strong economic management, Standard and Poors have upgraded Australia's foreign currency debt to AA plus, paying tribute to our `favourable economic performance and prospects, as a result of economic reforms, reinforcing resilience, flexibility, diversity and competitiveness'.We have achieved all this while delivering a $5 billion budget surplus—our third successive budget surplus. But we have not stopped there. This government has also undertaken the most comprehensive reform of the taxation system while our critics have dithered. As part of the government's tax reform plan, we established the Review of Business Taxation. In its latest publication, A platform for consultation, the review stressed the need for capital gains tax reform because Australia's capital gains tax regime is one of the toughest in the world. By almost every measure—the CGT rate, the level of rollover relief, the deductibility of capital losses—Australia is top of the list for zealous taxation where capital gains are concerned. Australia's CGT rate is too high—36 per cent for companies—and the marginal rate for individuals is not internationally competitive. Furthermore, under Australia's CGT regime, capital losses cannot be offset against other income—many other countries do allow this; the CGT rate does not diminish over the time the asset is held, as is the case in the United States, Canada and the UK; and our rollover provisions are too limited in comparison to most other countries.Australia does not have an internationally competitive or domestic conducive CGT regime because we are competing against countries with far more favourable CGT regimes. When Australia's capital gains tax was introduced in September 1985 by the so-called world's greatest Treasurer, Paul Keating, he used the following reasoning:In a capital scarce country one must ration the capital carefully. Therefore, the capital must go to the most productive areas of the economy rather than into over-investment in real estate or any other non-productive area of the economy, as has been the case over the years.We know that Keating got it wrong on capital gains tax, a tax that caused the very problem it was designed to avoid. Has capital gone to the most productive areas of the economy? No. It has instead become locked up in less productive areas such as underutilised real estate and underperforming shares. It has also created a road block that prevents venture capital from entering Australia. This has occurred because capital gains tax is a discretionary tax—you pay it only when you sell appreciated assets.This tax on economic activity discourages the efficient allocation of capital, reduces the competitiveness of Australian companies both at home and overseas, and constrains economic growth and job creation. Capital gains tax also discourages entrepreneurship because it creates a disincentive to risk making capital gain. This steers investment away from venture capital industries and lures those industries offshore. Australia's high rate of CGT ensures that we miss out on venture capital funds, funds needed to develop the high technology industries needed to secure future growth and development.Capital gains tax is causing a great distortion to Australia's share market because it penalises shareholders for selling. Unless shareholders wait until they have made a loss, they will pay capital gains tax on shares that have returned a profit. As a result, the share market is less responsive to market signals and this resistance affects Australia's competitiveness. Because capital gains tax is a relatively new tax, our share and property markets are skewed between pre-September 1985 and post-September 1985 assets. This causes a distortion in the share market because pre-CGT shares are effectively worth more to shareholders than post-CGT shares of the same value.There is a strong argument to extend scrip for scrip rollover relief. It seems reasonable that CGT should not apply where only paper changes hands because in these transactions the shareholder's net equity has not changed. When a scrip offer is made during a merger process under the current system, a capital gain may result for shareholders in the target capital company, even though the transaction is unlikely to involve cash with which the tax could be paid. Without funds to cover the CGT liability, shareholders are reluctant to approve of mergers and a reduction in merger activity is detrimental to the economy because mergers allow better economies of scale, increased profitability and enhanced competitiveness.Capital gains tax also causes major distortions to the property market because it interferes with a market mechanism for determining price and it discourages people from moving money into more productive areas of their own personal property portfolio. The net result is that property owners are encouraged to hold on to their asset rather than work their portfolio investments. Capital gains tax also distorts the value of property because the seller will often consider their CGT liability before agreeing to sell in order to calculate their net return after CGT. In some cases, the seller might seek the market price plus the CGT liability due on the sale. Ultimately, the price is whatever the market will pay, but the CGT component can also influence this price. This distorts the market's price mechanism for determining the value and utility of real estate. In effect, property may remain underutilised for longer, inhibiting the reorganisation of business structures, hindering development, employment and growth.A division having been called in the House of Representatives—Sitting suspended from 4.43 p.m. to 4.53 p.m.RI4Prosser, Geoff, MPMr PROSSER—As I mentioned earlier, capital gains tax is a discretionary tax—it is only paid when owners sell appreciated assets. This causes a distortion, effectively dividing the market into pre-CGT and post-CGT properties. Furthermore, the rate of CGT is so high that owners would rather hold on to their assets than sell and divert the income into higher yielding investments. This freezing up of assets discourages the realisation of capital gains. It inhibits the rationalisation of capital holdings, delays a firm's exit from non-core assets and alters the correct response to outgrowing a firm's property. From a government perspective, this reduces CGT revenues because owners of appreciated assets are encouraged to defer their CGT liability indefinitely.However, it should be said that, by providing limited rollover provisions, government has come part of the way in addressing some of the problems caused by the current capital gains tax regime for small business. There is an estimated $7.5 trillion in unrealised capital gains locked up in the portfolios of American taxpayers, and over the past 40 years the appreciation of capital assets has outpaced realised capital gains some 40-fold.The current CGT regime also causes problems when a property or part of a property is needed for compulsory acquisition. CGT does not apply to land resumed by compulsory acquisition, but it does apply to any property that might be sold in order to regain a property's utility. The current distortion in the market between pre- and post-CGT properties has a significant effect on property development. Under the current system, owners of pre-CGT properties may be reluctant to engage in development because it may trigger the CGT clock. This can result in the underutilisation of property and it has flow-on effects to employment, investment and growth. It also discourages pre-CGT owners from gaining the efficiency savings of developing their own properties—savings on the costs of additional stamp duty, conveyancing, et cetera, that a new developer would incur.The current CGT rules surrounding the inheritance of property also need reform. Under the current rules, CGT is triggered from the date on which the beneficiary purchases the property, not the date on which the inheritor acquires the property. In yet another area, that of testamentary gifts, Australia's capital gains tax rules have given rise to the crazy situation where benefactors refuse to donate properties because they will be slugged with a massive CGT bill. Fortunately, this bill addresses this problem by allowing a capital gains tax exemption for testamentary gifts of property to bodies eligible to receive tax deductible donations from 1 July this year. This is a small step in the right direction, and it is an area where further reform needs to be undertaken.Another area unfairly penalised by Australia's CGT regime is the venture capital sector. This point was highlighted in a recent article in the Australian Financial Review entitled `Exodus: Why Australia's high-tech champions are leaving the country'. In that article, Larry Lopez, a senior vice-president at Silicon Valley Bank, had this to say about Australia's high technology exodus:Until Australia gets some better tax laws, Australians won't be the beneficiaries of the success of Australian companies . . . a lot of the wealth that's created won't be enjoyed by Australians.Mr Lopez then said that Australia's capital gains tax stops US firms, especially pension funds, from investing in `early stage' Australian companies. Why? Because our CGT rate is far higher than it is in the United States. This means that venture capital funds stop at the border. Mr Lopez continued:Every time I go to Australia, I come back completely re-energised—the whole attitude in Australia is pro-technology, but the tax laws are anti-technology—they're anti-entrepreneurial.Venture capital investors are not long-term investors; they do not expect continuing dividends from their investments. A capital gain is the only gain these investors expect to make, and our CGT treatment is a barrier to this type of investment. By discouraging investment in venture capital industries, our CGT regime fails to assist the development of industries that spur on technological advance and create new jobs.Australia's hostile capital gains tax regime discourages would-be entrepreneurs from leaving comfortable jobs at regular salaries because it adds another layer of disincentive to risk taking. Our CGT regime also makes it difficult for entrepreneurs to find the capital they need to develop and commercialise their ideas in Australia. Entrepreneurs are risk takers; they put deals together, they raise capital and they create jobs. Entrepreneurs do not need the government to underwrite their investments, but they do need a fairer CGT regime that will enable them to raise capital and commercialise their ideas in Australia.The current global market for venture capital exceeds some $US80 billion, $US55 billion of which is in the United States. According to Roger Allen, co-principal of the high technology fund manager Allen and Buckeridge:Not one cent of that money has come to Australia because Australia has a hostile Capital Gains Tax Regime.Australia's CGT regime belies the reality that Australia must compete in a global market for venture capital. Foreign pension funds, particularly those in the US, are the main exporters of venture capital and favourable capital gains tax treatment is the main attraction for their investment.Australia's high rate of CGT discourages foreign superannuation funds from investing in Australia because, when they invest through limited partnerships or trusts, they are taxed as companies at 36 per cent. As a result, venture capital funds are bypassing or marking down Australian investment opportunities because they know that 36 per cent of their potential return will be lost in taxes. This restricts our access to venture capital funds and hinders the development of the rapidly expanding high technology sectors that form the frontier of new investment and future economic growth. When Australian entrepreneurs do manage to raise capital and develop new industries, our high rate of CGT makes it difficult for them to commercialise their projects in Australia. This encourages entrepreneurs to undertake the commercialisation of their projects overseas. As a result, Australia loses intellectual property, employment, economic growth and taxation revenue.How much are we losing? One need only look at a few of the Australian technology companies that have made the exodus to the United States to get some idea. ResMed, a medical systems developer which began at the University of Sydney and now has headquarters in San Diego, is worth $US420 million on the Nasdaq. Quokka Sports, an online entertainment company, conceived in Melbourne and now based in San Francisco, is about to raise $US57.5 million on the Nasdaq, giving it a capitalisation of several hundred million dollars. Brilliant Digital Entertainment, a games developer formed in Bondi and now based in Los Angeles, is worth $US68 million on the US Stock Exchange. Another, LookSmart, an Internet media company founded in Melbourne, is tipped to list on the Nasdaq in the next few months as being worth over $US1 billion.These are just some of the venture capital investments that Australia has lost because our CGT regime is not competitive. These companies now have American offices, are creating American jobs and are enriching American shareholders. A CGT relaxation would increase the rate of capital formation, economic growth and job creation. It would unlock vast amounts of unrealised capital gains, thus promoting more efficient allocation of capital. It would encourage entrepreneurship and innovation, particularly the development of high technology industries that have arisen as a result of the revolution in information technology, and it would substantially raise tax collections and increase CGT payments.17:03:006594Hatton, Michael, MPMr HATTONLN6BlaxlandALP00—The member for Forrest gave a very considered speech in relation to the problems with the current capital gains tax arrangements and the fact that more could be done, particularly to encourage US pension funds to invest. I indicate that our shadow Treasurer has indicated Labor's willingness to look at those issues and the importance of getting further venture capital funds into Australia. They are things that need to be addressed and addressed directly.We are looking at three bills— Appropriation Bill (No. 1) 1999-2000 , Appropriation Bill (No. 2) 1999-2000 and Appropriation (Parliamentary Departments) Bill 1999-2000 . In a cognate debate in relation to that vast area in the 1999-2000 budget, we are dealing with what is supposed to be a brand new way of approaching the budget papers. As is usual, the Commonwealth Treasurer has oversold the benefits of what is being done here. The move from cash accounting to accrual accounting and accrual budgeting has been heralded as if this is a vast new and previously untouched area and one that virtually no-one has done. He has noted, as have others, that New Zealand and Iceland have an accrual accounting approach and that some other countries are moving that way. Firstly, the Treasurer heralded this move after the former Labor Treasurer, the former member for Gellibrand, had indicated that it was Labor's intent to move towards accrual accounting. Secondly, the key purpose for the coalition government doing this is to have more transparent government budget papers.The Treasurer's approach to this smacks of the same kind of venture he put forward when dealing with the Charter of Budget Honesty. I think he can put forward an argument that a certain piece of legislation and the changes it makes are reforms and things for the better, but it is always dangerous when one overreaches. The Treasurer overreached greatly in what he claimed with regard to the Charter of Budget Honesty. Even the very name of that legislation reached too far and projected that it would do much more than it in fact has. With his approach to the changeover to accrual accounting methods, I think he has done the same; he has done too much.It is reasonable for any government to look at detailing how they raise and spend their money in different ways, and there may be ways that have long-term benefits. It has been argued by accountants in both New Zealand and Iceland who have looked at these approaches that one of the things that has happened for those governments is that they have looked at what they are doing in different ways and they have taken a longer term approach to their government programs. Because they are using accrual budgeting, things that were not apparent previously have become apparent. So it is the long-term effects rather than the more short-term and immediate effects that the government has been alerted too. That, in fact, can be a good thing. One could argue that this changeover, which has been very difficult for the departments involved, may have a series of advantages and benefits. But the key point the Treasurer has made about this move is that it is about greater transparency—that is, the budget papers are much more open and you can tell exactly what has happened.I want to use the first part of my speech to deal with a specific case study to see whether the Treasurer's assertion—I think he made too much of an assertion—that the government is far more transparent holds up. The shadow minister for finance, Lindsay Tanner, put in a request to the Minister for Finance and Administration and the Treasurer prior to the budget that the budget papers should not only present the new accrual accounting format and the approach to accrual budgeting but also keep the functional information we previously had. For example, when government departments go about things, perform functions and have jobs to do, that was previously costed on a cash basis. You could tell from one budget to the next—over a one-, two-, three-, four- or five-year period—exactly what was being spent on a particular function of a department.Because that functional information has been taken out, one of the areas where we get opaqueness—not transparency—in the new approach taken relates to the Australian Geological Survey Organisation. In last year's budget, $33.3 million was allocated to them for a specific function—that is, to identify prospective new oil zones in frontier areas, particularly the southern continental margins of the Great Australian Bight. I refer here to Budget Features 1999-2000, a report put out by the Library. In this particular case, I refer to Mike Roarty's `Significant budget measures' paper on the Department of Industry, Science and Resources. That was in the last budget. In this budget, what has happened? In this budget there has been a rearrangement of the financing. With that rearrangement in the financing there has been a shift in how this money is to be expended. But, instead of it being open and transparent, things are basically being covered up. The information has not been provided directly with regard to these programs.More specifically, if you look at the Australian Geological Survey Organisation as a whole—it performs a vital function for Australia and a vital function for private companies investing in Australia in the minerals and resources area by providing the statistical basis upon which those companies decide whether or not to go out and prospect for resources in Australia on either the landmass or on the continental fringes of the sea—you see that its ability to work effectively has been decreased. In one of the government's first budgets they decreased the number of staff from about 602 to 490. You will not find it in these budget papers because of the new approach that has been taken, but that 490 has now been knocked down to about 390.On 12 May the executive director of the organisation put out a press release. So it was not in the budget papers at all; you cannot find this information in the budget papers. He said that there would be a major restructuring and staff reduction in the Australian Geological Survey Organisation. In that press release he said that 72 permanent positions would go and 17 contract positions would go. This is not an insubstantial organisation, but I will quote from Mr Roarty's paper as to just what it does. He says:AGSO is Australia's national geological research organisation. AGSO's stated role is to improve the quality, extent and accessibility of publicly available geoscientific knowledge. This knowledge is aimed to enhance a more productive, competitive and diversified Australian mineral and petroleum exploration industries, management of Australia's ocean resources consistent with sustainable development principles, and development of strategies to mitigate the effects of natural geological hazards.This is not something that the private sector have been involved in previously, nor I think would they be likely to become involved in the kinds of functions that this organisation performs. We have seen over two budgets—one of the government's first and this one—a dramatic reduction in what this organisation is capable of doing, in the functions it can perform and the manner in which it can carry out its role with the necessary expertise.Currently, there are about 3,000 people in Australia who have expertise in the area of geological surveying. Martyn Evans, our shadow minister for science and resources, recently pointed out in an address to the Minerals Council and also in his speech on the appropriation bills that Australia, because of the diminution of work for the AGSO, faces a situation where those 3,000 highly skilled people, whose skills are very translatable to other countries in the world, may be lost to us—not for a short time but for a long period of time, possibly forever. They will take their skills elsewhere because they need to ensure that they have jobs.If we look immediately into these budget papers, there was nothing in these supposedly transparent budget papers about the dramatically changed function and role of this department. It was in fact covered up. It was hidden. You cannot find the information directly. You cannot trace that information over time. It is only in the non-associated press releases and the other material that comes out later that we find that an organisation has been decreased by almost 100 people. You then go on to make a further series of estimates as to what will be the effect of that. Martyn Evans has indicated that the effect could be that we could lose those highly skilled people to competitor countries.If you look at what the industry itself has done—it has done surveys in terms of the impact of these kinds of changes on the future productive capacity for Australia—one could expect that a 15 per cent cut in this budget will have an impact in about five, six or seven years time that could be quite dramatic in terms of not only employment within the minerals and resources sector but also the number of projects that are available because of this cut. So it is not a smart cut. It is not a sensible one. It is one that is readily made, as the government did in the first budget, but it is one that can have a deliberate impact.Take that in conjunction with the fact that, on the most recent statistics—as the shadow minister pointed out in his speech—in the last 18 months private sector exploration funding by companies for minerals and resources exploration has decreased in Australia from $300 million per quarter down to just $225 million a quarter. So if you take that fact, together with this cut in the resources available and the information available to those companies who were investing in Australia, then the impact down the track could be major in terms of employment and losses of earnings for the Australian people.So where it might seem sensible to the people making the cuts to just chop out one part of this and to think, `We won't really need it; it's not really important. We don't need that kind of government activity because we really don't believe in it,' this is not an area that is going to be taken up by private industry. We have not seen them marching forward in their battalions to replace this government activity. The end result of this is—not being able to find it in the budget papers, and it is a fairly major restructuring—I will quote from Mike Roarty's conclusion about this. He says:One of the central thrusts of the switch to accrual accounting was in large measure, increased transparency. This claim cannot be borne out in the AGSO case.I would argue that this is one small example of what was supposed to be transparent, but that change in function is in fact hidden within these budget papers. That mirrors the situation with the Treasurer's previous Charter of Budget Honesty. He trumpeted it as transparency; in fact, it has been meant to make it more difficult to get information about what has actually been happening.So on to the greater issues with regard to these appropriation bills. The two key underpinning features of these budget bills are that they are bills based around the goods and services tax and that they are also based on a presumption that at least 16 per cent of Telstra will be sold in the very near future, once the government secures the vote of Senator Harradine. Both of these are linked directly to the provision of a surplus. This is the third surplus in a row that this government has produced. I point out that in the history of the Commonwealth there have been only four other surpluses. They were produced in a row as well and they were produced under the Keating government.So this surplus budgeting, based on a series of cuts that we have seen in the past—the cuts to AGSO in this budget and the cuts that have been there in former budgets—has the effect that we have a $5.4 billion surplus. If we did not have a GST, the surplus would be a great deal more because all of the compensation measures that are flagged within this budget are to compensate for the introduction of a GST which raises more than twice what the wholesale sales tax brings in. As well, the importance to this coalition government of selling off Telstra has been underlined in these government papers. The expectation is that they will raise at least $16 billion, if not $25 billion, and that, through that, a great deal more of the government's debt will be paid off.We have seen in parliamentary session after parliamentary session an enormous amount of trumpeting from the Treasurer, the Prime Minister, every one of the government ministers and every backbencher you could imagine about how important it is to wipe away debt completely and about how the government should never have gone into debt at all and how it is important that we do go into surplus and stay in surplus forever. In fact, if you look at some of the reasoning within the budget papers themselves, they tell a slightly different story about past history. Labor had four government surpluses as a result of the recession in 1990-91. After that, we had a series of budget deficits which were major. That in fact is part of the economic cycle. We will go in the future into periods of recession and we will go in the future into periods of major depression—the world will not forever be able to escape the normal cycles that operate.So in the past we had surpluses and we also had deficits. David Richardson in his paper entitled `Government surpluses and debt' points to the budget papers being ambiguous about the long-term aim of fiscal balance versus surpluses, and he points to where we presently are in the current economic cycle. He quotes the budget papers:Adequate surpluses will be required while the economy is expanding to allow room for policy to respond in the event of a downturn, at least to the extent of allowing automatic reductions in the surplus, from lower tax receipts and higher unemployment assistance payments, to support demand.1There is nothing in that quote that I could disagree with, because there is nothing put there in Treasury's arguments that would not have been put previously when Labor put its four budget surpluses together. That takes account of the fact that in the good times if you put away more, when the inevitable bad times come you have more margin to take up the fact that it is the government's task to support people through periods of recession and to pay out very high unemployment assistance to keep people in readiness to go back into the work force.It should also be noted, and it is somewhere in these papers, that when most of the Asian countries that have had so much difficulty in recent times and have been through an economic firestorm, from Thailand right through to Korea, were hit with that economic firestorm, they were in fact running surplus budgets. So, purely running a surplus budget does not mean that you can avoid the kind of maelstrom they went through. Mr Richardson points out at the end of his very interesting paper, where he looks philosophically at what taxes are for, what is the point of a surplus and why at some stages during economic cycles you have to go into budget deficits, that you have to ask yourself what you are going to do with surpluses and look at what has happened in the past when surpluses were run. He looks at the US experience, where a lot of studies have been done in the past in terms of the effect of surplus budgeting, deficit budgeting and how you need to change your approach. He says that if you look there:. . . there were six periods during which the government ran surpluses and significantly reduced the government debt. In each case a depression followed (1819, 1837, 1857, 1873, 1893 and 1929).That is at page 28 of the report entitled Budget Features 1999-2000 . So trumpeting the three surpluses that this government has had, the surpluses in prospect—which are now less than they might have been because of the deal that has been done with the Democrats—and arguing for a future full of surpluses takes no account of the fact that the world's economic circumstances change. The balanced argument, saying that one needs to take care for the future and put aside at a time of relative plenty for when things will go bad, as they have after previous periods of surplus budgets within the United States, is an important corrective. The Treasurer, as he did with the Charter of Budget Honesty, has overstated the case in terms of the change from a cash budget to accrual accounting. The example of AGSO is but one case study of how that was an overclaim.17:23:006598Macfarlane, Ian, MPMr IAN MACFARLANEWN6GroomLP10—May I say what a pleasure it is to speak this evening on Appropriation Bill (No. 1) 1999-2000 , on something positive, after the unsavoury, unnecessary and, as it was shown, unwarranted events of the House this afternoon. May I just say on that matter that I think an Australian tradition has been upheld with the failure of the censure motion and that the move of the member for Leichhardt as a fair dinkum Australian to help a mate who was in trouble has been vindicated and warranted.Turning to the bill, we do trumpet the surplus in the budget, and well we should. The surplus of $5.4 billion contained in the 1999-2000 budget is certainly something to be proud of. The budget does, of course, lay the foundation for the GST that we will introduce next year with the support of the Democrats. It does lay the foundation for a far bigger tax reform package than just the GST. In doing so, we will give industry, business, small business and families in Australia the shot in the arm that they need to ride out the difficult circumstances that confront them in their day-to-day lives and that also confront Australia in the economic region we are in. I do not step away for one moment from the action of the government in ensuring that we do have tax reform that encourages people to work, that encourages businesses to succeed, that encourages families to look after their children—or makes it easier for families to look after their children—that rewards the winners in Australia and that ensures the economy continues to grow.It is interesting that the previous speaker, the member for Blaxland, quoted the surpluses of the Keating government. Of course, we know that the last five Labor budgets raised the national debt by $80 billion. During his address, the member for Blaxland asked what we were going to do with our surplus. What we are going to do with our surplus, of course, is pay back some of that Labor debt. We are going to pay back the debt of the nation so that our future generations are not burdened by an interest bill which consumes the income of the country. I think the Treasurer should be congratulated for producing a budget with a surplus at the same time as he planned for tax reform.The sale of Telstra, an asset which is worth a great deal of money, is something that I also support. It needs to be understood that Telstra is now a corporatised body; a body which the government and the minister responsible for communications, Senator Alston, have absolutely no control over. In fact Telstra has that unique status, not known anywhere else in the universe, of being half-pregnant: people think it is a government controlled organisation but it is not; it wants to be a private business controlled by shareholders yet, because of political interference, it cannot be.Telstra will give the best service to its customers, who include the people that I represent; that you represent, Mr Deputy Speaker; and that all regional members represent. Telstra will give that level of service and better, based on sound management practices, good control measures and modern technology. It is completely irrelevant whether or not Telstra is owned by the government. In fact, from my business background, I believe that to give a business the size of Telstra a long-term prospect it should be privatised and privatised completely, provided of course that some very basic principles are met. Those principles are that those people whom you and I represent, Mr Deputy Speaker, are given assurances in terms of getting not only a phone but also a communications system capable of taking them into the 21st century; a communications system that will allow them to use the Internet, which they cannot do at the moment in many areas; a communications system that will give them access to information and data wherever they live; and, most importantly, communications at a price comparable to that which is paid by our city cousins.Those sorts of gains in telecommunications, and that sort of treatment of people in regional Australia, will only happen if, firstly, Telstra is allowed to operate as a privatised company and, secondly, the government makes sure that it continues to contribute through the community service obligations and the universal service obligations and that it continues to manage the finances of this nation in such a way that it is able to pay for those community service obligations. This budget is a sure sign that a coalition government is able to manage its money and is able to manage the economy. The faith of the people of Australia in the Commonwealth government headed by John Howard is in a government which is going to lead us comfortably and securely into the next century, into the next millennium.Mr Deputy Speaker, let me remind you and everyone of a few facts about the economic management of this Howard-led government. Inflation is as low as we have seen in 30 years. Home mortgage interest rates are at the lowest they have been for 30 years. Unemployment has reached its lowest level this decade. Interestingly, as I reported in the House last night, private health insurance has risen to the highest level in the last decade, so we must be doing everything right.Not only is the current budget good for Australia but it is very good for the electorate I represent. The Darling Downs, with Toowoomba as its hub, is an area which has many industries and service organisations. It is a great centre for both health and education. The federal budget has provided a great surge in funding over the next five years in areas of particular interest and benefit to my area. The extra $553 million provided to Catholic schools over the next five years will be of particular benefit to the people of Groom and the people of Queensland who rely on Toowoomba to educate their children.Toowoomba has a number of fine Catholic schools. I have had the pleasure of visiting many of them in my short time as a member of parliament. In fact, I look forward to watching one of the Catholic school's football teams play this weekend. Dare I say that I hope they do not win because I will be supporting the opposition—but it too is a fine independent private school in Toowoomba. This government's commitment to Catholic schools has been shown loud and clear in this budget. Toowoomba and the surrounding region of Groom will benefit from their share of this $553 million.Of course, not all the schools in Toowoomba are Catholic schools. Some of the private schools in Toowoomba service families from the lower socioeconomic groups. The parents of these children are battlers and want to give their children every opportunity in life. They send their children to schools like Concordia, which provides an excellent level of education. In this budget the federal government has allocated some $561 million to schools such as Concordia to enable them to lower the fees charged to the parents of these children.Toowoomba is a city known for its health services and commitment to education. There is a commitment to health services in this budget. The commitment to health insurance is ongoing and very successful—I mentioned that briefly before—and we continue to pour money into ensuring that we can get GPs into towns like Clifton, which is just south of Toowoomba, into Pittsworth, which is currently looking for another doctor, and into small regional towns and communities right across Australia.The $43 million allocated over the next four years to provide an incentive for GPs to continue to operate in regional centres is the first real attempt to ensure that we maintain a basic level of health care. In the last decade there has been an alarming trend of doctors leaving the bush. As well as trying to keep the doctors who are there already, the government is introducing an undergraduate scholarship scheme for rural students to train as doctors. There are a number of other incentives to introduce new doctors to the bush.Toowoomba sits in a very focal point in Australia's transport system. The highway west of Toowoomba carries the highest tonnage of freight of any highway in Queensland. That highway fans out to all points west and north into three other states. Transports leave Toowoomba to go to Darwin. They service the vast mineral wealth of western Queensland and central Queensland, and they service the north-western parts of New South Wales. The federal government is continuing to explore the opportunity of a new range crossing—and don't we know how we need it; the range crossing was put in almost a century ago with horses and is probably safe only for horses. Figures indicate that the range crossing will be at safe capacity limit in less than six years. I can only urge that the government continue its investigation and add to the funds allocated in this budget, which was some $2 million, to further bring about a new range crossing to Toowoomba. The range crossing will lead to greater industrial and economic growth in the region, but it will also service much of western Queensland west of the Great Divide, and parts of the Northern Territory, South Australia and northern New South Wales.The defence facilities on the Darling Downs are well known. At Oakey we have an excellent Army aviation base, which I have had the pleasure of visiting. The base houses the Black Hawks, and it is now being used by the Singaporean Air Force to train their helicopter pilots. In the joint facilities at Oakey and Cabarlah the federal government has invested a further $1.9 million in defence projects.I mentioned before the issue of Telstra and privatisation. As part of Telstra's service to the region, and as part of the federal government's commitment to ensure that the people of my electorate are not disadvantaged by the phasing out of analog services, a commitment also given by the previous Labor government, the latter part of this year will see the introduction of new technology in the form of CDMA—code division multiple access—which really means nothing to me, and I doubt whether it means a lot to most people. What does mean a lot to them is that this mobile phone system will enhance the ability of people in the bush to communicate. It will give the voice quality and confidentiality of a digital phone system combined with the data transfer ability of that system. As we know, digitals do not work in the bush—and that is another legacy of the previous Labor government—but we need the coverage of analog, and that is what we are going to get out of the CDMA.Not all the budget allocations that will go to Toowoomba this year are in the millions of dollars. One of the more important allocations in this year's budget is $50,000 to the Rockville School Parents and Citizens Association to fund an early intervention program to build tolerance between races. I congratulate the people involved in that project—the people of Rockville and its small community—for firstly bringing forward this project. I congratulate the minister, Philip Ruddock, for funding this project from the Living in Harmony initiative.This project is making a real difference to the relationships between the various ethnic groups in Groom and in particular in Toowoomba and the area of Rockville. It is a successful project and the money that has been provided will allow this community to employ a `peace builder' project officer and create an environment which not only reduces violence but establishes a more peaceful way of living in schools, organisations and communities. There are other projects which I hope to see funded in future budgets. I am sure that while the coalition remains in power and continues its strong economic management these projects will come to fruition if the economics and the environmental impacts stack up.One of the most imaginative projects I have ever seen is the project to divert the waste water—the sewage—of Brisbane back onto the rich farmlands of the Darling Downs. The project has the potential to bring between 130,000 and 150,000 megalitres per year into our region, thereby saving Moreton Bay and the beautiful environment of Moreton Island. There is of course a flow-on effect into the beautiful Pacific Ocean, but that water will create enormous wealth west of the Great Divide. It has been said that it has the potential to give $1,200 per man, woman and child in Groom. I am currently working with the local group, Vision 2000, to see if we can get that project up and going. Whilst it is primarily a water resource—and therefore a state government issue—I am lending my support and looking at opportunities for the federal government to get involved.The other thing that is causing a lot of excitement, not only in my electorate but in all regional eastern Australia, is the Melbourne to Darwin railway line. At meetings today—and at meetings almost weekly now—we have continued to explore the possibility of giving a real transport benefit to people in regional communities.There has been a lot said by governments of both persuasions about regional development. In my opinion, this project is the first and the biggest development program ever put into regional Australia. It will bring the opportunity for equality of transport and communications to the people but, most importantly, it will give an opportunity for the industries and businesses—not only in Groom, but right across the eastern inland—to have a competitive base from which to operate.With lower transport costs, we will see industries re-establishing in inland Australia, and it will be the thing that brings people back to the bush. Government programs always have limited opportunity to change the way people go about their lives and where they want to live, but the thing that brings people anywhere is jobs. This railway line has the potential to put jobs back into the bush. With jobs come families, with families come services and with services come population.I look forward to the introduction of this budget, and I look forward to watching the introduction of the next budget, because Australia's economy, to quote the Treasurer, has been `fireproofed' from the Asian crisis. It is a clear example of the sound economic management of the Howard-led coalition government. Its economic management has allowed the Australian economy to outgrow virtually every other economy in the world. It is something that, as a member of the government, I am proud of.17:42:006602Latham, Mark, MPMr LATHAMK26WerriwaALP00—Just to pick up the last point of the honourable member for Groom, an economy with a current account deficit running at six per cent of GDP is hardly fireproofed. An economy with record foreign debt is far from fireproofed, and an economy with a record trade deficit in the month of April just past is by no means fireproofed from any of the external threats that we now face.That brings me to the main theme of my response to the 1999 budget, which is to examine the unravelling of this government's macro-economic strategy. It is very important to get Australia's economic performance in proper perspective. The truth is that we have experienced a great leap forward in productivity—both labour and factor productivity. Anyone with a basic knowledge of economics would understand that you do not get a great leap forward in productivity overnight. It cannot even be generated in a full term of a parliament.What Australia is now experiencing is the great economic legacy of the Hawke and Keating governments. That is the reason why we have a leap forward in our rates of productivity. So the Prime Minister, instead of trying to claim credit for these achievements, as he did earlier today in question time, should actually be striking the Keating medal for economic achievement! That is the truth about what has happened: the micro and structural economic reforms of the Hawke and Keating governments have produced a structural lift in our labour and factor productivity.I cannot for a moment pretend that, for all the achievements of those governments, they were perfect in every respect of economic management. There was some unfinished business which produced some big promises from Mr Costello and Mr Howard prior to the 1996 election. The unfinished business of the Keating government was our chronic current account deficit problem—the permanent brake on Australia's long-term rate of economic growth, induced by difficulties on our external account.In 1996 the then Howard opposition set itself one great test of economic management. Its one great promise to the Australian people was to deal with our current account deficit problem to thereby deal with our foreign debt difficulties—and this was all going to be generated by addressing the paucity of national savings. That was the big promise. That was the one great test that this government set for economic management. It did not relate to tax reform. It did not relate to industrial relations reform. All its rhetoric in 1996 was built around national savings, the current account and foreign debt.By that one great test and those great promises, this government has been an abysmal failure. This government has done nothing to increase national savings. It has done nothing to deal with our chronic current account problem. It has done nothing to release the brake on Australia's long-term rate of economic growth. It is by those fundamental failings that it will now be judged. You cannot get away from some of the fundamentals in economic policy, and in that regard this government is running into difficulties.As I mentioned earlier, we experienced a current account deficit for the March quarter that has touched on six per cent of GDP and in the month of April a record trade deficit. That will surely kick the current account deficit over six per cent of GDP when the June quarter figures are recorded and released. So this government has not been able to fulfil its basic economic promise. There are few, if any, rules in economics, but one of them I tend to repeat—I know my colleague the member for Isaacs has heard this many times, but it bears repetition because it is in many respects the golden rule of the Australian economic circumstances—is that a small economy with weak national savings cannot run faster than its trading partners without incurring a problem on its external account. Whether you are Labor or Liberal, whether at the top or the bottom of the economic cycle, that is the one thread that runs through our economic performance for the past 15 to 20 years, and you cannot get away from it. And the problem is still there. This government has done nothing to address our chronic problem with national savings and the current account.Of course, that current account deficit drives up foreign debt and makes our companies much more susceptible to takeover by global capital. We are susceptible also to risks on the international markets. With a rising current account deficit, we run the risk of difficulties on Wall Street transferring into our economy. I think it is true that if the American economy in the next couple of years sneezes the Australian economy will catch cold. These are the fundamentals, and they point to the failure in this government's strategy.The whole strategy in the Costello budgets has been based around the twin deficits theory: the idea that, if you reduce the federal budget deficit, you will reduce the current account deficit. We have seen a reduction in the federal government deficit and in fact the federal government moving into savings, but at the same time the current account deficit has continued to rise. So the government's assumption on the twin deficits theory has been false, and it has failed to deliver on its basic economic promise.The national savings have not risen. All we have seen is a substitution of public savings for private savings. Public savings have just replaced private savings, and national savings have not moved. This is a government that decided to bring the budget into savings by cutting expenditure in areas of essential services—education, health, child care and housing. Of course, as the government has spent less in those areas and saved more, households have been forced to spend more and save less, and the net impact on national savings has been zero.You just cannot cut education spending and think that Australian households will not put their own spending in to compensate. You cannot cut child care, trying to force women back into home, without some women deciding, `I like a career; I like a professional life.' And they spend more out of their own pocket for child care to compensate for the absence of government spending. You cannot cut back on housing without Australians having to spend more out of their own pocket on housing. You are just seeing these substitution effects. The government has spent less and saved more, forcing households to spend more and save less. The net impact on national savings has been absolutely zero.Of course, the household savings and debt circumstances now are quite disturbing, and that shows up in the Reserve Bank's recent report on monetary policy. In 1990 household debt in Australia was 50 per cent of household disposable income. It is now 90 per cent; that is, in less than a decade, Australians have almost doubled their exposure to household debt, and this has driven the saving rate through the floor. In 1989 the Australian household savings rate was nine per cent; that is, for every dollar of disposable income, Australians were putting 9c into their household savings. But now of course in the latest national account figures that has fallen to 0.4 per cent. Just imagine what that now means. For every dollar of disposable income, Australians are saving less than half a cent.A nation that refuses to save is a nation that can never be secure in the global economy. Australia needs a solid base of national savings to help fund our national investment. If we do not have that savings in Australia, we are forced to borrow on the savings of other countries. That, of course, generates our current account and foreign debt problems. It just cannot go on that way. This government needs to lift national savings, as it promised to do in 1996, and thereby release the brake on Australia's long-term rate of economic growth. Unfortunately, this government has no strategy for household savings. Its only strategy was to force households to spend more and save less by virtue of federal budget cuts in 1996, 1997 and 1998.Of course, these things can get even worse. In terms of macro-economic strategies, the government's GST strategy is something of a sitting duck, because the government has locked itself into massive tax cuts coming on line on 1 July next year—$12 billion of tax cuts—and it may well be that the last thing the Australian economy needs at that point is a huge fiscal injection. The net impact of the government's tax package is a fiscal stimulus of one per cent of GDP. At a time when our imports are running way ahead of exports, when household spending is sucking in more imports to Australia and when we are running well ahead of the growth rate of our trading partners, generating a current account problem, there is the risk of the Australian economy overheating.I have been on about these themes for quite some time, and I am not used to the Secretary to the Treasury, Mr Evans, joining that chorus of concern, but that is what he did just yesterday at the Senate estimates hearing, where he said:. . . one would expect that if growth was strong enough to be heralding a problem on inflation you would see a monetary policy response.That is quite plainly an increase in interest rates. So this government has locked itself into a fixed macro-economic strategy that might be quite inappropriate 12 months from now. You have the Secretary to the Treasury pointing out that if the economy continues to grow strongly it will not need this stimulus from the GST package and that may force an increase in interest rates.With household debt at 90 per cent of disposable income, Australian households are very tightly geared to their debt, and the last thing they need is an increase in interest rates. This government is really going to challenge the family budget—and, I dare say, challenge its own electoral prospects—through poor economic management. If we see an increase in interest rates, households will feel the pinch, and that will have an adverse impact right throughout the Australian economy and Australian society.The government has failed in these areas. Its main task was to lift national savings. They have not moved in three years. It said it would release the brake on long-term economic growth. Anyone can pump the economy up for the short term, but growth is only sustainable if Australia does something about its chronic current account problem, and that of course has not been alleviated by this government. In many respects, it is getting worse—six per cent of GDP and rising and a record trade deficit in April. This problem will only grow worse for the remainder of 1999.I turn now to one of the very few policy initiatives in this budget. It was a budget lacking in policy ideas. One of the very few related to schools funding. Australian schools are yet another victim of Australia's federal system of government. We run a quite unusual system of school funding with two streams: one stream with the federal government funding non-government schools and another separate state government stream for government schools. This has led to a whole range of problems. We normally see this sort of difficulty in the health system. School funding is getting to the point where the dual funding structure is generating a whole host of problems. The first of those is an inadequate state funding base to look after the government schools. That difficulty has been worsened by this government's regressive enrolment benchmark adjustment policy. The Australian states do not have a growing revenue base, and for that reason they have had to cut back on government school funding. At the same time, there has been quite an expansion of federal school funding for the non-government sector.The second problem is cost shifting. Because of these financial difficulties, you have seen state governments closing down government schools, knowing full well that the federal government will fund the opening of non-government schools. In Victoria there has been the ridiculous circumstance of a government school with a couple of hundred students closing down and then a non-government school, using federal funding, opens up on the same site in the same buildings using the same school facilities—a deliberate attempt by the Kennett government to shift the cost of school budgets off the state budget and onto the federal budget. That is not good public policy, and it is certainly not good for the school sector as a whole.The third problem has been a substantial increase in government school fees. Government school budgets now feature an average seven per cent funding by parental contributions. For every $100 of government school funding, $7 comes out of the pockets of parents. So we are starting to move substantially away from the concept of free public school education in this country, and that is a very worrying trend.The fourth problem is a neglect of the needs of disadvantaged schools. In recent decades, we have seen a polarisation of the labour market in Australia. Stronger suburbs are getting stronger, weaker areas are getting weaker, but we have not adjusted for what that might mean in terms of a disadvantaged schools policy. I fear that running disadvantaged schools within the comprehensive system is not going to be adequate to address these bad neighbourhood effects that come out of a polarised labour market.Something needs to be done about this bizarre and unsatisfactory dual funding system in our schools. We need to unite the funding streams to establish a common national standard for what an average Australian school might be expected to achieve and then, through cooperation between federal and state governments, fund all schools up to the national standard on the basis of need. To unite the federal and state government funding streams would be a major breakthrough in the fairness and efficiency of our school funding.One positive aspect of this government's reforms is that the new SES funding system has the potential to do just that. My concern, though, with a note of caution, is that Dr Kemp is likely to use this new funding system as a way of cashing out school entitlements; that is, to get onto his ideological hobby horse about vouchers. Dr Kemp will have a very narrow ideological agenda with the new funding system. I believe the Australian Labor Party should try to use this new system more for the purpose of equity: to establish a Commonwealth-state schools agreement that pools all the schools funding—government and non-government—and then allocates it school by school on the basis of need.We can do that because of this new system that has been introduced for non-government schools. It is an assessment of school funding based on the socioeconomic factors for each of the students. It looks at the school catchment and the school population and produces a funding assessment based on student addresses and census data—the ABS census data using some of the census collector district material. Each school would have an index which measures its relative socioeconomic status; that is, an accurate school by school assessment of school need and school circumstance. It would then be possible to have for every school in Australia—government and non-government—an accurate assessment of their needs and circumstances and to then allocate the money according to those particular needs. The only thing that would need to be varied, of course, is to build into the assessment for non-government schools a judgment about the capacity of parents to pay for the private school education, given the fact that they have made a choice to move outside the free public school education system.So the possibilities are there to reunite the government funding streams for both government and non-government schools; to have a socioeconomic index of educational need for every school around Australia and then, with that special consideration of non-government schools, fund them on the basis of their need and their circumstances; and to have true equity in the Australian school system. It would close down the problem of cost shifting. It would not be possible for the states to try to shift their budget costs onto the Commonwealth for their school responsibilities. Best of all, it would end the 150-year poisonous debate we have had in this country about state aid.The truth is that state aid is necessary. There are many needy non-government schools just as there are many needy government schools. There should not be a funding system that says, `We treat government schools differently from non-government schools.' A needy school is a needy school, and they should have the same equitable funding across the country other than the judgment that, of course, there should be some parental contribution to non-government schools based on their capacity to pay.To end the cost shifting, to end the inefficiency, to end the inequities and to end the poisonous state aid debate which has plagued us in this sector for more than a century would be a magnificent achievement. This new funding system really releases that possibility. I would urge everyone in the parliament to have a close look at the socioeconomic status funding system that Dr Kemp has introduced, stand firm against his proposition which will lead to school vouchers but support the idea of a fairer funding system in this country based on the new possibilities.The Howard government is not implementing this new system properly. It applies to just 10 per cent of non-government schools around the country. Every potential loser—that is, the wealthier schools—will lose nothing under this government because they get the money they have now plus indexation. So the possibilities to redistribute money from wealthy to needy non-government schools are limited under this government's use of the new funding system.The Catholic school system has been excluded altogether from the funding arrangements. This, unhappily, ignores the inequities within the New South Wales and Queensland Catholic systems. Those two states, unlike their counterparts in the rest of the country, produce equal per capita funding for each school diocese. So you do not get any equity distribution within the New South Wales and Queensland Catholic systems diocese by diocese. The member for Forde would know that. You, Mr Deputy Speaker, would know that. It leaves a lot of Catholic schools in needy circumstances, particularly in my region, Western Sydney.State aid was primarily designed to assist needy Catholic schools, not to ignore the need for equity within their state based school systems. It is a simple matter of fairness and accountability in the use of public funds. I believe the government should expand this school by school index to the Catholic system, and it should say in return for federal funding that, in New South Wales and Queensland, there needs to be a much more equitable distribution of funds in those systems. That would be the fair and decent thing to do as part of some substantial improvements in school policy that are long overdue. (Time expired)18:02:006607Elson, Kay, MPMrs ELSON6K6FordeLP10—I believe that most members of this House come here with a genuine desire to do what is best for the people of Australia. We do not always agree on the best ways to achieve it, but we know we must work towards building a nation where everyone is given the opportunity to succeed, those who experience difficulties are helped and we pass on a better quality of life to our children and their children. As I said, there are vastly different views on how to achieve this. Certainly the approach the Howard government has taken, reflected in this 1999-2000 budget, has been a total contrast to that of the previous government.This budget delivers a $5.4 billion surplus. The last budget of the Labor government promised a surplus but actually delivered a $10 billion budget black hole. But debt and deficit were the way of the Labor Party. Their last five budgets saw government debt soar from $16 billion to over $96 billion. Interest payments alone on that amount were a staggering $9 billion each year.Anyone who runs a household and has children knows how tough it can be to balance a budget. It takes a responsible approach—making judgments between genuine needs and desires and weighing your capacity to pay when making spending decisions. Such difficulties are inevitable, which is why it is important to save for a rainy day or to get on top of debts so you are in a better position to tackle any future financial problems. It inevitably means sacrifice, hard work and restraint, but the benefits are security, certainty and a better way of life for our families.No parent, however well meaning, would spend wildly beyond their means and run up an enormous credit card debt in the guise of providing more for their children's future because we know the buck eventually has to stop. We know it is not responsible to run up huge debts. It means we cannot meet mortgage payments and we cannot afford necessities, and it threatens the financial security that we all work hard for. It does not make sense and it is not by any stretch of the imagination compassionate.Yet, this is precisely what the previous Labor government did during their terms in office. They spent billions of dollars more each year than Australians could afford. Despite continually increasing their indirect wholesale sales tax and a raft of other taxes and, may I add, not delivering the tax cuts they promised, they simply could not afford the massive spending programs that they embarked on. That perhaps would not have been so bad had their programs been commonsense ones that actually helped families or small businesses or the record one million unemployed people they created.But the fact is that programs like Working Nation, which cost billions of dollars, produced very little by way of positive outcomes. Labor had a parade of revolving door training programs that were notorious for shuffling people off the dole queue. They threw massive amounts of money at serious issues like the welfare of our indigenous people, yet they achieved nothing in terms of the very crucial areas of improving health, housing, real education and employment opportunities.Under Labor, the welfare debt ballooned and they claimed that there was no fraud. Yet, since we were elected to office, we have saved the Australian taxpayers a massive $46 million each week by making sure that only those who are entitled to benefits actually receive them. By cracking down on welfare cheats, we are making sure that the welfare is for the needy, not the greedy. We are making sure that taxpayers' money is not wasted, it is fair and it makes sense.Labor claimed record spending on the environment, yet serious issues like salinity and the Murray-Darling Basin were virtually ignored in favour of trendier issues. This was Labor's biggest failing. Even the member for Batman has today acknowledged that Labor lost their way, that they spent huge amounts of taxpayers' money on the issues that really did not matter to mainstream Australians.In fact, it is the coalition that has delivered the biggest ever environment program, our Natural Heritage Trust, which was a social bonus of the sale of the first third of Telstra. This huge endeavour is providing real, practical support through programs like Landcare and Green Corps to help local communities to help themselves. It is spending that makes sense and delivers real and tangible benefits.This budget delivers further, with $51 million for Landcare, increased funding to protect and manage our ocean resources, $3.4 million to increase the protection of the Great Barrier Reef, $21.7 million for the River Care Program and a boost to the fantastic Green Corps program with more than 6,800 extra places for young Australians. I have seen first hand what a fantastic program Green Corps is, with two teams of young volunteers working in my electorate to preserve and restore the unique hinterland environment at Mount Tamborine and Canungra. They do a great job and they are tireless workers.It is practical programs like Green Corps that are the signatures of the Howard government's approach in office—sensible spending to deliver maximum benefit to the community. That is what Australians want from their government. The responsible management of the economy by the Howard government, as reflected in this budget and our previous ones, will bring cascading benefits for years to come. That is what Labor fails to realise. By paying back debt, reducing the annual interest bill and getting the budget back on track, we are creating enormous opportunities for future government spending where it is needed most, because the bottom line is that all the good intentions in the world amount to nothing if there is no funding available for the government to actually deliver practical assistance.I remember well the first budget when we came to office—the Labor Party shed buckets of crocodile tears and said we should not have reduced the deficit so much, that it was not necessary. After the next budget, they said again that the surplus was not necessary. They actually criticised us for beginning to pay back the massive debt that they left behind, and in their view it was not necessary.Yet how would Australia have fared when the Asian economic crisis hit if we had not taken the right decisions back then? Where would we have been if we had taken Labor's path and kept racking up the debt and deficit? A few things are certain: we would not have been the fastest growing economy in the world right now, Australians would not be enjoying the enormous benefits of the lowest home loan interest rates in 30 years, unemployment would not be at its lowest level in nearly 10 years and we would not be able to afford the many necessary and compassionate social programs that the budget delivers.While we still have a long way to go in paying back Labor's debt, we are delivering the benefits of our responsible economic management now by helping those who need it most. For example, this budget provides an extra $209 million for better hearing programs so that more pensioners, part-pensioners and veterans have access to hearing services and an extra $84 million for respite care services to help carers of people with dementia and cognitive behaviour disorders. Having worked in that industry for 15 years prior to coming to government, I know first hand that that area was neglected the most and that these people are applauding these endeavours by the Howard government. There is also $230 million to address youth homelessness through the national homeless strategy's Support Accommodation Assistance Program, an extra $20 million for respite care for carers of young people with disabilities and an extra $10 million for the disability employment model.There are now a record 206,400 apprenticeships providing young people with practical skills. The Howard government has provided these to help fix the low apprenticeship levels left behind by Labor. We are increasing education funding by a massive $870 million over the next four years, bringing our annual spending on education to $11 billion. That indicates an extra $131 million for literacy and numeracy to make sure that all Australian children learn the basic reading and writing skills. It is indeed a sorry indictment of Labor that, under them, many Australian children were leaving school unable to even read or write.This budget also includes an extra $19.8 million to teach our children about the dangers of drugs and even more funding, used under our Tough on Drugs plan, for rehabilitation services to help addicts recover. Tough on Drugs is another of the Howard government's practical, sensible plans to make a real difference. Drugs destroy Australian lives and they are the root cause of much crime and family breakdown.I would like to take this opportunity to express my full support for the Prime Minister's stand against heroin trials. I agree that it would send completely the wrong message to our young children when it comes to drugs. We have to let our young people know about the dangers of drugs and we have to provide support to help people who want to kick the drug habit, but I do not believe the way to do it is by saying, `If you take drugs and you're badly addicted, don't worry, the government will provide you with some free drugs.' That is not the approach that I believe we should be taking and, from discussions I have had, many people in my electorate strongly share this view.There is enormous community support for the Prime Minister's sensible approach to tackling the drug menace aimed at education, rehabilitation and cracking down on drug traffickers. It is commonsense, it is in the national interest and it is fundamental to our basic society. That is where Labor get it wrong.Labor also think that social policy is all about appeasing their special interest groups who are pushing their own causes. Supporting families through tax cuts is not social policy to them because it is not a handout. It is letting people keep more of their hard-earned cash rather than paying it in tax. But the fact is that I and my colleagues on this side of the House believe that social policy is not about handouts; it is about providing opportunities for people to improve their situation. It is about getting the government out of people's lives and letting all Australians make choices and decisions for themselves and their families.Why shouldn't people be able to keep more of what they earn and make choices about how they spend it rather than have the government take it from them and spend it in the way they think is important? Labor think compassion and social policy are about giving money to every possible noisy interest group, regardless of whether it has community support and even though it is against the national interest. They attack the Howard government and they have many friends in the national media who also like to push the line that the government does not have a social heart and that we are not interested in people, just economics.As I have said before in this place, responsible economic management and a social conscience are not mutually exclusive. In fact, you cannot have the latter without the former. You cannot have social programs without the money to fund them. That is where Labor went wrong. Not only were their social programs way out of touch with mainstream Australia but their approach led to a massive blow-out in government debt that the coalition is working hard to repay. Because we are beginning to repay that debt and the economy is thriving, we can continue to build on our many social programs to date.Our real, practical programs include our focus on immunisation to protect our children. This campaign has been a tremendous success, and I congratulate our Minister for Health and Aged Care on achieving improved levels of immunisation. It was appalling that, under Labor, Australia's immunisation levels fell lower than many Third World countries. As a mother of eight children, this is an issue very close to my heart, especially as I had to witness one of my own children struggle with whooping cough, which she contracted in the first few weeks of life, before I could immunise her against it.These preventable diseases must be eliminated from our society in order to protect all of our children, especially our babies. They cannot be eliminated unless we increase immunisation levels from Labor's appalling 52 per cent to well over 90 per cent, and I am pleased to say that we are well on the way to achieving this. It is another social problem that, as a government, we have identified and tackled and we are continuing to solve.Another problem is the plight of the long-term unemployed. As we all know, unemployment hit a record high level under the Labor government when the current Leader of the Opposition was the employment minister. He sat on his hands and let the unemployment rate soar to over 11.2 per cent. Now we have got unemployment down to its lowest level in ten years—and not by fudging the figures, as Labor did for many years. When people are participating in Work for the Dole, they still appear on the unemployment figures, unlike many of the Labor Party's so-called training programs. Work for the Dole is the ultimate social program. It helps those who participate and it directly benefits the community. It has been and continues to be a resounding success, because it embodies the commonsense approach of the Howard government—and mutual obligation itself is the fulfilment of the community's sentiment.I keep in close contact with the local Work for the Dole projects in my electorate of Forde, and I am pleased to say that we were part of the pilot program and now have many more projects operating. The results are remarkable, just as they have been throughout the nation. The strongest support comes from those long-term unemployed who participate. It boosts their self-esteem as well as their determination to find work. Most of all, it gives them a sense of self-worth and it makes them feel part of the community.This budget provides $111 million to double the number of Work for the Dole places to 50,000. But despite the enormous benefits it brings to the long-term unemployed and the community at large, the Labor Party do not see Work for the Dole as a social program. They are opposed to the concept of mutual obligation, and the fact is that Labor will get rid of Work for the Dole if they get back into office because their mates in the union movement are opposed to it. It is as simple as that. Because Labor are beholden to so many special interest groups, they are unable to make decisions that are right for Australia. Their idea of a compassionate government is not whether you put in place programs that deliver real benefits but how much money you throw at a particular problem and how well you appease the noisy interest groups. That is not what the people of Australia want or expect.This budget is all about paying back Labor's debt so that we have the funds in the future to ensure that people who genuinely need assistance from the government are able to receive it. It is about creating a prosperous, compassionate society where people work together to build a community spirit and goodwill. As a government, you need financial security to fully deliver this. This government is 100 per cent committed to governing in Australia's national interests, and this budget reflects our commonsense approach to doing just that.18:18:006611O'Byrne, MichelleMs O'BYRNE84SBassALP00—This budget illustrates just how quickly and how far this government is prepared to walk away from the needs of regional Australia. This government, which prides itself on its own special definition of choice, has offered a choice to regional Australia—and it is not one that they sought. This government offered a choice between a job destroying tax, the full sale of our telecommunications service and the most basic level of access to regional programs and government assistance.Regional Australia has a right to expect a guaranteed level of infrastructure and service from any government. Instead, what we have is a budget that walks away from the needs of regional Australia. Even the President of the National Farmers Federation said in his press release on budget night:. . . there is a long way to go before rural and regional Australians will feel they're getting the same level of services as those who live in cities.The needs of Tasmania, where my electorate is based, are in some sense pretty self-evident: jobs, regional infrastructure, access to services—just to name a few. This budget goes no way towards addressing these issues, but nowhere is it so deficient as in the area of jobs and job creation. Unemployment in the northern statistical region of Tasmania, which encompasses Bass and the top part of Lyons, is currently running at 11.4 per cent. The participation rate is less than 70 per cent, yet this government has failed to implement any programs for real jobs. In his speech to ACOSS on 5 November last year, the Prime Minister said:Maximising employment growth will be a priority for this government in its second term.Perhaps the Prime Minister meant some time later in his second term, because this budget does not maximise employment growth. The issue of employment assistance is conspicuous only by its absence. The people of Australia deserve much better than that. They deserve a government that will tackle the job problem head-on, that will make it a major part of any part of its budget. Instead, we have what Paul Cleary from the Australian Financial Review called `hints' at `possible solutions'.People are making a decision to opt out of the search for work. We are a nation that tends to define people by the work they do. It is generally the first question people ask when they meet you. Constant rejection and loss of spirit causes many people to just drop out, and that is the future that this government is prepared to consign Australians to. But perhaps regional Australia is expected to be grateful: after all, we were promised $90 million for the rural and regional apprenticeship scheme. We only got $50 million, but one must be grateful for small mercies.We have had an extension of the Work for the Dole program so that a few more people can receive no training under this `culture of blame' scheme. It is not good enough. The government have failed on jobs, just as they are failing on delivering services to rural and regional Australia. Their willingness to ignore service provision in regional Australia is summed up when we look at their plans for Telstra. On 23 January 1996, in an interview by John Laws, the now Prime Minister was asked whether he would sell one-third of Telstra in that term. The Prime Minister responded:In that first term one-third of Telstra, no more. If we decide to sell more, we will put a proposal to the Australian people as part of our policy seeking their support. Now nothing can be fairer, more open, more explicit, more democratic than that.This government went to the election last year with a promise to the Australian people—a promise not to sell more than 49 per cent of Telstra without a full, independent inquiry. Let me quote from a press release from the Minister for Communications, Information Technology and the Arts on 22 July 1998:The government will seek to sell the remainder of Telstra in stages—the first sale will be 16%, which will leave 51% . . . in government hands . . . no further sale beyond 49% will be possible until the government has established an independent inquiry which will assess Telstra's service levels to customers in each of the metropolitan, rural and remote areas against the prescribed standards. . . . unless and until the independent inquiry certifies that service levels are adequate, there will be no further sell down beyond 49%.This budget presupposes the full sale of Telstra. This budget pre-empts not only the findings of an inquiry but the calling of an inquiry. This budget shows exactly how much faith rural Australia should put in the promises of this government.This government has had the full privatisation of Telstra as their plan from the beginning, because they are consumed with an ideological obsession. They do not want a publicly owned service, but they have never received endorsement from the electorate for the full sale. And that is because the electorate knows what the privatisation of Telstra will mean. They know that Telstra will put shareholders first. In fact, one National Party member on 8 July last year, just prior to the election being called, said:. . . when you strip away the rhetoric what Telstra is really saying, quite properly is that if they have shareholders they'll be looking at the bottom line not the bottom paddock.The provision of privatised Telstra services to Tasmania is not going to mean big bucks for shareholders. Regional areas such as Tasmania are more expensive to service than downtown Sydney. In an answer to a question without notice on 30 March this year about a service provision problem in Tasmania, the Minister for the Arts and the Centenary of Federation representing the Minister for Communications, Information Technology and the Arts cautioned that we should `keep in context that the number of connections in rural Tasmania is very small'. Adrian Lynch in the Australian in May 1998 said that rural people are discriminated against `not only because of the physical distances involved but because their communities are not profitable'. When this privately owned service speaks to its major shareholders, how well do you think towns such as Gladstone and Branxholm in north-east Tasmania will fare?The sale of Telstra will severely disadvantage the state of Tasmania. Eighty per cent of Tasmanians live outside of the capital city. Most of our people are in rural areas, and Tasmania is a regional area all by itself. We have already seen adverse implications from Telstra's privatisation: a hospital on the west coast of Tasmania without a telephone for over 30 hours, and a tourist facility on the east coast without a telephone service for days. We cannot afford it and we will not accept diminution of services.Tasmania, though, as honourable members will know, is in an interesting position when it comes to agreements about telecommunications privatisation. Many people believe that we got a great deal through the last sale. Let's look at the offer that Tasmania got for the first part-sale. There was $58 million which, it has been claimed, was already on the Telstra Business Plan. And who can forget that wonderful commitment to Senator Harradine not to close the Hobart Work Management Centre? The Australian Communications Authority December quarterly figures found that in Tasmania there had been a 24 per cent decline in new services, a 10 per cent decline in fault repair times and an 11-hour increase in the average time for payphone fault clearances. This does not sound like a great deal for Tasmania.Let us look at what we are being offered now, should the Senate view the second sale favourably: a project worth $30 million over five years, the establishment of a Telstra multimedia development laboratory, advanced Internet access for a set of customers in Launceston to provide a living laboratory, and a business development fund. There is a fair level of cynicism when Tasmania is offered such projects and funding, particularly when attention is paid to the timing of such offers. But these are projects that Telstra, with its multibillion-dollar-a-year profit, should be undertaking. And it should be undertaking them because they are good policy decisions. They should not be offered just to win over the support of particular Tasmanian representatives. Tasmania is an excellent site to test new schemes and to undertake research for many reasons. Ziggy Switkowski in his speech at Launceston said, `Launceston is an ideal testing ground for many of our products.'This government's attitude of trading in order to access what they want is insulting. Tasmania as a regional area will suffer at the hands of a privatised monopoly. How do we know that? Because we have already seen it. My parliamentary colleague the member for Perth, in his second reading debate speech on the National Transmission Network Sale Bill 1998, illustrated why the ALP was opposed to the sale of the NTA. He outlined many of the difficulties we believed, as a party, that would come to challenge and haunt regional Australia as a result of the privatisation of the NTA. Many of the concerns the shadow minister raised on this occasion have now materialised. Unfortunately, the prophecy of doom and gloom for regional Australia—the crushing of community expectation and overwhelming public interest—was accurately founded.The community of Lilydale in northern Tasmania is a privatisation casualty. Lilydale has been unquestionably adversely affected by the federal government's failure to ensure the continuation of a partially constructed television transmission tower. I might remind members that that was a tower which the government had already invested substantial public funds towards developing. Unfortunately, the rapid growth in the number of transmitters—from 826 to 1,197 in the years 1992 to 1997 nationally—is unlikely to grow with the sale of the NTA to the NTL. I know that the residents of Lilydale would like to see at least one growth in the number of operational transmitters in this financial year. Lilydale is a Tasmanian example which illustrates the implications of privatisation and why the federal government must attempt to discover a sense of fairness and equality which extends to regional areas.Lilydale is a small township 50 kilometres outside of Launceston. Its residents have been experiencing the impact of privatisation in its worst form. This government continues to display an absolute lack of foresight and appears to have an inability to identify strategies for regional Australia. Lilydale residents are not asking for the world, they are just asking for access to television—something they could have access to if they lived a few kilometres closer to town. It appears, however, that when the government decided to sell off the National Transmission Authority, it did so without ensuring that communities like Lilydale were protected.Lilydale requires the construction of a tower for network access. The identified site has always been Browns Mountain. This was identified as the most economically viable site and will provide the best coverage. The former member for Bass, Warwick Smith, promised that money was allocated for the purpose of constructing the transmission tower in the 1998-99 budget. The residents of Lilydale are still waiting for their transmission tower. They may now remain waiting in perpetuity as a result of the privatisation of the NTA, because it appears that the government has not ensured that the work on the transmission tower will be finalised. This leaves people in an area just 50 kilometres outside of Launceston with ABC transmission only. Most residents do not receive SBS, WIN or Southern Cross broadcasts.In order to receive broadcasts above and beyond ABC, some residents have gone out and paid a minimum of $1,700 for a satellite dish. This is despite the fact that work on the Lilydale Browns Mountain transmission site has commenced, roads have been built, licences have been granted and many of the legal technicalities have been addressed at some considerable time and expense for this government. Despite this, the NTA, in a letter to one of Senator Newman's staff which was reproduced in part of the Lilydale Progress Association newsletter, said:With the sale of the National Transmission Network imminent, we are unable to resolve the issue in the time that is left to us.The people of Lilydale have an absolute right to be angry, because they were made a promise. The residents of Lilydale had and continue to have a legitimate expectation that the transmission tower will be completed. Many residents have contacted my electoral office; almost all have referred to the promises made to them by the former member for Bass. The question really becomes whether or not the completion of the Browns Mountain tower is on the agenda of the NTL at all. Unfortunately, it does not appear that it is going to be.According to a media release dated 19 March 1999 called `National transmission network sale' from the Minister for Finance and Administration and the Minister for Communications, Information Technology and the Arts:The contractual arrangements entered into with the NTL guarantee the continuation of all existing services at current levels of service.I repeat: `existing services'. It would appear that, as a partially completed facility, there is no contractual provision that will ensure the tower is constructed by the NTL. So what does the partially completed tower mean for the residents of Lilydale? It means poor, substandard communication transmissions, and this is how one constituent in my electorate has described the situation:We have lived in several countries around the world including Africa (third world) and have never had to put up with such appalling reception as we have here.This is hardly a glowing recommendation for the Howard government's privatisation process.It is absolutely unacceptable that at the time of privatisation a partially completed transmission tower at Browns Mountain would attract no assurance from the buyer to complete the tower. This is a blatant waste of taxpayers' money, which has already been spent on the site, and it is an absolute sell out of regional Tasmania. The federal government should as a matter of urgency indicate to the residents of Lilydale exactly when they can expect their partially completed Browns Mountain transmission tower to be operational. It is very disturbing to see this happen—to see the federal government walking away from communities like Lilydale for the sake of a dollar in order to deliver a budget surplus and introduce the GST.Tasmania will suffer disproportionately high effects from the GST. Tasmanians realised this and voted with their feet at the last federal election. All five federal seats in this House are now held by the ALP. Tasmanians unequivocally told the Howard government they did not want a GST. With the Liberal Party receiving less than 49 per cent of the two-party preferred vote for the House of Representatives in the last federal election, it is fair to say that there was never widespread support for the GST policy. The Democrats and the Howard government have ignored this voter message.Yesterday, polling published in the Australian newspaper shows that 58 per cent of the electorate currently reject the GST while only 33 per cent support the policy. Both the Prime Minister and the Democrats have failed to appreciate and understand that you cannot make the GST fair. No amount of exemptions will produce fairness and deliver equity to the people of Tasmania.Constituents have overwhelmed my office since the Democrats and coalition deal on the GST was announced, concerned by the unfairness and inconsistencies inherent in the GST. Queries have ranged from pensioner concerns about the increase in service costs to the increase in food costs. Tasmanians already have the highest priced groceries in the country. This was confirmed by a recent Choice magazine survey. Launceston residents paid $86.12 for a typical basket of food which cost $80.68 in Darwin, another regional area struggling with high food costs. Hobart was the only other city where groceries were more expensive, at $86.48. Nationally, the average is around $75. In Tasmania, we pay more for our groceries than any other state. This is an incredibly unfair position for Tasmanians to find themselves in, but this government will continue to fail to act to alleviate this injustice because the imposition of a GST on top of the higher grocery prices will mean that Tasmanians are paying a larger share of the GST.The Inbound Tourism Organisation of Australia has also been ringing the alarm bells. Andrew Burns, the organisation spokesman, said:. . . regional destinations and states like Tasmania . . . will be the first to be dropped from tour programs.Where does this leave places like Flinders Island? Flinders Island is a beautiful part of Tasmania and I urge all members listening to go and visit it some time. The Flinders Island economy is increasingly relying on the tourism industry. Similarly, Scottsdale, in the north-east, is developing new tourism ventures. According to statements made by those within the industry, a GST will price tourists out of the Tasmanian travel market. The Democrats have specifically promised the tourism industry support. I quote John Schumann, who made the following statement on 20 May 1999:We have spent a lot of time and resources going around the country promoting our platform on zero rating of travel packages. We are not now, nor will we, move away from this aspect of the GST.Have they been left high and dry by the Democrats deal? Well, who can tell.The wine equalisation tax will strangle the tourism operations of wineries in Tasmania. Premium wines like those produced in Tasmania will be more expensive, if they are in fact continued to be produced. Many small wineries feel that they will have no option but to close their doors, a concern clearly communicated when the shadow minister for small business and I met with small winery producers on 28 April 1999. The message was once again clear and unequivocal: a GST combined with a WET will destroy the industry.With the highest unemployment rate in the country, the loss of one job in northern Tasmania is too great a cost. According to the government's preferred economic modeller, Chris Murphy, the GST will cost 1,000 jobs in Tasmania. A GST will cripple and savage the Tasmanian economy. That is the cost of a GST to be carried by Tasmanians. Local councils are also concerned about the GST and its impact on the many and varied services they offer. Service costs will escalate. The local councils will have little choice. They will have to choose between passing increased costs on to the consumer or not offering the service at all. The GST will back local councils into a corner and the real losers will be the community.So too will small business be a real loser under the GST deal struck between the Prime Minister and the Democrats. There is a realisation within small business that this tax is, in the words of the Treasurer, Nightmare on Main Street. The Premier of Victoria has also thrown his weight behind the criticism of the GST in its current form and the cruel compliance implications created for small business.The GST is delivered on the backs of small business. This system of taxation will be very difficult for business to administer, and the burden will fall more heavily on small business as the compliance costs as a proportion of turnover are likely to be much higher. The Howard government seems to have forgotten that over 12,000 Tasmanians are employed in small retailing business, and this GST deal is putting many of those jobs at risk. Small business will pay the price. They will carry the burden of the GST. This government has deserted small business.This GST is an attack on the very fabric of society. It is unconscionable and a disgrace to this government and to the Democrats if they walk away from their constituents and do not deliver on their election promises and key areas of their policy. It is the Labor Party who are in touch with the Australian population, who are opposed to this regressive, unfair and unworkable tax, and that is why we will not support it. The Prime Minister decided some years ago that the GST was his plan—at least that is what I believe—and he will introduce it without any care for the damage it will do for regional Australia. I believe that it is the failure to listen and respond that has created this policy nightmare for the government.I think one of the most interesting things about the budget announcements was the decision that there would be a regional summit held to discuss the needs of rural and regional Australia. Fabulous idea. It is a shame they have not been listening over the last few years. But where is this regional forum going to be held? In Canberra, of course. I can only point out that this contrasts so strongly with the actions of the Tasmanian government, who are holding regional meetings and entering into partnerships on a regional basis with Tasmanians to make sure that what they hear and what they do are what the Tasmanian community wants.Tasmanians made their position on the sale of Telstra and the introduction of a GST very clear in the 1998 election. But this government has chosen to ignore this outcome. This government talks of mandates. Tasmanians do not believe that it has one. What this government had was an obligation—an obligation to guarantee levels of services in rural areas, to not impose restrictive and unfair tax burdens on low income families and to at least try to resolve our jobs crisis. The government has failed and it will be judged on that failure at the next election.18:37:006617May, Margaret, MPMs MAY83BMcPhersonLP10—I am pleased to rise today in support of the Howard government's 1999-2000 budget. In times past, there was a great deal of hype surrounding the federal budget. The self-proclaimed world's greatest Treasurer crowed one year about how it would `bring home the bacon'. In fact, there were grandiose promises and expectations every year under Labor and, in the course of each financial year, they evaporated. Growth expectations were never matched and, at a time when other economies in the Asian region were booming, Australia was plunged into recession. The contrast between Labor's flashy, failed approach and the Howard government's sensible and responsible economic management over the past three years is enormous. Now when other Asian economies are in recession, Australia has the fastest growing economy in the world, far exceeding our promised budget forecasts.In the three years of the Howard government, in net terms, we have not borrowed a single cent. In fact, with successive budget surpluses, we have begun to pay back the massive debt that Labor left behind. It is hard to imagine but, in the last five years of the Labor government, they increased government debt from just $16 billion to over $96 billion, including of course the infamous $10 billion black hole. We all remember how the finance minister of the day, now the Leader of the Opposition, put his hand on his heart and told the Australian people during the 1996 election campaign that the budget would be in surplus. In fact, he left a $10 billion deficit. I am pleased that never again will any government be able to deceive the Australian people in this way thanks to the Howard government's legislated Charter of Budget Honesty. Thanks to our sensible and responsible approach, in just three short years we have reversed Labor's trend of running up debt on the bankcard year after year.The truth is that all Australians have had to pay Labor's debt. The interest bill alone each year on $96 billion was over $9 billion, so every year we had to pay $9 billion just to keep our debt at the same ridiculously high level. That is $9 billion that could have been better spent on reducing hospital waiting lists, or improving roads, or increasing pensions, or providing more funding for our schools or reducing taxes. That is why it is so crucial that we pay back Labor's debt, and that is exactly what our government is doing. Every cent of the $5.4 billion surplus in this budget will go towards reducing the debt so we can provide a better future for all Australians. Sure, it would have been easy to take Labor's big spending approach and leave the consequences for future generations. It would have meant less political flack, but I do not believe that is the Australian way.The truth is that our country was built on the sacrifice and thrift of that generation of Australians who worked so hard throughout the forties and fifties to make Australia such a special place. Many served us in war, others made great sacrifices on the home front. Their approach was one of building local communities and national pride through hard work and dedication. This generation of Australians are now in their 60s, 70s and 80s. They are a special group and I am proud to represent a large number of them as the member for McPherson. In this the International Year of Older Persons I think it is fitting that we look to the values and ideals that drove this generation and we strive to reflect on those values and ideals in today's modern society.Unlike the Labor Party, I do not believe we have to sacrifice values like commonsense, responsible economic management or hard work to the altar of progress. In fact, I believe these fundamental elements are absolutely crucial to our successful progress as a nation into the 21st century. The media, the Labor Party and some special interest groups might like to label such an approach as passe, but I believe these values are the essence of what it is to be Australian, and as a government I know we will continue to strive to honour the legacy of our seniors.At the same time, we will extend a helping hand to those seniors in need of care, and help all retired Australians enjoy security and certainty in the future. This budget reinforces our strong commitment to seniors, a commitment already displayed over the past three years. For the first time, pensioners now have certainty, with a legislated guarantee that their pension will increase along with increases in average male weekly earnings so that it will not drop below 25 per cent.Self-funded retirees with the same income as pensioners now have the same tax rebate as pensioners. Older Australians who delay their retirement can benefit from the pension bonus plan. The domiciliary nursing care benefit has been increased. Most self-funded retirees now have access to cheaper prescriptions with a Commonwealth seniors health card. Self-funded retirees have had a tax cut with the new savings rebate. Provisional tax has also been reduced.More funding has been provided for nursing homes and over $270 million has been provided for community care, with the staying at home package to help older people remain in their homes longer. Private health insurance has been made more affordable with the 30 per cent government rebate. Recently, free flu vaccines were made available for everyone over the age of 65. For veterans, a very special group of seniors, there have been benefits like the extension of the gold card to all veterans who served in World War II and real improvements in services provided by the Department of Veterans' Affairs.All of these are commonsense measures that bring real benefits to pensioners, self-funded retirees and veterans. This budget, I am pleased to say, builds on those positive changes. It provides $209 million in additional funding to help an extra 67,000 pensioners, part pensioners and veterans each year have access to hearing services. We recognise this is a crucial funding commitment, given that 25 per cent of people aged over 65 have some form of hearing impairment. This funding will help ensure they are able to fully participate in family and community life.This budget also provides an extra $6.6 million for a special health program to help reduce the incidence of falls in older people. Falls are a very serious health problem in this age group, and we will also be training health care workers on this problem and researching how we can prevent falls. Respite care services are boosted by $82 million in this budget, particularly for carers of people with dementia and other cognitive and behavioural disorders. I know that in my electorate alone there are hundreds of dedicated carers who do a tremendous job under very trying circumstances in many cases. They care for their loved ones with dedication and commitment.This government recognises the huge stresses this can place on people. We have already significantly boosted support services for carers. As well as increasing their benefit, we have established more carer respite centres, as well as a carer resource centre to help provide advice, understanding and access to respite care. I am pleased that this budget goes further so that more carers will be able to take a well-deserved break from the important job they do.In addition, this budget provides $41.2 million to establish Carelink, a network for regional contact points which will make it easier for people to access community care services. More money is provided for nursing homes, including $25.6 million in capital grants to improve facilities in nursing homes. This budget also increases the range of services available to older Australians under the Medicare benefits schedule, including voluntary health assessment for all people aged over 75. These assessments will be conducted in people's own homes as much as possible and are designed to ensure early detection of any health problems.Veterans also benefit in this budget with the extension of the Homefront initiative which provides funding for home assessments and improvement to help prevent falls and accidents in the home. An extra $7 million will help boost resources for ex-service organisations to assist veterans, war widows and widowers in making claims and in accessing other services. The Community Care Seeding Grants Program will continue, with an extra $5.3 million to improve the independence and quality of life for veterans.There is also funding for a range of commemorative programs to ensure that future generations have an understanding and appreciation of the great sacrifices and endeavours of the special people who served our nation in war. In addition to all these sensible and practical measures, the government's commitment to the International Year of Older Persons has been doubled, with an extra $5 million for a national media campaign to combat negative stereotypes of older Australians. I strongly believe that we need to promote greater understanding of, and respect for, our seniors.Unfortunately, there has been a trend away from the extended family network that so many of us enjoyed in the past. Families are increasingly fragmented. Many children are growing up in households where they may have little or no contact with grandparents or great-grandparents. They have little opportunity to foster close ties with older relatives and to learn in a practical way to respect the wisdom and experience of their elders. As I said at the outset, I believe the government does have a role to play in ensuring that the values and ideals of this generation who built our great nation are forever etched in the Australian psyche.One of the government's initiatives which embodies the Australian ethic of a fair go for all is our highly successful Work for the Dole program. Work for the Dole is all about helping a mate. The principle of mutual obligation is that people who need assistance must be given it and, in return, they are expected to give something back to the community which is helping to support them. It is the commonsense way that close-knit communities have operated for years, helping their own and knowing that those who receive help are doing their utmost to repay that assistance.Work for the Dole has tremendous community support because it is all about helping a mate. Fundamentally, Australians believe in giving people a hand up rather than a handout. We have seen remarkable results in Work for the Dole programs all around Australia. I am proud to say that many successful programs are operating in my electorate of McPherson. I recently had the pleasure of presenting certificates to the 50 young people who were involved in the Work for the Dole program run by Kings Christian Centre at Reedy Creek. These young people were involved in a range of services, including office administration, hospitality services, extensive construction and horticultural works, land care management, working for the elderly, gardening, refurbishing, rebuilding and retailing.Participants also undertook certified courses in senior first-aid and security loss prevention, as well as fire emergency response training. Not surprisingly, the majority of these young people are now in paid employment. They credit their time with Work for the Dole with helping them find work. These local results are reflected around the country. It is very pleasing that this budget provides an extra $111 million to double the number of Work for the Dole places available so more Australian job seekers and local communities can benefit from this sensible plan.The success of this plan underlines how out of touch the Labor Party still is in opposing Work for the Dole. Its program on employment programs while in office provides another marked contrast. Some initiatives in Working Nation cost up to 200 times more than Work for the Dole and did not achieve the same outcomes in terms of participants finding employment. With Work for the Dole, 34 per cent of participants are in paid employment after three months. A further 11 per cent are in further education and 23 per cent have had some employment outcome. These were people who were previously long-term unemployed.Not only are the results great for those who participate—with 83 per cent of participants saying that their experience has increased their determination to find work and 75 per cent reporting that it has increased their self-esteem—but the beauty of Work for the Dole is that the community benefits as well. Work for the Dole programs are helping to make our community an even better place to live in practical ways like beautification of public places, helping charities and community groups like Meals on Wheels, providing assistance to schools, and in a range of other ways.We cannot begin to measure the benefit of helping to instil the values of hard work and dedication and providing real opportunities for people who may otherwise have felt that society had failed them badly. It is intangible. It is about creating a better Australia for future generations. It is what so many of us believe in. I always think it ironic that people in the Labor Party set themselves up as the thinkers. They talk about vision and the big picture. Surely there can be no grander vision than a fair and prosperous nation where young people have the opportunity to succeed, hard work is rewarded, businesses can grow, and older Australians can enjoy their retirement in certainty and security. As a nation, we can afford to help those in need rather than having to pay back the debt racked up by previous generations. That is what this budget is all about; that is what this government is all about.As someone who represents Australia's tourism Mecca—the wonderful Gold Coast—it would be remiss of me not to mention the additional funding in this budget for tourism. The Howard government is providing an extra $8 million to be matched by the states and territories to help fund a campaign to encourage Australians to holiday in Australia. There is no doubt that domestic tourism, which is worth $41.9 billion each year, is the backbone of the tourism industry. Thousands of Australians pack their families in their cars each year and make the pilgrimage to our wonderful beaches and beautiful hinterland. I know I am biased, but the Gold Coast—particularly the southern Gold Coast—is the perfect destination for a family holiday.This additional funding will help encourage even more people from around Australia to visit the Gold Coast. I can say categorically, having lived in some of the neighbouring Pacific Islands, that nowhere in the world are the beaches better than those on the Gold Coast. Holidaying at home not only helps create local jobs but, in my view, shows impeccable taste. The government is pleased to support this campaign in the budget. In addition, we are providing $8 million to help regional Australia become more tourism ready as part of our regional tourism program. Part of this funding will help regional tourism organisations develop their online capabilities. With the Internet fast becoming the best way to plan and book a holiday for people all around the globe, this will help ensure that Australia continues to draw more and more overseas visitors now and into the 21st century.There are so many positives in this budget that there is simply not time to list them all today. There is a massive boost to funding for education, both in schools and universities, with an extra $131 million for our literacy and numeracy plan to ensure that all schoolchildren know how to read and write. In fact, we are spending a record $869 million over four years to make sure our kids learn the basics at school. This budget provides increased funding for environment programs like Landcare—programs which are providing real practical benefits through local projects to help restore and protect the environment. We are providing a record number of apprenticeships, which means more opportunities for young people and a more skilled work force.This budget provides a huge increase in medical research, a special program to assist asthma sufferers and also, very importantly, more funding for the Prime Minister's Tough on Drugs campaign. The war on drugs is perhaps the biggest battle we face as a society. The government has taken a tough stand, with a three-pronged approach: more education for our young people about the dangers of drugs, more support for people who want help to recover from drug addiction, and a tougher stand against the pushers and the people who bring drugs into this country. Every parent will welcome the Prime Minister's commitment to be tough on drugs. Most crime against either person or property is committed as a direct result of drug abuse. People steal to fund their habit. Drugs often cause aggressive and antisocial behaviour. To make our community a safer place to live—which is a genuine desire of all Australians, and a particular concern for older Australians—we must tackle the menace of drugs.The bottom line is that this budget is about delivering for mainstream Australia. The best way to deliver a range of practical and effective social programs is, as I have outlined, through sensible and responsible management of the economy. Big spending, running up debt and listening to noisy interest groups did not work under Labor and it would be a recipe for disaster now. I am proud to be part of a government which is not beholden to any special interest group—we are not tied to the unions or the noisy interest groups as Labor continues to be.This government can truly deliver in the national interest. This has meant a better deal for families and small businesses in my electorate. In the International Year of Older Persons, this has meant that we can deliver a range of benefits to provide certainty and a better way of life for pensioners, veterans and self-funded retirees. The next step is sensible tax reform. I will be pleased to discuss that at another time in this place. I commend the budget to the House as being both in the national interest and in keeping with the values and ideals that all Australians hold dear—fairness, commonsense and a better deal for the future.18:55:006622Swan, Wayne, MPMr SWAN2V5LilleyALP00—I rise to speak on Appropriation Bill (No. 1) 1999-2000 . The fundamental feature of any decent and caring society is that it is affordable for families to bring up children. In the 1990s, families are stretched to the limit coping with longer working hours and the rising costs of raising children. For the first time, our society has become a place where more and more couples are deciding not to have children because they are concerned that they will be unable to provide the opportunities that every child should be entitled to. As Professor Peter McDonald recently observed, the agenda of the Howard government has worked against families, not for families. He said:What's been happening is there has been cutbacks to family service, the rolling back of family funding and supporting people who have children. We are giving the message that if you have children it is your responsibility, instead of saying that children are a social good and are our future therefore our society should be supporting children.For all the government's rhetoric in this budget about families standing on their own two feet, we know that that is code for cutting essential government services. For all its budget rhetoric, the current government has not delivered for families. The government has created a massive social deficit by cutting funding in services to families in the areas of health, education, social security and child care. These cuts have placed extra burdens and responsibilities on struggling families. The appropriation bill that we are discussing today does virtually nothing to restore that loss.The cuts in health, education, child care, income support and aged care and the abolition of labour market programs in recent years have severely affected the living standards and life chances of families and their children. These government cuts have put massive pressures on families, and many families have not been able to cope. Financial pressures have torn many families apart. This must change. But it will only change when this government acknowledges the problems and puts policies in place that place families back into the heart of society and government.Until that happens, more and more parents will have trouble just keeping their heads above water. In the end, unfortunately, unemployment, family dislocation and rising social ills such as substance abuse, drug addiction, alienation and crime will continue to destroy a growing number. If we continue in this vein, we run the risk of developing two nations. There is now a growing gulf between the living standards of two-parent families and single-parent families. I draw attention to the report from the Society of St Vincent de Paul released yesterday called The `hidden faces' of poverty: identifying poverty issues in Australia. It says:From the evidence we are able to collect from our 40,000 volunteers Australia wide, the problems associated with poverty are worsening.Over two million Australians directly experience poverty, but indirectly, poverty affects us all. As the numbers of poor continue to increase, our community generally becomes poorer.. . . . . . . . .The Great Divide in Australia between the relatively affluent and the poor is increasing. Few people from the more affluent parts of Australia can imagine what poverty is like . . . And it goes on. This has to change. As I said before, if we continue in this vein, we risk widening the gulf between the living standards of the privileged few and those of the greater number of impoverished. As I said before, this has been recognised by St Vincent de Paul, but it has also been recognised by ACOSS in recent times in many reports. So the challenge for government is to provide the right kind of support to these families, the kind of support that helps them move up and out of poverty. If we cannot do that, then we as a nation will have accepted that these children can simply be forgotten and left behind. Labor does not accept that.Comparatively, Australia is a small country and, if we want to succeed into the future with all its uncertainties, we must capitalise on our most important resource—the next generation of Australians. If couples cannot afford to have children and families are struggling to give their children decent opportunities, then Australia has no future. If we cannot give our children a shot at a decent future, we will pay the price down the track with massive pressures on health, welfare and policing.With this budget, this government is once again heading in the wrong direction. It has not been listening. It has not been up to the task of providing resources to families, particularly those on low and middle incomes. And, if the government gets its way with this budget, things will get worse. This is the case particularly with the government's so-called `tax reform agenda' which has as its centrepiece the antifamily GST. It does not take an economist to see that the GST is a tax on consumption. Families by their very nature consume the most, and it will come as no surprise that the GST will hit them the hardest.The tax package shifts more of the tax burden onto low and middle income earners and families. The GST puts extra pressure on families, with the cost of raising kids set to rise dramatically. The tax cuts offered are not targeted to low and middle income families; they are tilted to high income earners without kids. High income earners will, again, gain the most under the GST.The GST is a fundamentally unfair tax that hits just about all of the fundamentals of life. Parents will be paying the GST on most essentials—clothes, school books, bus fares, electricity bills, phone bills and so on. Clearly, just exempting food from the GST will not make it fair for families. After examining the coalition-Democrat deal, we find that it has not even GST-exempted most food. If we analyse the package that has been produced by the Liberal-National-Democrat coalition, it can be seen that pensioners and income earners below $30,000 will still pay the GST on 75 per cent of their total weekly budgets.On the dramatic effect of this package, the St Vincent de Paul Society has concluded that we will enter:. . . the next millennium having lost the opportunity of providing a just and equitable Australia, by enshrining a system that will provide an unegalitarian and unfair Australia by locking millions of Australians—as has been done to people in other countries—into a cycle of poverty . . . This is what we find to be the nature of the Liberal-Democrat-National coalition deal: that, in fact, the GST is still applied to a third of all food purchases—so the Democrats have not been true to their promise to exempt food—and that those on low incomes of under $30,000 will be paying the GST on 75 per cent of their purchases. I seek leave to table a table to that effect.Leave not granted.2V5Swan, Wayne, MPMr SWAN—That is a pretty miserable approach from those opposite, but it is in keeping with the budget and the general approach of the government. Nevertheless, we shall forge on.The GST is a tax on families. It is, by its very nature, one which affects those who have more children rather than fewer or no children. It particularly hits those families who have to spend extra on housing costs, fuel and power, clothing and footwear, household services, transport, and recreation. Families with three or more children spend something like $98 a week on housing costs compared with the $76 spent by couples without children. Families with three or more children spend $23 on energy costs compared with the $16 spent by couples without children; $46 on clothing and footwear, compared with $29 for couples without children; and $45 on household services compared with $29 for those without children. All of these items will rise in price. So the GST taxes the things that families spend most on. That is the reason that the GST is literally a tax on families—and nothing that the Democrats have done in the current package alleviates its pernicious and vicious effect.Yesterday we had circulated by the Democrats some claims as to how generous this deal is for pensioners and lower income people, be they singles or couples. Essentially, what the Democrats succeeded in doing was giving something like an extra $1 a week to a poor family—and they claim that is a big win! It is certainly not a big win for these families when you look at the increased expenses that will flow to them from the impact of the GST. So make no mistake about it: if the GST comes in, it will be a bitter blow for thousands of families who are already on the edge.The GST is part of the individualistic `every man for himself' philosophy that the conservatives stand for. The philosophy undermines traditional values like responsibility, sharing, sacrifice, family and community. Their approach leads to the disintegration of society and the destruction of a sense of family and community. Despite all the family friendly rhetoric, the government policies are simply weakening families. They are making it harder for families to get ahead and to provide opportunities for their children.The Treasurer told the parliament that the bills we are dealing with and debating today would provide an extra $2.5 billion extra in assistance for families. It is a pity that, in that speech, the Treasurer neglected to mention the term `GST' once—because the truth is that this $30 billion tax will take a lot more from these families than they will get back in their miserable tax cuts at the lower end and what they will get in family payments. So the combination of the unfair GST and tax cuts that go to the top end means that income inequality will widen and lower and middle income families will go backwards.Let us just consider a few figures. Even with the Democrat changes announced a couple of weeks ago, a family earning $30,000 with three children gets just $16 a week in tax cuts compared with $60 a week for a couple earning $100,000. Some equity there! This means that children born into a family earning $30,000 are worthy of one-quarter of the tax cuts that the same children born into a family earning $100,000 are worthy of.Tax cuts and the GST aside, what we can really see is that this is simply a hoax. The so-called family package is simply a poor attempt at compensating for an unfair GST. What has the government said in the tax package? It has assumed that the GST cost of a child will be just 30c a week extra. What a joke that is! That 30c a week extra is supposed somehow to be an estimation of what will be the extra costs with school uniforms, haircuts, video hire, books and so on. Just 30c a week? This is simply ridiculous.The Democrat deal does not increase family tax package measures, which is what you would have to do if you were really, genuinely trying to decrease the vicious inequity in this measure. We do not get any increases to the family payment, the family tax initiative, et cetera; they all remain the same. So, given the opportunities the Democrats had, they have failed to improve the family package. The deal provides that only $1 of every $5 of additional expenditure goes directly to people in the form of increased compensation. Families get just seven per cent of the total additional compensation package. Families were obviously not a high priority of the Democrats or the government.This package also penalises dual income families where both parents have decided to work or have had no choice but to work. A one-child family with one income of $50,000 gets $61.60 a week while children in dual income families earning the same amount get just $27.31. Why is one group of children worth half of what the other group is worth? This is very bad social policy. Even worse, single income families earning $75,000 with one child get $60 a week while double income families on $35,000 get just $20 a week. This will have perverse results on one parent's decision to work, and that, of course, is usually the female.We do not need the more poverty traps enshrined in this package; we need fewer. Already there is an $850 a year back to school penalty when children turn five because of the prejudice in the family tax initiative. Then there are the struggling families who have had extra burdens placed on them by virtue of the youth allowance. These families, many on low and middle incomes, are hurting and what the Democrats agreed to is nothing short of an insult. It does not put back one-half of what was taken out over a year ago. Families with young unemployed children who lost $175 a fortnight now stand to get just $50 a fortnight back. Parents will have to pick up the tab on the rest, including the GST costs on the young unemployed adult. And they say that their package is about helping families. It is simply shameless.Then there is the some one million people who are outside the tax and social security systems. They are still out in the cold. Once again, the Democrats have been dudded. Yesterday we heard the Treasurer insinuating that no extra money would be available because they were already being compensated. Well, I guess that will be news for the Democrats, who know there is no compensation for them. The economists who identified this group and their severe disadvantage would also be stunned by the fact that the government simply could not allocate any money to this particularly disadvantaged group.If you look at the combination of the tax changes and other spending measures and revenue raising measures enshrined in the tax package and the budget, you can see that we have a package which is inherently anti-family and which penalises low and middle income families and will make it harder for them to get ahead. What governments really need to be doing is developing a life cycle approach to the development of family policy, recognising that what families with very young children need is very different to what families with adult teenagers need. I have already argued for more flexibility in the social security system so that one parent can remain at home when children are young. We also need national parenting programs and we need tax credits, because we need to give families some real incentives to get ahead and to make it worth while for them to work.This government have been talking about early intervention, but what they have on offer is absolutely tokenistic. There is no truly national approach to the provision of resources. The government spends just $2 million per year on a Good Beginnings program, which is something like 0.00036 per cent of what they spend on parenting payments. Experience and commonsense tell us that children who experience problems at home have a tough time making a future for themselves. They are less likely to finish school and get a job. They are disproportionately involved in crime. Their own relationships suffer and a cycle of neglect and abuse is likely to continue with their own children. There is a very powerful case for a national approach to early intervention and positive assistance programs, but nothing in this budget and nothing in past budgets has done anything to provide the level of national resources that are required if we are determined in this country not just to apply bandaids but to go to the causes of problems and provide positive assistance to families. This government needs to devote some real resources to early intervention, not a bandaid approach. If the government were really serious about early intervention, it would take Labor's lead and commit itself to a truly national approach rather than token programs it is currently offering.But it is not just a question of what is being offered by way of programs. We also need to construct a tax system which is fair. To this end, Labor's tax credits and our work bonus for the long-term unemployed are part of Labor's new policy artillery to get people off welfare and into jobs. To date, tax credits have been underestimated, but now we are seeing broad support from economists, welfare groups and industry. There is an increasing awareness that tax credits are about much more than just tax cuts. They have a fundamental role to play in ensuring that there is an incentive to work and also in ensuring there is some fairness within our tax system.It is a combination of things that is required if we are to inject a degree of fairness and inject a degree of justice for families in this country. What we have seen in recent times is that this has now been recognised not by just the Labor Party but by the churches, the charities and the community groups. Last week we saw ACOSS, who had previously been a supporter of this government and had been on the cart of tax reform, jump off the cart and condemn this Liberal-National-Democrat deal. This is what ACOSS had to say about the inherent unfairness in this package:The package will therefore widen the gap between rich and poor, and the whole nation will suffer from greater division between the haves and the have-nots.While food is exempted from the GST, the definition is too narrow. There is a high risk of future budget cuts in social security, health, education and welfare services. The churches, the charities in this country and the community organisations have all now come out and said, `You cannot trust this government when it comes to tax reform. You cannot trust them to deliver a degree of fairness that is required in this country. You cannot trust them with the future of this country. They simply cannot be trusted.'ACOSS went on to say that, whilst tax cuts for high income earners are reduced from $86 per week, all taxpayers with taxable incomes over $60,000 get a much larger tax cut than lower income earners and so on. When we look at how this budget has been received, when we look at the tax package and indeed when we look at all of the polling, we can see the inherent unfairness is now clearly understood in the wider Australian community. Something like 60 per cent of all Australians now reject the GST. Some 30 per cent of all Liberal supporters—coalition voters—actually reject the GST. The churches reject it. The charities reject it. The community organisations reject it. And the people reject it.This budget ought to be rejected for what it is, which is simply another excuse for this government to implement another raft of policies which have as their final aim to redistribute income in our community from low and middle income earners to the top. The people who will pay the price for that in the long run will be children of this country.19:15:006627Sullivan, Kathryn, MPMrs SULLIVAN3E4MoncrieffLP10—I am glad to have an opportunity to make a brief contribution on what the Howard government is doing through its aid program and to address the misunderstandings of some honourable members of the opposition. Whilst welcoming the interest shown on the subject by the member for Reid and the member for Calwell during this debate, I must correct the record on a number of points.In his speech on the appropriation bills last week, the member for Reid referred to an Adelaide Advertiser article headed `Overseas aid cut to record low'. Aid cut to a record low? That claim is wrong, plain wrong. The fact is that this year's aid budget has been increased by $22 million over last year's figure, bringing it to a total of just over $1.5 billion. There was a clear increase of the aid budget in dollar terms, and it was maintained in real terms. It was not cut, and it is quite wrong to say that it was.There was a slight fall in the measure of aid as a percentage of GNP. But—and this is important—the reason was not that the aid program was cut; the reason for the percentage change is that the Australian economy grew at a faster rate than expected in the last financial year. Thanks to the sound economic policies of the Howard government, the Australian economy is bigger and growing. In stating the level of overseas development assistance, ODA, as a ratio of gross national product, GNP, if the economy—the denominator—increases, then of course the ratio will be smaller, despite aid funding—the numerator—being maintained. Most Australians are pleased that our economy has grown, despite adverse international circumstances.On another aspect, the honourable member for Reid got it wrong again. In the context of this ODA to GNP ratio, the honourable member said: `There has been an attempt by subterfuge to muck around with the figures and mislead.' He refers to an earlier statement by the Australian Council for Overseas Aid as his apparent grounds for this allegation, without any consideration of Australia's justification of the measurement we use. Perhaps he is referring to the fact that, by international convention, more items are to be included in the measurement of a country's GNP. Financial intermediation services, capitalisation of mineral exploration expenditure and expenditure on computer software are going to be recorded in future. So, again, the GNP—the denominator—will be increased. However, this is part of an OECD agreement—SNA 93, to be precise. To claim this is subterfuge or an attempt to mislead is ill-informed and irresponsible.Or perhaps the honourable member for Reid's claim of our so-called subterfuge is based on comparison of our ODA to GNP ratio to the weighted average of OECD countries. Where is the subterfuge in that? Using a weighted average has been the longstanding tradition in a comparison of OECD countries' overseas aid because the weighted average, by its very nature, provides a more, not less, representative picture of the total flows of ODA.To sum up, the GNP has grown because of the sound policies of this government and because of some measurement changes. Even so, our ODA to GNP ratio has not declined to the 0.22 per cent claimed by that honourable member, and at the correct figure of 0.25 per cent our ODA to GNP ratio is indeed higher than the OECD average. Unfortunately, that is not the end of the mistakes of the honourable member for Reid. He also claimed that `much of the foreign aid program includes measures such as the construction of Australian embassies, et cetera, overseas', and referred to the construction of `embassies' in Dili and Croatia. AusAID will incur some comparatively small establishment costs to enable AusAID staff to work in the consulate in Dili but not for constructing `embassies' in Dili, Croatia or anywhere else, for that matter. The aid budget is not used to construct embassies. Such costs come from other parts of the appropriation for the Department of Foreign Affairs and Trade, not from the aid budget. Therefore, to say that `much of the foreign aid program' goes for that purpose shows ignorance, frankly, about the appropriations.The aid budget is spent on measures to assist developing countries to reduce poverty and achieve sustainable development by investing in programs and projects of real significance. You only have to read the budget statement to know that, far from spending much of the foreign aid program on construction of embassies, the money is spent on substantial and purposeful initiatives.Let me enumerate some of this year's initiatives: doubling the Asia crisis fund so as to assist countries most affected by the financial crisis; increasing country program assistance to Indonesia, taking total flows to an estimated $121 million; substantial assistance to East Timor, including a $20 million package of cash and in-kind contributions for the United Nations Trust Fund plus humanitarian relief activities via non-government organisations and the International Committee of the Red Cross; an additional $2 million allocated to the emergency program for demining activities; a new three-year microfinance initiative totalling $3 million, which will make credit available to very poor entrepreneurs; an extra $670,000 to support the global target of eradicating polio and iodine deficiency disorders by 2000; a 30 per cent increase in the Human Rights Fund so as to expand our capacity to fund small community-based human rights activities; and increases of $2 million to the Solomon Islands government to further support that government's economic reform program. This is a substantial and purposeful achievement. It is part of the process of implementing the vision set out by the coalition government in Better aid for a better future in 1997 and focusing on what really matters to very poor people in other countries.There are other errors in the honourable member for Reid's address, but I think the point is already clear. The aid program was not cut; it was increased in dollar terms and maintained in real terms. The ODA to GNP ratio is not 0.22 per cent but 0.25 per cent. Australia remains above the average of OECD donor countries. And no, much of the foreign aid program is not spent on construction of embassies. It is invested in real, well-targeted and substantial development programs, particularly in our region.In his contribution to the debate on the appropriation bills, the honourable member for Calwell was critical of the development impact of globalisation. That is a major topic and it is not possible for it to be adequately debated here and now. There are risks and problems inherent in globalisation, both economic and social. The recent crisis in Asia has been an economic, social and political shock to many countries. But there is a real and greater danger if the problems of globalisation result in countries retreating into insularity, closed markets, declining productivity and falling international trade in goods and services. The interwar years this century, and their terrible consequences, tell us that economic insularity and trade protectionism are even greater threats to prosperity and peace than is globalisation.Both the honourable member for Reid and the honourable member for Calwell made a plea for the Jubilee 2000 campaign—an initiative to cancel debt for the poorest countries. This is a well-intentioned initiative, but we have fundamental reservations about whether it will work. Cancelling debt, by itself, will achieve little or nothing in the absence of genuine economic reforms and policies by the governments of the countries concerned. Indeed, it could reward those who have made the least soundly based decisions. Cancelling debt will also drive away future investors. This is not what the very poor or their countries need. There are other ways of tackling the problems of debt burdens, particularly through policies that promote durable and participatory growth and development. We should focus our efforts on those measures.In closing, mass poverty is the single most important economic and social issue on our planet today. It affects our world and our region. It impacts on Australia. The Howard government takes that challenge seriously, and that is why we have a quality aid program of which all Australians can be justifiably proud. I seek leave to continue my remarks later.Leave granted; debate adjourned.Main Committee adjourned at 7.26 p.m.Answers to Questions in Writing6630The following answers to questions were circulated:6630(Question No. 543)5436630Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Education, Training and Youth Affairs, upon notice, on 24 March 1999:Further to Question No. 128 (Hansard , 11 May 1999, page 4159) concerning the National Youth Roundtable, (a) what was the cost of the National Youth Roundtable held in Parliament House, Canberra, commencing 9 March 1999; and (b) how will members of the National Youth Roundtable be assisted to enable them to consult with their peers and local communities on the issues raised by him in opening the Roundtable.6630Kemp, 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) The overall cost of holding the first National Youth Roundtable was $99,980.(b) Between Roundtables participants are encouraged to demonstrate their commitment to a particular issue discussed at the Roundtable by becoming involved in a National Youth Roundtable Community Action Project which is based on participants working, both in teams and at a local community level in one or more of the issues raised at the forum. As the groups are drawn from diverse parts of Australia, this may mean collecting the views of young people on a single issue from remote, urban and regional locations depending on the community of each of the topic group members.The design of the projects involves participants working with members, government and youth to develop community based strategies and practical solutions to local issues. To support each National Roundtable Community Action Project, participants are provided with individual mentoring and support by a YMCA co-ordinator who ensures that each participant is comfortable with the range of their project and has appropriate community links, skills and resources to be able to fulfil the task that they undertook to do at the first Roundtable.Federal Government departments have identified a series of resource people who are able to direct and assist Roundtable members with sourcing a range of information about policy development and provide background information. Regular teleconferences are held on a monthly basis for participants and their support team to exchange ideas and provide progress reports. Topic teams are also linked via the secure Internet site developed by my Department and will be provided with regular updates on the progress of their team and other teams through this facility.At the second Roundtable the participants will present their findings to the Government.6630(Question No. 589)5896630Thomson, Kelvin, MPMr Kelvin ThomsonUK6WillsALP00 asked the Minister representing the Minister for Communications, Information Technology and the Arts, upon notice, on 11 May 1999:(1) Is it intended to close the Essendon Post Office or convert it to a licensed operation.(2) Will the Minister ensure that the Essendon Post Office continues to remain open.6630McGauran, Peter, MPMr McGauranXH4GippslandNPArts and the Centenary of Federation10—The Minister for Communications, Information Technology and the Arts has provided the following answer to the honourable member's question:(1) Australia Post has advised that it has no plans at present to either close the Essendon Post Office or convert it to a licensed operation. As a small, unprofitable outlet, however, the Post Office is likely at some stage to be considered for conversion. Thus, while Australia Post is fully committed to maintaining a retail presence in the vicinity, it is not in a position to give an assurance that local postal services will always be provided from the current Post Office building.(2) As a Government Business Enterprise, Australia Post is responsible for its own commercial and management decisions within the context of Government policies and legislative requirements, including the requirement that it performs its functions in a manner consistent with sound commercial practice. Any decision to change the arrangements under which the Essendon Post Office operates would be at the discretion of Australia Post, so long as it continues to provide services to the Essendon locality consistent with its statutory obligations. 6631(Question No. 597)5976631McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister representing the Minister for Family and Community Services, upon notice, on 11 May 1999:(1) Has the Government conducted research on its own behalf or retained the services of another organisation to advise it on the steps required to outsource or privatise Centrelink's fundamental functions of assessing pension and benefit entitlements and the payment of those entitlements.(2) Is the Government considering outsourcing or privatising any of Centrelink's functions; if so, which functions.6631Truss, Warren, MPMr TrussGT4Wide BayNPAgriculture, Fisheries and Forestry10—The Minister for Family and Community Services has provided the following answer to the honourable member's question:(1) No. However, the Department has sought advice from consultants regarding overseas developments on new directions in the delivery of income support and related services.(2) As part of the Government's IT Outsourcing Initiative, Centrelink is currently testing the market for the provision of IT Infrastructure services. A Request for Proposal was released on 28 April 1999, with a Request for Tender scheduled for release in late July.Centrelink is currently evaluating responses to a Request for Proposals in relation to publishing, printing, distribution and related services and for personalisation of bulk customer letters and related mailing services.In line with the Government's decision that each agency systematically review its activities to ensure that agencies are focused on those activities that are primarily the responsibility of the Commonwealth, Centrelink is examining its support functions with a view to either re-engineering or market testing.6631(Question No. 618)6186631Sawford, Rod, MPMr Sawford3J4Port AdelaideALP00 asked the Minister for Foreign Affairs, upon notice, on 12 May 1999:(1) Does Australia actively support the G-7's action and initiative on forgiving debt.(2) What is the Government's position on the Jubilee 2000 campaign.(3) Is Australia supporting the World Bank's Heavily Indebted Poor Countries Initiative; if so, how. (4) Will Australia support the World Bank's comprehensive development framework; if so, how.6631Downer, Alexander, MPMr Downer4G4MayoLPForeign Affairs10—The answer to the honourable member's question is as follows:(1) Australia supported at the April 1999 meetings of the International Monetary Fund's Interim Committee and World Bank's Development Committee the examination of options to broaden, deepen and hasten debt relief under the World Bank-IMF Heavily Indebted Poor Countries (HIPC) Initiative. This examination of options to enhance the Initiative is being undertaken as part of a wide-ranging review by the Bank and IMF. The review is considering a number of proposals including suggestions by G7 countries. There is, at this stage, no agreed position by the G7 although the issue is expected to be a focus of the G7 Cologne summit scheduled for 17-18 June 1999.(2) The Government acknowledges the good intentions behind the campaign by the Jubilee 2000 Coalition. The devastating effects on very poor countries of unmanageable debt are well known. The Government does not support the call by Jubilee 2000 for cancellation of debt, free of conditions by creditors. A key part of the solution to the debt problem—and, indeed, to achieving long term sustainable growth—is the pursuit of sound economic and social policies. Debt write-off has the potential to shield governments from their responsibilities to pursue sound policies, and to send confusing signals to those poor countries managing their economies (and debts) well and in a sustainable fashion. It is important therefore that debt relief is provided in a way which supports the pursuit of sound policies and good governance—especially if the accumulation of unsustainable debts in the future is to be avoided.(3) Australia has supported strongly the World Bank-IMF Heavily Indebted Poor Countries Initiative both financially and by encouraging the World Bank and IMF to continue progress on its effective implementation. The Initiative aims to reduce the debt of the world's poorest countries to sustainable levels, subject to the pursuit of sound economic and social policies. The Government believe that it is the most credible way to provide sustainable debt relief because it seeks to achieve a lasting solution to the debt problem.Unlike previous mechanisms, the HIPC Initiative deals with debt in a comprehensive way by involving all creditors, including multilateral development institutions.The Initiative has so far committed US$6.1 billion in nominal debt service relief.In June 1998 the Treasurer, the Hon Peter Costello MP, announced Australia's contribution of A$30.5 million. Australia also supports the comprehensive review of the Initiative being undertaken by the World Bank and IMF with significant input from governments, civil society, non-government organisations and international organisations. At the April meetings of the Bank and IMF, Ministers reiterated the importance of ensuring a clear link between debt relief and sustainable development and poverty reduction, and endorsed the examination of options to provide broader, deeper and faster debt relief. Ministers also supported the continuing link between debt relief and sound economic and social policies and good governance to ensure that debt relief is not wasted. The review's conclusions and recommendations are expected to be considered at the 1999 Bank and IMF annual meetings in September.(4) Australia supports in principle the Comprehensive Development Framework (CDF) proposed by the World Bank. Australia also supports the Bank's intention to test the framework in selected countries in the next 18 months. There are, however, a number of operational and implementation aspects of the CDF—including the implications for multilateral and bilateral donors—which are yet to be resolved. The CDF aims to define, under country ownership, long-term development priorities, to improve donor coordination to achieve these priorities, and to provide a common basis for evaluation and accountability for aid programs. The CDF will be piloted over the next 18 months in 13 countries. The Bank has stated its belief that this should be sufficient to show whether it is possible to achieve the kind of broad consultation and consensus building that is needed. At the recent World Bank Development Committee meeting, attended by Australia, Ministers recognised that the ultimate test of the CDF would be in its implementation and they called on the Executive Board to monitor and evaluate progress in the pilot country cases. Australia will be a participant in discussions within the World Bank, and more broadly, aimed at further refining the CDF concept.