1999-09-223914REPS1014301999-09-22Mr SPEAKER(Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Miscellaneous10143Motion (by Mr Reith)—by leave—proposed:That the House take note of the following paper:East Timor—United Nations Security Council—Resolution 1264, 15 September 1999.Debate (on motion by Mr Horne) adjourned.Miscellaneous10143Motion (by Mr Reith)—by leave—agreed to:That:(1) the following order of the day, government business, be referred to the Main Committee for debate: East Timor—United Nations Security Council—Resolution 1264, 15 September 1999; and(2) so much of the standing and sessional orders be suspended as would prevent Members speaking on the motion being limited to 10 minutes each.Bills10143r91210143Bill presented by Mr Reith, and read a first time.1014309:30:0010143Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I move:That the bill be now read a second time.This bill makes a number of amendments to the Affirmative Action (Equal Employment Opportunity for Women) Act 1986. The bill is a logical, commonsense and practical continuation of the government's ongoing policy commitments in this area.The amendments are aimed at achieving genuine equality of opportunity for women in Australian workplaces. The bill seeks to bridge the gap which currently exists between the provision of equal opportunities for women in the workplace, and the ability and inclination of business managers to provide those opportunities. The bill will make the act more business friendly and flexible, ensuring that organisations covered by the act are not subject to outdated and overly complex paperwork and costs associated with compliance. It will also assist in meeting the government's commitment to cut paperwork for business.The Affirmative Action Act has now been in force for 13 years and, last year, its role and performance were reviewed by an independent committee. The committee unanimously found that the act had delivered substantial gains to women and desirable outcomes for business, and was still fulfilling a valued and valuable role. However, it was also found that amendments to the act could make it more efficient and more effective.The committee also recommended the establishment of an advisory board under the existing provisions of the act. I was particularly pleased to endorse this recommendation, with the advisory board first meeting on 19 August 1999. I am confident that the board will provide a proficient and valuable link between the agency, the organisations covered by the act, and me. This is an important aspect of ensuring that the act is responsive to business, and to women, and is at its most efficient and effective.The focus of this bill is to modernise the existing features of the Affirmative Action Act to allow it to more clearly reflect today's workplace procedures and practices. The bill endeavours to deliver genuine flexibility to employers in how they achieve equal employment opportunity for women in their workplaces, acknowledging that the previous `one size fits all' approach to equal opportunity for women in the workplace does not serve the best interests of women, business or the Australian economy more generally.This bill proposes a fair and contemporary law which complements and positively reinforces the major objectives of our revitalised workplace relations system. It puts workers and businesses first, not institutions; it is relevant to modern Australia; it builds on the common interests which exist in the workplace; and it provides for fair and productive outcomes reflecting our national economic and social goals.Most importantly, in achieving these outcomes the bill retains and promotes the importance of equal opportunity for women in the workplace. Employers who currently have obligations under the Affirmative Action Act will be the same employers who have obligations under the amended Affirmative Action Act. The bill will simply change the nature of some of those obligations, making it more conducive for employers to provide genuine equal opportunity for women in the workplace.The name of the act, agency and directorThe bill clarifies the true intention of the act. Unfortunately the term `affirmative action' is too often misconstrued as pertaining to `reverse' or `positive' discrimination based on preferential treatment and quotas. `Affirmative action' has been a misnomer, because the substance of the existing act has required `equal opportunity' in employment, rather than `affirmative action'. This is an appropriate direction for the act, and one which the government will continue, with both the substantive and nomenclature changes achieved by the bill.This bill therefore proposes a change in name to the act, agency and the director's title to dispel, once and for all, any misunderstandings about the essential aims of the legislation. The bill seeks to rename the act the `Equal Opportunity for Women in the Workplace Act', the agency will be known as the `Equal Opportunity for Women in the Workplace Agency' and the director will be the `Director of Equal Opportunity in the Workplace'.Inserting an objects clause To support the name changes, the bill also introduces an objects clause. This reflects contemporary legislative practice and further elucidates the genuine objectives of the act.The new objects clause states that the principal objects of the act are to: promote the principle that employment for women should be dealt with on the basis of merit; promote, amongst employers, the elimination of discrimination against, and the provision of equal opportunity for, women in relation to employment matters; and to foster workplace consultation between employers and employees on issues concerning equal opportunity for women in relation to employment. In short, this bill aims to facilitate equal opportunity for women in the workplace, recognise the importance of merit, and promote dialogue between employers and employees on matters relating to equal opportunity for women in the workplace.The objects clause will provide guidance to employers and the agency about the interpretation and administration of the act. With respect to consultation, this will mean that employers will be encouraged to ensure adequate dialogue between employers and employees on matters relating to the act. The agency will take into account this objective in the full range of its activities including its educative and promotional activities.The insertion of this objects clause will not detract from the agency's existing role with respect to the promotion within the wider community of the understanding, acceptance and public discussion of issues relating to equal opportunity for women in the workplace.Definition of `employment matters'The definition of `employment matters' is broadened by the bill. In addition to those matters already covered by the act, such as selection processes and conditions of service, the bill adds `work organisation' and `arrangements for dealing with sex based harassment'. These matters were identified by the review committee as being of importance to women in achieving equal opportunity in the workplace. These changes will bring the act up to date with respect to matters relevant to the workplace of today. This list of employment matters is not intended to be an exhaustive account of matters relevant to the act. Indeed, the revised definition of an equal opportunity program means a program designed to remove all forms of discrimination against women in relation to employment matters at any particular workplace. This means that direct, indirect and systemic discrimination can be considered within the context of this act.Equal opportunity for women in the workplace programsUnder the existing provisions, employers are required to develop affirmative action programs based on a prescriptive and complex `eight step' process.The revised approach, as introduced by this bill, is simpler and more straightforward. Its aims are outcomes oriented, rather than being process-driven, allowing and encouraging employers and employees to put in place programs that are tailored to the needs of their particular workplaces.The new workplace programs will require the preparation of a workplace profile. This profile will be based upon data relating to the occupational and gender characteristics of the workplace. In collecting data, employers can choose to use standard ABS categories, or employers can use any other categories relevant to them. Some organisations have their own very specific classification system, while others use industry or occupational standards. This provision supports our objectives of greater flexibility and the alleviation of unnecessary processes and paperwork.Once an employer has a workplace profile, the employer will then be required to undertake an analysis to identify issues that the employer would need to address to achieve equal opportunity for women in the employer's workplace.Once the analysis is undertaken, the program must then provide for actions to be taken in relation to priority issues, and for an evaluation of the effectiveness of these actions.The new emphasis is squarely on actions and achievements. It provides opportunities for employers and workers to be genuinely innovative, and encourages real and appropriate measures to be put in place and gains to be made.The new program requirements also encourage organisations to take into account the broader business context, putting equal employment opportunity firmly in the context of good business practice, and integrating it into more general management strategies.This also means that employers will not have to duplicate activities that are undertaken for another purpose, but that also meet requirements under this act. In particular this relates to the collection of data for the purpose of the workplace profile.Reporting requirementsTo reflect the revised program requirements, the bill also introduces new reporting requirements. As with the existing provisions, employers will still be required to submit reports to the agency concerning their programs. However, the new reports will afford significantly more flexibility to reporting organisations, focusing less on processes and more on outcomes. The integrity of the reporting system will be maintained with organisations required to analyse, describe and evaluate the actions taken in the previous reporting period, and also to provide a forward-looking plan for the next reporting period. Workplace profiles are to be submitted with respect to each reporting period.Reporting periodsThe new reporting cycles will be more firmly aligned with strategic work force planning. The bill introduces a two-year cycle, as opposed to the existing one-year cycle. This will significantly reduce the paperwork burden on employers and will again soundly place the emphasis on quality program development and genuine achievement of equal opportunity for women in the workplace. During the review process, a number of organisations sought longer reporting cycles to enable equal opportunity for women in the workplace to be embedded in corporate planning. One year was considered too short a time frame to put in place actions aimed at achieving real and sustained change.A two-year cycle will enable equal opportunity for women in the workplace to better sit beside strategic human resource development issues. Savings realised by employers with the reduced reporting burden will allow resources to be redirected towards measurable progress.Waiving of reporting requirementsThe bill introduces a revised waiving arrangement. The agency will have the power to waive reporting requirements, for a specified period, where it is satisfied that the employer has taken all reasonably practicable measures to address the issues relating to employment matters that affect equal opportunity for women in their workplace.The phrase `reasonably practicable' is a commonly used expression in Commonwealth statutes. This test contains an objective standard that is balanced by the capacity to consider the particular facts of an employer's situation. The test is objective in that the agency will consider whether the measures taken are of the type that would be taken by a reasonable employer when addressing issues that affect equal opportunity for women in the workplace. The reference to `practicable' also provides for consideration of the actual constraints and limits that face the employer in deciding what measures will be taken.To meet the requirements for waiver, employers must satisfy the agency that they have taken all reasonably practicable measures to address each identified issue relating to each defined employment matter. If the organisation has no issues concerning a particular employment matter (for example, an all-female workplace that has had no experience of sex-based harassment), then no actions in that area need be taken. Of course there may also be cases where, by addressing one issue, other related issues are subsequently resolved.It is likely that the revised waiving criteria could mean that certain smaller companies, who do provide equal opportunity for women in their workplaces, are not necessarily disadvantaged simply because they cannot meet the standards of sophisticated equal opportunity for women in the workplace programs put in place by their larger, and wealthier, counterparts. There will be more scope for genuine effort and innovation to be rewarded, and more room for genuine constraints to be recognised.The new Equal Opportunity for Women in the Workplace Advisory Board has been asked to examine this provision in more detail, and to develop guidelines on how it should administered. However, it is anticipated that this revision will enable a wider range of organisations to be rewarded for their efforts.There is also provision for the agency to waive the reporting requirement, for a specified period, on its own motion. Regardless of whether an organisation is waived by applying to the agency or on the own motion the agency, they will still have to meet the same standard—that is, that they have taken all reasonably practicable measures to address issues affecting equal opportunity for women in the workplace.Agency may request informationTo ensure the probity of reports under this act, the bill also introduces a provision allowing the agency to request the employer to provide information concerning any aspect of the employer's workplace program or the preparation of the report, or the report itself.This counters any implication that the revised reporting requirements in any way diminish employers' responsibilities with respect to equal opportunity for women in the workplace. The agency can, at any point in the reporting cycle, seek verification of information supplied to the agency about the workplace program or report.This provision also assists employers. Previously the agency could only seek information once non-compliance had been determined. The proposed amendments allow the agency to ask for information at any time, thereby assisting employers to comply with the act at an early stage, and ensuring that they are not subject to the retained sanctions associated with non-compliance.Mr Speaker, the introduction of the bill implements the legislative aspects of the government's response to the independent committee's report on the regulatory review of the Affirmative Action Act as well as undertakings made by the government in our policy More Jobs, Better Pay.The committee's report followed an extensive consultation process, including the seeking of submissions—of which over 180 were received—the convening of roundtable discussions in each state and territory capital city, and the survey of all organisations covered by the act. I thank all those who constructively participated in these consultations. I particularly mention the chair of the advisory board, Janine Bevan, and thank her personally for the work that she has done. The bill has had significant input from the board, and has been the subject of valuable comments from the Office of the Status of Women.The proposed changes to the Affirmative Action Act support the government's, and Australia's, commitment to equal employment opportunity for women by ensuring that the act is fully and effectively meeting its objectives.I commend the bill to the House and table the explanatory memorandum.Debate (on motion by Mr Horne) adjourned.Bills10147r92510147Bill presented by Mr Ruddock, and read a first time.1014709:48:0010147Ruddock, Philip, MPMr RUDDOCK0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—I move:That the bill be now read a second time.The bill that I now place before the chamber is part of the package of measures announced by the Prime Minister on 27 June 1999 in response to a massive increase in the numbers of attempts at illegal entry to Australia.The bill is part of the government's ongoing commitment to combat the flow of unauthorised arrivals and other breaches of our laws at our borders.The changes the bill proposes will strengthen legislative provisions relating to the prevention of the smuggling of people into Australia.These changes will maintain the integrity of Australia's borders against attempted intru sions of the criminal elements behind most people smuggling activities.The bill also implements a number of recommendations made by the Commonwealth Ombudsman in relation to arrangements for the detention of non-citizens fishing illegally in Australian waters.The recent events in East Timor provide a graphic and immediate illustration of circumstances that can drive people to leave their normal places of residence and seek safe haven elsewhere.You will be aware of the appropriate, generous and compassionate response of the Australian government and the Australian people to this tragedy.I am sure the chamber will join with me in recognising the professionalism and courage shown by our armed services in leading the multinational force now in East Timor.There is, however, another side to the mass movement of people. This is the cynical worldwide trade in smuggling people from one country to another.It is a trade which preys on the misery and hopes of people. It is a criminal industry that the United Nations estimates has a turnover of $7 billion a year and involving up to four million people.It is a trade which is increasing in scale and sophistication, and one which is now targeting Australia.It is a trade which taxes the ability of law enforcement agencies to respond effectively.It is a trade which requires a strong, determined response from governments.The trade is often closely related to extortion, prostitution, drug trafficking and other criminal activities.The true concern of the criminals behind this trade is profit.These criminals have no concern for the safety of the people they move, as was shown only recently with the tragic sinking of an unseaworthy vessel off Christmas Island which took the lives of 15 people. These people were all on their way to Australia.These criminals can also deal in large numbers of people. Earlier this year a ship was organised which was to leave Kenya with around 2,000 people of Somali descent on board. These people were all on their way to Australia.It is a trade that needs to be dealt with before more lives are put at risk.The activities of these criminals violate the sovereign rights of states to determine who can enter their territory.The people being smuggled are, in most cases, not genuine refugees seeking haven in the first available safe country. They are instead young migrants from less developed countries who are seeking to work in developed countries.Australia is increasingly a preferred destination and unwilling recipient of the attention of these people.In 1997-98 for example, there were 13 unauthorised boat arrivals in Australia with 157 people on board.In 1998-99, this had increased to 42 boats with 926 unauthorised people on board. This year, to date, there have been 50 boats carrying 1,267 people, and we are just one-quarter of the way into the year.These figures do not include the much larger number of persons detected and deterred by our overseas posts.Clearly this is a significant problem for this country and one that demands our immediate attention.The government is responding quickly to the increase in this criminal trade.The first of the influx of Chinese boats arrived in December last year, travelling at the conclusion of the monsoon season in the Northern Hemisphere.A total of 471 Chinese nationals arrived, most targeting our eastern coastline.This could happen again this year.We need this legislation to be able to respond should it re-occur.If we are to ensure that Australia is no longer seen as a soft target the changes made by this bill have to be in place well before the end of this year. This legislation will be only the first legislation that we will be proposing to deal with these problems.It should be understood that Australia is not alone in adopting a more active approach to people smuggling.The United States of America, for example, has announced its intention to broaden the scope of its border enforcement powers beyond its territorial waters. Canada is also reviewing its laws to combat this criminal activity.I expect that other countries will soon follow. The fact is that if we are not at the forefront in dealing with these issues through legislation of the sort that I am proposing, and other measures, we will be seen as a more attractive destination to the people smugglers who are arranging this sort of trafficking.It may be helpful if I outline an example of where Australia's existing laws to combat people smuggling are inadequate.Earlier this year `snakeheads'—as they are called in China—or people smugglers, from Fujian, conspired to bring a boatload of would-be illegal entrants to Australia.The Fujian group were attempting a totally clandestine entry, attempting to avoid detection and to disappear into the Australian community.The vessels involved in the Fujian operation were steel-hulled and equipped with modern navigational and communications equipment.These ships travelled, by a circuitous route, through international waters, across the top of Papua New Guinea, before targeting Australia's eastern coast.They avoided contact with those neighbouring countries whose officials might alert Australia of their imminent arrival.The snakeheads coordinated the route taken by the vessel and arranged for accomplices onshore in Australia to receive and conceal the ships' human cargo.Their plans were to exploit the limitations of our current laws.The `mother ship' was to wait in international waters. Accomplices in Australia were to travel out to the vessel in high-powered ocean-going speed boats that had been specifically purchased for this purpose.Those accomplices were to ferry the passengers to Australia under cover of darkness.The mother ship, relieved of its human cargo, would then sail back to China without being detected or arrested.As it stands, the captain, crew and the snakeheads in command were immune to Australian law, which does not extend to people smugglers sitting so far off Australia.They were beyond the reach of our laws.The legislation that I present today is designed to ensure that these smugglers, operating on mother ships sitting off Australia's coast, will not be immune.They will not continue to be beyond the reach of Australian law.The bill will create new powers that will allow our officers to undertake enforcement action beyond our territorial waters, and to arrest and prosecute those involved in attempts to breach our sovereignty in this way.The bill ensures that the investigatory and enforcement powers held by officers of front-line border agencies are complementary so they may function more effectively and efficiently on behalf of Australia.The powers proposed will enhance the ability of our officers to deal with other forms of illegal activity they encounter at sea such as drug smuggling and illegal fishing.The bill achieves these aims by making amendments to the Migration Act 1958, the Customs Act 1901 and the Fisheries Management Act 1991.This bill revises and enhances existing powers of investigation and enforcement at sea in the context of our obligations under the United Nations Convention on the Law of the Sea and customary international law.Amendments to the Migration Act and the Customs Act will allow the detaining, forfeiture, seizure and, as necessary, disposal of ships and aircraft used in people smuggling operations.In addition, vessels found to be unseaworthy, a risk to safety or navigation or a threat to the environment, will be able to be moved or destroyed.The main target of the bill is the smuggling of human cargo by sea.However, future attempts could also be made by air. Accordingly the bill gives our main border agencies similar powers over aircraft being used in this criminal trade.To ensure the safety of our officers, in the increasingly violent world of people smuggling, amendments to the Customs Act will allow Customs officers to carry approved firearms.They will also be able to carry other approved items of personal defence equipment in the performance of their duty.Customs officers will also be officers for the purposes of the Fisheries Management Act and carry approved firearms in matters relating to surveillance and enforcement against illegal foreign fishers.The measures contained in this bill are a major part of the government's strategy for dealing appropriately with unauthorised arrivals. Another element of this strategy is contained in the Migration Legislation Amendment (Judicial Review) Bill 1998.That bill is presently before the Senate, and its passage through the parliament is crucial, in this government's view, to assist in combating this heinous trade.This bill will limit the grounds for judicial review of migration matters, particularly for unauthorised arrivals, and provide a clear message that people will not be able to use the judicial review system simply to prolong their stay in Australia.The passage of that bill will help ensure that the snakeheads and other people smugglers cannot hold out false hopes that an extended stay in Australia can be easily arranged.I encourage the opposition to take a broader view of that legislation and this current bill in the context of the issue of people smuggling into this Australia.At this time, I would remind the chamber that there is a qualitative difference between organised people smuggling and the irregular movement of people in need of safe haven.Australia recognises that genuine refugees are sometimes caught up in the criminally organised people smuggling operations. However, our refugee determination system works to identify those who are genuinely refugees and accord them the protection, irrespective of how they gain entry to this country.It is the very generosity of our refugee determination system that some see as an incentive to make their way to Australia illegally.For example, we have seen a dramatic increase in the number of people from Iraq and Afghanistan who are arriving illegally by boat. Of the 378 people who arrived by boat in July and August this year, 262 were from Iraq and 71 from Afghanistan.That is more than twice the number of Iraqis that arrived in the full financial year 1998-99.One of the factors behind this dramatic increase may be the perception that past illegal arrivals from those countries had been successful in engaging Australia's protection obligations.These perceptions have led to expectations.I was disturbed to hear reports of some of these arrivals asking for Pert 2-in-1 shampoo immediately upon arrival in Australia.Some of them have arrived with details of medical treatment that they wanted to receive whilst in detention, including dental work, and often asking to see orthodontists—something I think many Australians would like to be able to do free of charge.We have had more than one case of demands being made for very expensive medical treatment—with the full expectation that the Australian taxpayer would foot the bill.Others have been critical of the conditions in which they are being detained.Whatever the reasons for the increase, the fact remains that travelling to Australia by boat is a hazardous undertaking.It places people in leaking, rusty hulks which are often prone to breakdown.It places them at the mercy of the weather.Most of all, it makes these people vulnerable to criminals behind the smuggling trade.It is these factors that require that this parliament deal with this bill quickly, for it to gain passage and come into force before December of this year. It is also for this reason that we need to pass the other legislation that is before the Senate, and the further legislation that the government will be proposing to deal with these matters.I was heartened to read that the shadow minister for employment, training and population had placed a motion before the House indicating the utmost concern about the activities of people smugglers.I trust that this concern will result in unequivocal support for this bill and the other legislation for which the government will be seeking the support of this parliament.This bill also proposes a number of amendments to the Fisheries Management Act to allow for the detention of foreign fishermen who are suspected of fisheries violations.These amendments flow from a recent report on this issue by the Commonwealth Ombudsman.Consequential amendments to the Migration Act will provide a scheme by which these fishermen will be taken to hold a visa immediately upon enforcement action by fisheries officers.This new visa will come into effect automatically for the duration of the period of detention of persons suspected of fisheries violations.Once fisheries detention is concluded, any continued detention will be under existing provisions of the Migration Act. Among other things, these provisions enable any custodial sentences to be served.The bill also makes a number of miscellaneous amendments to the Migration Act. Some of these changes are consequential to the main thrust of the bill and act to streamline the operational aspects of enforcement practice.Others revise existing provisions relating to the bringing of unauthorised arrivals into Australia where those persons need to travel to Australia for various reasons.The bill provides for such circumstances and ensures that officers implementing these returns are not acting contrary to the law and therefore vulnerable to prosecution. It also ensures that those returned will be detained on arrival and will not reactivate entitlements that they had already used.In summary, this bill is part of a package announced by the Prime Minister on 27 June 1999 to combat international trade in people.This bill will allow Australia to increase its capacity to detect and to deter people smuggling.It will ensure that the organisers of this criminal activity are not beyond the reach of our laws.The government has responded promptly and unequivocally to this growing and real criminal activity.I ask that all non-government parties support us in our endeavours to combat this kind of international crime and ensure that this bill becomes law before the end of this year.I commend the bill to the House and I table the explanatory memorandum to the bill.Debate (on motion by Mr Horne) adjourned.Bills10151r92210151Bill presented by Mr Truss, and read a first time.1015110:07:0010151Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—I move:That the bill be now read a second time.The purpose of this bill is to correct an inconsistency between the starting dates of the Primary Industries Levies and Charges (National Residue Survey Levies) Regulations 1998 and amendments made to these regula tions by Statutory Rules 1998 No. 182. As a consequence of this inconsistency, sheep traders liable to pay a `per head' national residue survey levy on sheep transactions were unintentionally liable for a higher levy rate than that collected from 1 August 1998. Similarly, lamb traders were technically liable for a lower `per head' national residue survey levy rate than that collected.The national residue survey implements residue monitoring programs for agricultural products under the National Residue Survey Administration Act 1992, the National Residue Survey (Customs) Levy Act 1998, and the National Residue Survey (Excise) Levy Act 1998. These acts also provide for recovery of the costs of national residue survey programs from participating industries.These programs form the basis for documentation enabling the Australian government to certify that food is not contaminated by chemical residues. This documentation is a requirement for access to the European Union, United States and Japanese markets, and is also a requirement for access to Australian domestic markets for all meat products under the Agriculture and Resource Management Council of Australia and New Zealand health standards.It is therefore very important that the national residue survey programs operate smoothly and that its funding base is secure.The financial impact on levy payers has been nil, as the levy was collected at the rate specifically requested by industry.I present the explanatory memorandum.Debate (on motion by Mr Horne) adjourned.Bills10151r92610151Bill presented by Mr Williams, and read a first time.1015110:09:0010151Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:That the bill be now read a second time. The Family Law Amendment Bill 1999 gives effect to a number of the government's election promises on families and family law, marking it as an important step in the process to reform the Family Law Act 1975.The government recognises the extraordinary stress that is placed on people experiencing relationship difficulties and is committed to assisting people to maintain stable, healthy relationships. When people do experience relationship difficulties, however, the government is committed to assisting them to resolve those difficulties with a minimum of stress and as fairly as possible.The bill will help separating couples achieve greater financial equity and certainty by implementing a number of recommendations contained in the 1992 report of the Joint Select Committee on Certain Aspects of the Operation and Interpretation of the Family Law Act 1975.The bill has two broad aims. The first aim, given effect by amendments in schedule 1 of the bill, is to streamline and enhance the enforcement of parenting orders by the introduction of a new three-stage parenting compliance regime.The second aim is given effect by amendments in schedules 2 and 3, which provide for the introduction of binding financial agreements and enable the commencement of private arbitration of disputes about property. The object of the amendments in schedules 2 and 3 is to provide greater choice for parties in property settlements and to provide a more efficient and less costly means of dispute resolution in property matters than that which is available through the Family Court.Turning to the amendments in schedule 1, the bill will address an area of significant public concern, the enforcement of parenting orders. Under the current law, in many cases, contact order compliance in particular is seen as being optional. When the court makes an order about the parenting of a child, it must be observed. However, Family Court orders are different to other court orders in two important respects. First, they must balance the emotional distress that often accompanies relationship breakdown. Second, the opportunity for the breach of a parenting order providing for contact comes about on each occasion of contact.Because of the unique nature of parenting orders, a new three-stage parenting compliance regime will be introduced covering prevention, remedial measures and ultimately punitive sanctions. The three-tiered approach in this bill was recommended by the Family Law Council in June 1998. That recommendation followed the council's detailed study of enforcement cases and broad-ranging community consultation of alternatives for improving compliance with parenting orders, particularly contact orders.The government is committed to encouraging parents who separate to consider carefully the needs of their children and to put in place workable parenting arrangements that promote the best interests of their children. The first stage of the parenting compliance regime will therefore be preventative. The aim of the first stage will be to ensure that parents are aware of their parenting obligations, the responsibilities imposed by any orders and the consequences if they fail to observe the orders.This stage is also intended to improve the communication between parents. The court or a legal practitioner who is representing a party must explain the effect of the parenting order. This information will be required to be given in language that the person receiving the explanation is likely to understand. People who make registrable parenting plans will also be able to obtain an explanation of what they are agreeing to and the consequences of failure to comply with the agreement.The second stage of the parenting compliance regime will contain remedial measures. When a breach of an order occurs for the first time, the court will be able to send parents to a range of post-separation parenting programs as well as making an order to compensate for lost contact. The aim of the educative programs will be to help parents to resolve issues of conflict about the parenting of their children. Parents will be required to attend such programs provided that the program is available within a reasonable distance from the person's place of residence or work. For example, within the metropolitan area of a city or large regional centre it would not be unreasonable to require attendance if public transport could be used to get to the venue or if the person had private vehicle access. In smaller communities, it would not be unreasonable for attendance to be required if the person had private vehicle access and the one-way journey did not exceed one hour. I will compile, each year, a list of the programs that will satisfy the requirements.When the court requires a person to attend one of the listed programs, the court will also be required to provide information to the program provider, including the details of the person ordered to participate. In some cases, the program provider will be required to notify the court of the outcome of the person's attendance. These cases will be where the person has failed to attend the program as ordered, or the person has not participated so as to derive benefit from their attendance, or the person has been deemed unsuitable to participate in the program. When the court is notified of a failure in the program, the court may then make further orders concerning attendance or may proceed to take action under the third stage of the regime.The third stage of the parenting compliance regime will contain punitive sanctions.Where there are persistent breaches or where the first breach is particularly serious, the court will be able to impose a range of sanctions including community service orders, fines, bonds or, ultimately, imprisonment. These sanctions already exist under existing part XIIIA of the act but in that part the court has a discretion as to whether to impose a sanction. The bill will remove this discretion.For the court to impose one of the range of sanctions available in the third stage of the parenting compliance regime, the person must previously have been ordered to participate in a post-separation parenting program or, alternatively, the court must have ordered compensatory contact. These requirements will not apply if a post-separation parenting program was not reasonably available or the court considered that it was not appropriate for the person to participate in such a program or considered that it was not appropriate to order compensatory contact.Community service orders will be a valuable alternative sentencing option under the new three-tiered parenting compliance regime. Such orders offer a valuable alternative sentencing option for the court to consider. The bill includes imprisonment as a sanction available for the non-payment of maintenance where the contravention was wilful or fraudulent. The joint select committee recommended in 1992 that imprisonment should be an option in such cases.The bill defines the meaning of contravene with the emphasis being on the wilfulness on the part of the parent in failing to comply with the parenting order or that of another person who assists a parent to contravene a parenting order.The changes to the parenting compliance regime for children's matters will apply to orders made before as well as after the commencement of the bill and will apply regardless of whether the contravention occurred before or after the commencement.I now turn to the amendments contained in schedule 2 to the bill. These amendments will enable binding financial agreements to be made before or during marriage or after separation.Currently, under the act, people can make prenuptial agreements about their property. However, the use of these agreements has been limited because the agreements are not binding. Despite the existence of an agreement, the court has been able to exercise its discretion over any of the property dealt with in the agreement.The settlement of the financial affairs following separation has remained basically unchanged since the act commenced in 1976. However, the Australian community—and its attitude to marriage—has undergone substantial change during that time. The changes in this bill will attempt to bring the act into line with prevailing community attitudes and needs.Binding financial agreements will be of particular benefit to people who are entering subsequent marriages as well as to people on the land and those who own family businesses. The aim of introducing binding financial agreements is to encourage people to agree about how their matrimonial property should be distributed in the event of, or following, separation. Agreements will allow people to have greater control and choice over their own affairs in the event of marital breakdown. Financial agreements will be able to deal with all or any of the parties' property and financial resources and also maintenance. An agreement may cover how property would be divided or how maintenance would be paid. Particular assets, such as rural properties, would be able to be preserved.People will be encouraged, but not required, to make financial agreements. For these agreements to be binding, each party will be required to obtain independent financial or legal advice before concluding their agreement. The decision of whether a party requires legal advice or financial advice or both will be a matter for that person to choose. This will enable people to obtain information that suits their particular circumstances. The provider, or providers, of the advice will certify, on the agreement, that the advice has been given. Requiring parties to obtain independent advice will mean that couples will be aware of the implications of the agreements that they are entering into and will not unknowingly enter an agreement that is not in their best interests.Because parties will have obtained prior advice, the court will only be able to set aside an agreement in certain limited circumstances reflecting the contractual nature of the agreement: for example, where there is fraud, where the agreement is void, voidable or unenforceable, where it is impractical to enforce the agreement and, most importantly, where there are changes in the circumstances relating to the care of a child.Schedule 3 of the bill contains provisions to increase the range of non-judicial dispute resolution services.The government has already increased family and relationship counselling and mediation by providing additional primary dispute resolution services through community based counselling and mediation services and through conferencing in legal aid commis sions to assist families to resolve disputes. The government's aim is to ensure that wherever possible, where people cannot resolve their relationship difficulties, they are able to avoid costly legal fees and emotionally debilitating court proceedings and to resolve their marital, separation and parenting disputes sensibly and respectfully.The amendments in schedule 3 to the bill also promote these aims by introducing a workable scheme of private arbitration that will allow qualified arbitrators to settle disputes and make enforceable decisions about the distribution of property on marriage breakdown. The amendments will mean that, if people are unable to agree about property on marriage breakdown, they will be able to use the services of arbitrators rather than needing to resort to a court to resolve the dispute. Therefore, people who utilise the services of arbitrators will have access to a less expensive and quicker option to resolve their dispute.Where the parties choose, some aspects of their property may be arbitrated: for example, parties may choose to have complex issues, such as superannuation, arbitrated, with the remainder being settled either by financial agreement or by court order. Even where proceedings have commenced in the Family Court, the court may, with the consent of the parties involved, order that particular issues be arbitrated. Similarly, the bill will permit an arbitrator, prior to making their arbitral award, to refer a question of law to a single judge.Decisions of the arbitrator will be subject to review on questions of law by the Family Court. Confining the review of arbitral awards to questions of law will ensure the finality of arbitral resolutions.Arbitrators, in order to be eligible to perform arbitrations under the act, will be required to satisfy prescribed qualifications and experience criteria. People will be able to choose an arbitrator easily from a list of arbitrators who meet the required criteria maintained by the Law Council of Australia.Finally, the bill will make a number of other amendments to the act designed to assist the smooth functioning of the court, to facilitate transfer of proceedings between courts, to make minor changes to child maintenance orders, to extend the application of location and recovery provisions of the act to international child abduction cases, to limit the application of the separate representative provisions in international child abduction cases and to provide the court with broader powers to make Rules of Court about enforcing property and financial orders.These changes are intended to benefit persons involved in family law matters. This bill not only will improve the procedural efficiency with which matters can be dealt with by the courts but also will open up a new range of choices for separating parties to resolve their disputes with dignity. This bill is an important step in minimising the distress and trauma that arises when families break down.I commend the bill to the House and present the explanatory memorandum to the bill.Debate (on motion by Mr Horne) adjourned.Miscellaneous1015510:23:0010155Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:Customs Tariff Proposal No. 5 (1999)Customs Tariff Proposal No. 5 (1999), which I have just tabled, contains alterations to the Customs Tariff Act 1995 to remove the customs rates of duty on steel tinplate and aluminium cansheet.This action was recommended by the 1996 industry commission report on packaging and labelling. As announced by the Minister for Industry, Science and Resources in July this year, the government has accepted the recommendations to take effect from 1 October 1999.The removal of these customs tariffs should result in lower input costs for the food and beverage canning industry. This should improve the competitiveness of this industry, and lead to increased exports of these products.Steel tinplate is primarily used for food cans but is also for other containers such as paint tins and aerosol cans. In the case of aluminium cansheet, the removal of tariffs will apply to three cansheet products— bodystock, endstock and tabstock used in the manufacture of aluminium cans.The removal of these customs rates of duty is further proof of the government's commitment to lowering business costs and helping develop competitive Australian industries, while providing consumers with better priced products.A summary of alterations has been prepared and is being circulated for the information of honourable members.I commend the proposal to the House.Debate (on motion by Mr Horne) adjourned.Bills10155r89010155Debate resumed from 30 June, on motion by Mr Slipper:That the bill be now read a second time.10:26:0010155Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Taxation Laws Amendment Bill (No. 8) 1999 is an omnibus taxation bill covering 10 separate subject areas. The major ones are corporate philanthropy, treatment of bribes of overseas officials, tax rate for friendly societies, post-judgment interest on damages claims,and a number of technical issues including anti-avoidance provisions, simplifying rules for prior year losses, amendments to the dividend franking rules and redrafting to take into account simplifying tax legislation and the correction of drafting errors. 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 this House;(1) condemns the Government for its continuing unwillingness to legislate against tax minimisation through the use of family trusts and notes the conflict of interest involved in approximately 17 Government frontbenchers holding family trusts; and(2) calls on the Government to introduce into the House without delay the anti avoidance entity taxation arrangements announced in the ANTS package; and(3) notes with alarm the consequent failure of the Government's response to the business tax revenue neutral criterion and the effect of the resulting fiscal loosening on the current account deficit; and(4) notes that Jeff Kennett has received a strong rebuke from the voters of Victoria due to his championing of the GST, excessive secrecy and nobbling of the Auditor General.The key issues for debate here are, first, corporate philanthropy. The Prime Minister and other ministers announced these proposals in March to take effect from 1 July this year. They are supposedly aimed at increasing private philanthropy by making the tax consequences of gifting much more attractive. This is to be achieved, firstly, by providing tax deductibility for gifts of property valued at more than $5,000 held by a taxpayer for more than one year, irrespective of the valued at which it was acquired, to tax deductible public funds such as charities, universities, et cetera, and for similar gifts to a new category of tax deductible private funds. Secondly, it will provide a capital gains tax exemption for the increase in value of the property over the period that it was held by the gifting taxpayer under the cultural gifts program and for testamentary gifts—that is, gifts through wills to tax deductible funds. Thirdly, it will allow taxpayers to elect to spread tax deductions for gifts made over five years instead of the year of gift only.While increased private philanthropy may be a worthwhile aim, Labor is concerned that the government wishes or intends to use this as an excuse for reduced future public philanthropy to welfare or charity agencies or to cultural ones. The opposition is concerned that the government is positioning itself to be able to pull back support in the future, arguing that it has installed incentives for the private sector to donate. This is similar to the arguments that the coalition will want to run in the future concerning vital state government services. So, when states complain they do not have enough resources to provide adequate levels of service to the public and ask the Commonwealth to contribute, we know what the conservatives will say: `You have the GST, if you want more money, you will simply have to increase the rate of the GST.' This is the Howard agenda on tax. We are concerned it will be the Howard agenda on community support as well.That is why we need to closely scrutinise these proposals, which will greatly increase the tax benefits accruing to gifts. I point out that the cost of the concessions is quite considerable—it is said to be in the order of $71 million by the financial year 2002-03—so whether these public resources are best spent by assisting private philanthropy, over which the public has little or no control, is an open question. This is something that the Senate should examine closely. How do we ensure that the resources that will be obtained in tax concessions will be efficiently used to assist our community?Providing tax concessions in respect of testamentary gifts is a complex issue. Should tax concessions be provided to assist the estates of what are almost exclusively wealthy taxpayers? If people decide to be generous with their assets in death, should a tax concession be granted to their estates? These issues need to be explored, and I dare say they will be in the proposed Senate inquiry into this bill.The second area of concern is the proposal to allow deductibility for gifts of property to private funds. Whilst private charitable funds may be as beneficial to the community as well-known public funds, there is a major accountability risk with private funds. How are we to know that the funds are being effectively administered? How are we to know about the effectiveness of their operations? Are they worthy of public subsidy through tax concessions for donations to them? We need to be certain that such entities cannot be used to foster tax avoidance. It might sound obscene to suggest that a charity would get involved in tax avoidance, or that anyone would attempt to use a charity for tax avoidance, but that is a real threat.A former Treasurer, Ralph Willis, prior to the election in 1996, announced a crackdown on the misuse of charitable trusts, and the incoming government picked up that initiative and carried through with it. Clearly, the threat of misuse for private charitable trusts must be significantly greater than that attached to public institutions. I make the point that private philanthropy should be about services to the community and not about tax dodges for wealthy people to hide behind.The third issue in the legislation is that of donations to political parties. This bill proposes that gifts to a political party of property over $5,000 will qualify for a $1,500 deduction. In a separate bill, Labor is opposing measures which would increase the level of tax deductibility for cash donations to political parties from $100 to $1,500. Labor intends to be consistent and to oppose the proposal in this bill in respect of gifts of property.It is outrageous that the government seeks public subsidy for gifts from wealthy people to political parties. If wealthy people wish to make political donations, that is their prerogative, but they should not be able to get a subsidy from the Commonwealth—from the taxpayer—for making such a contribution. Indeed, the Howard government ought to have much more pressing priorities than to subsidise wealthy contributors to the Liberal Party. The government is happy to cut funding for essential community services, and yet it now seeks to subsidise its own wealthy contributors. This is an outrageous proposal which this House should reject.The next issue in the legislation is that of bribes for overseas officials. Australia has agreed, through the OECD, to legislate to deny tax deductibility for bribes paid to foreign government officials in an attempt to level the international playing field for foreign trade and investment. These proposals are consistent with recent amendments to the criminal law, which make it a crime to pay such bribes to foreign officials. The measures in the bill extend to situations where amounts are paid with the intention of influencing a foreign official in the exercise of his official duties to obtain or retain business or to obtain or retain an advantage in the conduct of business. However, if the bribe is legal in the official's country, it will be allowed as a deduction.In addition, facilitation payments will still be deductible. A facilitation payment involves a payment to get an official to undertake or to expedite a routine government function. Examples include visas, the provision of electricity, water, telecommunications, mail services and the loading or unloading of cargo. This simply recognises the reality of dealings in some countries. Note that facilitation payments cannot extend to a business contractual matters. Labor supports these measures; they should assist Australian businesses to compete against less scrupulous competitors. They are being enacted around the world and they should therefore penalise those competitors who are paying bribes and thereby gaining an unfair advantage against honest Australian competitors.We can all speculate about how many taxpayers honestly describe the bribes they pay as `bribes'. There would be dozens of euphemisms to cover what objectively are bribes, so one would expect that the revenue attached to these proposals would not be large. Notwithstanding the specific practical issues around this, the principle is a sound one and Labor supports these proposals. On the same principles as those for foreign officials, denial of tax deductibility should also be extended to domestic officials' bribery situations. This should level the playing field for businesses operating in Australia. We intend to pursue this matter by way of an amendment in the committee stage of this debate.Labor is recommending to the government that the non-deductibility should be extended to domestic bribery situations—to Commonwealth, state, territory and local governments—not just to foreign situations. This is an important issue that my colleague the shadow minister for justice and customs will take up in detail in his contribution in this debate.I want to go to an issue relevant to this, that of corruption in government and the culture of secrecy—which I have referred to in the second reading amendment—the culture of the Kennett government Victoria. There is no better description of this than on the web site of Stephen Mayne, which can be found by people who are interested at: www.jeffed.com. Stephen Mayne has a unique history as an adviser to the former Victorian Treasurer, Alan Stockdale. On this web site he raises issues to do with secrecy inside the Victorian government. The first issue that concerned him as an adviser to former Treasurer Stockdale was his knowledge that the Premier was `using his position to secure unusually large allocations in hot floats'. He said:. . . I became uncomfortable and raised these concerns with Alister Drysdale, the Premier's chief adviser at the time.The other cause for concern that he had was the Premier's attitude to the media. He says:He regularly and systematically courted the moguls such as Kerry Packer, Rupert Murdoch and Conrad Black whilst simultaneously beating up on frontline journalists and editors where necessary.Mr Mayne refers to the Premier's media director, Steve Murphy, gloating about a lunch with Rupert Murdoch at which, he says:The Premier opened proceedings with a very familiar "So, Rupert, how's your mother?"Mr Mayne makes the point, which I think is absolutely valid, that `politicians should deal with journalists and editors, not management and proprietors'. The other part of the Premier's way of dealing with the media was, and has been, by very vicious attacks, including those on the Age . Mr Mayne says that the Premier was active in seeking to secure changes of personnel he did not like at media outlets. He goes on to say at his web site:When David Walker was appointed state economics editor, we got a much better run in The Age and were also supported by Age business columnist, Steve Bartholomeusz, who I've disagreed with strongly over the appropriate level of criticism that should be made of Crown . . . a more critical eye should have been cast across some of the later dealings by the government, particularly in areas such as the profits generated from gambling licences, share allocations in the Transurban float and beneficiaries of government policy who subsequently donated to the Liberal Party.Mr Mayne goes on to say:The Premier's strategy of aggressively courting and complaining to media owners, chairmen and directors has worked profoundly in his favour . . . Basically, I believe the Premier has most commercial media outlets either in his pocket, cheering from the side or too intimidated to take him on. The others, most notably ABC television, have largely been marginalised through denial of access and vitriolic attacks. Mr Mayne also says in relation to his own situation as someone who resigned from the Australian Financial Review in order to contest the recent state election:. . . based on past performance, he or his staff have probably already made contact with Fairfax senior management and directors to argue the case that I not be reinstated at the Financial Review. AFR Editor-in-Chief and publisher Michael Gill refused to reinstate me after my nomination was ruled ineligible.Some of the issues that Mr Mayne wished to raise and became very concerned about, given his knowledge from the inside of government, are, for example, that it was Alister Drysdale, a key person on the Premier's staff:. . . who wrote the statement for Elliott when he first went publicly on the attack in 1993 against the NCA and the DPP. The statement lamented the "relentless and unremitting campaign" against Elliott who, using Drysdale's words, said the DPP had "aided and abetted" the NCA "in an attempt to blacken my name".Mr Mayne goes on to say:. . . the most senior member of Mr Kennett's staff should not have written statements for Elliott attacking the DPP at the same time as the Premier and Attorney General Jan Wade were planning sweeping reforms to Mr Bongiorno's office. Asked in State Parliament about this, the Premier said it was a matter for Mr Drysdale. No one ever has asked Drysdale directly if he wrote that speech and what broader role he took in Elliott's campaign. If what media manager Murphy said is true, this basically means Elliott's campaign against the DPP was partly being run out of the Premier's office. Most reasonable people would think this is inappropriate given the widely accepted doctrine known as separation of powers, whereby the judiciary should be completely independent from executive government.Indeed, it is most ironic that some of the words that Mr Drysdale, ghostwriting for John Elliott, said in this speech were:One of the cardinal principles of the rule of law in democratic society is that there must be a strict separation of powers between politicians and law enforcement bodies.Stephen Mayne also comments at his web site on the issue of the Crown Casino. He comes back to Alister Drysdale, who also doubled as the Premier's special adviser on gambling, commenting to him that:. . . Crown's application in May 1994 to triple the size of its hotel to 1000 rooms was "a done deal". The so-called independent Casino and Gaming Authority announced it had approved the proposal several weeks later.It is a matter of public record that Mr Drysdale received a $62,000 discount in early 1993 on a St Kilda Road apartment, in the former BP House, which was redeveloped by Hudson Conway. Naturally, it was the casino subcommittee of cabinet, chaired by the Premier, that did the deal rather than Drysdale himself. Mr Mayne also expresses concern about the fact that Hudson Conway was involved in suing the government and doing deals with the government simultaneously. He says:I thought it was a bit rich that the Casino Sub-Committee of Cabinet, still chaired by Mr Kennett, was doing "deals" with Crown when its major shareholder and manager Hudson Conway was suing another arm of the government. Only weeks earlier, HudCon lodged its $100 million claim against the government-owned Gas and Fuel Corporation . . .—which was over the cancellation of a contract by the Gas and Fuel Corporation to build a new headquarters. He says further:It is indeed ironic that the Coalition is still attacking Labor for losing the State Bank, when the Tricontinental chairman was given government posts and the state successfully extracted a $136 million settlement from the failed merchant bank's auditors, KPMG.He goes on to say that the other key part in the Crown-Kennett equation was the Premier's defamation action against the Nine Network's A Current Affair , which was resolved some three months after Mr Mayne rejoined the Herald Sun . A Current Affair had carried a story about a Melbourne water worker who had committed suicide because of changes to WorkCover introduced by the Kennett government. This was an erroneous story. When Mr Mayne raised this with the Premier's media man, Steve Murphy, on the night it was broadcast, he was abruptly told not to correct it. He was told that the Premier had attempted to call Kerry Packer and Ian Johnston, the head of the Nine Network in Melbourne, to complain about the story, and when it had not been corrected, the Premier told his wife that he was going to make them pay. Further down the track, we find that Steve Murphy told Mr Mayne that the Premier received a cheque for $400,000 in relation to this defamation action, that this was more than enough to pay for his renovations, which cost $300,000, and that the Premier had spoken to Kerry Packer about it directly and so it should not have taken so long to settle. Mr Mayne also says that he quoted Mr Murphy in the Financial Review earlier this year, saying the settlement was $400,000 and had paid for the renovations. There was no communication from Mr Murphy denying it or seeking clarification. You would expect this if it were inaccurate, particularly given the sensitivities of the parties involved. Mr Mayne said that it was this combination of events which first seriously pricked his concerns about the Premier.Kerry Packer owned almost 20 per cent of Hudson Conway, about 45 per cent of the Nine Network, and almost 30 per cent of Crown at the time. As Stephen Mayne said:The Premier should not have been simultaneously negotiating a personal payment from one part of the Packer empire while adjudicating on regulatory changes for another part, namely Crown. At the time of the settlement, Mr Packer was well over $100 million in front on his Crown/Hudson Conway investment. Given all these circumstances and varying accounts, surely the parties could agree that the public has a right to know what the settlement was and who organised and paid for the renovations, just to clear the air once and for all. It is simply too sensitive an issue to remain confidential.This emphasises the need for vigilance against bribes to public officials.Stephen Mayne goes on to outline the fact that Mr Alister Drysdale, the top adviser of Premier Kennett, subsequently departed to the gambling company Tattersalls on a package he told other staffers was worth $460,000 a year. He says:This hiring came just a few months after Treasurer Alan Stockdale had written to Tattersalls seeking a retrospective fee for its lucrative gaming machine licence.. . . . . . . . .Negotiations with Tattersalls dragged on until the eve of the 1996 election, when it was announced that the beneficiaries of the late George Adams would contribute the equivalent of $422 million in today's dollars. Based on Tabcorp's share price, the Tattersalls pokie licence is in fact worth more than $2 billion and it is making more than $100 million a year in profit after these additional annual licence payments.They are in an extraordinarily good situation. Mr Stephen Mayne asks:So what did Drysdale bring to Tattersalls? Was he a fee stopper, or a fee minimiser? A door opener, perhaps?Stephen Mayne points out:In the United States, it is illegal for government advisers to leave and immediately start working as lobbyists or advisers for companies negotiating with government. As far as I know, no-one has ever asked the government or Tattersalls what role Mr Drysdale had in negotiations.He then turns to Ron Walker. He says:I had a problem with Ron Walker being many tens of millions of dollars in front on his Hudson Conway shares thanks to Crown and also being the primary fund raiser for the Liberal Party and one of the Premier's closest personal friends. As the man who personally brought the Grand Prix to Melbourne without any Cabinet or Treasury scrutiny, I felt his prediction on the day the coup was announced that it would cost $10 million to establish the course and would run at an annual profit should have somehow been binding to him. When the public costs started mounting, I can remember Steve Murphy telling me that Ron had said in one meeting "It would be different if it was private money" . . . "the Treasurer nearly fell off his chair".Stephen Mayne says:Given that Mr Walker has made about $30 million out of Crown and taxpayers have spent more than $100 million on the Grand Prix and related infrastructure, I felt Mr Walker should have been held more accountable for the huge blowout. If it was good enough for him to personally take over a $4 million Liberal Party debt, then why shouldn't he also have personally contributed to the Grand Prix blowout he never predicted, especially given his casino profits. Ron Walker is so close to the Premier, this is never going to happen.Mr Mayne also talks about some of the Premier's personal investments. I may not have time to go into them in the detail that would be appropriate, but one that ought to be mentioned is where he rang the former Stock Exchange chairman, Laurie Cox, and secured some 20,000 Yates shares for his wife. Mr Mayne alleges that Mr Kennett used his position to make a $7,000 profit in the name of Mrs Kennett, and he described Mr Cox as one of his brokers. This is interesting because Mr Cox is also chairman of the world's biggest toll road company, Transurban, a position he was supported into by the Premier. Mr Mayne says:The Transurban float is the best example I've ever seen of fat cats and insiders making millions from a business which relies on ordinary citizens paying up . . . Mr Cox has profited to the tune of more than $2 million. So one of the Premier's brokers has made $2 million out of Transurban, yet no-one in the Melbourne media seems to care.For these reasons, we will be moving an amendment in the consideration in detail stage concerning bribes to Australian government officials, and we hope this is something which would strengthen the hand of the tax office.In the remaining minutes open to me, I will briefly comment on some other issues in this bill. For friendly societies, the bill proposes to keep the current tax rate for the 1999-2000 year and then raise it for the 2000-01 year, when the business tax reforms are currently scheduled to commence. This is a measure which Labor supports.The bill will exempt from tax the amount of post-judgment interest in personal injury compensation cases. This issue has arisen from the Whitaker case, where Mrs Whitaker became blind, and it was held that post-judgment interest was taxable income. Frankly, the government's delay in addressing this issue is quite unacceptable. This is a measure which will cost $14 million this year and $2 million in future years. It is strongly supported by Labor. We assume that the $14 million cost this year reflects the refund of tax paid back to those unfortunate enough to have been caught up in the net already. The minister might like to clarify that point when he sums up at the end of this debate.The fifth item in the bill is controlled foreign corporations and capital gains tax. There is the closing of a loophole, ensuring that capital gains tax is payable on assets held by these controlled foreign corporations. This is an important issue in terms of the future integrity of the tax system and has the full support of Labor. Item six is dividend imputation. There are a series of amendments covering anti-avoidance provisions concerning the dividend imputation system. These matters are highly complex. We want to have a look at them in the Senate. They are not opposed in principle by us, but we do want to look closely at what they mean.Item seven is the company law review. There are a couple of categories of amendments proposed, flowing from the reform of company law to eliminate the concept of par value of shares. We proposed this reform and supported its introduction. But in relation to the tax avoidance possibilities that are opened up by it, the measures now before the House protect the revenue base and are supported by the opposition. Item eight is company loss provisions. At this stage, this proposal is not opposed in principle. We will have some further exploration of this provision in the Senate.Item nine is the extension of family trust election. The bill will allow an extension of time for a family trust to make a family trust election in order to take advantage of other provisions in this bill that I have previously mentioned. Trusts and their tax avoidance opportunities are the favoured vehicles of this government. Yesterday, yet again, we saw the Treasurer squib on tackling the taxation of trusts. It is something that the government says it is going to do. It promised before the election that it would do it, but in fact the government has put off tackling this issue again. We are told that this is going to be addressed the year after next.So hardworking Australians get the GST next year; tax avoiders get let off again. This is a disgraceful set of priorities by this government, always with the same objective: shifting the tax burden away from those who have the greatest capacity to pay to those who have no choice but to pay. As I pointed out earlier, this is a government which is full of ministers with trusts who have a permanent conflict of interest in terms of dealing with this issue. Indeed, it is more important to this Treasurer to tax a takeaway sandwich than it is to deal with tax avoidance through trusts.I do not have time to go into detail on the issues to do with business tax, but I think other speakers on this side of the House may make some observations about business tax. We are concerned about the lack of fine print in the government's proposals. There are all the signs of a smoke and mirrors piece of trickery. It is disgraceful that a government which made much of the Charter of Budget Honesty refuses to provide information about where the revenue is coming from to balance the package and make it revenue neutral, as the government claimed it would be.I would like to foreshadow amendments that will be moved in the committee stage of this debate, which will limit tax deductions to $100 for donations of property to political parties and extend non-deductibility for bribes to bribes paid to Australian government officials. We will explore these important issues at a later stage of this debate.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Is the amendment seconded?83VEMERSONMr Emerson—I second the amendment and reserve my right to speak.10:56:0010161Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—I will confine my remarks to some of the issues raised by the member for Wills on the Taxation Laws Amendment Bill (No. 8) 1999 rather than his motion to amend, which to me does not touch on the bill but it certainly did give the member for Wills an opportunity to continue to vent the `Jeff obsession'.There is no one theme to this bill, it being a series of measures intended to deal with a whole range of taxation issues, some rather technical amendments and some as a result of anomalies in the current law. All in all there are some 10 separate issues within this amendment bill. At a time when the government has introduced wide-sweeping changes to business taxation consequent upon the Ralph review, there are still many aspects to our current laws that require amendment or review.The member for Wills did not touch in any detail on much of the bill, so we are obviously getting it right. I must admit that reading through this bill was rather like eating an artichoke: it looked pretty unpalatable reading at first, but as you peeled off the layers it became increasingly tasty. But it seems I will only have time to devour a few of its leaves, for there is an enormous amount of detail involved—perhaps best evidenced by the fact that the explanatory memorandum itself runs to about 110 pages.I believe that some of the issues I will address will be of interest and will certainly be welcomed by those in the Curtin electorate, including: the treatment of certain post judgment interests, which responds very quickly to a recent full Federal Court decision; non-deductibility of bribes, which might sound self-evident but it is a response to an OECD initiative; and amendments to encourage greater philanthropy by allowing certain tax deductions—this being in line with the government's commitment to introduce measures to encourage the further growth of philanthropy in this country.I will start with the last mentioned first. The government has been committed to encouraging greater philanthropy in corporate circles since coming to office and has sought to foster a greater philanthropic commitment to arts and culture in this country. In view of the suspicions voiced by the member for Wills as to the motive, I restate the obvious. The government identifies corporate sponsorship as complementary to federal government support of the arts so that there can be an overall increase in total funding of the cultural sector. It is true that, through enlightened self-interest, many businesses in Australia contribute in this way now to the community, including to the arts and cultural sectors. But the government must lead the way and enhance the opportunities.In March 1998 the Business and Community Partnerships Round Table was convened by the Prime Minister, and it came up with a number of recommendations. In March of this year—12 months later—the Prime Minister announced that the government would establish a new body to encourage partnerships and philanthropy in Australia. More recently, he announced the membership of the Prime Minister's Community Business Partnership, which he will chair. Eleven prominent Australians have agreed to be part of the partnership, which is to play an important role in developing a new social coalition for Australia by fostering new partnerships between community, government and business. I was particularly pleased to see the range of inter ests, backgrounds and experience of the members comprising the partnership, including a constituent from the Curtin electorate, Mr Tony Howarth of Challenge Bank in Western Australia, who I know will provide to the group an extremely sound business and financial perspective.Against those objectives the taxation regime must be compatible. The philanthropy provisions in this bill result from the government's announcement of a $51 million package of taxation measures to encourage greater corporate and personal philanthropy in Australia. It is intended that the initial annual revenue cost will rise over time as these measures encourage the further growth of corporate philanthropy.Specifically, the Income Tax Assessment Act will be amended to allow an income tax deduction to certain funds, authorities and institutions and to political parties for gifts of property worth more than $5,000, regardless of how or when the property was acquired. The amendments will provide a capital gains tax exemption for testamentary gifts of property to certain funds, authorities and institutions and to political parties unless the property is reacquired by the estate, a beneficiary of the estate or an associate. It will provide a capital gains tax exemption for gifts of property made under the cultural gifts program unless the property is reacquired for less than the market value by the donor or an associate. It will allow the apportionment of deductions for donations made under the cultural gifts program over a period of up to five income years and will allow concessional taxation treatment for specified private funds which will not be required to seek donations from the public but which will be subject to the other requirements applying to public funds.Currently taxpayers are entitled to tax deductions for certain gifts or contributions, as set out in division 30 of the Income Tax Assessment Act, and certain donations made to listed recipients are eligible for tax deductibility, the recipients being gift deductible organisations. The cultural gifts program encourages gifts of significant cultural items to public art galleries, museums and libraries. It offers donors a tax deduction for the market value of their gifts. The Department of Communications, Information Technology and the Arts administers the program with the advice of the committee on taxation incentives for the arts.Donors are required to ensure that the public collecting institution of their choice is eligible to participate in the program and that it will accept a gift for its collection. Currently, two valuations of the market value of the gift are required. Following valuation, presentation and endorsement, the donor can then claim the average of the valuations as a tax deduction for the financial year in which the gift was made, unless otherwise advised by the committee. So the new provision in division 30 of the act will allow apportionment of deductions for gifts made under the cultural gifts program over a maximum of five income years and this apportionment applies to deductions for gifts made on or after 1 July 1999.Specifically, the recipients under the cultural gifts program are the Australiana Fund, any public libraries, any public museums, any public art gallery in Australia and the Commonwealth for the purposes of Artbank. In Western Australia we have some fine collecting institutions in the Art Gallery of Western Australia, the Western Australia Museum and the Battye Library—all well-deserving beneficiaries of philanthropic support. I believe that these amendments will add stimulus to those wishing to contribute to our national cultural and heritage collections and to ensuring the viability of our collecting institutions. They are measures that will be welcomed by many who contribute in this way or who wish to do so.As to the other amendments, deductions for gifts of property valued at more than $5,000, the schedule to the bill will amend the table of deductible gifts and contributions to allow a tax deduction for gifts of property valued by the Commissioner of Taxation at more than $5,000. This relates to recipients that are funds, authorities or institutions specified as public funds—broadly, funds that are open for subscription by the public and to which the public can contribute. A public fund is not actually defined in the act but case law has established that a fund will be public where it is the intention of the promoters or the founders that the public will contribute to the fund, that the public—or a significant part of it—does in fact contribute to the fund, and that the public participates in the administration of the fund.There is also an amendment to allow deductions for gifts made to specified private funds. The member for Wills questions the accountability of charities, for example. He overlooks that, while a prescribed private fund does not have to comply with the requirement of public funds in seeking and receiving contributions from the public, it will have to comply with all other requirements of the public fund. This will mean that individuals and corporations will be able to establish funds for philanthropic purposes without advertising for public contributions. I think the member for Wills was somewhat uncharitable in his assessment of these measures. I believe this to be a measure that will see an increase in personal and corporate philanthropy that perhaps will begin to mirror in some way the extraordinary levels of private philanthropy that underpin much of the cultural and artistic life in the United States, for example. This will be of benefit to generations of Australians. But the government needs to set the environment and stimulate growth in the area.The second matter about which the member for Wills spoke is the amendment to the act to disallow deductions for bribes made to foreign public officials. It may seem to most right-thinking members of the Australian business community that such a provision need have no place in our domestic tax laws. Most certainly the government considers that the Australian business community has high ethical standards in general. But we are increasingly carrying on business in other countries. It is an increasingly global marketplace and Australian business and industry is evident around the world. I do note the support for this measure as articulated by the member for Wills.Australia is also one of the 29 member countries of the OECD, an organisation that provides governments of the countries com mitted to a market economy and a pluralistic democracy a setting in which to discuss, develop and perfect economic and social policies. The OECD recognised that corruption is internationally a major problem in society that is capable of endangering the stability and security of societies and undermining the value of democracy and morality. It recognised that corruption has the potential to threaten social, economic and political development in some countries. This holds true both at domestic and international levels. So, with the growing globalisation of markets and of services, goods and people, there has been an accompanying internationalisation of illegal activities and an increase in the international dimension of corruption. Accordingly, reducing corruption has become a priority at both national and international levels in countries, including those which are members of the OECD.The OECD Convention on Combating Bribery in International Business Transactions went into effect on 15 February this year. The convention was signed by all 29 OECD members, and commits the members, as well as five non-OECD member countries which signed the convention, to adopt common rules to punish companies and individuals who engage in bribery transactions. The convention and an associated recommendation represent important steps in the concerted international effort to criminalise bribery and reduce rampant corruption in world economies. It aims to stop the flow of bribe money for the purpose of obtaining international business deals and to strengthen domestic anticorruption efforts—all aimed at raising standards of governments and increasing civil society participation—a worthy objective.The OECD convention makes it a crime to offer, promise or give a bribe to a foreign public official in order to obtain or to retain international business deals. The convention also effectively puts an end to the practice affording tax deductibility for bribe payments made to foreign officials.Australia, as a signatory to that convention, has made recent amendments to the criminal code which make it a criminal offence to pay bribes to foreign public officials. Under these amendments to the Income Tax Assessment Act, a taxpayer will be regarded as having made a bribe to a foreign public official to the extent that an amount is incurred in providing a benefit to a person where the benefit is not legitimately due to that person, and the amount is incurred with the intention of influencing a foreign public official in the exercise of that official's duties in order to obtain or retain business or an advantage in the conduct of business.Currently our laws allow deductions for losses and outgoings that are incurred in the gaining or producing of assessable outcome, or that are necessarily incurred in the carrying on of the business for the purpose of gaining or producing assessable income. The act does not differentiate between expenditure in pursuing an illegal or a legal income-producing activity. Therefore, theoretically, the payment of a bribe to a foreign public official could be an allowable deduction if the payment otherwise satisfies the requirements set out in the act. The test to be introduced in this amendment that the taxpayer incurs is the intention of influencing the foreign public official in the exercise of the official's duties.There are, of course, circumstances where legitimate payments are made to foreign officials. In order to prevent a taxpayer being denied a deduction in those circumstances, the amendment proposes that an amount will not be treated as a bribe to a foreign official if no person would have breached a law of that particular foreign country. We of course have a self-assessment tax system and it is unlikely that an Australian taxpayer will have a detailed knowledge of foreign criminal laws to meet this requirement, but, if a taxpayer has been asked to make payments to foreign officials, obviously prudence would dictate that one would obtain advice on whether such a payment to a foreign official is in fact a criminal offence in that particular country.There are of course exceptions. One of the proposed subsections deals with facilitation payments which treat amounts as not being bribes paid to foreign officials if they are paid for the sole or main purpose of obtaining routine minor government action. This phrase is defined as meaning that the action of the official is that ordinarily performed by the official and the action is listed in a specific list of activities.It is obvious that the act was not ever intended to enable deductions for illegal activities in international business transactions but, theoretically, if we allow a tax deduction for what turns out to be a bribe to a foreign public official, by retaining this position on the statute books we would contribute unwittingly to a perception that such payments are an acceptable practice for those trading in the international business community. This amendment will align Australia's tax position with the other OECD member countries who have also committed themselves to ensuring that their national parliaments pass legislation to end the practice, or indeed the theory, of allowing tax deductibility for bribe payments made to foreign officials. This will be of interest to people doing business overseas and to their financial or taxation or, indeed, legal advisers. The proposed amendments therefore implement the recommendation of the OECD council and they satisfy the federal government and the community expectations of our contribution to a more equitable and efficient world market. The third matter to which I will address some comment—although the member for Wills did not specifically address this in detail—is the amendment to exempt certain post-judgment interest received in personal injury compensation cases, which is again a matter of considerable interest to all parties involved, or to be involved, in such cases—plaintiffs, insurers, the legal profession.The correct tax treatment of an amount received as an award of damages for personal injuries sustained in a motor vehicle accident has exercised the minds of lawyers and legal writers for some time. There has been case law as well as commissioners' rulings on the tax treatment of awards of damages. The position regarding the tax treatment of pre-judgment and post-judgment interest has been the subject of even further debate. In Whitaker v. The Federal Commissioner of Taxation, the Federal Court of Australia at first instance held that pre-judgment interest, although included in the overall award, was assessable income. The matter went to the full court of the Federal Court who overturned that decision. The reasoning of the full court in the Whitaker case was that the whole amount, including interest, is awarded for the loss of income earning capacity—that is, for the loss of a capital asset—and therefore the full amount is of a capital nature and accordingly it is all exempt under the Income Tax Assessment Act.The interest is a quantification of the compensation due to the plaintiff for the loss or detriment suffered by being kept out of his or her money during the relevant period. If the plaintiff had received his or her entitlement at the time the cause of action arose, the plaintiff could have chosen to use the money however he or she wished to alleviate the pain and suffering.The full court in Whitaker's case then confirmed that post-judgment interest was a separate matter and found that interest to be assessable income. The payment of such interest could arise where the original decision is the subject of an appeal and payment by the defendant is delayed until the liability to pay the award is confirmed on appeal. So it awaits the outcome of all of the avenues of appeal. Interest would accrue in the period between the handing down of the original judgment and the eventual date of payment to the plaintiff—and that can be some years in some cases.The position was therefore that the whole amount of damages, including components for loss of income and superannuation in the past and in the future, and pre-judgment interest, was a capital receipt and was exempt from capital gains tax. But the post-judgment scenario was deemed to be assessable income by virtue of the full court in Whitaker's case.The member for Wills speaks of a delay, which is an absurd thing to say. The judgment was in 1998. The minister announced the proposal earlier this year and the impact of the proposal will date back to the 1992-93 tax year when Mrs Whitaker should have been paid the sum, but the matter went on appeal. Hence these amendments seek to exempt from income tax post-judgment interest received in personal injury compensation cases where there is delay in payment awaiting the outcome of any or all avenues of appeal. This is a fair and equitable outcome to those who have had to wait, often for many years, for the full payment of damages and interest consequent upon a decision in their favour of an award of damages.There are seven other aspects to the bill containing equally interesting changes to the tax laws, but time does not permit anything other than this small offering. I commend the entirety of the bill to the House.11:16:0010166Smith, Stephen, MPMr STEPHEN SMITH5V5PerthALP00—Mr Deputy Speaker, you can tell this is a tax bill. We have about three times as many advisers in the advisers' box as we have members in the House.The member for Wills has outlined the opposition's general approach to the Taxation Laws Amendment Bill (No. 8) 1999 as a whole and has circulated a second reading amendment. That has been seconded by the member for Rankin who, when he makes his contribution, will I am sure go through the full array of the bill in detail. There are two issues which I want to draw attention to. The first is the proposal to increase the deductibility of a donation to a political party from $1,500 to $5,000. Here I wear my former party official's cap, on the old adage `once a party official, always a party official'.This legislation is linked, in a sense, to legislation which has been presented by the government to increase by a comparable amount from $1,500 to $5,000 the size of a non-disclosable donation. Talking in terms of public policy crimes, it is probably the case that it is a far greater public policy crime to increase the size of this non-disclosable donation from $1,500 to $5,000, than it is to increase the amount to which deductibility applies. So the fact that this amendment to increase the deductibility from $1,500 to $5,000 follows on from legislation which the government has presented to increase the non-disclosable amount from $1,500 to $5,000, makes it doubly offensive in policy terms.The hallmark of our political system in Australia ought to be that if people make donations to political parties then those donations are disclosed. That is the primary objective, which this government has run away from both when in opposition and now in government. I will not labour the point about the Greenfields Foundation and the obvious rort in that respect, but I make the point that this particular measure in this tax bill follows on from a government measure to increase the non-disclosable size of a donation to a political party from $1,500 to $5,000. That runs counter to a sensible public policy regime which says that donations to political parties ought to be disclosed and therefore on the public record, for the obvious point that if there is going to be a conflict of interest it is there for all to see.For all the differences we might have had at the Commonwealth level about public policy over almost a century of federation, from time to time in the state arena—in different states over different times with different political parties—state administrations have got into trouble in the donations area. That is for two reasons. Firstly, they have not had at the appropriate time comparable disclosure measures as the Commonwealth has had and, secondly, there is a far greater measure and diversity of scrutiny at the Commonwealth level. But the primary bulwark of that diversity and scrutiny when it comes to donations is the disclosure regime. I make that point about the increase in the deductible amount for donations to political parties because it is linked to the government's measure to move away from the disclosable nature of such donations.The second area that I want to comment on briefly is the corporate philanthropy measures. I am in favour of increasing corporate philanthropy in Australia. While I am always naturally chary to pat the Prime Minister on the back, from time to time he may well pop up with something which, at its heart, is a good or benevolent measure. For example, the United States has a very well-honed culture of corporate philanthropy. In Australia, we have none of that. So a measure which seeks to change the culture I think is worth supporting and worth doing.The key point about corporate philanthropy is that it can never be an excuse for not having public policy philanthropy or for bad public policy, or for not having public policy philanthropy expressed through the statutes of this parliament. I will mention a couple of anecdotes. In addition to being a former party official, I am a lapsed lawyer. Like lapsed lawyers, I have in the past done my share of voluntary duty counsel and pro bono work. The legal profession I come from in Western Australia has a very fine tradition of doing that. The former member for Pearce in this place, Fred Chaney Jr, was one of the people who, from nothing, helped establish a very rigorous Law Society of Western Australia duty counsel regime. That was to his credit, as it was to the profession's credit. But that was not and could never be a substitute for decent public policy which gave rise to a decent legal aid regime. While corporate or business philanthropy can be an appropriate and desirable and acceptable contribution, it cannot be a substitute for good public policy.The same applies in the health area. I can remember, when I was very much younger—probably at the same time that the minister at the table, Mr Abbott, was at university—sitting having a cup of tea—it was probably a beer—on a veranda in Cottesloe in the western suburbs of Perth, which are entirely different from the western suburbs of Sydney, as the minister at the table would know. However, I can remember at that time having the argument made to me by the daughter of a medical practitioner that because her father did voluntary medical work that was a substitute for the proposed introduction of a Medicare regime. So somehow the benevolence of community oriented good doctors was a substitute for decent public policy in health, namely making sure that decent health care was available as a matter of course and of right to individuals, irrespective of income and irrespective of whether or not medical practitioners decide to be benevolent.The point I make with these two examples is that to promote and encourage corporate philanthropy is of itself a good thing, but it is no substitute for public policy. On the one hand, the Prime Minister stands up and encourages philanthropy by way of taxation incentives and, on the other, he implements a public policy regime from day one in office where he withdraws sensible public policy and sensible services which benefit, through this parliament, the vast bulk of the Australian people, whether that be the withdrawal of services from rural and regional Australia or the imposition of an unfair consumption tax regime.I do not propose to go through the detail of the proposed legislation, other than to make the point that I assume that this tax bill—like just about every other bill that goes through this place—regrettably or otherwise, will be referred to a Senate committee. There are a number of points of detail which are worth looking at. In any taxation legislation the devil is in the detail and the same applies to these measures in respect of corporate philanthropy. Some of those points of detail will go to whether the taxation concession, for example, should be provided to the estate of a taxpayer and what accountability measures, nomination measures or approval measures ought to go to the proposed mechanism for private funds. So there are some points of detail which are worth seriously considering, and I suspect they will be considered in the committee process in another place.The provision of a taxation deduction for contributions to a political party being increased from $1,500 to $5,000 is wrong because it parallel tracks or mirrors the government's move to remove the disclosure requirements for that comparable amount; secondly, corporate philanthropy is a good cultural change to seek to imbue in the Australian business and general community, but it can never be a substitute for sensible public policy. In my experience, that sensible public policy which benefits the vast bulk of Australians only ever comes from our side in this chamber.11:26:0010167Baird, Bruce, MPMr BAIRDMP6CookLP10—I rise to support the Taxation Laws Amendment Bill (No. 8) 1999 , which seeks to amend the taxation law. It is appropriate that some of the measures have been discussed in this chamber today. The bill contains a series of amendments which I believe would have the support of the community. Part of the bill involves amending the control of foreign company rules in the Income Tax Assessment Act. It also enables those tainted capital gains to be taken into account when applying the active income tax and it also relates to the franking of dividends. It amends the Income Tax Assessment Act 1936 to make a number of corrections to the franking credit trading and dividend streaming rules, and these changes will apply from the commencement of the measures. It also relates to the non-deductibility of bribes, questions of corporate philanthropy and company law review amendments. All of these provisions are worth while, and I will return to the question of corporate philanthropy.The provision in the bill which particularly attracts my attention concerns a couple living in my electorate—and that is the amendment to the income tax law to exempt post-judgment interest received in personal injury compensation cases from income tax where the interest accrued from a time a judgment debt arises until all avenues of appeal have been exhausted. The amendment will apply from the 1992-93 year of income. This will allow taxpayers who have already paid tax on post-judgment interest in recent years to obtain a refund.This aspect of the bill has come about because of a bitter struggle between one of my constituents, Mrs Maree Whitaker, and the Australian Taxation Office. I commend the Treasurer and the government for making these amendments and for responding to what happened in the courts. They saw there was an injustice and they took it into account. It has been a difficult case for Mrs Whitaker. I have met the Whitakers—both Mrs Whitaker and her husband Norm. This was a case where justice won out in the end. Not only did justice win out but also the fact that Mrs Whitaker was prepared to take this to the wire—it was eventually taken to the High Court—to stand up and defend her rights, means that it is a win for everybody in a similar situation throughout Australia. This is a particularly significant amendment because of that. In 1984, Mrs Whitaker underwent an operation for a corneal graft in one eye. The operation went badly but, worse still, she lost the sight of the other eye. The basis of her case was that she was not warned by her surgeon of the likelihood that a graft in one eye may affect the sight of the other. As a result, she lost her sight and now she cannot differentiate night from day. She brought proceedings against her surgeon in the Supreme Court of New South Wales. In these proceedings she claimed damages against the surgeon for negligence. In addition, she claimed for interest pursuant to section 94 of the Supreme Court Act. Mrs Whitaker's case was eventually heard by Justice Campbell of the Supreme Court of New South Wales and the decision was handed down in Mrs Whitaker's favour—in the sum of $808,000. The judgment included an amount of $65,000, representing the interest.Mrs Whitaker's surgeon appealed to the New South Wales Court of Appeal. His appeal was unsuccessful. He then appealed, with leave, to the High Court of Australia, and again the appeal was dismissed. Subsequently, Mrs Whitaker received interest on the verdict for the period 13 August 1990 to 19 November 1992, agreed upon as being $208,671.Mrs Whitaker became entitled to pre-judgment interest and post-judgment interest in respect of claims for damages for personal injury. The pre-judgment interest compensates a plaintiff for being deprived of money between the date the action arose and the date of judgment. The interest is calculated on a sum that is not known until the date of judgment and is part of the underlying cause of action. Post-judgment interest is paid to compensate a taxpayer for being deprived of the judgment award between the date of judgment and the completion of the appeal process. If a defendant unsuccessfully appeals a judgment, he or she may be liable for post-judgment interest. As Mrs Whitaker's surgeon was unsuccessful in his High Court appeal, Mrs Whitaker was awarded post-judgment interest for the period from the date of the judgment to the completion of the High Court appeal. I make the point that this judgment money is not some windfall that came Mrs Whitaker's way but rather damages awarded to her to compensate her for damage and loss, to give her some financial security in her later years.After this amount was awarded, the Commissioner of Taxation contended that the amount paid to Mrs Whitaker and the amount of post-judgment interest payable under section 95 of the act were income in ordinary concepts. Of course, Mrs Whitaker considered this amount to be of a capital nature and thus not assessable income. In Mrs Whitaker's case, the taxpayer was found to be assessable on her post-judgment interest but not the pre-judgment interest. The distinction between the two for tax purposes was that the post-judgment interest was paid in respect of a known principal sum whereas pre-judgment interest relates to an unknown principal amount.The case was reported in the media and depicted as being a harsh result for the taxpayer—and rightly so, may I say. This couple, who live at Miranda in my electorate, have had a particularly difficult time in this regard. It was harsh for the Taxation Office to impose a taxation on the interest she received because her surgeon, unsuccessful in the New South Wales Supreme Court, took it to the High Court, so she was unable to get the money. When she finally did get the money and was entitled to the interest, the tax office said, `You can pay tax on that amount.'Fortunately, the government took note of what was happening in the court. Normally it goes through as a legal process. The government decided that to take this action was unfair and unconscionable conduct. The government has reviewed the taxation treatment of post-judgment interest and concluded that post-judgment interest does form part of the assessable income in the year in which it was received. The government has decided to amend the income tax law to exempt such interest from taxation. This is part of the amendments today. The purpose of the amendments is to exempt from income tax post-judgment interest received in personal injury compensation cases. This will ensure that, where individuals have suffered injuries and there has been a delay in receiving the compensation, they will not be taxed on the interest that they receive because of the delay brought about through no fault of their own— a delay brought about by the plaintiff who takes an appeal to another jurisdiction. They will be entitled to receive that interest without being further taxed. The proposed amendments will provide a fair and equitable taxation treatment for post-judgment interest. They will provide an equivalent or more generous taxation treatment than currently exists in other jurisdictions.The basic principle in relation to the assessment of damages under the common law is that damages are supposed to place the injured person in the position in which that person would have been had he or she not been injured, as far as this can be done by the payment of money. A claim for damages is made up of various heads of judgment in terms of pain and suffering, past loss of income, future loss of income and the like. Because there is this delay, the interest factor becomes involved in the whole equation.We have a situation where Mrs Maree Whitaker has suffered considerable personal loss. She was not warned of the possible damage to the sight of her other eye if she undertook this corneal graft. As a result, she is permanently blind and with no possible chance of reversal of her current situation. I am very glad that the fact that it was allowed to go right to the High Court, that the surgeon took it that far and yet still lost—lost twice—has come to the public attention. Clearly, Mrs Whitaker, who undertook this operation in 1984, had to wait until 1992 until she actually saw any of the money, despite all the changes that she and her husband needed to make to their home in Miranda and their own lifestyle and the fact that she lost all possibilities of future occupation and the damages that that involved. To be then taxed on the basis of the payment which she received from the courts was to add insult to injury.Through these provisions, which are only one part of the provisions in the bill today, this anomaly can be reversed. I am very pleased that the government has taken on board an issue which should not have been allowed to happen in the first place. There is a need for compassion in these cases. It is a great pity that the tax office took this line of action. But it has been resolved, and I am delighted to see that to be the case. I wish Norm and Maree Whitaker a long life together and that Mrs Whitaker overcomes the difficulties that she has experienced. At least she receives compensation for her injury and can receive the interest payment without the tax office having its own share of that revenue.It is also appropriate that I make a comment in regard to the question of corporate philanthropy. There are provisions here of taxation incentives for personal and corporate philanthropy in Australia. It is one of the features of Australian life that Australians are generous in support of aid agencies when there is a cause there. Even though we have the cynical nature of Australians, when Australians do believe in something they are better in giving than many countries around the world. In their support for the aid agencies, whether it be World Vision or Australian Aid Abroad, they are very generous.Sometimes it is disappointing to see that some companies are not as generous as we would like them to be. It was one of the observations of the recent inquiry into the retail sector that one of the disappointments in rural and regional centres was that the majors, Woolworths, Coles and Franklins, did not get involved in philanthropy in local communities. While they may have given on an overall basis—I know that Woolworths have given to Sydney Children's Hospital and Coles, likewise, to various worthwhile activities, the Salvation Army, et cetera—approaches by local communities were normally rejected. This was experienced by local communities that we visited in this process whereas we found that in the past many of the small stores provided assistance to the Brownies and the Guides and provided football jumpers to the teams, et cetera. One of the comments that has been made by both Dennis Eck and Roger Corbett is that they now understand that part of the problem is their lack of involvement in the local community with assisting charities and various community groups, and I do believe we will see a change on their part as a result of the inquiry. To have a bill that will actually assist this process is to be supported. If you look at the US, for example, there is a major program of corporate philanthropy there. Company employees are encouraged to donate significantly to support charities, and there are many successful programs and campaigns under way.I note the comments of the opposition member before me saying that all worthwhile initiatives come from his side of the House. I take issue with that. There are many issues that have been developed by this government which do show our compassion. I have outlined one of them today. No one side of politics has complete control of all that is good and worth while and shows compassion in our community. This concern with those in the community runs deep on both sides of the House, and there are many of my colleagues who show deep compassion to the community.My final comment is on the questions that have been raised as a result of the amendment today. It seems as though the opposition are floundering on the very day on which we have all the major newspapers in the country coming out and supporting the taxation changes proposed by the government. We have this somewhat pathetic attempt to condemn the government for a raft of measures, the ANTS package and various taxation measures. The fact is that the opposition have been left behind in the process of taxation reform, and some amendments that they wish to make today will not save them from the corporate view that they have missed the boat. The most significant reforms to taxation that this country has seen since Federation have been put in place by this government by way of both the ANTS package and the Ralph reforms which were announced yesterday by the Treasurer. There is no second prize. The opposition have cut themselves out of the agenda by not debating the key issues but more acting like some sort of mean-minded accountants going through a litany of small technical questions rather than being involved in the overall debate. The amendments today will highlight that poverty of understanding of what is required to provide real incentives to the business community in this country. As someone who comes with some reputation from New South Wales—0V5SLIPPERMr Slipper—A reputation?MP6Baird, Bruce, MPMr BAIRD—A fine reputation as someone who did an excellent job in New South Wales. I note the comment made in the amendment that `Jeff Kennett has received a strong rebuke from the voters of Victoria due to his championing of the GST'. This is somewhat amazing, having seen no mention in any of the papers about that being a factor. So a good try but it has no validity. There is also mention in the amendment of `excessive secrecy and nobbling of the Auditor-General'. If we want to talk about excessive secrecy and nobbling of the Auditor-General, I suggest we also look at New South Wales, which has been subject to some considerable criticism by the Auditor-General for excessive secrecy. It has been criticised continually in editorials in the Sydney Morning Herald for its failure to disclose information. So by all means have a debate on excessive secrecy, but if we do have such a debate let us put all the cards on the table and let us see which states are lacking in this regard. New South Wales clearly has a lot to answer for in terms of excessive secrecy the way the current Carr government operates.Overall, I would like to say how much I support the provisions in this bill. Obviously it clears up many of the anomalies that we have in the tax act, but also from my point of view it has two outstanding provisions: first, encouraging corporate philanthropy and, secondly, removing the anomaly so that those people who receive compensation through the courts for personal injury are not disadvantaged through the tax office taking its share in taxation revenue from the interest payment because of delayed judgments and decisions. I commend the bill to the House.11:44:0010171Emerson, Craig, MPMr EMERSON83VRankinALP00—I wish to speak to the Labor amendment to the Taxation Laws Amendment Bill (No. 8) 1999 . In particular I want to spend some time talking about the government's disgraceful backsliding on the taxation treatment of trusts. The government's record on this matter is a very sorry history. In 1995 the then Labor government introduced in the parliament specific amendments to the legislation that dealt with particular aspects of the taxation of trusts. That legislation went to the Senate and the Democrats and the now government—the Liberal and National parties—combined to put it off into some sort of Senate inquiry and ended up killing that particular piece of legislation.Since this government has come into office, it has spoken long and loud about the crying need to do something about the taxation of trusts, but every time it speaks it defers. On the one hand it says, `We must do something,' but within months, if not weeks, of those pronouncements the measures that it talks about are deferred. Yet again, in the release of the government's response to the Ralph Review of Business Taxation, there has been a deferral of changes to the taxation treatment of trusts—a large area of revenue lost and a large area of tax avoidance which urgently needs addressing.To his credit Mr Ralph, in his review, actually recommended that measures to deal with this problem of tax minimisation and avoidance through trusts come into effect from 1 July 2000. I do give credit to Mr Ralph for making that recommendation. Yet this is the same legislation about which, as reported in the Australian in an article by Glenn Milne, the then Leader of the National Party of Australia and Deputy Prime Minister declared in a party room meeting a few months ago, `We will kill this in cabinet.' The National Party has enjoyed spectacular success!There are around 17 holders of trusts on the government front bench. Those 17 holders of trusts, who enjoy the benefits of tax minimisation through this particular vehicle, have obviously formed themselves into a special taxation review committee of the cabinet. Each and every one of those members who holds those trusts would be a member of this taxation review committee. They would be saying, `We have had a wonderful victory today.' They would not miss being a member of that committee for quids.In the announcement by the Treasurer yesterday, he said the key changes to business tax include:Implementing the entity tax arrangements outlined in A New Tax System (including the taxation of trusts like companies, but with removal of the inter-corporate dividend rebate rather than the reintroduction of a deferred company tax.)That seems like good news. This is one of the measures that those opposite reaffirm. But this is what they talked about at the last election. It was going to be in the ANTS package, it was going to be part of the legislation implementing the ANTS package; but no, the decision then was to defer that to the business tax review.When you read the first couple of pages of the Treasurer's press release of yesterday you think that at last they are doing something about this very big problem of leakage of revenue from the tax system. But, when I went over to page 3, to my dismay I read that the government will defer until 1 July 2001 the commencement of some major elements of the package, notably most of the redesigned company tax arrangements including the consistent treatment of entities. In other words, it is deferring—against the recommendations of Mr Ralph—an attack on tax avoidance through the use of trusts. He says to implement it from 1 July 2000, but those in government announce, `No, we are going to defer it to 1 July 2001.' Okay, let us have some evidence of their bona fides that this is a deferral for one year and not into the never-never. That evidence is not forthcoming because there is no legislation. They have not put into this parliament or have not even shown the parliament the legislation that they propose to deal with this. Why? Because the National Party and the 17 holders of trusts have had a great victory in killing this in the cabinet room, as they declared they would.The implications of this continued condoning of tax avoidance are very profound indeed. If we go to the one solitary table in the Treasurer's attachments to the announcements that he made yesterday and add up the overall impact of the concessions that the government has offered in the business tax review, we see that adds up to $3,820 million. That is a really large hole in the budget. That is $3,820 million over the period covered in the table, which is from the current year through to 2004-05.The next line beneath that is headed `Impact of deferred measures'. That includes the ever-elusive attack on tax minimisation through trusts. The figures are not disaggregated. But if we add together the amounts for the various years in that same period—the revenue that could be obtained from these initiatives—we see the figure is $4,220 million, which is actually considerably larger than the cost of the package.A most alarming footnote is attached to that. It says the revenue from the deferred measures `is dependent upon the time of implementation'. If the government were genuine about implementing the antitrust legislation from 1 July 2001, it could put in firm figures there. But obviously some people, probably Treasury officials, have had the integrity to indicate that the timing is uncertain; the timing has not been determined for the implementation of this legislation. We now have a new chapter in the `Charter of budget dishonesty' and that is that you can count the money from measures such as the attack on trusts if the Treasurer happens to express a disposition towards doing so.That point is reinforced today in the Australian Financial Review in an opinion piece by Alan Kohler where he says:Treasurer Peter Costello has pioneered a new technique in tax policy announcement: you defer the nasty measures for "further consideration" but still count the proceeds from them.The business tax changes announced yesterday look revenue neutral only because up to $1 billion per year from deferred, possible, anti-tax avoidance measures was included in the numbers.He goes on to say:In fact the new business tax system unveiled yesterday is a triumph of smoke and mirrors and political tap dancing.That says it all. There is a large black hole in the tax package announced yesterday. The government has said time and time again that the fundamental criterion governing the tax changes in the business tax review would be the criterion of revenue neutrality, that new measures would pay for new concessions, but the new measures designed to collect that extra revenue have, by and large, been deferred. They are new measures on the never-never. This hole of $3,820 million over the six-year period is another blow to the ever diminishing budget surplus. It does not include the government's decision on accelerated depreciation where they said, in relation to mining in particular, `We will remove accelerated depreciation from the mining industries. However, if you want to knock on the door of our special projects unit and come forward with reasons why you think you should have a special deal on accelerated depreciation, you are most welcome to do so.'There will be large projects, the proponents of which will be knocking on the door of government saying, `This large project in Western Australia cannot proceed unless we get a special deal on accelerated depreciation—that is, the reintroduction for our project of accelerated depreciation.' We will get the same thing in Queensland. There will be major projects that they will argue will not proceed unless they get a restoration of accelerated depreciation—I am talking here of projects such as the expansion on the North West Shelf and other major mining and gas development projects in rural and regional Australia—and the government, inevitably, will agree.But where are the figures in this document on the cost to the revenue for restoring accelerated appreciation for those projects? There are none. I cannot recall a more rubbery set of figures than those provided by the Treasurer yesterday. He said, `We nearly got revenue neutrality'. He did not get anywhere near revenue neutrality. They have fudged the figures and they have fudged them in a most disgraceful way so that they can obfuscate and backslide on their repeated promises to deal with the taxation of trusts and the minimisation of tax through that device. That is why the 17 frontbenchers of the government have had a great victory because they have had this measure deferred indefinitely, yet again.What worries me about all of this is that the government are bent on the redistribution of the tax burden of Australia. They always want to redistribute the burden of taxation off the shoulders of higher income earners, who are able to take advantage of these trusts, and onto the shoulders of low and middle income earners and, amazingly and disgracefully, the pensioners of Australia. They bring in a massive change in the indirect tax system through the goods and services tax and, for the low and middle income earners and pensioners, they say, `You will pay GST.' But for the big end of town, which is able to avoid its fair share of tax through the instrument of trusts, they say, `We will defer that indefinitely.' The impact of that on fairness is self-evident: it is completely unfair.I want to talk for a moment about the impact of the overall tax changes on small business. Consider this: a small business operator who happens to breach the law in relation to the GST will face severe, stiff penalties, there will be no negotiation and no special deals for small business people who do not pay their GST on time. But if you happen to be from the big end of town, if you happen to be an active and financial supporter of the Liberal and National parties and you have a trust, you are safe from the government because they have deferred, indefinitely, these measures. In doing so, they have opened up a large hole in the budget. That hole is expanding on the hole that they blew in the budget as a result of the fact that their tax package—the ANTS legislation—gave around 80 per cent of the tax cuts to the top 20 per cent of income earners. They used a lot of the surplus to finance that and now they are using more of the surplus to finance this.What does that mean for the basic issue of service delivery in this country? The Treasurer declared a few weeks ago, `I'm a tax cut man. That's what I like to do: offer more cuts in the higher rates of marginal taxation.' At first he said that he wanted to push that 48.5 per cent marginal tax rate out to multiples of average weekly earnings, but then a few weeks later he followed up and said, `There is not much incentive in 48.5 cents in the dollar tax but there is a lot of incentive in 30c.' What he is trying to do is get that top marginal rate of tax down from 48.5 per cent to 30 per cent. Just yesterday he was asked, as a result of these arrangements announced in the business tax review, `Won't this in crease the incentive to avoid tax through incorporation?' The answer was astonishing.The Treasurer said, `Yes, it does increase the incentive to incorporate, and therefore to minimise tax, but only for those people earning more than $100,000 a year.' In other words, `Yes, we have made changes that allow people earning more than $100,000 a year to get a further tax break.' And he was proud of it! That is the colour of this government. Where is the money going to come from to finance these further benefits for high income earners? The money is going to come out of basic services. It is going to come out as further cuts in education funding.Last Friday the Australian Bureau of Statistics released figures on government funding of education. Total Commonwealth spending on education in the first two years of this government went backwards by more than $500 million. It went from 1.99 per cent of GDP to 1.90 per cent of GDP. University funding has fallen by a massive 12.7 per cent. The government is going to find the money to plug the black hole with further cuts to education and with further cuts to health—further cuts in the basic services that Australians expect of governments. The government will say, `We have to do this to be fiscally responsible. We have to be responsible economic managers. We can't go into deficit, so we have to confront a new round of spending cuts.' We are witnessing a complete shift in the burden of taxation from high income earners to low income earners, and the withdrawal of services from ordinary families in Australia, to fund these ongoing tax breaks for high income earners.What is happening in Australia is a tragedy. It has been disguised by the good economic figures that come out from time to time about economic growth, but the benefits of that growth are not being fairly shared. I want to draw to the attention of the House this disgraceful backsliding on the part of the government. I call on the government to confirm that it will proceed with the legislation on trusts. I call on the government to table its legislation on trusts so that we can have just one example of this government doing something towards a fairer and more decent Australia.12:02:0010174Latham, Mark, MPMr LATHAMK26WerriwaALP00—The title of the Taxation Laws Amendment Bill (No. 8) 1999 is a pretty good guide to the growing complexity of the Australian tax system. There have been eight omnibus amendment bills just this year in the House of Representatives. I can give the House this one guarantee: where there is tax complexity there are tax avoiders and tax evasion. This government continues to go down the path of complex tax policy. It is adding to the complexity of the tax system. In some of the methods mentioned earlier by the member for Rankin it is opening up further opportunities for tax avoidance in this country.If you asked a prospective tax avoider what sort of income tax system they would want in Australia, they would say they want one personal income tax rate, a separate company income tax rate and a separate rate for capital gains tax. Out of the recommendations of the Ralph review, that is what this government is planning to. It is planning to give the tax avoiders in this country more complexity. It is planning to give the tax avoiders three separate tiers of income tax rates.We know what the likely outcome will be—people will shift around their tax arrangements to suit the various rates. They will shop around within those rates for the best chance to minimise their tax commitments. Further, if you were to ask someone how to most substantially hurt the knowledge economy in Australia, they would say, `Provide tax incentives to move economic effort from trading income to asset trading.' Again, what is this government proposing to do out of the Ralph committee? It is proposing to do the thing that tax avoiders want. They want incentives to move out of trading income into trading assets. They want the opportunity for property and asset speculation in the Sydney land market rather than a taxation system which promotes value adding in the information technology sector.The member for Rankin outlined some of his concerns about the Ralph review. Let me say that my prime concern is that it will add, through these shoddy capital gains tax propo sals, to the great Australian disease of asset and property speculation, particularly in our big cities. It will take away resources from the knowledge economy and put them into the least productive, least honourable aspects of Australian economic activity.If anyone thought that the ANTS package should have been rejected due to its massive inequities, then they would have to thoroughly reject the capital gains tax proposals outlined by the government yesterday. Ralph has squibbed it; Ralph should have had the foresight and courage to recommend the first best option for business tax, which is to move to an expenditure base. It is an amazing missed opportunity for this country. At a time when the superannuation industry, the financial houses, the information technology sector, the Australian Industry Group, the NFF, the mining sector and Bob Joss—who was one of the members of the Ralph review—were supporting the move to a business expenditure tax, it is absent. It is absent in the action of this federal government, and it is absent in the front-line recommendations of the Ralph review.Let me now move to one of the provisions in this omnibus amendment bill: the provisions on corporate philanthropy. The legislation provides $71 million in additional tax concessions for corporate philanthropy directed at registered charities and universities. This is said to be a key part of the Prime Minister's so-called social coalition, yet this is a coalition where people do not come in contact with each other. It is not very social at all, and it is not very effective.It is a social coalition that promotes the worst features of passive, remote and impersonal welfare. The proposals in this bill for corporate philanthropy encourage rich executives to write their cheques on the 25th floor and then wipe their hands and clear their consciences of any direct contact with the poor. It adds substantially to the distance between the rich and the poor in our society.It is certainly true, as many people have said, that, unfortunately, in Australia at this time the poor are falling further behind. But so too it needs to be understood that the rich are becoming more remote. The development of walled housing estates, the loss of public space and the loss of shared public activities in our society are of great concern. We are seeing the polarisation of Australia into two societies, and a lot of it happens on a geographic scale: suburbs for the rich, suburbs for the poor. So what does this government do with its so-called social coalition? It promotes a philosophy of corporate philanthropy where the executives can write their cheques and wipe their hands of any direct personal involvement with the poor. It is not promoting a genuinely social coalition where companies are expected to have direct personal contact with the most disadvantaged parts of our community. It is a real concern that the government is going down this path. Passive corporate philanthropy adds to the welfare problem in Australia; it does not solve it. The more passive the solution the less effective the answer to welfare issues.The Prime Minister's so-called social coalition reflects a failure of welfare and social philosophy. In July at the Brisbane Institute the Aboriginal leader Noel Pearson fingered the central failing of Australia's welfare sector: it operates under the suspicion that the poor are hopeless. It believes that, without growing government intervention, the poor will remain helpless. It gives no credence to the idea that the poor actually have the capacity to help themselves. It positions the poor as the problem and the government and now, in this case, the corporate sector as the only solution. In fact, this `pity the poor' attitude is the real problem. It fundamentally misreads the nature of welfare dependency. It sees welfare as an equation in dollars and cents, and this bill perpetuates that. It just sees the welfare issue as an equation in corporate dollars and cents instead of an equation between people. The main drivers of dependency are social, not financial. Basic relationships of self-esteem, status and trust have broken down in disadvantaged areas. At its core, long-term poverty is a problem in the relationship between people.There is a debate about welfare, and this bill is part of it. I do not support the welfare philosophies of either the New Right or the old Left. The New Right, led by the Minister for Employment Services, tries to position poverty as a rational choice, as if the poor are sitting down everyday, having a cup of coffee and doing their sums to work out whether they are better off staying on benefits. He then says that they make a decision to stay on benefits and that makes them job snobs. Well, that just shows his total ignorance of the position of the poor. Being poor is not a quiet life in this country; it is not a life of inactivity. It is a life of turning to the wrong side of social behaviour, where people start to take their self-esteem and their success signals from negative rather than positive behaviour in our society. The sign of success in youth gangs may come from how many cars you pinch or how many houses you break into instead of how many job promotions you might receive. So the New Right, with this rational economic choice philosophy, is totally wrong.So, too, the compassionate Left has always expressed its concern for the disadvantaged, but it has neglected the significance of social relationships. It has positioned welfare solely as a relationship between government and its citizens. Its only answer to poverty lies in changing the immediate material conditions of welfare recipients. While this remains an important policy goal, it is not sufficient to break the cycle of welfare dependency. People will use the material gifts of government productively only if they have the basis of self-esteem and social capital. This is one of the reasons why inequality and social exclusion have become so entrenched in our country, despite massive increases in welfare spending. The things that people can do for themselves have been overlooked.The first step in ending poverty is for welfare dependent communities to rebuild the habits of self-help and achievement. This will not be achieved through pity or through the material gifts of government or the corporate sector. A number of Third Way projects have demonstrated the critical role of social entrepreneurs in rebuilding communities. Far from being helpless and hopeless, people have regained the dignity of achieving things in their own right. The poor are actually the solution much more than the problem. Only with a strengthening of these social foundations is it then possible for government to play a constructive role. Governments are needed in these projects, but very much more as junior partners to communities rather than the reverse. That is the welfare philosophy to which I subscribe and I only wish it were reflected in the Prime Minister's so-called social coalition and the provisions in this bill for corporate philanthropy.The Howard social coalition also allows companies to direct the benefits of public money involved in the tax concessions. Companies tend to support those causes that have a maximum PR spin-off. Other causes such as AIDS related work tend to be left behind, and that is one of the very real concerns of this bill. I advocate a better approach, a real coalition, something that addresses the social and personal nature of the welfare dependency problem. This approach has three main aspects. The first is that it must encourage direct personal contact. The companies themselves should run projects and programs for the disadvantaged. They should establish a direct relationship with disadvantaged communities. Projects such as housing redevelopment, education and training initiatives, community employment programs and other forms of community development are available to the corporate sector. It should not be a matter of passive giving; it should be a matter of active involvement and face-to-face contact with disadvantaged communities.The second aspect supports a tender system for corporate giving, rather than tax concessions. It is much better to have direct outlays rewarding good corporate projects on a merit basis than to do this through tax expenditures. Government should pick the quality corporate projects consistent with public interest goals, and it should ensure that no projects and no charities are left behind. If a charity or a project does not necessarily have a positive PR spin-off for the company, that is no reason why it should be punished in the financial allocations of this parliament.The third aspect of a different approach, a different and much improved social coalition, is to recognise the self-interest and profit motive that companies might have in develop ing their corporate skills through community projects. The company of the coming century needs lateral thinkers. It needs problem solvers and managers who can think on their feet and solve issues and problems in a rapidly changing corporate environment. What better way to develop those skills of management than to get corporate managers involved with social problems and solve some of the problems of disadvantaged areas, face-to-face, with their direct involvement.This building of a bridge between the corporate sector and disadvantaged communities matches up corporate and public interests. I refer the parliament to an outstanding article by Rosabeth Moss Kanter, in the May 1999 edition of the Harvard Business Review, which sets out this very different approach to corporate philanthropy. It advocates hands-on, face-to-face corporate involvement in the issues and problems of the poor instead of passive, remote giving. It wants to bring the rich and the poor closer together in a social context. The article states:Today several leading companies are beginning to find inspiration in an unexpected place: the social sector—in public schools, welfare-to-work programs, and the inner city. These companies have discovered that social problems are economic problems, whether it is they need for a trained workforce or the search for new markets in neglected parts of cities. They have learned that applying their energies to solving the chronic problems of the social sector powerfully stimulates their own business development. Today's better-educated children are tomorrow's knowledge workers. Lower unemployment in the inner city means higher consumption in the inner city. Indeed, a new paradigm for innovation is emerging: a partnership between private enterprise and public interest that produces profitable and sustainable change for both sides.. . . . . . . . .. . .. traditional corporate volunteer activities only scratch the surface . . . companies often just throw money at the problem, then walk away. The fact is, many recipients of business largesse often don't need charity; they need change. Not spare change, but real change—sustainable, replicable, institutionalised change that transforms their schools, their job prospects, and their neighbourhoods. And that means getting business deeply involved in non-traditional ways.. . . companies that are breaking the mold—they are moving beyond corporate social responsibility to corporate social innovation . These companies are the vanguard of the new paradigm. They view community needs as opportunities to develop ideas and demonstrate business technologies, to find and serve new markets, and to solve long-standing business problems. They focus their efforts on inventing sophisticated solutions through a hands-on approach.Tackling social sector problems forces companies to stretch their capabilities to produce innovations that have business as well as community payoffs. When companies approach social needs in this way, they have a stake in the problems, and they treat the effort the way they would treat any other project central to the company's operations. They use their best people and their core skills. This is not charity; it is R&D—a strategic business investment.Ms Kanter goes on to give some case studies from the United States of this new corporate paradigm. This is the kind of thing we should be promoting in Australia—not remote corporate giving but hands-on corporate involvement in community projects in disadvantaged areas.The Prime Minister has a coalition which is not social at all. He is forming a coalition which is remote and distant and which is adding to the divide between the rich and poor parts of this country. There is a better way to approach this issue and that is to develop the sort of model advocated by Rosabeth Moss Kanter. It is a model where companies would put forward to the government their community development projects for disadvantaged areas. The government would then, on a tender basis, look at those projects and ask: are they hands-on? Are the corporate managers involved in the communities? Are we building a real social coalition to help the disadvantaged? Are less glamorous causes being assisted as well as those where there might be a positive PR spin-off? Are we getting a good spread of our charitable effort and community effort for public resources in Australia? The government would make all those assessments and then pick the projects that best match the public interest. The good thing about this model is that it also matches the corporate interest.I repeat: if companies want to develop lateral thinkers and problem solvers in their management, they need broad skills. They need to get them involved and skill them up, and community projects are a great asset for the modern, forward-looking corporation. So there is a better way; unfortunately, it is not being addressed by this government, but I understand it will be addressed in Senate processes, where opposition members and, I hope, the Democrats will pick up the different model for a social coalition. We can do much better than the approach that is being used by this short-sighted Prime Minister and government.I turn now to another provision in the legislation, and that is the encouragement of corporate philanthropy for Australia's universities. There is a good reward for the country in people providing resources, particularly for research, to our higher education institutions. But the great problem with this legislation is that it neglects the existing gap between rich and poor universities.Some universities in Australia have a huge base of assets and investments. Other universities, such as the University of Western Sydney, have a very limited base of assets and investment. Why isn't there, in this legislation, special consideration for asset poor universities so that they can attract a bigger proportion of public and corporate giving to their research and other activities?I have done a few sums from an answer I received from the education minister, which is recorded in the Hansard of 8 February this year. It adds up the current asset investments, the non-current asset investments, the equity reserves and investment income for each of Australia's universities for 1997. I will give the statistics to the House, because they demonstrate the great gap between asset rich and asset poor universities. According to these statistics, the University of Sydney has holdings of $2,600 million, the University of Melbourne has $2,010 million, the ANU has $1,051 million, and the University of Queensland has close to $1,000 million.At the other end of the scale, Swinburne University has barely $9 million in assets and investment holdings, the University of New England has $25 million, Deakin University has $30 million, Central Queensland University has $33 million, and Northern Territory University has $38 million. I mentioned the University of Western Sydney: it has $148 million in assets and investment holdings. How do you compare that? Just look at Sydney University with $2,600 million and the University of Western Sydney with $148 million. It is a small fraction—about five per cent of the assets that are held by the University of Sydney.Surely governments should be trying to equalise our universities and give an improved tax arrangement for the asset poor universities so that they can catch up to the sandstone institutions—the older universities—which have a very rich bank of assets and investment. I hope that one of the outcomes from the Senate process will be that, through this particular taxation amendment, government will be able to play a proper equalising role in the university sector.12:22:0010178Ellis, Annette, MPMs ELLIS5K6NamadgiALP00—As previous speakers have stated, the Taxation Laws Amendment Bill (No. 8) 1999 deals with 10 separate subject areas. I intend in the time I have today to contain my comments to the measures contained in schedule 5 of the bill. Schedule 5 implements the government's response to the report on philanthropy in Australia by the Business and Community Partnerships Working Group on Tax Reform. The measures will amend the income tax law to implement the government's response to the report on philanthropy in Australia by the Business and Community Partnerships Working Group on Tax Reform.On 26 March 1999 the government announced measures to encourage greater corporate and personal philanthropy in Australia. There are three different categories of gifts for which a deduction is available. Under the 1997 act, taxpayers are entitled to income tax deductions for certain gifts. Donations to listed recipients can be claimed as income tax deductions. Examples of recipient organisations include public libraries, public hospitals and charitable organisations. The cultural gifts program provides a tax deduction for gifts of significant cultural items to public art galleries, public museums and public libraries by offering donors a tax deduction. This program is administered by the Department of Com munications, Information Technology and the Arts.The Taxation Laws Amendment (Political Donations) Bill 1999 amends provisions on political donations. The political donations bill is amended by item 12 of schedule 5 of this legislation to allow a gift of property valued at more than $5,000 to qualify for a tax deduction. The government proposes to limit the deduction to $1,500 for contributions of more than $5,000 or a gift of property valued at more than $5,000. As previous speakers have stated, Labor does not support this amendment.In the area of deductions for gifts to private funds, schedule 5 also allows gifts to be made to certain private funds called `prescribed public funds'. A prescribed public fund would be defined as a fund that is prescribed by the income tax regulations. The proposed provision expressly excludes funds that are declared by the Treasurer in writing to not be a prescribed public fund. Private funds have to obtain the approval of the government to be prescribed in the regulations. If a prescribed public fund does not comply with the requirements, the Treasurer may declare the fund is not a prescribed public fund. From the date of declaration, gifts to such a fund will not be deductible.While I believe that increased private philanthropy is a worthwhile aim, I am very concerned that this government or future governments could use this as a reason to reduce public contributions to welfare, charities and, in fact, cultural organisations. I wish to thoroughly endorse the comments made by the member for Werriwa and, particularly, the member for Perth in earlier debate today on this part of the bill. I am concerned that we might be heading down the old American path, where very many worthwhile welfare and charitable organisations will not receive any significant corporate support because they do not have a sufficiently high public profile—in other words, that the charitable donations are made purely on the wish of the philanthropist and not expressly on the need of the community.There can be no doubt that American corporations skew their contributions towards those causes with the greatest public relations spin-off. Other causes—such as disability, drug and sexual health related work and so on—can tend to be left behind. It is with the American experience in mind that I caution against adopting their model without putting in place any appropriate safeguards. We need to be sure that future governments of either political persuasion, when facing tough financial times, will not be tempted to reduce public welfare provision. We need to be sure that those causes that are not `marketable' or `appealing' are not forgotten.We only need to look at the area of the environment to see what this could mean. How much work has it taken to promote the eradication of weeds—in fact a worthwhile cause—as against maybe cuddly warm animals, dolphins and so on? I do not wish to sound flippant, but it is a very good example of how a corporate donation could be very much skewed to the image they wish to promote rather than to the actual environmental need. We can very easily use that as a good analogy when we think about the sorts of donations that could be made into the welfare sector particularly.I concur very much with the comments of my colleague the member for Werriwa that this Howard model of corporate philanthropy encourages that passive charity that he spoke so well about. It is easy to see the big corporations writing their large cheques, providing the odd opportunity for a photo that would go into the annual but then basically walking away. What responsibility will they take for the outcomes? What meaningful relationships will be formed with disadvantaged communities? I am afraid the answer will probably be none or very little in terms of responsibility or relationship.In closing I would like to say that it does not really have to be like this. I am sure the parliament can work towards an alternative model—a model that provides for more direct community involvement with corporations. Why can't companies be encouraged to get more involved in directly running the projects with those disadvantaged communities very much as the member for Werriwa has just in great detail outlined? I can personally think of a range of projects in my electorate that would benefit greatly from a level of direct corporate involvement. Some of them would have great appeal to the corporate image, some of them much less appeal, but none is less worthy than the other. I am sure all members would have a similar range of examples in their own electorates.I will be one of the first people in this House to step forward and encourage the philanthropy of those who can afford it into our community and to the areas where that assistance and help is required. In fact, I sometimes bemoan the fact that members of our communities answer doorknock appeals, badge selling appeals and Daffodil Day appeals with much more enthusiasm and generosity in relation to their affordability for those families than many of our larger more well-off corporations and individuals. I would be the first one to encourage similar generosity across the higher level of income in this country.However, I believe the government of the day should be the part of this puzzle that actually dictates where most of that money goes. If the government of the day is not in a position to know where the need is, I do not believe we should leave it up to corporations to find where they believe their need is—their need being the good feeling of giving to where they believe they can get the most return, not the charity itself.For those in the corporate sector who do play an honourable role in the philanthropy of their communities, I do not wish for one moment to malign them; but I say to the government: think very carefully about what path you are taking us down and where you believe it could lead us. In the long run, a partnership arrangement between the community, the government and the corporations sector, particularly when we look at philanthropy in the welfare sector, is the only way we should go.As the member for Werriwa said, rather than a corporation merely writing out a cheque, getting the good photo for their annual report and feeling pretty terrific about it at the end of the day, I would much rather see a corporation take an active role—to understand the relationship between themselves and the wealth that is generated to them by the community in which they operate and then to act accordingly. I strongly urge caution before we go too far down this path. I agree with earlier speakers that the Senate process must have the opportunity to flesh this out more and to come up with what we would regard as a viable, good alternative model.12:31:0010180Slipper, Peter, MPMr SLIPPER0V5FisherLP10—in reply—I thank all participants in the debate on the Taxation Laws Amendment Bill (No. 8) 1999. It certainly will not come as any surprise to members of the House that as a government we reject the ALP's second reading amendment. This bill makes some very substantive changes to the tax law to reflect some major and not so major policy developments and it also contains some highly technical amendments. Firstly, schedule 1 of the bill will address anomalies which give rise to avoidance opportunities in the interaction between the controlled foreign company laws and the capital gains tax laws. To correct the anomalies, capital gains tax arising on the deemed disposal of assets of foreign controlled companies, where the companies have previously taken advantage of rollover relief under the capital gains tax provisions, will be subject to tax in Australia as a result of this bill. This is what would have happened if the whole transaction had taken place in Australia.It was always the intention that income of controlled foreign companies would be treated the same as income of Australian residents. In addition, there will be amendments to enable the tainted capital gains to be taken into account when applying the active income test and to prevent taxpayers from using schemes or arrangements to dilute their attribution percentage in the foreign controlled company holding the relevant development assets.Secondly, with effect from the 1992-1993 income year, post-judgment interest payable in personal injury compensation cases will be exempt from income tax. This is the interest which accrues from the time a judgment debt arises until the time the matter is finally settled. The exemption reverses the effect of a decision in the Federal Court in Whitaker v. The Federal Commissioner of Taxation which held that post-judgment interest is taxable. The honourable member for Cook in his speech mentioned the plight of the Whitakers. I acknowledge the efforts of Mr and Mrs Whitaker in bringing about this change to the law, which has the result that those who have suffered personal injuries do not bear the added burden of income tax on interest payable as a result of time elapsing in finalising the case while the court process is followed.Thirdly, there will be a number of amendments to the franking credit and dividend streaming rules to ensure that they operate as intended. Again, these amendments have a strong anti-avoidance flavour. They will reflect the 45-day rule, the limiting the source rule, and general anti-avoidance and antistreaming rules.Next, in accordance with the recommendation of the OECD, deductions for bribes paid to foreign officials will be disallowed unless the payment falls within the category of facilitation payment. It might help the House if I outline the difference between a bribe and a facilitation payment. A payment is a bribe to a foreign public official if it has been paid to provide a benefit to someone that they are not legally entitled to in order to influence the official to obtain or retain business or obtain an advantage in the conduct of business that is not legitimately due. However, a payment will not be a bribe if it is a facilitation payment, which is a payment incurred to expedite routine government action of a minor nature such as issuing a work permit or visa or installing a telephone, et cetera. I was particularly pleased to see the honourable member for Wills indicate that the opposition is supporting this measure.In a separate measure, the government has introduced amendments to the criminal code to make it an offence to pay bribes to foreign officials. Schedule 5 includes major initiatives designed to encourage personal and corporate philanthropy in Australia. There are three main elements to these measures: increased incentives for gifts of property to eligible bodies, tax deductibility for gifts to suitable charitable private funds, and a provision to allow the apportionment of deductions for gifts made under the cultural gifts program over a period of five years.It was interesting to listen to the honourable member for Werriwa, who always makes a thoughtful contribution to debate, suggest that asset-poor universities, such as the University of Western Sydney, should gain some additional advantages over other institutions. I assure the House that the government is treating all tertiary institutions equally. Most honourable members would believe that this is the appropriate way for the government to proceed.Schedule 5 gives effect to the government's response to the report on philanthropy in Australia by the business and community partnerships working group on taxation reform. It is a recognition of the valuable philanthropic work of business in Australia and will make it easier for business and individuals to contribute more to their communities. I was absolutely astounded by the suggestion made by the honourable member for Werriwa, and supported by the honourable member for Canberra, that it was in some way wrong for corporate Australia to write a large cheque to benefit charities. There seems to be some criticism of the body because it may not personally have a hands-on approach to carrying out the charitable work. Quite frankly, the purpose of this legislation is to encourage philanthropic donations and, of course, those donations would be handled by appropriate management bodies and there would be very substantial benefits to the entire community as a result of those donations. The actual company does not necessarily have the hands-on situation for the money to do the job.Schedule 6 will ensure that the rate of tax on friendly societies remains at 33 per cent rather than be increased to 39 per cent as previously scheduled for the 1999-2000 income year. The government has previously indicated that the scheduled increase will be deferred pending the outcome of the review of business taxation.The explanatory memorandum indicates that, subject to the review recommendations with respect to business taxation, this rate will be changed to the company tax rate for the 2000-01 income year. Honourable members will be aware that the review of business taxation has, in fact, recommended that the company tax rate be reduced from the current rate of 36 per cent to 34 per cent in the year 2000-01 and 30 per cent in the 2001-02 income year. To avoid undue disruption to friendly society policy holders, the review has recommended that the rate of tax on the life insurance business of friendly societies be retained at 33 per cent in the 2000-01 income year and be reduced to the 30 per cent company tax rate in the 2001-02 income year.Schedule 7 amends the tax law to ensure that share premiums are included within the ambit of capital streaming and dividend substitution rules and makes minor technical changes so that the provisions will operate as intended. Schedule 8 makes further technical corrections to the provisions governing excess tax offsets. Schedules 9 and 10 provide for the concessional tracing rules to companies. The measures will largely benefit family companies owned by discretionary trusts, including discretionary family trusts.I now want to move to the pious second reading amendment moved by the honourable member for Wills. He is critical in that second reading amendment of the position taken by the government in a number of areas. I want to place on record that the government has taken substantial action to combat tax minimisation and avoidance and significant reform has already been implemented. For instance, we have closed the abuse of the research and development concession, and we are stopping abuse on luxury car leasing, closing down the infrastructure borrowing scheme, addressing tax avoidance through overseas charitable trusts, extending the general anti-avoidance provisions, preventing the trafficking of trust losses, taxing distributions disguised as loans from private companies, and preventing franking credit trading and denial of artificially created losses. They relate to point (a) of his pious amendment. With respect to points (b) and (c), the reforms will take Australia into the next century with a modern, competitive and fair taxation system. They will create the environment for achieving higher economic growth. When one looks at the newspaper editorials around the country today, there is very strong support for the government's approach. Also, more jobs will be created and there will be improved savings—and providing a sustainable revenue base means that the government can continue to deliver services to the community.Opposition members suggested that we were going to cut social spending, that indeed we were not interested in providing a social safety net. This government is very proud of the fact that we do provide services to the community, and our ministers and the government generally will continue to do this.It should also be noted that changes proposed under the tax proposals include the lowering of the company tax rate from 36 per cent to 30 per cent, and we will have an internationally competitive capital gains tax regime. Small businesses are big winners with the introduction of a simplified tax system—despite the erroneous comments made by the honourable member for Rankin. The government is committed to introducing an entity tax arrangement to address concerns raised by those opposite in relation to trusts. As well, a substantial number of measures will reinforce the tax system's integrity. For instance, the 13-month prepayment rule is being tightened. We are preventing loss duplication and value shifting. We address the taxation of lease assignments and also the matter of treating non-commercial loans from members to closely held trusts. Those non-commercial loans are, in fact, treated as equity. So the government certainly rejects any suggestion made by the opposition that we are taking an inappropriate course of action.The government wants to encourage philanthropy. The Prime Minister has made it very clear that we are trying to create a new culture in Australia. I believe this is supported strongly by the Australian community, and we are certainly not going to back away from that. The fourth element, though, of the pious amendment referred to the Victorian election. I can understand my colleague opposite, the member for Wills, likes to talk about the Victorian election. I felt a bit sorry for him because he frittered away an enormous proportion of his time indulging his vendetta against Premier Kennett and the Victorian government.The honourable member for Wills also asked how the government could explain the $14 million cost to the revenue in the 1999-2000 year of income with respect to post-judgment interest arrangements. I want to assure the honourable member that the $14 million cost to the revenue reflects the taxpayers who have paid tax on post-judgment interest since the 1992-93 year of income and who will, upon passage of the bill, be able to have this tax refunded. This represents an estimated $2 million revenue cost in each of the prior income years.The honourable member for Perth and the honourable member for Wills both referred to suggestions that the philanthropy measures increased the tax deductibility of donations to political parties from $1,500 to $5,000. This statement is incorrect. If the Taxation Laws Amendment (Political Donations) Bill 1999 passes, this bill will ensure that donations will only be deductible up to $1,500. If the Taxation Laws Amendment (Political Donations) Bill 1999 does not pass, this bill will not change the amount which is tax deductible for party political donations.The honourable member for Wills also suggested that the government was being soft on the taxation of trusts. We reject that. An article by Tim Boreham in today's Australian, with the headline `Personal trust havens disappear', states:By accepting the Ralph committee's proposal to tax personal trusts in the same way as companies, the Government has spelt the end of trusts as a tax minimisation tool.Labor party members opposite huff and puff and make a lot of noise about the government's perceived lack of integrity in this matter, but the facts simply speak for themselves. The honourable member for Rankin also made a suggestion which I consider bizarre. He suggested that small business is going to be hurt by this bill, which is not the case at all. Again, I refer to a comment in the Sydney Morning Herald today in an article by Anthony Hughes, who states:Small business owners have emerged as one of the biggest winners from the overhaul of business taxation through special treatment on capital gains tax and reduced paperwork.7K6ENTSCHMr Entsch—Hear, hear!0V5Slipper, Peter, MPMr SLIPPER—I thank the member for Leichhardt for his support in that area. It is about time that the Labor Party were honest in this place. It is tragic when they come in and just say whatever comes into their minds with a view to impugning the motives and, indeed, the very fine record of the government.The government is very pleased with the legislation currently before the chamber. We support it. At this stage I want to foreshadow some government amendments which we will be moving in the consideration in detail stage, and I understand that the member for Wills might have some amendments. We have not yet seen those, but we will look at them when we receive them. I commend the bill to the House.Amendment negatived.Original question resolved in the affirmative.Bill read a second time.10183Bill—by leave—taken as a whole.12:47:0010183Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—by leave—I move:(1) Schedule 4, page 18 (line 2) heading, after "bribes " add "to foreign public officials ".(2) Schedule 4, page 18 (item 1) line 7 after "bribes " add "to foreign public officials ".(3) After Schedule 4, page 21 (after line 8) insert:Schedule 4A—Non-deductibility of bribes Income Tax Assessment Act 19971 Section 12-5 (after table item headed "Bribes to foreign public officials")Insert:Bribes to public officials . . . . . . . . . . . 26.532 After section 26-52Insert:26-53 Bribes to public officials(1) You cannot deduct under this Act a loss or outgoing you incur that is a *bribe to a public official.(2) An amount is a bribe to a public official to the extent that: (a) you incur the amount in, or in connection with: (i) providing a benefit to another person; or (ii) causing a benefit to be provided to another person; or (iii) offering to provide, or promising to provide, a benefit to another person; or (iv) causing an offer of the provision of a benefit, or a promise of the provision of a benefit, to be made to another person; and (b) the benefit is not legitimately due to the other person (see subsection (3); and (c) you incur the amount with the intention of influencing a *public official (who may or may not be the other person) in the exercise of the official's duties as a foreign public official in order to: (i) obtain or retain business; or (ii) obtain or retain an advantage in the conduct of business that is not legitimately due to you, or another person, as the recipient, or intended recipient, of the advantage in the conduct of business (see subsection (4)).The benefit may be any advantage and is not limited to property.Benefit not legitimately due(3) In working out if a benefit is not legitimately due to another person in a particular situation, disregard the following: (a) the fact that the benefit may be customary, or perceived to be customary, in the situation; (b) the value of the benefit; (c) any official tolerance of the benefit.Advantage in the conduct of business that is not legitimately due(4) In working out if an advantage in the conduct of business is not legitimately due in a particular situation, disregard the following: (a) the fact that the advantage may be customary, or perceived to be customary, in the situation; (b) the value of the advantage; (c) any official tolerance of the advantage. Duties of public official(5) The duties of a *public official are any authorities, duties, functions or powers that: (a) are conferred on the official; or (b) the official holds himself or herself out as having.3 At the end of section 110-25Add:(1) Expenditure does not form part of the cost base to the extent that it is a *bribe to a public official.4 Subsection 995-1(1)Insert: bribe to a public official has the meaning given by section 26-53.5 Subsection 995-1(1)Insert: public official means an employee or official of an *Australian Government Agency or of a local governing body. Local governing body has the same meaning as in section 74A of the Income Tax Assessment Act 1936.6 ApplicationThe amendments made by this Schedule apply to losses, outgoings or expenditure incurred in the 1999-2000 income year or a later income year.(4) Schedule 5, page 24, item 14 (line 21, omit "$1500 ", substitute "$100 ".(5) Schedule 5, page 24, item 14 (line 23), omit "$1500", substitute "$100".These amendments go to two separate issues which we flagged during the second reading debate and which I will turn to briefly. I am aware that our prospects of being successful in the House of Representatives in relation to amendments are not good. I am also conscious of the fact that, after we have a division on this, we will be able to go and have some lunch. I have some sympathy with Gough Whitlam in relation to the importance of lunch. Those who recall the events of 1975 might remember Gough Whitlam being sacked by Sir John Kerr and going off to have lunch rather than informing his Senate colleagues of what had taken place. I always had sympathy for Gough Whitlam in those circumstances.These amendments go to two issues. The first is our desire that the denial of tax deductibility for bribes to foreign officials ought equally to be extended to bribes for officials in domestic situations. On the same principles as the government has outlined for foreign officials, which we absolutely support, denial of tax deductibility should also be extended to domestic bribery situations. This would level the playing field for businesses operating in Australia. We would like the government to consider and respond positively to our suggestion that non-deductibility should be extended to domestic bribery situations—Commonwealth, state, territory and local governments—not just to foreign situations. That is the intent and purpose of amendments (1) to (3).The intent of amendments (4) and (5) is to oppose the government's intention to increase the level of tax deductibility for cash donations, in this case for property donations to political parties from $100 to $1,500. As I said in the second reading debate, Labor believes that it is outrageous that the government should seek public subsidy for gifts from wealthy people to political parties. If someone wants to make a political donation, that is their prerogative, but they should not get a subsidy from the taxpayer to be able to do that. We think that, if you want to make those contributions, that should be something you do without a subsidy from the Commonwealth. We think that this government ought to have much more pressing priorities than subsidising wealthy contributors to the Liberal Party.We have all manner of essential community services not receiving adequate support in this country, but the government says that it is more important that there be an increased level of tax deduction from $100 to $1,500. This essentially goes hand in hand with the government's proposition that the threshold for disclosure of donations should be increased from $100 to $1,500. That is part of another piece of legislation which we also strongly oppose. We do not think people ought to be able to hide political donations, particularly wealthy contributors to the Liberal Party. We are not going to support the government's endeavours to enable this to happen. Equally, we are therefore moving amendments (4) and (5) with the intention of ensuring that the government is not able to enable property donations of over $5,000 to qualify for up to a $1,500 deduction. We think that is a quite improper move by this government and we are therefore opposing it.12:52:0010185Slipper, Peter, MPMr SLIPPER0V5FisherLP10—The pessimism of the honourable member for Wills, which he expressed in his speech on Labor amendments is well-placed. The government does not support either of these two propositions, and I will explain the government's point of view.The government has introduced legislation to give effect to recommendations made by the OECD relating to the taxation laws aimed at combating bribery in international transactions. The OECD has not sought that the legislation apply other than to foreign public officials. In giving effect to the terms of the OECD recommendations, the proposed amendments already extend to Australian residents who are in the service of public international organisations and to foreign government officials based in Australia.The government would not want its position to indicate any support for the matter of bribes, but the taxation law does not make any distinction between whether an expense is incurred in pursuing legal or illegal income earning activities. Income is assessable whether it is derived from legal or illegal sources and expenses are, in general terms, allowable deductions provided they are necessarily incurred in deriving that income. Any change to the treatment of domestic payments, as suggested by the honourable member for Wills, would require broader tax policy issues to be reviewed. Now is not the time or place for that to occur.The opposition's second approach was to put forward a proposal to reduce the tax deduction limit on donations to political parties from $1,500 to $100. The government also rejects this amendment. If the Taxation Laws Amendment (Political Donations) Bill 1999 passes, this amendment would mean that two different limits would apply to political donations—$1,500 and $100—depending on the type of donation. That would detract from consistency, which one would want to see. If the Taxation Laws Amendment (Political Donations) Bill 1999 does not pass, this amendment would have no effect.12:55:0010186Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I am very disappointed with the parliamentary secretary's response to the amendments. What he is saying essentially is that the government is not prepared to look at whether bribes to officials in this country are tax deductible or not. Frankly, from our point of view, it is quite unacceptable for the government to come up with the legislation before the House saying, `We are going to make sure that bribes to foreign officials are not tax deductible, but we are not prepared to examine the situation applying to domestic officials.' It seems quite clear from his remarks that bribes to public officials in Australia are tax deductible, or may well be tax deductible. We regard that as an unsatisfactory state of affairs. If it is correct, as the parliamentary secretary says, that this raises other policy questions, the government ought to be examining those public policy issues and doing the necessary preliminary work to enable it to accept the sorts of propositions that we are putting forward—if not here, in another place—or with legislation of its own.The parliamentary secretary also said that he is not willing to accept our amendments concerning the level of political donations. Essentially, his contribution confirms what we are saying. This is part of a bid by the government to increase the threshold for political donations up to $1,500 so that you can make those donations, not have them disclosed and have them tax deductible. This is something designed to benefit the wealthier benefactors of political parties and, in particular, government political parties. We will not support that. We will continue to pursue this issue in the Senate.Question put:That the amendments (Mr Kelvin Thomson's ) be agreed to. 13:01:00The House divided. (Mr Deputy Speaker—Mr D.P.M. Hawker)60Mr AdamsMr AlbaneseMr AndrenMr BevisMr CoxMr CreanMrs CrosioMr DanbyMr EdwardsMs EllisDr EmersonMr M. J. EvansMr L. D. T. FergusonMr M. J. FergusonMr FitzgibbonMs GerickMs GillardMr GriffinMs HallMr HattonMs HoareMr HollisMr HorneMrs IrwinMr JenkinsMs KernotMr KerrMr LathamDr LawrenceMs LivermoreMr McClellandMs J. S. McFarlaneMs MacklinMr McLeayMr McMullanMr MartinMr MelhamMr MorrisMr MossfieldMr MurphyMs O'ByrneMr O'ConnorMr O'KeefeMs PlibersekMr PriceMr QuickMr RipollMs RoxonMr RuddMr Sawford*Mr SciaccaMr Sercombe*Mr SidebottomMr SmithMr SwanMr TannerDr TheophanousMr K. J. ThomsonMr WiltonMr Zahra74Mr AbbottMr AndersonMr K. J. AndrewsMr AnthonyFran BaileyMr BairdMr BarresiMr BartlettMr BillsonMrs B. K. BishopMs J. I. BishopMr CadmanMr CameronMr CausleyMr CharlesMr CostelloMr DownerMrs DraperMrs ElsonMr EntschMr FaheyMr FischerMr Forrest*Mrs GallusMs GambaroMrs GashMr GeorgiouMr HaaseMr HockeyMrs HullMr JullMr KatterMrs D. M. KellyJackie KellyDr KempMr LawlerMr LiebermanMr LindsayMr LloydMr McArthur*Mr I. E. MacfarlaneMr McGauranMrs MayMr MooreMrs MoylanMr NairnMr NehlDr NelsonMr NevilleMr NugentMr PyneMr ReithMr RonaldsonMr RuddockMr St ClairMr SchultzMr ScottMr SeckerMr SlipperMr SomlyayDr SouthcottDr StoneMrs SullivanMr C. P. ThompsonMr A. P. ThomsonMr TrussMr TuckeyMr M. A. J. VaileMrs D. S. ValeMr WakelinDr WasherMr WilliamsDr WooldridgeMs WorthMr BeazleyMr HowardMs BurkeMr ProsserMr WilkieMr BroughMr G. J. EvansMr Hardgrave* denotes tellerQuestion so resolved in the negative.13:05:0010187Slipper, Peter, MPMr SLIPPER0V5FisherLP10—by leave—I move:(1) Schedule 9, page 45 (after line 21), after item 10, insert:10A After section 160ZCInsert:160ZCA Information about family trusts with interests in companies: first caseNotice about company(1) The Commissioner may give a company a notice in accordance with section 160ZCB if the requirements of this section are met.Company must have applied a net capital loss in certain circumstances(2) In determining in its return of income for the 1997-98 year of income whether a net capital gain accrued to the company, the company must have applied a net capital loss that is to be taken to have been incurred in the 1996-97 year of income where, under subsection 160ZC(5), it would not have been allowed to apply the loss if it did not meet the condition in section 165-12 of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act.Role of family trust(3) The Commissioner must be satisfied that the company meets the conditions in section 165-12 of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act, but it would not do so unless one or more trusts were family trusts (within the meaning of section 272-75 of Schedule 2F).Non-resident trust(4) When the Commissioner gives the notice, for at least one of the family trusts: (a) a trustee of the trust must be a non-resident; or (b) the central management and control of the trust must be outside Australia.When notice must be given(5) The Commissioner must give the notice before the later of: (a) 5 years after the 1997-98 year of income; and (b) the end of the period during which the company is required by section 262A to retain records in relation to that year of income.160ZCB Notice where requirements of section 160ZCA are metInformation required(1) The notice that the Commissioner may give if the requirements of section 160ZCA are met must require the company to give the Commissioner specified information about conferrals of present entitlements to, and distributions (within the meaning of Subdivision 272-B of Schedule 2F) of, income and capital, since the start of the 1996-97 year of income by all of the family trusts meeting the requirements of paragraph 160ZCA(4)(a) or (b).Company knowledge(2) The information need not be within the knowledge of the company at the time the notice is given.Period for giving information(3) The notice must specify a period within which the company is to give the information. The period must not end earlier than 21 days after the day on which the Commissioner gives the notice.Consequence of not giving the information(4) If the company does not give the information within the period or within such further period as the Commissioner allows, the company is not entitled, and is taken never to have been entitled, to apply the net capital loss.No offences or penalties(5) To avoid doubt, subsection (4) does not cause the company to commit any offence or be liable to any penalty under Part VII for applying the net capital loss in the company's return.160ZCC Information about family trusts with interests in companies: second caseNotice about company(1) The Commissioner may give a company a notice in accordance with section 160ZCD if the requirements of this section are met.Net capital loss must have been applied in certain circumstances(2) In determining whether a net capital gain accrued to the company for the 1997-98 year of income, a net capital loss that is to be taken to have been incurred in respect of the 1996-97 year of income must have been applied, where subsection 160ZC(5) would have prevented it from being applied but for the application of subsection 175-10(2) or 175-15(2) of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act.Role of family trust(3) A family trust (within the meaning of section 272-75 of Schedule 2F) must have been: (a) one of the continuing shareholders mentioned in subsection 175-10(2) of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act; or (b) the person who had the shareholding interest mentioned in subsection 175-15(2) of the Income Tax Assessment Act 1997 , as so applied;as the case requires.Non-resident trust (4) When the Commissioner gives the notice: (a) a trustee of the family trust must be a non-resident; or (b) the central management and control of the family trust must be outside Australia.When notice must be given(5) The Commissioner must give the notice before the later of: (a) 5 years after the 1997-98 year of income; and (b) the end of the period during which the company is required by section 262A to retain records in relation to that year of income. 160ZCD Notice where requirements of section 160ZCC are metInformation required(1) The notice that the Commissioner may give if the requirements of section 160ZCC are met must require the company to give the Commissioner specified information about conferrals of present entitlements to, and distributions (within the meaning of Subdivision 272-B of Schedule 2F) of, income and capital by the family trust since the start of the 1996-97 year of income.Company knowledge(2) The information need not be within the knowledge of the company at the time the notice is given.Period for giving information(3) The notice must specify a period within which the company is to give the information. The period must not end earlier than 21 days after the day on which the Commissioner gives the notice.Consequence of not giving the information(4) If the company does not give the information within the period or within such further period as the Commissioner allows, the net capital loss cannot be applied.No offences or penalties(5) To avoid doubt, subsection (4) does not cause the company to commit any offence or be liable to any penalty under Part VII for previously applying the net capital loss in the company's return.(2) Schedule 9, item 14, page 49 (lines 23 and 24), omit "mentioned in that paragraph", substitute "for which that paragraph is being applied".(3) Schedule 9, item 16, page 55 (lines 1 to 3), omit subitem (2), substitute:(2) The amendments made by items 5 to 10 apply: (a) to allowable deductions for the 1996-97 year of income for amounts in respect of debts incurred in that year of income; or (b) to allowable deductions for the 1997-98 year of income for amounts in respect of debts incurred in that year of income or in the 1996-97 year of income.(4) Schedule 9, item 16, page 55 (lines 17 to 22), omit paragraph (c), substitute: (ba) so far as the amendments affect Subdivision 165-CA of the Income Tax Assessment Act 1997 —where the earlier income year mentioned in that Subdivision is the 1996-97 income year or any later income year and the current income year mentioned in that Subdivision is the 1998-99 income year or any later income year; and (c) so far as the amendments affect Subdivision 165-CB (including as modified by Subdivision 166-B) of the Income Tax Assessment Act 1997 —where the income year mentioned in that Subdivision is the 1998-99 income year or any later income year; and(5) Schedule 9, item 16, page 55 (line 27), omit "the income year", substitute "the current year".(6) Schedule 9, item 16, page 56 (after line 2), after paragraph (4)(b), insert: (ba) so far as the amendments affect Subdivision 175-CA of the Income Tax Assessment Act 1997 —where the earlier income year mentioned in that Subdivision is the 1996-97 income year or any later income year and the income year mentioned in that Subdivision is the 1998-99 income year or any later income year; and(7) Schedule 9, item 16, page 56 (line 3), omit "175-CA or".(8) Schedule 9, item 16, page 56 (line 17), omit "mentioned in that paragraph", substitute "for which that paragraph is being applied".(9) Schedule 9, item 16, page 56 (line 19), omit "mentioned in subparagraph 180-5(2)(b)(i)", substitute "for which subparagraph 180-5(2)(b)(i) is being applied".(10) Schedule 9, item 16, page 56 (lines 21 and 22), omit "mentioned in subparagraph 180-5(2)(b)(ii) or paragraph 180-5(2)(c)", substitute "for which subparagraph 180-5(2)(b)(ii) is being applied".(11) Schedule 9, item 16, page 56 (after line 23), after paragraph (5)(c), insert: (ca) the earlier income year mentioned in paragraph 180-5(2)(c) is the 1996-97 income year or any later income year and the income year for which that paragraph is being applied is the 1998-99 income year or any later income year; or(12) Schedule 9, item 16, page 56 (after line 35), after paragraph (6)(b), insert: (ba) the earlier income year mentioned in paragraph 180-15(2)(c) is the 1996-97 income year or any later income year and the income year mentioned in that paragraph is the 1998-99 income year or any later income year; or (13) Schedule 9, item 16, page 56 (line 36), omit "180-15(2)(c) or (d)", substitute "180-15(2)(d)".(14) Schedule 9, item 19, page 58 (after line 30), after paragraph (b), insert: (ba) the company applied a net capital loss (within the meaning of Part IIIA of this Act) where it was allowed to do so but, because of subsection 160ZC(5), it would not have been if the family trust had not been a family trust; or(15) Schedule 9, item 23, page 61 (lines 23 to 26), omit paragraph (a), substitute: (a) both: (i) persons must have held fixed entitlements (see subsection (6)) to all of the income and capital of the company; and (ii) non-fixed trusts (see subsection (6)), other than family trusts (see subsection (6)), must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or(16) Schedule 9, item 28, page 67 (lines 12 to 15), omit paragraph (2)(a), substitute: (a) both: (i) persons must have held fixed entitlements (see subsection (6)) to all of the income and capital of the company; and (ii) non-fixed trusts (see subsection (6)), other than family trusts (see subsection (6)), must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or(17) Schedule 9, page 70 (after line 9), after item 28, insert:28A Before section 160ZDInsert:160ZCE Information about non-fixed trusts with interests in companyNotice about non-resident non-fixed trust(1) The Commissioner may give the company a notice in accordance with section 160ZCF if the requirements of subsections (2) to (5) of this section are met.Company must have applied a net capital loss in certain circumstances(2) In determining in its return of income for the 1997-98 year of income whether a net capital gain accrued to the company, the company must have applied a net capital loss that is to be taken to have been in curred in the 1996-97 year of income where, under subsection 160ZC(5), it would not have been allowed to apply the loss if it did not meet the condition in section 165-215 of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act.Information about non-fixed trust(3) In order to determine whether it meets the condition, the Commissioner must need information about a non-fixed trust mentioned in subsection 165-215(5) of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act.Non-resident trust(4) When the Commissioner gives the notice: (a) a trustee of the non-fixed trust must be a non-resident; or (b) the central management and control of the non-fixed trust must be outside Australia.When notice must be given(5) The Commissioner must give the notice before the later of: (a) 5 years after the 1997-98 year of income; and (b) the end of the period during which the company is required by section 262A to retain records in relation to that year of income.160ZCF Notices where requirements of section 160ZCE are metInformation required(1) The notice that the Commissioner may give if the requirements of subsections 160ZCE(2) to (5) are met must require the company to give the Commissioner specified information that is relevant in determining whether the requirements of subsection 165-215(5) of the Income Tax Assessment Act 1997 , as applied on the assumption mentioned in subsection 160ZC(5) of this Act, are satisfied in relation to the non-fixed trust mentioned in subsections 160ZCE(3) and (4).Company knowledge(2) The information need not be within the knowledge of the company at the time the notice is given.Period for giving information(3) The notice must specify a period within which the company is to give the information. The period must not end earlier than 21 days after the day on which the Commissioner gives the notice. Consequence of not giving the information(4) If the company does not give the information within the period or within such further period as the Commissioner allows, the company is taken not to meet, and never to have met, the condition mentioned in subsection 160ZCE(2).No offences or penalties(5) To avoid doubt, subsection (4) does not cause the company to commit any offence or be liable to any penalty under Part VII for applying the net capital loss in the company's return.(18) Schedule 9, item 35, page 71 (lines 23 to 25), omit paragraph (a), substitute: (a) both: (i) persons must have held fixed entitlements to all of the income and capital of the company; and (ii) non-fixed trusts, other than *family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or(19) Schedule 9, item 35, page 73 (lines 3 to 5), omit paragraph (2)(a), substitute: (a) both: (i) persons must have held fixed entitlements to all of the income and capital of the company; and (ii) non-fixed trusts, other than *family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or(20) Schedule 9, item 35, page 75 (lines 18 to 20), omit paragraph (2)(a), substitute: (a) both: (i) persons must have held fixed entitlements to all of the income and capital of the company; and (ii) non-fixed trusts, other than *family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or(21) Schedule 9, item 36, page 80 (lines 8 and 9), omit subitem (2), substitute:(2) The amendments made by items 24 to 28 apply: (a) to allowable deductions for the 1996-97 year of income for amounts in respect of debts incurred in that year of income; or (b) to allowable deductions for the 1997-98 year of income for amounts in respect of debts incurred in that year of income or in the 1996-97 year of income.(22) Schedule 9, item 36, page 80 (lines 21 to 26), omit subitem (5), substitute:(4A) The amendments made by items 29, 30, 31, 32, 33 and 35 (so far as the amendments made by those items affect Subdivision 165-CA of the Income Tax Assessment Act 1997 ) apply where the earlier income year mentioned in that Subdivision is the 1996-97 income year or any later income year and the current year mentioned in that Subdivision is the 1998-99 income year or any later income year.(5) The amendments made by items 29, 30, 31, 32, 33 and 35 (so far as the amendments made by those items affect Subdivision 165-CB of the Income Tax Assessment Act 1997 ) apply where the income year mentioned in that Subdivision is the 1998-99 income year or any later income year.(23) Schedule 10, heading before item 2, page 81 (line 10), omit " 1997 ", substitute " 1998 ".(24) Schedule 10, item 3, page 81 (after line 26), after subparagraph (i), insert: (ia) a company that would otherwise be prevented by subsection 160ZC(5) of the Income Tax Assessment Act 1936 from applying a net capital loss in the qualifying year of income would not be so prevented; orI have moved a number of amendments on behalf of the government to schedules 9 and 10 to this bill. Schedule 9 makes available to companies two concessional tracing rules that are available to trusts under the trust loss measures. Schedule 10 contains transitional rules to allow trusts additional time to make family trusts elections and related entities to make interposed entity elections. A number of amendments are required in relation to the concessional tracing rules for carrying forward net capital losses. These amendments will ensure consistency with the concessional tracing rules as they apply elsewhere in the taxation law. An amendment is also necessary to one of the concessional tracing rules—the alternative condition—to ensure that it operates as intended. The amendments do not affect the application date of the measures and the cost to revenue of the amendments will be nil. Amendments Nos 1 and 17 to schedule 9 will insert two additional items in the bill to include non-resident information gathering rules in relation to the concessional tracing rules that apply to the rules for carrying forward net capital losses. Amendments Nos 4, 6, 7, 10, 11, 12, 13 and 22 will ensure that the application rules operate consistently between the 1936 and 1997 Income Tax Assessment Acts. Amendment No. 14 will ensure that a company that is owned by a non-resident discretionary trust which is able to apply a 1996-97 net capital loss against a 1997-98 net capital gain will be liable for any family trust distribution tax if it is not paid by the non-resident family trust.Amendments Nos 15, 16, 18, 19 and 20 will ensure that the alternative condition will apply to companies in the same manner as it applies to fixed trusts under the trust loss measures.I have also moved several minor technical amendments—Nos 2, 3, 5 8, 9, 10, 21 and 23—to schedule 9. These are minor drafting amendments which ensure consistent use of terms and correct cross-referencing. I have also moved, in relation to schedule 10, amendment No. 24. This amendment includes a transitional rule so that a trust is able to make a family trust election for the 1996-97 and 1997-98 income years, and other entities which are related to the family trust can make interposed entity elections for those same income years. I table the supplementary explanatory memorandum to the amendments.13:09:0010191Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—As anyone who studies the amendments to the Taxation Laws Amendment Bill (No. 8) 1999 will become rapidly aware, these are incredibly complex amendments. As I said during the second reading debate, the opposition does not oppose them in principle. We will, however, take the opportunity both between here and the Senate and during the Senate's legislative deliberations to have a closer and more detailed examination of them, but we are certainly not going to oppose them here.13:10:0010191Slipper, Peter, MPMr SLIPPER0V5FisherLP10—The Taxation Laws Amendment Bill (No. 8) 1999 and the associated amendments reflect the government's commitment to a new taxation system which is better and fairer for companies and other entities, and I commend the schedule amendments to the House.Amendments agreed to.Bill, as amended, agreed to.10192Bill (on motion by Mr Slipper)—by leave—read a third time.Bills10192r87910192Debate resumed from 30 June, on motion by Dr Kemp:That the bill be now read a second time.13:11:0010192Evans, Martyn, MPMr MARTYN EVANSN36BonythonALP00—The Higher Education Funding Amendment Bill 1999 sets the maximum amounts for operating and other grants to higher education institutions by varying the amounts already legislated under the Higher Education Funding Act 1998 for 1999 and 2000 and inserts an amount for 2001. It also sets the maximum funding level for expenditure on the international marketing and promotion of Australian education and training services by Australian Education International for the 2001 funding year. It amends the HEFA to make provision for funding 60 medical places at James Cook university for 2001 and provides funding for the science lectureships of $14.7 million and the associated research infrastructure of $73.6 million initially announced in the budget.There are a number of areas in this bill which I would like to turn to now in more detail. Firstly, the maximum amount of funding for 2000 and 2001 reflects the axing of the merit based equity scholarship scheme, which was $39 million over three years. This action is extremely mean spirited. The scheme was the only skerrick of good news for higher education in the 1996 budget, which otherwise cut universities' discretionary funding by $216 million and cut universities' operating grants by $624 million, and student income support was cut by a further $500 million. The bill also increased HECS charges by $313 million, lowered the repayment threshold to many thousands of dollars below average weekly earnings, thereby taking a further $817 million from students and graduates.I quote from Senator Vanstone's media release of 9 August 1996 announcing the establishment of the HECS exempt scholarships targeted at disadvantaged students:The facts are that if you come from a socio-economically disadvantaged background or a rural or geographically remote area, your chances of going to university are less than if you come from a high status background and live in an urban area.These measures are aimed at bringing higher education within the reach of ordinary Australians. They are a practical demonstration of the Government's real commitment to fairness and equity in higher education.In 1997, 1,000 scholarships were offered, building to a pool of 4,000 by 1999. The scheme had scarcely begun full operation before it was axed. A sounding of the effectiveness of the scheme was carried out by DETYA. This involved university equity officers being asked via email their views on the scheme in such a way as it could easily be assumed that the government was seeking to improve and enhance the scheme rather than axe it. Many of the 19 equity officers who responded suggested that a grant of money would be more effective than a HECS exemption in attracting financially disadvantaged students and retaining them at university.The true motives of the government were revealed when, instead of using the same amount of money in the way suggested by their own survey, they used the findings to abolish the scheme. This is a further demonstration of the government's lack of any commitment to equity. Under the Howard government, it is user-pays all the way—and if you cannot pay you miss out.This bill provides funding to the end of 2001 for Australian Education International. Originally set up in 1994 under the name Australian International Education Foundation, the AEI is fully funded by government, and its job is to promote Australian education worldwide. It represents all sectors of the industry: schools, English language colleges, TAFEs, private training providers and higher education institutions. The concept is good, but it is a pity the government is so incompetent in its management in other ways of our increasingly important education export industry. For example, the establishment of Internet universities, like Greenwich and the University of Asia, has highlighted the need for the government to comprehensively review arrangements for the establishment of any business calling itself a university.Dr John Walsh, Chancellor of Greenwich University, which was established as an Australian university by an act of the Norfolk Island legislature last year, insists that senior people in DETYA, Australian Education International and the Australian Qualifications Framework Advisory Board not only were aware of the steps being taken to establish the institution on Norfolk Island but actually encouraged it. When the issue was raised in the media earlier this year, however, the minister's department claimed that it was a matter for the Norfolk Island legislature and that it had not looked in detail at Greenwich's bona fides.A review is now taking place under the auspices of the Ministerial Council on Education, Employment, Training and Youth Affairs. It is obvious that this should have happened before Greenwich was established as an Australian university by an act of parliament and before it began to market itself as such. Is John Walsh being untruthful when he says that the federal government was well informed on developments leading to the establishment of Greenwich on Norfolk Island, or is the government guilty of gross mismanagement of the reputation of our higher education industry? It does not matter whether Greenwich was given approval at the end of the review process. The issue is not whether it turns out okay in the end, but how the matter was handled. Conducting a review after the institution is operating is a classic case of shutting the stable door after this educational horse has bolted.The University of Asia operates out of a room in Adelaide and has not been recognised as a university by any Australian government. Its web site claims that it is accredited by several governments, although none is named. Yet this operation was given authorisation to use the business name `University of Asia' in what appears to be yet another example of poor administration of our $3½ billion education export industry.Added to this is the government's hopeless management of private training colleges through the Education Services for Overseas Students, or ESOS, Act. The urgent need for review was highlighted by the failure this year of the Business Institute of Victoria and the National Business Management College in Sydney. Under the ESOS Act, the Commonwealth maintains a register of institutions and courses for overseas students; requires private education and training bodies to maintain a trust account as insurance for students should their business fail; and requires such bodies to belong to a tuition assistance assurance scheme.Evidence given to a Senate inquiry last year highlighted the shortcomings of the present administration of trust funds with the federal department auditing funds once a year on a known date. Evidence was supplied of unscrupulous providers withdrawing funds following the audit. When the Business Institute of Victoria went into receivership in May this year, I understand that there was no money in its trust account. The National Business Management College was apparently catering for between 500 and 600 students, yet the federal minister's department was aware of only 232. These additional students are now missing, and it seems that this institution could well have been operating what the industry calls a `visa factory'.On 19 August, the minister announced a review of the ESOS Act which, while welcome, is certainly long overdue. Last year's Senate inquiry called for attention to the operation of the ESOS Act as a matter of priority, but it has taken the government an entire year to get to first base. Let me remind the minister that our reputation as a provider of quality education once lost will not be easily won back. In a letter to the Australian on 15 September, the Chair of the Australian Council for Private Education and Training, Clive Graham, said:ACPET has lobbied hard to clean up the post-secondary vocational education and training sector, and has on numerous occasions presented to State, Territory and Federal Governments details of the ways in which some unscrupulous operators exploit students.The quotation went on:That the Government has ignored the industry association warnings, to the detriment of Australia's export earnings, is surely a matter of concern to all Australians.It is indeed a matter of concern to the opposition, and we can only hope that the minister is serious in his claim that a whole of government approach will guide the reform agenda.In the meantime, there are many things he can do immediately, such as institute random audits of trust accounts to help expose operators who do not maintain their accounts year round. My colleague the member for Newcastle, following his trip as a member of a delegation to Norway, spoke in the House in June on a range of issues concerning education exports. He raised, for example, the cost of student visas: $290 for an Australian visa compared with $154 for New Zealand, $133 for Canada and $70 for the US. All of those figures are in Australian dollars.Our major competitors charge student visa fees as low as a quarter of Australia's. The member for Newcastle pointed out that, while the Norwegian government wants to increase the number of Norwegian students studying overseas and pays people to go abroad to study, there are a number of obstacles put in the path of prospective students by the Howard government. These include: the cost of visas, which went up in October 1996 from $145 to $250 and later to the present $290; only three doctors available to do medical clearances for students wanting to come to Australia; the high cost of around $200 for medical examinations for these students; and the lack of an Australian Embassy official in Scandinavia with responsibility for student visas.I would now like to turn to the VSU legislation. The government's VSU legislation is rapidly sinking down the list of government business on the Senate Notice Paper. On 23 August, it was item 19; by 26 August, it was item 22; and by 20 September, it was item 23. On 16 May, the minister said on Meet the Press that the government would `absolutely' press ahead with its VSU legislation. On 13 June, he told Laurie Oakes on the Sunday program, `If it does not get through this time, we will bring it back to the Senate again in three months time.'The three months is nearly up, and it has not even been debated in the Senate for the first time yet. That is because the government is faced with major opposition within its own ranks to this ideologically driven plan. It is time the minister admitted total failure in his bid to fight old student battles again in the parliament.The VSU bill contains other provisions with which the opposition does not disagree, the most important being the recognition in the Higher Education Funding Act 1988 of the University of the Sunshine Coast as a separate institution. The Queensland parliament legislated late last year to establish the University of the Sunshine Coast as a separate institution, and the university is anxious to begin receiving its Commonwealth funding directly. It is not fair that recognition under HEFA of the University of the Sunshine Coast should be delayed because of its unfortunate grouping with the VSU legislation. For that reason I will be moving amendments to give effect to that and to another measure contained in the VSU bill of a slight name change to the James Cook University.I now turn to the government's own amendments. The government is moving its own amendments to the bill before the House in order to provide compensation for increases in the cost of living due to the GST for Australian postgraduate award and Australian postgraduate award (industry) recipients. In 1998 there were around 1,600 APA scholarships and 213 APAs in industry. Universities also offer their own scholarships—there were around 1,240 of these last year—and there are no funds being provided for those scholarships to be increased to compensate recipients for increased living costs. Recipients of other types of scholarships—such as those managed by the NHMRC, other federal departments and agencies and state governments—will also miss out. This is yet another example of how education is far from GST free.In an article in the Financial Review of 29 July, author Donald Horne attacked the government for its narrow view on the funding of education. He states:Here we are in what is supposed to be a `knowledge society' and not one Cabinet Minister says so. At times you'd think that all that mattered was still the export of minerals, fibres and foodstuffs. Plenty of silliness about undergraduates being `customers', as if universities were supermarkets, but not one speech about the idea that expenditure on universities can be seen as one of the most important investment programs in a modern industrial State.Not one speech (of the kind we got from Bob Menzies and Gough Whitlam) on the universities as centres of knowledge and inquiry. Yet it is this that makes them the very centre of a `knowledge society'. And it is not computer technology or whatever that makes them so. It is because they develop the techniques of the critical pursuit of ideas.Turning to the impact of these cuts, universities are now being turned into businesses—a commercial focus must be pursued to the exclusion of everything else. I would like to bring to the attention of the House some examples of these cuts: University of Adelaide, cuts to performing arts courses; Australian National University, major cuts to the arts faculty; University of New South Wales, closure of St George Campus and cuts in applied arts and performing arts courses; Sydney University of Technology, loss of five academics and support staff in humanities and social sciences; University of Western Sydney, phasing out of the anthropology department, closure of the drama department and rationalisation of the arts faculty; Monash University, loss of 120 staff in the arts faculty and closure of the classics department; Queensland University of Technology, reduction of tutorial hours in the arts, media and social science courses; and Northern Territory University, closure of the English department and cuts to the ceramics, sculpture and cartography courses.For universities all over Australia, the story is the same. In an article in the Age on 25 March this year, Professor John Niland, President of the Australian Vice-Chancellors' Committee, wrote:Public-sector funding of Australian universities is at crisis level . . . The steady decline in some fundamental and important disciplines such as university science requires immediate government intervention.In the Australian on 19 May, retired Supreme Court judge Hal Wootten wrote:Public universities exist for the public good . . . Traditionally they have sought to admit the students best able to benefit, and to employ . . . scholars who have chosen to forgo the pursuit of profit from their professions in favour of the satisfaction of teaching those students and advancing knowledge . . . It is a radical change if students are admitted (and inevitably to some extent retained and passed) not according to their capacity to benefit from study, but their capacity to make up for the deficits in government funding; and if staff are chosen for their entrepreneurial flair rather than their teaching and scholarly skills . . . It is not politically correct to give more than lip-service to scholarship and the need for reflection, or to advocate small classes, to measure publications by quality rather than number, or to treat with suspicion powerful interests bearing gifts.Words like these fall on deaf ears with this government. The minister does not want to hear anything which conflicts with his ideologically coloured and blinkered outlook on the world.We cannot discuss higher education funding without reference to the government's own green paper on research. I note that the House Standing Committee on Industry, Science and Resources recently released a report entitled The effect of certain public policy changes on Australia's R&D. This report reiterates the need for concern about the low level of business expenditure in Australia on research and development. The committee indicates its belief that the fall in business R&D which began in 1997-98 is directly attributable to the government's reduction of the R&D tax concession from 150 per cent to 125 per cent. While the government's green paper is clearly intended to shift the focus of university research more towards the commercial end, the House committee report canvasses the issue of the right balance between basic and applied research. The report quotes from the ANU publication The case for additional investment in basic research in Australia as follows:There is a crucial distinction to be made between strengthening industry links and inducing university researchers to shift their activity towards applied and industry research. The former is mutually beneficial but the latter is damaging in weakening the national competitiveness of and infrastructure for basic research.Ultimately, if Australia ends up having to steal a dollar from pure research to fund an extra dollar in applied research or grant administration, then our research policy has failed. The report also notes the calls for increased infrastructure funding for university research, including that of the West committee. Yet the green paper proposes not only no extra money for research or research infrastructure but also a plan which is likely to lead to less flexibility for institutions to fund major infrastructure.The opposition will have more to say on research when we see the government's final proposals. We can only hope that the minister uses that opportunity to significantly improve his planned framework for Australian research funding. 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:(1) notes that the quality of Australian education institutions is of prime importance to our future, both economically and culturally; and(2) condemns the Government for damaging the quality of Australian education by: (a) punitive cuts to universities; (b) a lack of commitment to equity issues; and (c) mismanagement of the education export industry."10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hawker)—Order! Is the amendment seconded?JK6McCLELLANDMr McClelland—I second the amendment and reserve my right to speak.13:28:0010196Thompson, Cameron, MPMr CAMERON THOMPSON84CBlairLP10—The Higher Education Funding Amendment Bill 1999 makes reference to the functioning of the grant system for higher education. In fact, the recommendations it contains and the implementation of its contents will result in significant changes in the way the higher education grant system works—all to the better. There are 18 different types of grant schemes, according to the Bills Digest , but 88 per cent of those are contained within one, which are the operating grants for higher education institutions.The Higher Education Contribution Scheme was introduced in 1989. It was updated in 1997 and under that scheme students are able to contribute towards their higher learning and return that money once their salary reaches a certain level. It is a good scheme that is quite effective and which contributes an increasing proportion of the funds that we need to run our universities. The latest figures show that the grants that come through in this way from the Commonwealth make up 54 per cent of the total income of universities. Back in 1981 they made up 89 per cent, and in large part that is the impact of the Higher Education Contribution Scheme. It is also partly the impact of the increased numbers of overseas students that are full fee paying students and that is an important part of the scheme, too.The total income of the higher education sector for this year, 1999, is estimated to be $8.6 billion, of which a total of $5.6 billion will come from the Commonwealth. The Bills Digest covers a few possible new proposals that are being considered by the government as a way of amending the scheme still further. It refers in part to a proposal to provide public funding direct through the student, rather than by way of these direct operating grants that I was referring to before. When looking at the implications of that I referred back to the proposals being put forward by the coalition at the time the then Labor government went ahead with the unified national system back in 1988. The unified national system, of course, was the John Dawkins model that basically completely restructured higher education in Australia. At that time I note that the coalition was proposing the following, and I will quote from a press release of the then coalition spokesman on education, Julian Beale MHR, who said:Federally-funded student places, rather than being allocated directly to institutions, will be awarded directly to students through National Education Awards which will be redeemable at the institution of the students' choice. This will facilitate the development of a demand-driven pattern of enrolment and enable institutions to develop their own planning and expansion strategies.That sounds very much like a model for the proposals that are now being once again considered. When considering these options there is an immediate perception that we are heading down the path towards a voucher system. The voucher system of education has been demonised regularly by various experts, and I will quote Edwin West who said:An education voucher system exists when governments make payments to families that enable their children to enter public or private schools of their choice. The tax-funded payments can be made directly to parents or indirectly to the selected schools; their purpose is to increase parental choice, to promote school competition, and to allow low-income families access to private schools. Some opponents predict that vouchers will destroy the public system, aggravate poverty, and foster segregation. Others fear that voucher-receiving independent schools will be regulated out of recognition.I think that sums up some of the concerns over the years that have been raised about a voucher system of payment. The important thing to say here is that this proposal to fund through students in the higher education sphere is not a voucher system, but it is taking some of the important and positive aspects of voucher funding—that is empowering the students and enabling them to make choice—as an important part of the model and applying it where it has positive benefits.As I have said, we have had significant changes along the way already since the establishment of the unified national system. We have had the introduction of overseas fee paying students and the introduction of fee payment for postgraduate students in 1989. With regard to overseas students, in 1997 overseas students contributed a total of $620.4 million to the running of our higher education system.I want to spend a little bit of time now just looking at the unified national system as it stands. I had a few questions about that when I was researching this particular bill and I wanted to see something about how the unified national system has fared. In simple terms, when it established the UNS the government wished to expand the system in an era of intended financial restraint at that time. This meant that a degree of rationalisation of institutions had to be undertaken, together with a reform of the funding system.Since then there has been no formal evaluation of the unified national system as such. I searched high and low for that, but unfortunately we have not really got around to assessing in a hard-nosed sense just what we have and have not achieved as a result of the unified national system. I can say that from my experience of the unified national system, there have been some good points, but there have also been some bad points. In particular on the good side we have seen an increase in the EFTSU, the number of effective full-time student units—that is, the number of people undertaking higher education through our universities.If I take some specific examples, there are also bad points. I refer to the continuing difficulties being experienced at the Gatton campus of the University of Queensland, which of course is in my electorate and naturally I have a close concern for its further development. Under the unified national system that particular institution, and other agricultural higher learning institutions across Australia, have not really gone ahead in the way in which it was envisaged at the time they were introduced. Gatton is not alone in that respect. In fact, others have suffered more greatly, but we need to focus in on what is needed for agricultural higher learning. That is an area where the UNS has not really hit the mark at all.Another area where I have some personal experience was the initial refusal of the then Hawke government to allow the introduction into the system of the Northern Territory University. It was denied access on the basis that they did not believe at the time that the Northern Territory University could raise an EFTSU of 2,000 and so it was thought at the time that its economies of scale would be too small to include in the UNS. As it turned out, when I look at the latest statistics I can see that the Northern Territory University today has over 3,500 EFTSU and Darwin is being referred to as a university town. Really, the initial decision not to put the Northern Territory University within the system was cockeyed and the decision of the Northern Territory government at the time to go ahead anyway, call it a university and put the money in itself has definitely been the right way to go.There have been efficiency gains across the board and the Bills Digest refers to a reduction in the amount of the operating grant per EFTSU by something like 20 per cent since 1983. But we have to ask ourselves what is the quality or the value of the service we are providing through these universities and what elements we are seeking to progress in students by giving them a higher education through a university.When I look at the Bills Digest there is an interesting comment which highlights some of the possible concerns. I note that there has been a study of what the students think about what they are learning at university, and I understand that 75 per cent are happy with the quality of teaching and 89 per cent overall are happy with the course that they are undertaking. The Bills Digest refers to `credentialism'. It says:The process contributes to a form of inflation in credentials or credentialism where graduates are required to obtain more and more degrees in order to compete for jobs that do not really require such qualifications.Mr Deputy Speaker, I would like to put forward journalism as an example of that. When I started out as a cadet journalist my only experience of education up to that time had been at high school. I think that for many people who were undertaking journalism at that time—in the late 1970s and certainly before that—it was common to embark on a journalistic career with nothing more than a high school education. I do not believe necessarily that journalists were the lesser for it.In fact, I believe that in recent times there is real evidence that the standard of journalism has gone downhill. I refer specifically to a couple of examples. For example, certain standards used to apply and all those old subeditors at the ABC or on any of the newspapers used to absolutely flog them into the young cadets—things like carrying two sides of the story in every story that you run. It is a lazy way of journalism to take just one side and thereby completely aggravate the other side so that they respond. Then, as a journalist, you can play ping pong with people and fill up your news bulletins with that sort of thing. That is a lazy type of journalism.Then there is also the age old style of journalism which has really started to gain strength lately and that is comment masquerading as news. We see so much of that today. In practically every news article you read, in practically every TV item you see or in every radio news bulletin you hear, there is comment masquerading as news.We are getting that today despite the higher level of training that people are going through and you have to say that what we have as a result of this is not a higher standard of journalism. What we have got, I think, is a strong example of credentialism. We are putting a lot of time and money into people who already have a high school education, who are skilled in grammar and creative writing and all the kinds of things that they pick up at school; we insist that they go off and get a university degree before they can even start a cadetship as a journalist. It seems like a very roundabout way of equipping people with the basic skills that they already have. I would like to see us look very hard at some of these courses to see whether or not people already have the kind of credentials needed without having to resort to credentialism.The Bills Digest also refers to examples of undergraduate courses being re-badged as postgraduate courses. That, of course, would be a real concern. I can think of a couple of other examples, such as the way in which higher learning is made available to people in the public service—or some elements of the public service—where study becomes a part of their work. Instead of paying people to advance the public good by being good public servants, we are paying them to further their own education and they are doing that in work time. I suppose you might say, `Good on them', but we do need to remember that, while training is part of life and higher learning is an important goal to have, people also have jobs to do. They have to do those jobs to the best of their ability and continue with their study at the appropriate time.I think many people who work very hard in remote locations or in jobs in the private sector have a tougher time of it: they might find that the people sitting in the university course next to them have a free ride from their boss to the extent that they are able to sit down and study in work time. Along the way, I note in relation to some other aspects of training that 51.8 per cent of staff at Australian universities have a PhD and I think that rates fairly well in the world.One of the aspects of this bill is that it provides funding for the James Cook University to achieve a school of medicine. I think that is fantastic. I referred earlier to credentialism and the worry I have about needless credentials or an over-exaggerated focus on having a degree before you can start a cadetship in journalism. However, I would strongly argue that, when I look at the really disciplined areas of study—and I am talking primarily about medicine, the sciences and those things that are giving us the cutting edge—I would like to see funding diverted out of areas like journalism study and into those that really do involve that higher level of learning. So I do congratulate the government on establishing this new school of medicine at James Cook University, particularly when it is to cater for students from a remote or rural background. That is something I think we should be focusing on to a greater extent as well.Much has been made along the way of the impact of the government's intention to abolish the Higher Education Equity Merit Scholarship Scheme. Looking at the figures in relation to that scheme, and in relation to the raw numbers of people from rural or isolated areas or people from a low socioeconomic background who have taken up that scheme, I see that over recent years we have generated quite an increase in the number of people studying who are from those areas. From rural areas, in 1990 there were 36,000 people studying for a university degree; in 1997, there were 108,000. From isolated areas there were 4,000 in 1990 and 11,000 in 1997. From a low socioeconomic background, 28,000 were studying in 1990 and 90,000 in 1997. That has been quite a significant increase but, while that has been going on, there has also been a significant increase in the general population. Although we have made those improvements, there have actually been reductions in the percentages of people studying who are from those categories.The Higher Education Equity Merit Scholarship Scheme was going to consume $18.2 million in the years 2000-01. But, if we look at the impact of the increased funding from 1991 to 1997, we see that people from a rural background studying at a higher education level have gone from 18.5 per cent in 1991 to 17.4 in 1997; isolated people, from 1.9 to 1.8 per cent; and low socioeconomic people, from 15 per cent down to 14.5. We need to do better than that. When we consider the way to go about it, we should listen to the people directly at the coalface. We have got equity experts in every university in this country, who do have consideration for providing equity for students, and they have suggested that this scheme is not the way to go about it. I believe we should listen to them. There are better ways to do it, which we should pursue.Another point concerns overseas students. They are certainly contributing much more to our higher education budget, and it is interesting to note that the Australian Vice-Chancellors Committee found in a study that overseas students `significantly outperform local students'. That is, on an assessment of mean student progress units, those students are performing very well.Also, a study by JM Consulting, reported by the Global Alliance Ltd to the Australian government, found that the cost of attending Australian universities is globally competitive. So we have got a competitive market and a competitive product, and they are performing very well.I would like to compliment the places that are receiving large numbers of these overseas students. Unfortunately, they are not in Queensland. Monash and RMIT are leading the charge in Victoria, with over 6,000 students each. Curtin University of Technology, in WA, has 5,497 students. But I see that, unfortunately, the University of Southern Queensland has only 2,757. We can do better. (Time expired)13:49:0010200Gillard, Julia, MPMs GILLARD83LLalorALP00—I feel, after the contribution of the member opposite, that I should launch into a spirited defence of journalists in Australia and particularly the Canberra Press Gallery. But I suspect that, in the way of these things, they can look after themselves. I will leave the member opposite to their tender mercies.The Higher Education Funding Amendment Bill 1999 provides for funding for our higher education system for the years 1999, 2000 and 2001. In doing so, it implements a number of budget and policy commitments in the higher education area made by the Minister for Education, Training and Youth Affairs.Before turning to the detail of the bill and to the opposition amendment before the House, I want to deal with the policy framework of this minister for education and this government in the higher education area. I cannot say for sure where the minister for education was on Saturday night but it is a fair bet that, as a Victorian Liberal, he was at the Sofitel in Collins Street, at the Liberal Party wake on Victorian election night, watching the speech that, effectively, marked the end of Jeff Kennett's political career. If the minister was there or was watching the proceedings on television from some other location, I hope that the events unfolding before his eyes caused him to reflect on a number of important questions in public policy today.I hope they caused him to reflect on how one should treat rural and regional Australia, because Saturday night in Victoria proved that, if you treat rural and regional Australia with contempt, it will return the compliment. I hope they caused him to reflect on how Australians value a fair go, a fair sharing of the benefits of government services, and how they reject an approach of governing for the chosen few at the expense of the many. I hope these reflections caused him to adopt an approach to education policy fundamentally different from the one that we have seen adopted to date and the one apparent in this bill.I suspect that my hopes are misplaced. As Saturday night and its aftermath have proved, Victorian Liberals only rethink their arrogant and foolish approach after being kicked so hard in the head by the electorate that it produces tears. So we are left dealing with this bill in its current form—a bill which fails rural and regional Australia and fails the test of fairness.First, the bill fails by legislating for a phasing out of the Higher Education Equity Merit Scholarship Scheme. This is a scheme which provided 1,000 scholarships to encourage the participation of equity groups in higher education—specifically, the underrepresented categories of indigenous Australians, women in non-traditional areas, people with a disability, people from non-English speaking backgrounds, people from rural and isolated areas and people from lower socioeconomic backgrounds. From the figures, encouraging the participation of these groups is necessary.For example, using 1997 figures, we see that Aboriginal and Torres Strait Islanders form 1.7 per cent of our population but only 1.3 per cent of our student population. In respect of people from rural backgrounds, isolated backgrounds and low socioeconomic income backgrounds, we see that the percentage within our student population has fallen in each case since 1991 from 18.5 per cent to 17.4 per cent for rural people, from 1.9 per cent to 1.8 per cent for people from isolated backgrounds and from 15 per cent to 14.5 per cent for people with low socioeconomic backgrounds.My colleague opposite, in speaking before me, referred to the absolute numbers and suggested that there had been an increase in absolute numbers. Of course, using absolute numbers across the 1990s as a statistical measure is insufficient because of the large growth in the student community overall during that time period. The appropriate way of measuring whether or not participation rates are keeping pace amongst the members of these equity groups is to look at the percentage statistics which I have just given. Indeed, even in today's newspapers we see a report carried of a new study which shows that the sons and daughters of blue-collar workers are struggling to enter higher education in part, this study concludes, because of the limitations on the youth allowance and, consequently, income support for students.Against that backdrop of continuing failure in encouraging participation from members of these equity groups, you would wonder why on earth a government would cut out a scheme that seeks to redress these inequity issues, particularly a scheme as limited as one that costs $10 million a year. But it fits with the philosophy of this government whose view of access issues is that the dumb rich can buy a place while those with intellectual ability but a lack of resources are excluded.Limitations on access are not the only issue raised by this government's philosophy on higher education. The questions of quality and partial privatisation are also squarely raised by the continuing rolling back of government funding. As we all know, education was chosen for special punishment in the first Howard budget—$800 million was hacked out of university operating grants, the HECS burden for university students was increased by $1.1 billion, TAFE funding was cut by $167 million, $128 million was ripped out of government schools and student assistance was cut by half a million dollars.This bill details funding arrangements which will see in 2001 the real levels of the Commonwealth's contribution to operating grants of higher education institutions at about the same level as it was in 1983, although planned student load will have become in that time period 58 per cent higher. So the same level of resources effectively has to do 1½ times or more than 1½ times the job.Under this bill, the Commonwealth's contribution to operating grants per planned equivalent full-time student unit will continue its decline, and the decline between 1983 and the projected 2001 figures in this bill will be 37 per cent. Clearly, the increasing reliance on non-government sources of funds has different effects on different universities, but that is the source of funding that universities are forced to look to now with continuing cutbacks in the level of government support.Regional universities, and universities such as the Victorian University of Technology which has a campus located in my electorate, suffer considerably under this system. Regional universities, and the Victorian University of Technology which has made it a special mission and a considerable cause of pride to cater specifically for those from non-English speaking backgrounds and from less advantaged backgrounds, have a far smaller capacity to attract non-government funds than the Ivy League universities. To conclude that is simply no more than commonsense. Yet this funding cutback program continues apparently without regard to the special needs of the non-Ivy League universities and without regard to the quality questions raised by increasing student-staff ratios.Indeed, the student-staff ratio has moved from 13.5 in 1989 to 17.9 in 1998, a 33 per cent increase. Perhaps this is part of the explanation as to why 75 per cent of students expressed dissatisfaction with the quality of teaching in our higher education institutions in a 1996 survey. It may also be part of the explanation for a recent study showing that 40 per cent of students who commenced an undergraduate degree in 1992 had not completed their degree after five years, and one-third had dropped out completely. Comparable with the schools debate, it stands to reason that, if we have fewer teaching staff in our higher education institutions, they are able to offer less special care and less pastoral care to those students who need additional attention and, consequently, such students are at a greater risk of not completing their course.There is no doubt that appropriate resourcing, access and quality are significant issues which require creative public policy initiatives and, at the end of the day, the right number of dollars. This government in this bill shows no sign of providing either the creative public policy initiatives or the appropriate level of resourcing.Whilst the significant issues in higher education go generally unaddressed by this government and are not addressed in this bill, this minister spends his time reliving the battles of his youth. On 12 May this government gagged in this House further debate on the Higher Education Legislation Amendment Bill 1999 , which dealt, amongst other issues, with voluntary student unionism. That debate was gagged despite the fact that the opposition had a large number of speakers still wanting to address the issue, and despite the fact that members of the government backbench had publicly aired their concern about the matter and despite the fact that the minister could not be bothered turning up for the division on the gag.The bill then proceeded to the Senate and since that time nothing has happened. Despite nothing happening, the Prime Minister in this House on 29 June stated:The government's attitude towards voluntary student unionism has not changed. Any suggestion that we have sort of gone slow on the legislation in the Senate because we have altered our view is wrong . . . If we believe the Prime Minister that the government has not changed its view, what explains the fact that 133 days after the voluntary student unionism bill was gagged in this place it still has not been dealt with by the Senate and that there is no sign that the Senate is intending to deal with it any time soon? Could the explanation be ministerial incompetence?10000SPEAKERMr SPEAKER—Order! It being 2 p.m., the debate is interrupted in accordance with standing order 101A. The member will have leave to continue speaking when the debate is resumed.Questions Without Notice102021020210202Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Treasurer. Treasurer, is it not true that your claim of revenue neutrality relies on $4.2 billion worth of `deferred measures' that you have `indicated a predisposition to'? Will you guarantee to make every dollar of your predisposition a reality?10202Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The great news yesterday was that the government announced reform of business taxation—for the first time in this country. The reaction of business groups has been very, very supportive indeed. I notice that the opposition, which completely sidelined itself in relation to tax reform, is desperately saying, `We'd like to be part of the process.' And what does it do? This opposition which wants to be part of the process, which wants to get out of its marginalisation, cannot even help itself for the first question in question time today and comes in here trying to fernick its way around and trying to be critical rather than support broad-ranging, great reform which is great for the Australian economy and, most particularly, great for farmers and small business, and that is going to create new jobs.The measures which I announced yesterday are completely funded in this year and next year, and over the course of the forward estimates, without any additional measures, will have an effect of around $2 billion. Let me put this in context. On the current forward estimates, the government forecast is for a cumulative surplus of $28 billion over the next four years. If there were no further measures additional to those announced yesterday, those cumulative surpluses would be $26 billion. That is the big point.Let me compare it with recent history. The last four budgets before this government was elected—bear in mind we are comparing to $26 billion of cumulative surpluses—were cumulative deficits of $57 billion. So we now have the opposition getting up and saying, `Well, our big objection would be that, having taken the budget from a four-year cumulative deficit of $57 billion, you are only going to have a cumulative surplus of $26 billion rather than $28 billion.' I think that is the point that the opposition is trying to make.In addition to that, as I forecast yesterday, it can in fact be completely funded and we can return to full surpluses, with the additional matters that the government has indicated its agreement to and on which it is consulting on design and implementation. That will put Australia in a strong position—strong surpluses, a new indirect tax system, a dramatically lower personal income tax system, new Commonwealth-state financial relations, new family allowances and, best of all, a new tax system for the small business and business community of Australia.1020310203Jull, David, MPMr JULLMH4FaddenLP10—My question is directed to the Prime Minister. Specifically, what will the government's latest tax initiatives do to simplify the system, what benefits will there be for business, including small business and farmers, and for small investors and the aged, and what will they achieve in terms of investment and, more importantly, jobs?10203Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I thank the honourable member for Fadden for his question. It is appropriate that the last word in the question was jobs, because the fundamental purpose of tax reform is to generate more jobs in Australia. What we have done, as a government, over the last 3½ years in particular in reforming the Australian taxation system has been to create a climate where there will be more jobs as a result of that reform. Taxation reform is not an end in itself. It is only a means to creating a stronger and more competitive Australian economy that will generate more jobs.I take the opportunity of congratulating the Treasurer on behalf of the government for the outstanding job that he has done in putting this taxation reform package together. I want to thank all of my other colleagues on the front bench who have played such a cooperative, constructive role—which is the habit of this government—in putting together this major reform package.The reduction in the company tax rate will give to Australia one of the most competitive corporate tax systems in the world. The good news for small business and farmers has already, in the space of just over 24 hours, become almost legend as far as this taxation package is concerned. I have read a lot of news releases from the National Farmers Federation in my life—it is part of the job—and I have read a lot of news releases from small business organisations in my life, but I have never heard anything quite so praise worthy and lyrical about a taxation reform as the response of the National Farmers Federation.And so it should be, because this taxation reform will do more for the battling farmer of Australia than any other change made by any government since World War II. This is a major boost to the struggling farmers of Australia. Of all the messages that come out of this building to the farmers of Australia and to the rural people of Australia, none is louder and none is less ambiguous than the message from this government that we care about small business in rural communities. We care about the farmers of Australia, and that is why we have given them a remarkable reform so far as capital gains tax is reform. And when you add to that the enormous benefits by way of lower fuel costs—benefits that the Labor Party opposed—the farmers of Australia have an enormous benefit from this government.I notice that there has been some reference in the odd column since the policy was released that in some way this is just a policy for people at the higher end of the income bracket. I find that an extraordinary proposition, particularly when you look at the enormous benefits that it gives to small business and farmers. I point out to the House that a better capital gains tax regime, which halves the rate of capital gains tax for individuals and small businesses, will improve incentives to save and invest. The Australian Taxation Office figures for 1996-97 reveal that 77 per cent of all individual taxpayers who pay capital gains tax in fact earn less than $50,000 a year. In other words, 77 per cent of the beneficiaries of this taxation reform are Australians who will be earning less than $50,000 a year. That completely gives the lie to the tawdry argument coming from some of those opposite.They cannot quite make up their mind whether they are for it or against it. They would like to be for it but they think maybe there is a bit of a political advantage in being against it for a while. We will see over the days ahead whether they put the national interest ahead of political expediency or whether, as they did on the GST, they are going to do the exact opposite. I invite the opposition to support it. Let me say on behalf of the government that if the opposition comes out in full support of this taxation package there will be no criticism and there will be no gloating. There will be a ready embrace of the willingness of the opposition to put the national interest ahead of political advantage and come on side for a remarkable taxation package which is great for the farmers of Australia and great for small businesses all around the country.1020410204Evans, Martyn, MPMr MARTYN EVANSN36BonythonALP00—My question is to the Treasurer. I refer to the Treasurer's proposal that, in order to offset the $10 billion impact of removing accelerated depreciation, the government would be prepared to consider assistance on a case-by-case basis. Why doesn't your package allocate any funding for this measure? Is it because you do not intend to fund any projects or because you do not want to expose any further failure of the revenue neutrality test?10204Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—$10 billion in accelerated depreciation in what year? In what year is there $10 billion worth of accelerated depreciation?DT4CREANMr Crean—It is your package.10000SPEAKERMr SPEAKER—Order! The Deputy Leader of the Opposition.10204Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I only make that point to make the point to the frontbencher who read out a question that was no doubt written for him that there is no $10 billion cost of accelerated depreciation.DT4CREANMr Crean—Oh, isn't there?CT4Mr COSTELLO—There isn't. If you want to add up six years, you can get a figure something like that. Do you normally refer to the cost of something as a cumulative six-year cost? Does the Labor Party refer to its last budget as a $90 billion deficit? I only said you had a $10 billion deficit; I should have said your last one was $90 billion. It was the six-year cost.I make the point in relation to investment allowances that the government has said as part of the Mansfield process that we would, in relation to long-life projects, including North West Shelf projects, have particular taxation regimes. We have already announced that. We announced that because in relation to long-life projects it is not really important what your depreciation regime is, because unless you have income you do not have anything to use depreciation against. It is of no value to have a depreciation claim if you have no flow of revenue. You cannot offset depreciation against zero.DT4CREANMr Crean—What about Woodside?CT4Mr COSTELLO—So, in relation to long-life projects, the government has already said we would have special treatment, and indeed did have special treatment when the North West Shelf developed. I believe that treatment was negotiated at the time under the Fraser government.DT4CREANMr Crean—You investment policy freak.10000SPEAKERMr SPEAKER—The Treasurer will resume his seat. The chair always exercises a great deal of tolerance to the Deputy Leader of the Opposition and has no matter which party was in power. The Deputy Leader of the Opposition, however, is persistently interjecting and I ask him to restrain himself.CT4Mr COSTELLO—As it had special treatment—I believe that was done by the then Treasurer, the now Prime Minister—we announced that that would be the case in relation to other long-life projects. At the end of the day, though, there is a big question here. The Labor Party either can support tax reform or can oppose it. The very interesting thing is that yesterday the Labor Party was saying, `Deal us in on the process.' Today we see the critical questions starting to emerge. We have seen this before. This is precisely what the Labor Party did in relation to the GST. I ask people to remember it. When we announced our tax package change, the Leader of the Opposition made it clear that, first of all, they were prepared to look at it on its merits. He also made it clear, as he said, that if the government went to an election and won a mandate Labor would support it. That is what the Leader of the Opposition said. When he had the opportunistic opportunity to try and stand against national interest reform for cheap votes, he could not resist it.The critical question is whether or not Labor can resist the cheap opportunity on this one. Yesterday the Labor Party was trying to say, `Don't count us out. We want to be part of business tax reform.' I ask the people of Australia to notice the tenor of the questioning today and the tenor of the MPIs. They are going to trickle around and, if there is a chance for a cheap vote, they cannot resist a sale. The question now is whether the Leader of the Opposition can lead. Can he take a position to support the business community and the government, or will he again fail the test of leadership?1020510205Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—My question without notice is addressed to the Treasurer. Could the Treasurer please advise the House what the reaction has been to the new business tax reform? What is the next stage in business tax reform?10205Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The reception of the tax reforms which were announced yesterday has been very strong and very positive. I would like to thank those members of the business community—Mr Ralph, Mr Allert and Mr Joss—who worked so hard in preparing a blueprint which the government has adopted to try and reform Australia's business taxation system. This is the biggest reform to Australia's business taxation system that we have seen in Australia. It complements the reform of the indirect tax system, the reform of the personal income tax system and the reform of Commonwealth-state relations. Yesterday Rio Tinto welcomed the decision to reduce the general rate of company tax, which they said will underpin the international competitiveness of Australia's tax system. The Australian Institute of Company Directors welcomed the new business tax system. They said:The proposed changes to capital gains tax and to offer rollover relief are key elements in removing barriers to growth in the Australian economy.The Tourism Council yesterday welcomed the new business tax system. They said it was `investment friendly' and encouraging of future growth within the sector. The Investment and Financial Services Association said:Overall, the review has produced a set of proposals that greatly enhance the capacity of the economy to produce improved savings.The NFF said most of Australia's farmers would be more competitive. They said the removal of capital gains tax on assets held for more than 15 years was the highlight of the package. The Society of Certified Practising Accountants said:The government has listened to the calls of small business to reduce the compliance costs that they are facing. Of particular benefit will be the simplified taxation system.The Australian Superannuation Funds Association, the Financial Planning Association, the Vice-Chancellors Council and the Property Council also welcomed the changes yesterday and called on the Democrats and the opposition to support them. The Property Council said this:The Ralph reforms are a win-win situation for the community and industry and should be supported by the opposition and the Democrats.So here we have business organisations right across the spectrum of Australian industry welcoming tax reform, calling on the opposition and calling on the Democrats to join the government in the historic reform of business taxation. This is something that the opposition, the Democrats and government can do for the nation. As the Prime Minister said, we would welcome the bipartisan support of the opposition if it could rise to the challenge of supporting national interest reform.Of particular interest yesterday was the simplified taxation system for small business. What it means is that, for the first time for small business, those that have turnover of $1 million or less can go onto cash accounting. They can immediately write off any expense up to $1,000. They can pool their plant and equipment and depreciate it 30 per cent. They get relief in relation to capital gains tax—a 50 per cent disregard. If they are individuals, they get an additional 50 per cent cut in their capital gains tax liability and, if they hold an asset for 15 years, they can roll it over capital gains tax free. That is something for the small businesses of Australia. It is something that rewards saving and initiative. It is great for the farmers. It will be good for jobs. It is one of those things that taxation reform can deliver in national economic benefits.1020610206Crean, Simon, MPMr CREANDT4HothamALP00—My question is again to the Treasurer. Treasurer, will you confirm the view put forward by the BCA's Campbell Anderson last night that the deferred items necessary to meet the Ralph revenue neutrality test will be agreed by November of this year? Is that your timetable and when will we see the legislation on the deferred anti-avoidance measures and the taxation of trusts?ZD4HOWARDMr Howard—Well, we held our breath for 13 years.10206Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The Prime Minister says that, if we had been waiting for the Labor Party to come up with these measures, we would have been holding our breath for 13 years—13 years in government and they never once came up with the idea. It took this government to lead again and to come up with the idea. We have described the proposal and in the announcements that we made yesterday we said that the proposal will come into effect from 1 July 2001. It would come into effect from 1 July 2001 to give business breathing space in relation to tax changes. They are coming through the Y2K bug on 1 January; they are coming through the GST on 1 July 2000; that are coming through pay as you go on 1 July 2000; and we stage into the changes on 1 July 2001—also, interestingly enough, the day on which company tax would come down to 30 per cent. I will make this point—and for those on the Labor back bench who are thinking of economic policy, I would urge you to consider this—you will find it much easier to introduce entity taxation on a lower rate; it is one of the benefits. One of the benefits of entity taxation will be that it would not be at 36 per cent but it would be at 30 per cent—another reason for the Labor Party to actually support the government's reforms.In relation to the timetable with Mr Anderson, I said to Mr Anderson—I think it was yesterday, and I have been faithfully report ed—that I would be expecting feedback in relation to matters that are stage 2 during the month of October to enable the government to finalise its position on stage 2 thereafter and hopefully in November.1020610206Draper, Trish, MPMrs DRAPER0L6MakinLP10—My question is also addressed to the Treasurer. Can the Treasurer advise the House what the government is doing to ensure that the entire business sector pays its fair share of tax? Can you detail the anti-avoidance measures that were contained in the new business tax system released yesterday?10206Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The government announced a number of measures yesterday to protect the taxation system and to prevent tax avoidance. Many of those measures date from 22 February, when the government gave notice that it would be making an announcement backdated to that date to prevent particular tax avoidance measures.The measures the government announced yesterday to deal with avoidance included measures against lost duplication based on excess mining deductions, artificial debt forgiveness, new measures in relation to duplication of unrealised corporate losses and new measures on the disposal of loan assets within majority owned groups. We also announced measures to deal with defects in the continuity of the corporate ownership test and new measures to deal with non-commercial loans from members to closely held entities. We announced yesterday measures against tax avoidance for loss duplication on the transfer by corporates of revenue losses and taxing the full consideration received on disposing of interests in leased plant or leases. In addition, we announced changes to the prepayment rule, a rule which had allowed a prepayment of 13 months to be deducted in advance of income. Those changes go a considerable way to paying for the reduction together with the accelerated depreciation of reductions in corporate tax rates.The government has been very tight on making sure that those opportunities for tax avoidance which have been identified are dealt with, and yesterday we had all of those measures announced as part of the response to the business tax review. In addition, we have followed the same principle that we did in relation to indirect tax reform. If we broaden bases, reduce the opportunity for haemorrhaging in the system, take out those concessions which give unfair advantages, such as the prepayment rule, you can lower overall rates. One of the great things about the government's business tax regime will be broader bases, lower rates, and the opportunity for companies doing the right thing to get a tax cut, as we broaden the base to bring in those concessions which are the directing investment not to the best economic return but to the most tax effective concession.1020710207Crean, Simon, MPMr CREANDT4HothamALP00—My question is again to the Treasurer. I have noted the answer to his last question. We welcome the initiatives on tax avoidance in the package yesterday and we will support them. Treasurer, given that you propose to widen the gap between tax paid on income and tax paid on capital, why didn't you also announce yesterday tax avoidance measures to prevent the conversion of income into capital?10207Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The differential rate between the corporate tax rate and the individual tax rate has existed for quite some time. Those people who could find an arbitrage in the difference would have, I would have thought, done it long before now. If you want to reduce the arbitrage between rates—DT4CREANMr Crean—Mr Speaker, I rise on a point of order, and it goes to relevance. I think the Treasurer has missed the point; it is not corporate taxes and the top marginal tax rates, it is the taxes on capital that have been introduced and announced in the package yesterday and it is that—10000SPEAKERMr SPEAKER—The member cannot restate the question. The Treasurer has been consistent in his answer and I call him.CT4Mr COSTELLO—For those companies that are getting a lower corporate tax rate, they get a lower corporate tax rate in relation to both income and capital. A capital gains tax applies to a corporation as much as to an individual. Of course, if you do not reduce the corporate tax rate, you would not be reducing the rate of capital gains tax on a corporation's assets. That is the first point I make and another reason for the Labor Party to support the government.In relation to capital gains tax for individuals, we are moving to a system where we trade off indexation and averaging for a taxation system in relation to nominal capital gains for a half rate. This is an enormous advantage to individuals. You get rid of all the complexity and the compliance because you do not have to index your cost base on a regular basis—nor did individuals have great scope to take advantage of averaging—and, in return, we get a much reduced level of capital gains tax. This is the great breakthrough in capital gains tax. This is the first reduction of capital gains tax for individuals in Australia since capital gains tax was introduced by Labor in 1985. This is the area that has been crying out for reform. As the Prime Minister said, 77 per cent of individuals paying capital gains tax earned $50,000 or less.As we create a shareholder democracy in Australia—we are now the second largest share owning democracy in the world—mums and dads have come into Telstra, AMP and National Mutual. With Telstra 2 we expect—perhaps I had better not say because I would breach the prospectus—hundreds of thousands of new people, mums and dads and people who are saving, to come into shareholding in Australia. Now, for the first time, there is an opportunity to reduce that heavy burden of taxation coming on their savings vehicles.What is more, this now puts Australia back in the game. We have been running capital gains taxes at 48½, the Americans have been running them at 20 and the Brits have been running them at similar levels. Australia is now back in the game. We are internationally competitive. Mum and dad shareholders will get tax relief on their savings. That is great for them, and it is great for the government's attempts at encouraging saving and shareholder democracy. It has been warmly welcomed and, again, I ask the opposition to rise above politics and to stand for bipartisan support of good reform, in the national interest, which will create a better economic environment.1020810208Haase, Barry, MPMr HAASE84TKalgoorlieLP10—My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Can the Deputy Prime Minister advise the House of the benefits that will flow to rural and regional Australia as a result of the government's response to the Ralph Review of Business Taxation? What has been the response in the regions to the announcement?10208Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for his question, representing as he does such a huge area of rural and regional Australia, and representing it very well. I think the simple answer to his question is that there is no doubt that the improvements the Treasurer announced yesterday—and I join the Prime Minister in complimenting him and thanking him for his hard work and his great diligence in working through a lot of issues of real concern for many of us over the last few months—represent a great series of improvements for rural and regional Australia, especially when combined with the reforms that will flow through next year from the introduction of the goods and services tax and the abolition of Labor's wholesale sales tax and the fuel excise.Let me come to some specifics. Firstly, accelerated depreciation for small businesses and farmers has been very widely welcomed as being important for small business and the farm sectors. What is more, the reality is that it will be simplified and more workable from July 2001. There will be considerably less paperwork; it will indeed be a simplified tax system for many of the people who need access to accelerated depreciation.Secondly, we have lifted the dead hand of Labor's capital gains tax from the family farm and small business. This has been a real bone of contention for a long time. We are now in a situation where postwar generation farmers and small business operators can look forward to retirement with much improved security. Capital gains tax need no longer be an issue for them. If you look at the broader reforms on capital gains tax, people in small business will get a further 50 per cent small business exemption plus they will be able to apply the remaining 25 per cent capital gain towards a $500,000 capital gains retirement exemption. In addition—as has been referred to here, this has been widely welcomed by the National Farmers Federation—if they have held the asset for more than 15 years it will be totally exempt in any case. There is no doubt that it is a magnificent package for small business and for farm retirees. That is why we have seen Ian Donges reporting very well on it. The Queensland Farmers Federation has said simply, `It seems the government has listened to the concerns of farmers.' On special treatment for small business, the Courier-Mail said:This is good news for Queensland, given the state's reliance on a thriving small business sector to ensure the overall health of its economy.The Albury Border Mail editorial said:A simpler tax system will reduce the tax burden on business, therefore generate business investment, the end result should be a significant increase in the number of jobs.They are the sorts of comments that have been made. Thirdly, I think it is worth mentioning that removing the capital gains tax from scrip to scrip takeovers will provide a great boost to small innovative Australian companies that want to stay Australian. This is something that comes up a lot when I move around rural and regional Australia. It will mean that if you start a small company in Australia and grow it into a bigger company, you can do so without being crippled by Labor's capital gains tax. It encourages innovative fast-growing companies to continue their development in this country rather than relocating offshore, as we hear too often. There has been a very interesting endorsement of our approach from none other than the Premier of Queensland, Peter Beattie. He said:These capital gains tax changes will allow fledgling Australian companies to tap into the huge investment resources of the US pension funds and Australian superannuation funds.The Labor Premier of Queensland said:Hopefully, the regular stories of good Australian ideas being lost overseas will be a thing of the past. Amen to that. Rural, regional and remote Australia clearly want and need more investment and more jobs. I have no doubt that this package delivers those things. In the sense that it provides a further valuable instalment on our reform program, it will make a difference in rural Australia because it will boost existing industries and it will help us to attract new industries.1020910209Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Treasurer. I refer to his decision to introduce a new tax on the investment income underlying pensions and annuities, a measure confirmed in yesterday's business tax package. Treasurer, will you guarantee that this new tax will not lead to a reduction in the pensions and annuities of the thousands of Australian retirees who have purchased these products?10209Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—As part of its pre-election policy, the government announced changed arrangements in relation to life insurance. When I came to government, one of the things that was sitting on my desk as far back as then was a decision which had been deferred by the Labor Party—that the tax arrangements in relation to life insurance had to be streamlined and improved. I have referred to that in subsequent budgets. We have had the opportunity to do that and to finally make sure that we clear up the situation.Life insurers, depending on the class of their business, can currently be taxed at a rate of zero, 33 per cent, 37 per cent, 39 per cent and 47 per cent, according to whether the product is a statutory fund, an investment product, a life product, superannuation or some other part of their business. We announced, as part of the new tax system, that we would move to an entity tax arrangement which would have the same tax paid by life insurance companies on the same business as is paid for by investment companies—they will be paying the same in relation to superannuation as is paid by superannuation. This is a reform that is well and truly overdue. There have been transitional provisions, in relation to life policies, which provide for a five-year transitional period. That will protect policy holders and annuitants. This, again, is worthwhile reform—simplification which those who really had an interest in tax reform would be supporting.1020910209Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—My question is addressed to the Minister for Employment, Workplace Relations and Small Business. Minister, while there are many benefits flowing to big business from yesterday's announcement of the government's new business tax system, what will be the benefits to small business? To take the Prime Minister's point, what will be the impact on jobs that flow from these benefits?10209Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I appreciate getting the question because it emphasises the fact that this is a package which is relevant to small business. Whilst the Labor party has its shadow treasury spokesman asking questions, you never hear a question from the shadow minister for small business. That is because the Labor party is not interested in small business and has not got the vaguest idea what is necessary to assist small business. The Taxation Institute of Australia has an idea of the importance of small business. Their press release says, `Small business the big winner under business tax reforms, says Tax Institute'. One of the reasons that they have picked out this package as being beneficial for small business is that it is a genuine attack on the red tape problems facing small business. Anybody who has run a small business—and there are plenty on this side but I do not think there are many on that side—would know that.It is a simple point: if you are running a small business, you want to spend more time running your business than filling out red tape for government. So the tax institute makes the point that the cash accounting regime, which is a measure announced yesterday, is much more straightforward and is less costly. Obviously, it saves time for small business. The tax institute said:. A simpler and more generous depreciation scheme will dramatically streamline the asset records of small business; So it is a good deal on the tax side, but it is also a good deal in terms of reducing compliance costs on small business. In relation to stocktakes, as the tax institute says, something like three-quarters of small businesses do it themselves. The idea of having to spend your weekend bringing in the kids to help with the stocktake are days you will only remember from when Labor was in office. The red tape theme was picked up by the Society of Certified Practising Accountants. They say:The Government appears to have heeded calls from the small business sector who have been drowning in red tape.That, again, is a fair comment, reflecting the big change we are making to red tape. But they go further. About capital gains tax reforms, the CPA says that they `should assist in the growth and employment generating capacity of the economy as a whole.' That is a sensible point that anyone who has been associated with small business would know. Senator Murray, for example, is quoted in the Sydney Morning Herald this morning as saying:That gives you the idea that certainly jobs will be generated out of it because we all know small business looked after do produce jobs.Again, this is something we know. That is why we have been working hard on unfair dismissal. That is why we have been working hard to improve the climate for small business, because it will create jobs. The society also said, and it is a very important point of this package:The government has listened to the calls of small business to reduce the compliance costs they are facing.It goes on to say:It has shown it is prepared to listen to the concerns of small business and provide meaningful reforms to cut red tape and recognise the compliance burdens they face.The headline from COSBOA, the Council of Small Business Organisations of Australia, says it all. It says, `Drought breaks in small business tax.' This is very good for small business. It is good that it has been wellreceived by the small business community; that is no surprise to us. You should not forget also, Mr Speaker, that it comes on top of the ANTS package, the new tax system, where we did some great things for small business. Never forget: it was this government—Opposition members interjecting—WI4Mr REITH—I take the interjections. Those opposite say in a cynical tone that it was a ripper. We are abolishing provisional tax, and anybody who has been in small business knows that provisional tax has sent a lot of businesses broke over the years. We are abolishing it. This is undoubtedly good news for small business, and that means good news for jobs.1021010210McMullan, Bob, MPMr McMULLAN5I4CanberraALP00—My question is to the Treasurer. Isn't it the case that, by retaining the R&D tax concession at 125 per cent while reducing the company tax rate to 30 per cent, you have cut the real value of the R&D tax concession by a further one-sixth? Given the substantial falls in business expenditure on R&D since your 1996 cut to the R&D tax concession, what analysis have you done of the likely impact of yesterday's cut on business expenditure on research and development? If so, what does that analysis show? If not, why haven't you done such an analysis?10210Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—One of the great things about cutting company tax rates is that companies have more cash—more cash to reinvest and more cash to engage in R&D. This idea that you would actually help companies by raising the company tax rates so that the 125 per cent concession is worth more is called Labor economics. Let me turn it around the other way. I think the argument is that the concession is worth less because the company tax rate is lower. So that would mean, of course, that if you were actually putting up company tax rates you should reduce R&D concessions to maintain parity. Let me give you an example. Before the 1993 election the Labor Party, as I recall, promised to reduce company tax. After the 1993 election, like the l-a-w tax cuts, they actually put it up. When they put it up, did they reduce the R&D concession to maintain parity? Of course they didn't. These people have form. Some of us were actually here prior to the 1993 election. There are a lot of people who forget that, not only after the 1993 election did the Labor Party increase every wholesale sales tax—PE4BEAZLEYMr Beazley—Mr Speaker, I raise a point of order, which goes to relevance. A specific question was asked of the Treasurer on whether or not he had done any analysis on the effective devaluation of that R&D tax concession. Given the shocking figures they have managed to produce with that, you would think they might have done a bit.10000SPEAKERMr SPEAKER—The Leader of the Opposition has made his point of relevance and will resume his seat.CT4Mr COSTELLO—The Labor Party pulled it down before the 1993 election. After the 1993 election, they increased every wholesale sales tax rate. They took away the income tax cuts and they increased company taxes. I didn't notice them readjusting the R&D concession.1021110211Causley, Ian, MPMr CAUSLEY4K6PageNP10—My question is directed to the Minister for Agriculture, Fisheries and Forestry. Can the minister inform the House of the benefits which will flow to the agriculture, fisheries and forestry sectors from the government's new business tax reforms?10211Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—I thank the member for Page for his very important question. Clearly, as the Prime Minister and Deputy Prime Minister have said, these new tax arrangements are great news for farmers. In the words of the Queensland Farmers Federation, the government is listening to farm concerns, and we have responded in this package. It is fairer, it is simpler and it will certainly provide real benefits to Australian farmers. The House will be familiar with the benefits that have already been provided to the rural sector through the ANTS package—the new taxation system—and these reforms in business tax will build on those benefits.Farmers in particular will appreciate the simplified system. They will appreciate the slashing in capital gains tax. Most farmers will pay only about 25 per cent maximum on their capital gains, and in many instances even that will be able to be deferred because they will be selling one item to purchase a replacement asset. A retiring farmer or an incapacitated farmer leaving the farm at age 55 will be able to dispose of their property, if they have held it for 15 years, capital gains tax free. What an enormous contrast that is compared with the record of members opposite in relation to capital gains tax. They invented capital gains tax in the first place, after faithfully promising the people that they would never introduce a capital gains tax. And they have not learned the lesson. At the last election, the Labor Party actually promised to increase capital gains tax. By contrast, we are slashing capital gains tax, so that farmers will be able to retire without having the benefits of their labour taken away from them through high levels of capital gains tax. Farmers will also have access to the new, improved accelerated depreciation arrangements. Virtually all farmers will benefit from those arrangements, which will be a significant improvement from the point of view of simplicity and the real tax benefits that will be provided. Is it any wonder that the NFF and other farm organisations have given this package such a warm welcome? The President of the National Farmers Federation said:Farmers will be more competitive because they will be operating under a simpler and fairer system. The NFF welcomes the new simplified tax system for small business. Use of cash accounting will lower compliance costs while the enhanced depreciation provisions for small business will mean that many depreciation rates for common items of farm plant will actually increase from 1 July 2001.Congratulations, Mr Treasurer, on an excellent package—a package that farmers will justly welcome.1021110211Martin, Stephen, MPMr MARTIN8I4CunninghamALP00—My question is addressed to the Minister for Defence. Minister, could you explain how Australia is going to rotate Australian troops deployed in East Timor, especially considering that the government abolished the Ready Reserve scheme, removed leave for Defence Force reservists as an allowable matter under the Workplace Relations Act, and allowed recruiting to the reserves to fall short by nearly half the target? Will you acknowledge that urgent action must be taken with regard to the reserves so that Australian troops deployed to East Timor will be relieved from duty and replaced within six months, to ensure that they are not separated from their families and required to operate in a demanding and dangerous environment for an unacceptable period of time? Finally, what action are you now going to take to correct the litany of errors your government made with respect to the reserves?10212Moore, John, MPMr MOOREEI4RyanLPDefence10—The member would obviously remember that the responsibility for reserves falls with the assisting minister. Could I say, while I am here, that the deployment going on in Dili at the present moment is an excellent example of the professionalism of the Australian defence forces. This is the third day in which activities have been taking place there. They have been undertaken in an extremely professional manner, and they have been well organised on the ground. To date, they have been very well received by the local people in Dili, and, as the defence forces are deployed outside the township itself, they are meeting a great welcome from the people who are there.83TRUDDMr Rudd—Mr Speaker, I raise a point of order on relevance. The question was about how Australian troops were going to be replaced.10000SPEAKERMr SPEAKER—Given the nature of the question and the sensitivity of the involvement of Australia in East Timor, I have allowed the minister the opportunity to preface his question. He has been on his feet for under a minute, and I did not think it was inappropriate that he preface the question as he has done. I invite him now to come to the question.EI4Mr MOORE—As I was saying, this is an excellent opportunity for people in the House to get a report on what is actually happening on the ground in Dili today. I thought you may have been interested in that, because only yesterday we spent the entire day discussing it in this House, with your support. Because of that, I am appalled that you guys have paid so little attention to what is going on in Dili today.As I was saying, some 3,000 troops will be deployed in that province in the very near future, with full equipment, food, fuel and resources. As I said, the question dealing with the reserves should be addressed to the minister assisting. The question of rotation will be dealt with when that becomes relevant.1021210212Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—My question is addressed to the Minister for Financial Services and Regulation. Can the minister inform the House what the government is doing to attract large international mutual funds to Australia?10212Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—As a result of initiatives that the government passed through the parliament in June and as a result of our discussions and our recent trip to New York, Merryl Lynch has announced the launch of 12 international funds out of Australia over the next few months. These 12 international mutual funds will raise in excess of $US1 billion from Australian mums and dads for global investment. This is an excellent initiative. It follows on the expansion over the last six months of operations in Australia of Dow Jones, Goldman Sachs, Morgan Stanley, Societe Generale, Deutsche Bank, the Asia Loan Market Association and the Financial Intelligence Agency.It is no surprise that the Labor Party would choose not to listen to this, because the Labor Party has had absolutely no hand in helping to deliver jobs to the Australian people. It is no surprise that a company like LookSmart—Australian innovation; Australian product—has gone to the United States to try to raise in excess of $US230 million to fund their operations. Good, smart Australian companies have had to go the Nasdaq and launch operations in the United States to get ahead. LookSmart now employs over 500 people in the United States. As a result of the initiatives announced yesterday companies like that will have the opportunity to employ Australians and to raise capital in Australia.Mr Speaker, it is no surprise that the Labor Party has been flailing today in its analysis of the Ralph review from yesterday. Do you know why? It is because the Labor Party gets its tax policy advice from the union movement. Mr Speaker, I do not know if I can reveal my sources for that.Opposition members interjecting—DK6Mr HOCKEY—Well, if I am being pushed into it: the source of the Labor Party's tax advice is none other than the union movement. That was best explained by Peter Walsh. Do you remember him? Peter Walsh, former finance minister of the Labor Party, said in the 1980s:The ACTU, as usual, was a significant obstacle to fair and just tax policy.John Edwards in Keating: The Inside Story said:The ACTU had an influence that approached an effective right of veto over the new tax.When it comes to initiatives in the financial centre and when it comes to taxation initiatives to attract businesses to Australia we get our tax advice from the people who pay tax—the business community. That is the big difference. You get your advice from the union movement.Opposition members interjecting—10000SPEAKERMr SPEAKER—I find it rather extraordinary that the Leader of the Opposition should be seeking the call and denied the call simply because of the amount of noise behind him.PE4BEAZLEYMr Beazley—You've got to have a sense of humour.10000SPEAKERMr SPEAKER—The Leader of the Opposition wants the call. The Leader of the Opposition does not yet have the call. I call the Leader of the Opposition.1021310213Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Prime Minister. Prime Minister, is it not a fact that, following the Liquica massacre in early April, Portugal, as a party to the UN sponsored negotiations, expressed strong reservations about the total inadequacy of the security provisions in the draft tripartite agreement? Has the Prime Minister seen media reports that in April this year Australia despatched a senior diplomat to New York to dissuade Portugal from insisting on international peacekeepers in East Timor? Who was the senior diplomat sent to press the Portuguese, and when did he go to New York?10213Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I would be perfectly happy to examine that report and perfectly happy to get advice on it. If there is anything further that I can add, I would be very happy to provide that to the House. I do not immediately have the answer. I must say that, although I read things very carefully and I try to keep across the paper that comes to my desk, I do not retain in my mind the travel movements of every diplomat who represents Australia abroad. I would be very happy to check that out, and if there is anything I can provide to the Leader of the Opposition and to the House I would be very happy to do so.The question asked by the Leader of the Opposition is of a piece with the proposition that continues to be advanced that, in some way, it would have been possible to inject an international peacekeeping force into the situation in East Timor in advance of the holding of the ballot. All roads lead to that Rome as far as this particular argument is concerned. It is a proposition that the opposition advances, and they are entitled to do that. But we are equally entitled to make the obvious point that no less a person than Kofi Annan, the Secretary-General of the United Nations—who, arguably, along with the leadership shown by Australia, played a bigger role than anybody else in bringing about the insertion of the peacekeeping force that is now there—not only cast doubt on the peacekeeping force into Timor before the ballot was held but also made it very plain that, if the international community had sought to marshal an international peacekeeping force before then, the ballot would not have taken place.If there is one thing that we can be absolutely certain of it is that, if this government—or indeed any government around the world—had done anything to prevent the holding of that ballot after the 25 years of pain that the people of East Timor had gone through, we would have been condemned from one end of the country to the other. Those who would have been loudest in condemning us would have been those who sat opposite. Those who now say, `You could have got peacekeepers in,' are being completely wise after the event. Nobody who understands this situation seriously believes that it would have been possible to have got the peacekeepers in, to have got the support of the Indonesians for that to have occurred and to have preserved the timetable of the ballot. Indeed, if the world had made to inject peacekeepers before the holding of the ballot, Dr Habibie would have, in my view, run away from the proposition he put at the beginning of this year, and we would now be debating the point that East Timor's independence was as far away as it has ever been over the last 25 years.1021410214Ronaldson, Michael, MPMr RONALDSONXT4BallaratLP10—My question is addressed to the Minister for Foreign Affairs. Would the minister inform the House of the steps the government is taking to address humanitarian needs in East and West Timor?10214Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—I thank the honourable member for his question and appreciate his concern about the humanitarian situation that the people of East Timor are now facing. As the House knows, hundreds of thousands have lost their homes and are in urgent need of food, shelter, medicines, water, sanitation and protection. Australia is playing a key part in the coordinated international effort to help these people. Australian logistical support has been critical to ensuring a quick international response to the humanitarian crisis in Timor. Provision of warehouses in Darwin provided a base for aid agencies to pre-position supplies for delivery to Timor. Australian funded commercial transport are carrying food, shelter, materials, medical equipment and supplies to East Timor. An Australian funded barge will leave Darwin for Dili either today or tomorrow carrying 130 tonnes of humanitarian relief supplies and also some vehicles. An Australian funded transport plane is also moving personnel and equipment for the United Nations relief coordinator to Dili today.Emergency aid drops, as the House would know, began last Friday following approval from the Indonesian authorities for the flights late on Thursday night. I am pleased to say that, after a period of flights not being possible because of the arrival of the multinational force, flights have now resumed. Four flights are due to take place today using Australian Defence Force and other international military aircraft as well as a World Food Program C130. These flights will drop emergency ration packs and high energy biscuits, and the combined drops will feed over 40,000 people. It is important that the House understand that the situation in West Timor, not just in East Timor, is very grave and that it is very difficult to get access to the displaced East Timorese in the refugee camps in West Timor. The international community is working to free up access to these camps to provide relief and protection. The Australian embassy in Jakarta's representative is today visiting camps in West Timor with a United States led international mission. These are initial contributions only. The government is committed to the needs and the development of the East Timorese people. This is, of course, going to be not a short-term task but a long-term task. It is a task to which we are committed.1021410214Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—My question is addressed to the Prime Minister and concerns his claim yesterday that he raised the issue of peacekeepers with President Habibie at the 27 April Bali summit. Prime Minister, is it not a fact that on 11 May, two weeks after the Bali summit, your foreign minister gave a written answer to a question on notice in these terms:Australia's position has been to advocate for involved parties to first pursue dialogue before recourse to a peacekeeping presence. Peacekeeping operations have often been seen as a panacea by parties in conflict, and in that way, can undermine rather than advance the process of conflict resolution . . . discussion of peacekeeping is premature.Prime Minister, was this the position you put to President Habibie in Bali?10214Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—The answer to the first part of the question is yes. The answer to the second part of the question is no. If the member for Kingsford-Smith is unwilling to accept my version of the discussion that I had with Dr Habibie perhaps he would be willing to accept the version proffered by the spokeslady for Dr Habibie, Dewi Fortuna Anwar, who not only said that I raised it on one occasion; she alleged that I raised it on three occasions during the Bali summit. I think most members of the parliament would see no inconsistency between that and what the foreign minister has said.1021510215Lloyd, Jim, MPMr LLOYDIK6RobertsonLP10—My question is addressed to the Minister for Foreign Affairs. Can the minister inform the House of the government's response to the tragic earthquake disaster in Taiwan?10215Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—Mr Speaker—DT4CREANMr Crean—Bozo!10215Downer, Alexander, MPMr DOWNER4G4MayoLPForeign Affairs10—I am glad the opposition finds the earthquake in Taiwan so amusing. On this side of the House the Australian government, and I think the Australian people, would like to offer our sincere condolences to the people of Taiwan for the grievous—QI4PRICEMr Price—Mr Speaker, I raise a point of order. It is outrageous to make that suggestion about the opposition.10000SPEAKERMr SPEAKER—The member for Chifley does not have a point of order.QI4PRICEMr Price—Mendacity is allowed, is it?10000SPEAKERMr SPEAKER—The member for Chifley does not have a point of order. In fact, there was an exchange that I thought inappropriate from both sides of the House.QI4PRICEMr Price—Mr Speaker, I ask that the comment be withdrawn.10000SPEAKERMr SPEAKER—I do not propose to require that any comments be withdrawn, given that comments were made on both sides that I considered inappropriate but not unparliamentary.DH4HOLLISMr Hollis—Mr Speaker, I would like it withdrawn because I didn't say a word. I was sitting here waiting for the answer. The minister said `the opposition' and branded all the opposition. The member interjected; it wasn't from all the opposition.10000Mr SPEAKER—The member for Throsby will resume his seat. I have ruled on the matter. I call the Minister for Foreign Affairs.4G4Mr DOWNER—On behalf of the Australian government and people, I would like to offer our sincere condolences to the people of Taiwan for the grievous losses they have suffered as a result of the severe earthquake that occurred yesterday. Australia has a strong economic partnership and close people-to-people links with Taiwan. Indeed, Taiwan is one of our top 10 trading partners. The Taiwan community in Australia numbers some 25,000 people, and they make a very strong contribution to our society. The Australian Commerce and Industry Office in Taipei is at the moment remaining in close contact with the local authorities to determine whether any Australian citizens are among the victims. So far there are no reports of Australian casualties.As a result of Australia's deep concern about the situation in Taiwan, the Australian government has offered to send Australian disaster response experts to assist the United Nations disaster assessment and coordination team in Taiwan. I think it is entirely appropriate that Australia should offer to provide support at this tragic time.1021510215Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—My question again is to the Prime Minister. Prime Minister, in your letter to President Habibie last December, did you emphasise the longstanding Australian position that the interests of Australia, Indonesia and East Timor were best served by East Timor remaining part of Indonesia? Didn't you press Dr Habibie to pursue an autonomy package along the lines of the New Caledonia Matignon Accords and thereby defer a decision on East Timor's final status for many years, and, to quote you, `allow time to convince the East Timorese of the benefits of autonomy within the Indonesian republic'? Prime Minister, in reality, wasn't your proposed strategy fundamentally at odds with the fast-track approach subsequently adopted by President Habibie? If your letter was a catalyst for change, isn't it the case that the outcome was something very different from what you sought?10216Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—In answer to the honourable member for Kingsford-Smith, his summary of the thrust of that letter is broadly right. It is true that our position was—as he knows, because he criticised it—to argue for autonomy for a period of time in advance of independence, if that was what people ultimately wanted. The catalyst for the letter was that for the first time an Australian government was advocating to the Indonesian government that there should be an act of self-determination by the people of East Timor.We were the first ever to have done that. The Keating government did not do it, the Hawke government did not do it, the Fraser government did not do it and the Whitlam government did not do it. So, broadly, our proposition at that stage was that there should be this period of autonomy. In reality, I do not shy away in any way from saying that our position was initially that there should be a period of autonomy followed by a process that could have led to independence. At the time we were criticised by both the Leader of the Opposition and the member for Kingsford-Smith. Both of them said at that time, `No, that is not going far enough. You should go to independence.' They themselves, of course, in government, under Mr Keating, failed to do that—that government having been the most acquiescent of all the Australian governments towards the Suharto regime. There is one thing that can never be rewritten and that is the acquiescence of the Keating government towards the Suharto government.The other point that I would make to the member for Kingsford-Smith is that it is true, as I indicated in my speech yesterday, that Dr Habibie went further than what was advocated in that letter, and in the process—as I argued yesterday, and it is undeniably the case—created an absolutely irreversible dynamic. The proposition that an Australian government—the President of Indonesia, unexpectedly, for the first time for a quarter of a century having said, `I will allow an act of self-determination that involves the option of independence'—should then turn around and argue, after all that had been advocated in this country and all that had been advocated around the world, and from within large sections of the Australian Labor Party in particular, that, `No, this is going too far—please stop,' is a ridiculous proposition. It is not a proposition that was seriously argued at the time.But it does not alter the fact that the letter that I wrote on behalf of the Australian government represented a historic change in the attitude of Australian governments because for the first time we advocated a move away from the perpetual sovereignty of Indonesia over East Timor. We argued not only that should they engage the leadership of the East Timorese people but also that they should have an act of self-determination. We had argued for that in a way that the previous government had not done so, and it represented a historic change in Australian attitudes.It is true that Dr Habibie, to the surprise of many, went further—I think to his credit. I remain of the view that Dr Habibie has displayed great courage and that he has not received the praise around the world that he is entitled to, both in relation to the leadership he showed on democracy and also in relation to the giving of a vote to the people of East Timor. So I say to the member for Kingsford-Smith, yes, your broad analysis of what that letter said is correct, and the situation is as I have outlined it.1021610216Gash, Joanna, MPMrs GASHAK6GilmoreLP10—My question is addressed to the Minister for Veterans' Affairs. Can the minister inform the House what action the government is taking to ensure that the families of servicemen and servicewomen who have been deployed to East Timor are receiving the support that they require?10216Scott, Bruce, MPMr BRUCE SCOTTYT4MaranoaNPVeterans' Affairs; Minister Assisting the Minister for Defence10—I thank the member for Gilmore for her question. She represents a very important naval and defence installation. I know that she, along with many other members of the House, has taken a very real interest in what Defence and government are doing to ensure that those families and next of kin are supported whilst the troops are deployed in East Timor.The National Welfare Coordination Centre has been established and that is going to provide a 24-hour point of contact for families and the next of kin of ADF personnel who are deployed in East Timor. The National Welfare Coordination Centre tasks include, firstly, providing the Defence Community Organisation with details of families of deployed soldiers so that they can establish contact and assess the families' needs and, secondly, developing family support plans in conjunction with the regional Defence Community Organisation officers. This may include assistance in areas such as home maintenance. For the benefit of members of the House, the contact number for the centre is a 1800 number. Many members may be interested in it because they may get calls from constituents. The number is 1800 801 026.Further to that, the centre supplements the usual support provided to families by Defence Community Organisation officers and the Family Information Network. Already in its first day of operation, the centre responded to some 270 calls. That is a measure of the importance of this centre. The Family Information Network for Defence took some 140 calls. They are certainly being utilised for the reasons they were put in place. Equally important, the families will be given contact details of regional defence community organisations. Obviously, officers in regional areas are also very important to families out in those areas.The Defence Community Organisation will also sponsor social gatherings which will promote networking and also reinforce the valuable role that spouses and families play—one that we should acknowledge as a parliament. On top of this, the Department of Veterans' Affairs will provide automatic treatment for post traumatic stress disorder, and personnel and their dependants will have access to the services that are provided by the Vietnam Veterans Counselling Service, including in regional areas. Many parts of regional Australia do not have a Vietnam Veterans Counselling Service but, with agency arrangements that are in place, some 300 counsellors are in regional areas across Australia. We are not forgetting the regional dimension of where defence personnel so often are drawn from.Also, some seeding grants will be made available under the Defence Family Support Funding Program for groups with initiatives that are designed to support families while personnel are on the deployment. Further, we have had a lot of inquiries in relation to mail deliveries to those deployed into East Timor. Arrangements are being made for regular mail deliveries. I ask the House to understand that defence personnel have only just arrived in East Timor and are establishing their base and the security of the area. When those arrangements are put in place, they will be made available to the families. Also, that information will be available on Defence's web site.ZD4HOWARDMr Howard—Mr Speaker, I ask that further questions be placed on the Notice Paper .Personal Explanations1021715:18:0010217Horne, Bob, MPMr HORNEUU5PatersonALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the member for Paterson claim to have been misrepresented?UU5Horne, Bob, MPMr HORNE—I do, grievously.10000SPEAKERMr SPEAKER—Please proceed.UU5Horne, Bob, MPMr HORNE—In the answer given by the foreign minister, I claim to have been misrepresented. Like most of the opposition, I was sitting quietly, waiting for the foreign minister to respond.10000SPEAKERMr SPEAKER—The member for Paterson will resume his seat.Opposition members interjecting—10000SPEAKERMr SPEAKER—As has been the practice for as long as I have been in the parliament, a personal explanation must indicate where a person as an individual has been misrepresented, not as a member of a group. The standing orders clearly cover that.15:19:0010217Emerson, Craig, MPMr EMERSON83VRankinALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the member for Rankin claim to have been misrepresented?83VEmerson, Craig, MPMr EMERSON—I do, most grievously so.10000SPEAKERMr SPEAKER—Please proceed.83VEmerson, Craig, MPMr EMERSON—When the foreign affairs minister rose to his feet, he said that we were all laughing about the tragedy in Taiwan. I have a large Taiwanese community in my electorate.10000SPEAKERMr SPEAKER—The member for Rankin will resume his seat.Questions to the Speaker102181021810218Bevis, Arch, MPMr BEVISET4BrisbaneALP00—Mr Speaker, in accordance with standing orders, I ask that you write to the following ministers in relation to questions which I placed on notice on 7 June. They are question 697 to the Minister for Employment, Workplace Relations and Small Business, question 701 to the Minister for Health and Aged Care, question 703 to the Minister for Education, Training and Youth Affairs, question 705 to the Attorney-General and question 708 to the Minister representing the Minister for Justice and Customs, all of which are outstanding. In accordance with standing orders, I request that you write to them seeking a response.10218Mr SPEAKERMr SPEAKER10000PON/A10—I will take that action.Mrs Crosio interjecting—10000SPEAKERMr SPEAKER—The member for Prospect!Opposition members interjecting—10000Mr SPEAKER—I will check the Hansard and, if I have misrepresented the member for Prospect, I will take that up with her separately. I responded, not surprisingly, to her interjection.Personal Explanations1021815:21:0010218Brereton, Laurie, MPMr BRERETON5T4Kingsford-SmithALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the member for Kingsford-Smith claim to have been misrepresented?5T4Brereton, Laurie, MPMr BRERETON—Yes, I do.10000SPEAKERMr SPEAKER—Please proceed.5T4Brereton, Laurie, MPMr BRERETON—Mr Speaker, during question time the Prime Minister said that the opposition had criticised the government's attitude to self-determination and that the opposition had called for the government to go further to advocate independence. That is not so. We shared the view that this was a matter for self-determination.10000SPEAKERMr SPEAKER—The member for Kingsford-Smith understands that he must indicate where he has been personally misrepresented.5T4Brereton, Laurie, MPMr BRERETON—I was named and I was misrepresented, Mr Speaker.10000SPEAKERMr SPEAKER—The member for Kingsford-Smith will understand precisely why I intervened when I intervened—because he had not indicated where he had been personally misrepresented. I invite him to come to that matter.5T4Brereton, Laurie, MPMr BRERETON—The assertion by the Prime Minister that I had advocated such a position is incorrect. What I advocated was that this is a matter for the East Timorese, that the Australian government should not express a preference and that our concern was for the security of the process.Auditor-General's Reports102181021810218Mr SPEAKERMr SPEAKER10000PON/A10—I present the Auditor-General's audit reports Nos 10 and 11 of 1999-2000 entitled Financial statement audit—Control structures as part of the audits of financial statements of major Commonwealth agencies for the period ended 30 June 1999 and Summary of results and Performance audit—Financial aspects of the conversion to digital broadcasting—Australian Broadcasting Corporation and Special Broadcasting Service Corporation .Ordered that the reports be printed.Documents1021810218Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—Papers are tabled as listed in the schedule circulated to honourable members. Details of the papers will be recorded in the Votes and Proceedings .Motion (by Mr Reith) proposed:That the House take note of the following papers:Airservices Australia Corporate Plan July 1998-June 2003Aged Care Standards and Accreditation Agency Annual Report 1997-98 Corrigenda to the National Health and Medical Research Council 1999 Grants Book.Debate (on motion by Mr McMullan) adjourned.Matters of Public Importance102191021910000SPEAKERMr SPEAKER— I have received a letter from the honourable member for Hotham proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the government to meet its commitment to produce a business tax package that is revenue neutral.I call upon those members who approve of the proposed discussion to rise in their places.More than the number of members required by the standing orders having risen in their places—15:24:0010219Crean, Simon, MPMr CREANDT4HothamALP00—The Treasurer has had an interesting week. First there was the humiliation of Jeff Kennett last Saturday and then there was the football. Two more points to Essendon and he would have had the perfect weekend! Yesterday the Treasurer announced a business tax package that he says will not need to be changed for another 50 years. Then in his press conference he announced a `new standard of fiscal accountability'—that is, if the Treasurer has a `disposition' to do something in the future, the dollars can be counted now. This is a truly revolutionary concept. And then last night, as Labor was poring over the detail, elsewhere we had Lachlan Murdoch delivering what can only be described as the surrogate Placido Domingo speech.Finally this morning, on Radio National, we heard the Costello doctrine on tax policy—that is, oppositions should never seek to negotiate on tax policy. In the past, he said, the practice has always been to immediately endorse government tax policy. That is what the coalition always did from opposition, isn't it? Except for a couple of occasions, like its opposition to capital gains tax; its opposition to fringe benefits tax; its opposition to ending tax deductibility for entertainment; its opposition to taxation of foreign source income; its opposition to trust stripping; its opposition to reform of superannuation taxation; its opposition to petroleum resource rent tax; and its opposition to reform of employee share ownership.This is the same member who said, in 1995, that he would oppose Labor tax legislation `root and branch'; `we've knocked off the last two, and we plan to knock this one off as well,' he boasted. So much for the precedent of oppositions automatically supporting governments' tax policy. And so much for his approach to bipartisanship in trying to get a result. So we will not, be accepting his demand that we agree immediately to the whole package. We will not, because he has never done it and, more importantly, because the material he has given us is so incomplete.For all the Treasurer's assertions that his great tax adventure is over, it is not. For a start, it fails the revenue neutrality test. Yesterday's release of the Ralph Review of Business Taxation and the government's response is a good basis for negotiating competitive business tax reform in this country. There are many initiatives proposed by the government that Labor can support. Indeed, many reflect Labor policy. They include a lower company tax rate; simplification of the tax arrangements for small business; better depreciation arrangements for small business; measures to encourage greater investment in venture capital in Australia by foreign pension funds; pooled development fund relief for Australian institutions investing in venture capital as well; rollover relief for scrip for scrip takeovers; and some tighter anti-avoidance measures. In addition, Labor even has a preparedness to look at other capital gains tax measures to promote a more active investment climate.However, the key weaknesses of the government's response are its deferral of a number of the hard decisions, particularly in relation to the taxation of trusts, the opening up of new tax avoidance opportunities, and the failure to deal with some existing tax avoidance practices pointed out by the Ralph committee. By doing this it has sacrificed revenue neutrality, to the tune of $3.8 billion. Despite the Treasurer's promise that this package would pay for itself, it does not—but it can, although at the moment it does not even come close. If the detail of the tax avoidance and trust issues are addressed, it can. If the government is prepared to bite the bullet, talk with Labor and work to address the shortfall, it can be done. But at the moment it fails the revenue neutrality test—a parameter imposed by the GST, imposed by the Treasurer himself, and now being squibbed by the Treasurer. The Treasurer would have you believe that he has already met the test. He wants people to believe it. He gets us there by telling us about his `predispositions'. This Treasurer has both taxing and spending predispositions.We know about the $3.8 billion shortfall, but that is not the end of it. There are also the Treasurer's spending predispositions as well. To offset the considerable impact that the package may have on some areas of industry, he has announced that the government:. . . will be prepared to consider such projects, in the context of an expanded strategic investment coordinating process, including consideration of the option of targeted investment allowances.This gobbledegook means that the government may have to pay a grant to some businesses in order to ensure the important investment proceeds. Some very major projects may need to be assisted in this way, especially large resource projects. For this assistance to be meaningful, it is going to have to be very large indeed, as it is partially replacing over $10 billion worth of depreciation savings announced in his package yesterday.But we do not have any indication of the amount of money that has been set aside, or even if it has been set aside. So we have here a predisposition to spend but not to cost it. We suspect that there is no provision being made for these enormous further costs—a fact that the Treasurer was given the opportunity to address in question time today but again also squibbed. The extent to which there is none makes the revenue neutrality shortfall even larger than the $3.8 billion disclosed by the Treasurer. This is an important area that has to be explored more closely. As usual, this Treasurer has not provided the relevant information. He has hidden the detail in amongst other items so that we cannot see the actual effect of the separate decisions.His predispositions also extend to claiming savings from yet to be announced measures. Let us have a look at the attachment to the Treasurer's release yesterday. The only fiscal information provided by him was one table at the back of the release. It provides aggregate information only, and there is a deliberate strategy of not itemising separate decisions, so decisions are bundled together. There is a deliberately non-transparent methodology. So much for your Charter of Budget Honesty. Each measure should be separately disclosed. There should be some budget honesty about this process.The real impact, as I have been saying, is the bolded line headed `Overall impact of announced measures'. That discloses the $3.8 billion shortfall. Then we have the extraordinary next line, which is the deferred measures. So the Treasurer is trying to include measures which his cabinet has either rejected or specifically deferred by saying that he is predisposed to them. It is further qualified by the footnote in his table which says that the revenue from these measures is dependent upon the time of implementation. Remember the `never, ever' state taxes being abolished in the GST package? This is another cut at it. It is code for saying that they may never happen. Indeed, until the measures are agreed and legislated, we should treat them as not going to be implemented by this government. Just as we have draft legislation before us reflecting the decisions taken, we should see the legislation confirming these predispositions, to complete the package—to complete what has not yet been completed. But the secrecy and duplicity was exactly the same flawed strategy as the government pursued with the GST package. It has not supplied the relevant information.There are other critical areas of costing information which need independent analysis. One of them is the assumptions concerning the capital gains tax. This is a Treasurer who is arguing that tax avoidance will be tiny. The Ralph report, at page 732, admits that there will be tax avoidance from halving the capital gains tax, but then puts in a ridiculously low cost at only $20 million in year 1 rising to $180 million in year 5. This is simply not credible, especially if you do not bring in provisions to attempt to deal with the problem—another point of a question asked today which he refused to answer. Perhaps the Treasurer should seek advice from the last Liberal Treasurer, John Winston Howard, about the size of tax avoidance converting income into capital gains. He has a bit of experience in presiding over such a regime.For all of these reasons, I have written to the Treasurer seeking a detailed briefing from Treasury officials on the modelling underlying the package. It is an important first step in the process of public disclosure. This will be a pointer to how open and transparent the government will be. If he chooses not to cooperate, then we can conclude that he is hiding something, as he was with the GST. The only way the truth came out with the GST was a full Senate inquiry. We have always said we do not need to go down that route if the government is cooperative in providing full information. Unfortunately, it looks as though the Treasurer is determined to keep going down the secrecy route. If that is the case, then he will reap what he sows.The package represents a further loosening of fiscal policy at a time when we have an unsustainable current account deficit and when people are already beginning to worry about the fiscal irresponsibility of the government—a government that already has form with the GST package. It is almost as if we are now in the position that, so long as there is a surplus, there will be no public examination of fiscal policy. This is a wrong principle. Being soft on tax avoidance is not a worthy use of public funds and it should not be tolerated. This is the same Treasurer who, within the last week, has said that he wants to cut expenditure in order to pay for our national defence effort in Timor. Yet he is happy to dismiss a nearly $4 billion shortfall just a few days later. He has the priorities of Jeff Kennett as well as his arrogance.Labor supports a lower company tax rate. However, the extent of the cut and the means of funding it must be carefully considered. The proposals need further explanation and investigation. But they are a sensible basis on which to commence negotiations. In particular, it will be important to test with affected industries the impact of the trade-off between the lower tax rate and the abolition of accelerated depreciation. Labor welcomes the announcement concerning venture capital and scrip for scrip. To a very significant extent, it picks up Labor's policy.9V5PYNEMr Pyne—Ha, ha!DT4Crean, Simon, MPMr CREAN—Don't you laugh, you know it is true; and so does the Treasurer but cannot admit it. This was the same policy, I might add, that they wanted to ridicule at the last election.CT4COSTELLOMr Costello—We did ridicule the policy.DT4Crean, Simon, MPMr CREAN—There he is. The Treasurer said that he did ridicule this policy, and now he has picked it up. More fool you, Treasurer. Other measures, particularly the across-the-board cut to capital gains tax, need more analysis. In particular the new Costello avoidance opportunities have to be properly analysed. Inadequate information has been provided by the government to allow Labor to make a final judgment. The trade-off is simple. If this package does not pay for itself, then ordinary punters paying the GST will have to. That is not acceptable to Labor, nor should it be acceptable to the Senate, so we must ensure that the figures are real.Labor will support all measures designed to attack tax avoidance. However, the package does not go far enough. What we have said is that we will seek, through confidential briefings, access to the information that is not contained in the material. There does remain a strong basis for getting agreement to business tax reform. Labor is committed to an outcome which yields a more competitive Australian business sector with more jobs and investment. We will continue to talk with business and to pursue a constructive reform outcome. We have written to the Treasurer seeking detailed briefings on this report. Let us see how he responds to that to test whether he is genuine about entering any dialogue. In addition, we will continue our discussions with the business community, with the Democrats and with the government to find the common ground. If we can find that common ground, we will expedite its passage through both houses of the parliament. (Time expired)15:39:0010222Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—Mr Deputy Speaker, the one thing you did not hear in that speech, and he read every word of it, was a policy. The Deputy Leader of the Opposition gets up here announcing Labor's response to the biggest overhaul of business taxation that this country has ever had and what he says is, `I can't make my mind up. I'd like to have some briefing, I'd like to talk to some other people and then I'll try and make a decision.' The one thing you never hear from the Australian Labor Party is a policy. You never get a policy out of them.He said that he wants lower company tax, he wants a simplified taxation system, he likes venture capital cuts, he likes scrip for scrip rollover, he likes capital gains tax cuts and he wants revenue neutrality. In other words, he will support every cut but he will not support any one of the measures which is required to pay for them. Yet his real objection is that we do not have revenue neutrality. Did he say that he supported the change in accelerated depreciation? No, he did not. The change in accelerated depreciation is the one key measure that funds the package—the one thing that he studiously avoided saying anything about. Did he say that he supported the pre-payment rule, the second-largest funding of the package? No, he studiously avoided that. He says, `I'll support every cut, I won't commit myself on any funding measure, and my real objection is that there is no revenue neutrality.' It is intellectual bankruptcy—complete intellectual bankruptcy. He cannot get up here and say, `I will support a lower company tax rate paid for in an accelerated depreciation trade-off.' That is the first thing you could have committed yourself to. No, he only supports the lower company tax rate. He wants to have a look at accelerated depreciation and he wants revenue neutrality.He supports a simplified tax system, which of course cuts company tax rates, but he does not support the pre-payment measures. He is just in favour of every tax cut that is going and he wants more revenue neutrality. I must say it is intellectually barren. I have said this before: Labor was not always intellectually irresponsible. There was a time in the mid-1980s when Labor actually had people who thought about economic policy. During the period of Hawke and Keating there were people who were serious about economic policy. A test, I guess, of Labor's seriousness about economic policy was that in 1985 the Labor Party supported a broad based consumption tax. It was prepared to do something in the national interest. It had people who were prepared to go out there and argue a case, but now Labor has slipped into the so-called leadership of people who have never had a serious economic thought.The Deputy Leader of the Opposition claims that this is an endorsement of the Labor Party policy before the last election. The Labor Party had two key policies before the last election. One was to put a capital gains tax on all assets bought prior to 1985. It was your key policy.DT4CREANMr Crean—No, it wasn't.CT4Costello, Peter, MPMr COSTELLO—It was your key capital gains tax policy, which was debated right throughout the election campaign.DT4CREANMr Crean—It wasn't.CT4Costello, Peter, MPMr COSTELLO—It wasn't your policy?DT4CREANMr Crean—It wasn't the key policy.CT4Costello, Peter, MPMr COSTELLO—It wasn't the key policy, it was just one of the policies.DT4CREANMr Crean—What about the pension funds? What about tax credits?10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—The Treasurer should ignore the deputy leader.CT4Costello, Peter, MPMr COSTELLO—What they were arguing before the election was that Australia really needed a new capital gains tax at full marginal rates on pre-1985 assets. That is what they argued right throughout the election campaign. When they lost the election, they came out and said, `Oh, that was actually a wrong policy.' Whoops! As I said before, the luckiest thing for them was that they were not elected, because if they had been elected, by their own admission, they were trying to get elected to introduce a wrong policy. `We were saved from ourselves,' they say.Their other key policy, and I remember it well because of a very memorable sound bite from the old deputy leader himself, was that they were going to tax the Toorak tractors. That was their other policy. What Australia really needed was higher tax on four-wheel drives. With all of the trade union bluster that he could muster from a lifetime career in trade unions, he said that he was going to tax the Toorak tractors. When they lost the election, they announced that that was a wrong policy too. They wanted to get elected to introduce two wrong policies, both of which they said after the election were wrong and were mistakes and should never have been introduced or adopted. The thing we can say for the Australian Labor Party is that the luckiest thing that ever befell them was that they were unsuccessful in the last election.We come now to the period of indirect tax changes, the big changes in the Australian taxation system, where Labor was AWOL. Labor was absolutely AWOL on the big changes to the Australian taxation system. When the history of this period is written—when the big changes in the Australian taxation system were being put in place in 1999—serious political commentators in Australia are going to ask how it was that the Australian Democrats became the second party of Australian politics. How is it? The Australian Democrats came to the government, recognising the mandate that the government had received, and made themselves relevant to the tax debate. As for Labor, again in one of its most memorable events, the great contribution I recall the Deputy Leader of the Opposition making to the indirect tax debate was his coming into this chamber with a thermometer. Do you recall that? His thermometer was his great contribution to tax reform. And coming into this chamber with his salad in his plastic bag. This was the party of Chifley and Curtin!Mr Emerson interjecting—CT4Costello, Peter, MPMr COSTELLO—Can you imagine it. Old Chif would have been saying, `Has my light on the hill come to being a thermometer at the dispatch box?'Mr Emerson interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The member for Rankin! Settle down.CT4Costello, Peter, MPMr COSTELLO—This is somebody who has been a career politician from birth—went into dad's business, through the trade union movement and into the Labor Party—and the contribution that he made in relation to the tax debate was to wave a thermometer. I said in question time and I will say it again: if the Labor Party can support national interest legislation, we would welcome them in doing it.DT4CREANMr Crean—Good.CT4Costello, Peter, MPMr COSTELLO—We would welcome them in doing it. If the Labor Party will stand up and will announce its support of the Ralph report—DT4CREANMr Crean—Oh, yes!CT4Costello, Peter, MPMr COSTELLO—a report which has been produced by three leading Australian businessmen after 12 months of inquiry—DT4CREANMr Crean—What about the deferred bits?CT4Costello, Peter, MPMr COSTELLO—If the Labor Party will stand up and say, `We will support the government and John Ralph'—a short sentence—then we can reform business tax in this system.DT4CREANMr Crean—Yes, but you don't support the deferred parts.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The Deputy Leader of the Opposition! Slow down.CT4Costello, Peter, MPMr COSTELLO—You can see it from the way in which the speech was framed: `We cannot think of any theoretical reason why this is wrong. We cannot think why it is wrong to have a lower company tax rate. We cannot think why it is wrong to reduce capital gains taxes. We cannot think why it is wrong to introduce a simplified taxation system for small business.' But what you heard was one of those little political speeches to try to set up an opportunity to do the wrong thing. That is the key thing that happened today: to open a gate to doing the wrong thing.It was not as if there was an argument today that it is wrong in principle to lower company tax, nor that it was wrong in principle to lower capital gains taxes, nor that it was wrong in principle to trade off indexation and averaging, nor that it was wrong in principle to have a simplified taxation system and nor that it was wrong in principle to change arrangements in relation to life insurance. You never heard an argument. What you heard was an attempt to try to construct a basis for opposition to good policy.DT4CREANMr Crean—Rubbish!CT4Costello, Peter, MPMr COSTELLO—That is what you came in here today to do. You said, `We will be entitled to do the wrong thing if we do not get enough detail on costing,' or, `We will be entitled to do the wrong thing if we can argue revenue neutrality against the government.' All you ever hear from the Labor Party is about a mandate or an entitlement to do the wrong thing; you never hear a policy.You would never hear the Australian Labor Party come in here and say, `We are against a lower company tax rate because our policy is a higher one, and we will tell you why.' You would never hear the Australian Labor Party come in here and say, `We are against cuts in capital gains tax because our policy is a higher one, and we will tell you why.' You never hear a theoretical underpinning on policy, and I think this is why the commentators are now saying that an opposition, used to saying no for so long, after a while loses the capacity to create.This is why I think you are seeing trouble in relation to the leadership of Mr Beazley and his deputy, because they have now had 3½ years to construct a policy but we have not got one. They could actually say, `All right, we will support the government on this policy. This government has been determined to lead. We will support you on this'—and this would be a good political stratagem—`because the business community supports it and it is right for the country.'Mr Nairn interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The member for Eden-Monaro should restrain himself.CT4Costello, Peter, MPMr COSTELLO—Then they could try to move on to some other policy issue where they could try to heighten the differences. That is what a responsible opposition could do. I can remember the period when we were in opposition when we would walk to the dispatch box and we would argue a policy position.DT4CREANMr Crean—You're joking!CT4Costello, Peter, MPMr COSTELLO—We would walk to the dispatch box and we would argue the GST day in and day out. We would walk to the dispatch box and we would argue income tax cuts until the government got to the stage where it actually implemented our income tax cuts. It said it would do it without a GST and won an election and came back into the parliament—DT4CREANMr Crean—Shameless!CT4Costello, Peter, MPMr COSTELLO—It was shameless.Mr Emerson interjecting—DT4CREANMr Crean—This is shameless.Mr Emerson interjecting—CT4Costello, Peter, MPMr COSTELLO—It was shameless. It was totally shameless—and you were part of it. You sit around here as if Paul Keating was somebody who is lost in the mist of history. You know, Paul who? You served behind him. You were part of his cabinet. You voted to increase every indirect tax after the 1993 election. Then you took away the income tax cuts and then you increased the company tax rates. You actually increased the company tax rates just to make sure it was a complete betrayal of the Australian electorate that was actually put in place.Mr Emerson interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—If the member for Rankin expects protection from the chair, he should restrain himself and should set an example to others. Also, if he wishes to remain here to participate in the debate, I counsel him to be silent.CT4Costello, Peter, MPMr COSTELLO—Let us come to fiscal responsibility, because I do appreciate being given lectures by the Australian Labor Party on fiscal responsibility. This was another one of their big points in this debate. The Deputy Leader of the Opposition does not actually give out costs. Mr Deputy Speaker, do you know what he does? He adds up six-year costs—`You add it up over six years.' We do not even budget over six years; we do four years on forward estimates. He repeated in his prepared text the cost of accelerated depreci ation of $10 billion, which is the accumulated cost over six years. What he does not say is that the accumulated savings, if you added them up over six years of the company tax cut, would be something like $18 billion. That is just to put a perspective on it.Even if it were the case that this had a net cost over a four-year period of $2 billion, the accumulated budget surpluses would reduce from $28 billion to $26 billion. That is the point I made in question time. I take it the Labor Party's point is that there is a significant difference and their support will hinge now on whether the accumulated budget surpluses of the next four years will be $26 billion or $28 billion. The key question in their mind is whether the accumulated surpluses of the next four years would be $26 billion on $28 billion, after taking into account this package.This is the proposition, apparently, now being seriously advanced by a political party that, in its last four years of government, produced a cumulative budget deficit of $57 billion. It is a turnaround between $57 billion of deficit and $26 billion of surplus. What is that? An $83 billion turnaround. When we argued that the Australian budget ought to go into surplus, we were fought every step of the way by the Labor Party. After we have put the budget into surplus, what does the Labor Party lecture us on? Fiscal responsibility. It is an extraordinary proposition, isn't it? You fought every single savings measure—you said the budget did not need to go into surplus; you said we would put the Australian economy into an economic downturn—you fought us every step of the way, and when we put the budget into surplus you lecture us on fiscal responsibility.Once upon a time, when the Labor Party had economic thinkers, the Keatings and the people who thought about economics, they would not even have advanced a proposition like that. That proposition is so intellectually shabby that it would not even have been advanced under the Hawke and Keating years. The way to get through business tax is to accept the recommendations that have been put to the government, to endorse the government's position to move on to reform the tax system and to make this economy productive again. (Time expired)DT4CREANMr Crean—It has expired without him addressing the point!10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—If the Deputy Leader of the Opposition has finished his disorderly remarks, I will call the honourable member for Rankin.15:55:0010225Emerson, Craig, MPMr EMERSON83VRankinALP00—The government's response to the business tax review contains a $4 billion hole. The Treasurer says that Labor quibbles about $4 billion. We do quibble about $4 billion because $4 billion can buy a lot of education for our children and a lot of health care—$4 billion is important. The government said very clearly and very early that the task of coming up with a response to the business tax review was to produce a plan that was revenue neutral. This package fails that test fundamentally by $4 billion. Why has it failed so abysmally that test of revenue neutrality? The answer lies in the government's unwillingness to take on the hard task—for them, but not for us—of dealing with tax avoidance through the use of trusts.This has a sorry history. When trusts started to explode in the mid-1990s, Labor started moving against those trusts. Labor introduced legislation into the parliament and it was blocked in the Senate by a combination of the Democrats and the now government, including the Treasurer advising them to block this legislation in the Senate. They did block it. We then went to the 1996 election and the present government was formed. In 1996, the government said, `We are going to do something about trusts,' but did not. In 1997, they said, `It is getting worse; we are going to do something about trusts,' and they did nothing. In 1998, when the government went to the federal election, they put in the ANTS package figures on the revenue that would be gained from attacking trusts—that is, tax avoidance through trusts—and they said, `We are going to do that,' but they did not. When they came to confront the issue, they said, `We will put that off to the business tax review'—and it has been put off to the business tax review. Mr Ralph, to his credit, said, `From 1 July next year, these measures should be implemented to attack tax avoidance through trusts.' What has the government said? `We're going to put it off for another year, to 1 July in the following year.'Why is the government putting off dealing with tax avoidance through trusts? The answer is quite clear: 17 frontbenchers on the government side hold trusts. This is a massive conflict of interest. They formed a special taxation committee, and they are all members of it of course. You can imagine the talk down the corridor. One says, `Are you going to the special meeting of the taxation committee?' and the other one says, `I wouldn't miss it for quids!' And you would not miss it for quids. You cannot afford to miss it if you are on the front bench, because 17 have these trusts.What has that done to the revenue neutrality of this package? It has blown it to smithereens because the overall impact, over the period of the measures that have been announced by the government in reducing the corporate tax rate, capital gains tax changes and so on, is $3.8 billion. That is the cost, but if you look at the line underneath that it says, `The impact of the deferred measures.' If you add those up over the same period, it is $4.22 billion. That is more than enough to cover the hole. These deferred measures are primarily the deferral of the government's decisions on trusts.The deferral was foreshadowed by the then Deputy Prime Minister of Australia and Leader of the National Party in his party room when he said, `We will kill this in cabinet.' Well, it looks as though they have had a great victory because the footnote on the deferred measures says:The revenue from the deferred measures is dependent upon the time of implementation.Someone had enough integrity to put that in. If these measures were going to proceed from 1 July 2001, they would be able to put the figures for those in here and fill the hole, but someone with integrity has admitted that there is no fixed date for the implementation of this legislation. We would take heart if we were able to see some legislation. The government has been drafting legislation hand over fist but not one line of legislation dealing with trusts.The Treasurer, on AM this morning, laid down the Costello doctrine. He said:Normally what happens when a government announces a tax policy is that an opposition gives it bipartisan support because they recognise that governments have to enact these packages . . . He went on to refer to `normal' rules. The Treasurer spoke in question time against opportunism on the part of political parties. That is the Costello doctrine—bipartisan support for any tax changes that a government introduces because, to use his words, `Governments have to enact these tax packages.'Do you know how many times the Costello doctrine was violated in the 1980s by the current Prime Minister of Australia? No less than 12 times. The coalition, then in opposition, voted against the Income Tax Assessment Amendment Bill (No. 2) 1984, which was an anti-avoidance measure. It voted against the Trust Recoupment Tax Assessment Bill 1985. The coalition certainly had form! It voted against the Taxation (Unpaid Company Tax Assessment) Amendment Bill 1985, which dealt with bottom-of-the-harbour schemes. It voted against the Taxation Laws Amendment Bill (No. 4) 1985 to remove the tax deductibility of entertainment expenses by big business. It voted against that! It is a case of, `You go out to your free lunches; it'll be subsidised by the taxpayers of Australia. That's our policy.' And we get lectured about opportunism!The coalition voted against Taxation Laws Amendment Bill (No. 3) of 1985 and the Fringe Benefits Tax Assessment Bill 1986. The coalition, the now government, opposed the Income Tax Amendment (Capital Gains Tax) Bill, which provided a capital gains tax and stopped high income earners converting their income into capital, thereby avoiding tax. In 1986 it opposed the petroleum resource rent tax, and it opposed it again in 1987. There we have it. There were also the Taxation Laws Amendment Bill (No. 4) 1988, the Taxation Laws Amendment Bill (No. 5) 1988 and the Taxation Laws Amendment Bill (No. 6). There are a dozen of them.These are the opportunists. `We are going to offer you bipartisan support,' is what we said to them, and we meant it. They said, `We have to have bipartisan support on all these things.' A dozen times! It happened in 1984, 1985, 1986, 1987, 1988, 1989 and 1990—I have not counted any of the repeated times that they did this during the 1990s. Will the Treasurer rebuke the Prime Minister for his opportunism during the 1980s? `Bad Prime Minister for being opportunistic!'We will have a good responsible look at this legislation. The shadow Treasurer wrote to the Treasurer time and time again. He said, `Give us some advance notice; give us access to the Ralph report so that we may have a look at this in the spirit of bipartisanship.' Last night the Treasurer was in the media saying, `I'm not going to deal with Labor because I can deal with my friends in the Democrats. We'll get an easier deal.' Dirty deals done dirt cheap with the Democrats!The Leader of the Opposition time and time again offered a bipartisan approach to this. The Prime Minister said, hands across the table, `Let's get into some sort of bipartisan spirit on business tax,' but they are not interested in that; they themselves are interested in opportunism. The Treasurer asked us during question time, `What do you support?' We support a lot of the measures here, but the fundamental measure that the government has deferred—that we will offer full bipartisan support to—is a long belated attack on tax avoidance through the use of trusts. The government do not have the courage or the willingness to take on their constituents, and they do not have the fortitude to look over the top of their conflict of interest—the 17 members of that tax review committee—to come up with a decent policy that will make for a fairer Australia.We have this huge $4 billion hole. How is that hole going to be paid for over time? It will be by ordinary Australians through extra tax and through further cuts in services—further cuts to education in this country, which has been cut savagely by this government, and further cuts to health, which has been cut savagely by this government. When will this government show some decency and take on what for them is a hard issue—that is, overruling the 17 people who have a conflict of interest—and do something, for once in their lives, for decency and fairness in this country? (Time expired)16:05:0010227Pyne, Chris, MPMr PYNE9V5SturtLP10—The Deputy Leader of the Opposition spent some time talking about tax avoidance. In the excitable way the government has come to expect from the Deputy Leader of the Opposition, he said in his speech that these changes do not go far enough. The member for Rankin, in his shabby way—which unfortunately surprised us on this side of the House—launched a very personal attack on people who hold trusts. He also talked about tax avoidance and asked why the government had not done something about tax avoidance earlier.This side of the House finds it amazing—it makes us laugh—that the Labor Party has a genuine belief that it can come into this House and lecture us about doing things about tax avoidance. After 13 years of Labor government one finds it hard to remember when it was denied the implementation of a tax avoidance measure. The coalition did everything it could to support the former Labor government when it was in power, but now that we are in government, Labor puts up every hurdle. It comes in and lectures us when, for 13 years, it had a chance to do something about tax avoidance. One wonders when they were going to do it. In the 14th year?In the 1993 election, Ralph Willis waxed lyrical about tax avoidance and how they were going to fix up trusts when they were in power. Was anything done after the 1993 election, Mr Deputy Speaker Jenkins? You were a member of the then government; you would remember. Nothing was done by Ralph Willis when he was Treasurer following the 1993 election. For 13 years, Labor failed to effectively manage the Commonwealth budget in this country. It left a legacy of debt, excessive largesse and economic failure, and it did it all with the c'est la vie attitude of the Bourbon regime of France.Labor is as economically illiterate as the rotten Bourbon regimes of continental Europe. Its capacity for self-delusion is legendary, but this matter of public importance has raised the high bar even further. How can the Labor Party genuinely believe that it can come into this House and lecture this government—the government that has delivered surplus budgets within three years of coming to office—about fiscal rectitude? It is like Mobutu Sese Seko of Congo or Nicolae Ceausescu of Romania trying to plead the case for equitable distribution of incomes.Labor's legacy to Australia included interest rates soaring above 20 per cent, record high inflation and a deficit of over $10 billion. This package of business tax reform is the most far reaching of its kind in the history of the Commonwealth. Don't just take my word for it, listen to what the President of the Taxation Institute of Australia said:Small business is a winner under the government's proposed New Business Tax System. Tax should no longer be a hindrance to the competitiveness of small business to the extent that it is at present.The Chief Executive Officer of the Investment and Financial Services Association said that:The reduction [to the company tax rate] will make Australia's companies and capital markets internationally competitive and will encourage new business ventures.The Director of the Institute of Chartered Accountants said quite simply, `This looks like an exceptionally good package.' Labor is so hopelessly lost on this issue that they remind me of what Benjamin Disraeli said when he commented, `They are not so much out of their depth as they are three miles from the shore.' Labor has had more sides about what to do in business tax reform than a 50 cent piece. It is not like they have not had plenty of choices about where to get advice. They could turn to the book of the member for Werriwa, they could turn to the book of the member for Melbourne, who is sitting near the dispatch boxes, or they could turn to the bible of the left launched by Martin Ferguson or the myriad other sources of advice set up by the Leader of the Opposition in the last few months because of his inability to make a decision. They could turn to these sources to know what to do next.The incapacity of the Leader of the Opposition to make decisions or stick to a decision was well documented by the Hon. Neal Blewett in his book A Cabinet Diary, in which he wrote that the Opposition Leader was `flawed by a streak of most un-Churchillian timidity'. Later in the book he explained why:For so outwardly aggressive a figure he is extraordinarily timid, fearful of the students over the loan proposals, fearful of the Bishops over Catholic schools, fearful now of the public servants over the proposed Austudy transfer.Labor are a rudderless ship, snatching desperately at straws to fend off the inevitable. Inevitably, they will have to look seriously at tax reform. I know, and the government side knows, that they are a bit burnt since the attempt at tax policy by the member for Holt at the last election, but they are going to have to do more work than has been put into this matter of public importance by the Deputy Leader of the Opposition.The government's business tax reform plan is a blueprint for more investment and more jobs in Australia. The most visible feature of a country's business tax system is its company tax rate. The measured reductions proposed to the company tax rate, from 36 per cent to 34 per cent and then to 30 per cent, will earn Australia a reputation as an attractive and efficient place to invest and do business. Compare the proposed package to the tax regimes of some of our international competitors. Australia will enjoy a company tax rate which is lower than those of the United States, New Zealand, Germany, Korea, the United Kingdom and most of our regional neighbours—the countries we are often competing with for international investment.This is a comprehensive package of reforms which will deliver Australia a world competitive business tax system. Reducing the company tax rate will encourage the expansion of less capital intensive industries, particularly industries which are exporting services, such as the tourism industry. Slashing the company tax rate will also foster a broader range of foreign investment which will extend beyond mining and manufacturing and make many of our domestic industries more internationally competitive. Yet we have our toy soldier shadow Treasurer grasping at straws, with a distorted interpretation of the report's figures. He claims that the government's response costs revenue around $3.8 billion by adding in the impact of the announced decisions together over six years. That has no foundation. As the Treasurer said in question time today and earlier in this MPI discussion, that claim is as plausible as claiming that the real budget deficit left by Labor was $57 billion, because that is what it would have been after six years of more of the same. If they would like us to, we are happy to use that figure instead of the $10 billion of actual budget deficit they left this country with after their term of office. We are happy to say it was $57 billion if they want to start getting into those sorts of rubbery figures.The report clearly indicates that the reforms are revenue neutral in the first two years—in 1999-2000 and 2000-2001. In the third year the reforms are revenue negative by approximately $1½ billion. Furthermore, there are some deferred measures disclosed in the report which may come into operation and which will raise approximately $800 million. If these deferred measures are adopted, we will have a bottom line of close to revenue neutrality after four years.Surely it is impossible for the member for Hotham, the heir to the poisoned chalice that is Labor's shadow treasury under our Treasurer, to ignore the advantages of a lower and more uniform application of company tax. Unfortunately, it seems that he is still hogtied to the ACTU just as his predecessor, the member for Holt, was. The member for Hotham does not understand—or perhaps the unions will not let him acknowledge—that Australia's economic future lies in the services industry. At present, just over 40 per cent of Australia's work force are employed in the service and information sectors. All available indicators show that this figure will increase as we move into the next century. That is why the government has done what the former Labor government never could—reform the broken tax system that this government inherited from Labor and give our emerging industries a chance to be internationally competitive.The business tax package is a shot in the arm for the service and information sectors. The services sector will benefit from venture capital investments, a lower company tax rate, lower personal tax rates and reduced compliance costs. Reductions to the capital gains tax rates will encourage investment and saving and ensure that the services sector continues to contribute to economic and jobs growth. So why doesn't the member for Hotham focus on this in his debate? Why does he always look for the negative? Why doesn't the member for Hotham come up with any positive ideas? Why does he try to pretend that for 13 years Labor could not make the changes that we are making? Why does he try to pretend they were going to do it in the 14th year?The member for Hotham should consult his colleague the member for Werriwa. He understands something that the rest of his colleagues do not: that economic efficiency is best achieved if consumption patterns are determined by the true cost of production, and not by tax considerations. The member for Werriwa and all the members on this side of the House know that the current tax system fails to achieve adequate efficiency. If Australia is to remain internationally competitive and to stay in front of the pack, we need to lower the company tax rate to 30 per cent, reduce distortionary measures in the business tax system and provide an `aspirational' incentive for Australia's small investors. We are a reforming government, but there is more work to be done. Last night on the 7.30 Report the Treasurer quoted some of the things that we are going to continue to tackle. He said:. . . there's a lot of work to be done at the Commonwealth level . . . We have a complete tax reform . . . We're reforming family entitlements.There's more work to be done in relation to welfare reform. We're privatising Telstra and retiring Government debt. There's more work to be done in relation to industrial relations.The faster we achieve reform the faster we will progress as a country. This tax package will deliver just that, and I commend it to the House.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! The discussion is now concluded.Committees10230102301023016:15:0010230Nehl, Garry, MPMr NEHLAE4CowperNP10—I present the report of the Selection Committee relating to the consideration of committee and delegation reports and private members business on Monday, 27 September 1999. The report will be printed in today's Hansard and the items accorded priority for debate will be published in the Notice Paper for the next sitting.The report read as follows—COMMITTEE AND DELEGATION REPORTSPresentation and statements1 AUSTRALIAN PARLIAMENTARY DELEGATION TO THE PHILIPPINES AND JAPAN: Report on the Australian Parliamentary Delegation to the Philippines and Japan.The Committee determined that statements on the report may be made, all statements to be made within a total time of 10 minutes.Speech time limits—Each Member—5 minutes.2 MIGRATION, JOINT STANDING COMMITTEE: Report on immigration entry arrangements for the Olympic and Paralympic Games.The Committee determined that statements on the report may be made, all statements to be made within a total time of 15 minutes.Speech time limits—First Member speaking—10 minutes.Other Members—5 minutes each.3 FOREIGN AFFAIRS, DEFENCE AND TRADE, JOINT STANDING COMMITTEE: Report on a visit to the Northern Defence BasesThe Committee determined that statements on the report may be made, all statements to be made within a total time of 10 minutes.Speech time limits—Each Member—5 minutes.4 FOREIGN AFFAIRS, DEFENCE AND TRADE, JOINT STANDING COMMITTEE: Report on Bougainville peace process.The Committee determined that statements on the report may be made, all statements to be made within a total time of 20 minutes.Speech time limits—Each Member—5 minutes.5 TREATIES, JOINT STANDING COMMITTEE: Report 25 , Treaties tabled on 11 August 1999.The Committee determined that statements on the report may be made, all statements to be made within a total time of 10 minutes.Speech time limits—Each Member—5 minutes.PRIVATE MEMBERS' BUSINESSOrder of precedenceNotices1 Mr Latham to move: That the House urges the Australian Competition and Consumer Commission to conduct a full-scale inquiry into the medical profession, focussing on:(1) anti-competitive practices, particularly among surgeons and specialists;(2) reform of medical training practices, particularly within the College of Surgeons; and(3) areas where the medical profession does not comply with trade practices law. (Notice given 11 August 1999.)Time allotted—remaining private Members' business time prior to 1.45 p.m.Speech time limits—Each Member—5 minutes.The Committee determined that consideration of this matter should continue on a future day.2 Dr Emerson to move: That the House:(1) expresses its concern about widening inequality in Australia;(2) notes the increasing evidence that the earliest years of childhood are vital in determining the life chances of young people;(3) recognises that early intervention in the form of parenting programs, home visiting and literacy and numeracy programs are valuable in improving the life chances of young people; and(4) acknowledges that the Commonwealth has an important role to play in the funding of early intervention programs. (Notice given 12 August 1999). Time allotted—30 minutes.Speech time limits—Mover of motion—10 minutes.First Government Member speaking—10 minutes.Other Members—5 minutes each.The Committee determined that consideration of this matter should continue on a future day.3 Mrs Elson to move: That the House: (1) acknowledges the financial sacrifice made by parents, one of whom choses to care for their children full-time, rather than return to paid employment;(2) recognises the social and community value of this full-time care, including the reduced burden on Government expenditure;(3) notes the social pressure on many of today's women with young children to remain in paid employment; and(4) welcomes the Government's ongoing commitment to provide real choice for parents by easing the financial pressure on Australian families by (a) continuing low interest rates, (b) the new, fairer tax system and (c) specifically, recognising the value of full-time care by more than doubling of the tax free threshold for single income families with a child under 5 years of age. (Notice given 20 September 1999. )Time allotted—remaining private Members' business timeSpeech time limits—Mover of motion—10 minutes.First Opposition Member speaking—10 minutes.Other Members—5 minutes each.The Committee determined that consideration of this matter should continue on a future day.AE4Nehl, Garry, MPMr NEHL—I seek leave to make a brief statement in connection with the report.Leave granted.AE4Nehl, Garry, MPMr NEHL—I thank the House and you, Mr Deputy Speaker Jenkins. As far as I am aware, this is probably the first time that a statement has been made in relation to a report of the Selection Committee, and I make it at the unanimous request of the members of that committee. You will be very much aware, Mr Deputy Speaker, that the Selection Committee's task is to allocate time for private members business on private members days. One of the frustrations that the committee experiences is that normally there are only 45 minutes available for the presentation of committee and delegation reports.Under a recent change to the standing orders, the Selection Committee does have the option of cutting into private members business to provide more time for committee and delegation reports. The view of the committee is that it is not satisfactory, where people have made an enormous effort, either in a parliamentary delegation or in a committee inquiry—sometimes taking a year or two years—that, because of time constraints, they are not able to speak for a reasonable time or they are not able to speak at all.The matters contained in the report I have just presented include an Australian parliamentary delegation which spent a week in the Philippines and a week in Japan, which I actually led. We sought a total of 15 minutes for the debate of that report—not a great deal of time—but we are able to accord it only 10 minutes.The Joint Standing Committee on Migration have a report to present, entitled Going for gold: Immigration entry arrangements for the Olympic and Paralympic Games—a very important subject. They requested 25 minutes, and the committee was able to allocate them only 15 minutes. The next one is a report by the Joint Standing Committee on Foreign Affairs, Defence and Trade on a visit to the northern defence bases. I naturally do not know what is in the report, but I would imagine, in view of what has happened in the last few days, that the parliament would be very interested to know the details of that report regarding our northern defence bases. They asked for 15 or 20 minutes; we were able to give them 10 minutes.The next one is a report by the Joint Standing Committee on Treaties, on treaties tabled on 11 August 1999. They wanted `as much time as possible' and we were able to give them only 10 minutes. The final one is another report from the Joint Standing Committee on Foreign Affairs, Defence and Trade on the peace process in Bougainville—another very important issue and a very important report. They asked for an undetermined time, and we were able, by cutting into private members business, to provide 20 minutes for that report.I will not go on in greater detail, except to say that the committee is continually being bombarded by members because of their frustration and perturbation at not having the opportunity to discuss the reports or delegations that they have spent so much time on. I just wanted to advise the House that the Selection Committee is concerned about this matter. We are operating within the standing orders, but we believe there needs to be something extra done to provide backbench members—ordinary members—with sufficient time to speak about the enormous effort that they put into the compilation and examination of inquiries and delegations.16:20:0010232Sercombe, Bob,MPMr SERCOMBEQK6MaribyrnongALP00—by leave—I will be very brief, because I think the honourable member for Cowper has very adequately covered the matters on which the Selection Committee deliberated on Monday of this week. This is a committee which I think does work very effectively in a cross-partisan way in terms of reflecting the interests and concerns of members of the House, giving the opportunity for members to make a contribution, and ensuring that parliamentary delegations which carry out very important work on behalf of all members of the House have some opportunity to present it.As the honourable member for Cowper has indicated, this is a matter that is increasingly of concern to members of the Selection Committee, because the immense amount of work that members put in, on both private members business and on delegation matters, does not receive the attention in the House that it ought to.I would like to draw to the attention of the Manager of Government Business and others in the House that members have an interest in ensuring that this matter is considered so that work that private members and delegations do achieves more recognition and more opportunity for consideration. The purpose of my very brief statement is to support the remarks made by the member for Cowper on this matter.16:22:0010232Ronaldson, Michael, MPMr RONALDSONXT4BallaratLP10—by leave—I would like to place on notice that I have not heard the full input of either of the members who have spoken before. I do have some concerns that my colleague opposite purports to speak for all members in relation to our views on various matters. I would also like to place on record that it perhaps might have been appropriate for this matter to have been discussed with all members of the Selection Committee before it was raised in the House today. If the views of the honourable member opposite are meant to indicate full compliance on behalf of all members of the Selection Committee, I am sure that all members of the Selection Committee would like to have some discussion before statements are made on their behalf.102321023216:22:0010232Moylan, Judi, MPMrs MOYLAN4V5PearceLP10—On behalf of the Parliamentary Standing Committee on Public Works, I present the sixth and seventh reports of the committee for 1999 relating to RAAF Base Townsville Redevelopment, Stage 1 and Darwin Naval Base Redevelopment.Ordered that the reports be printed.4V5Moylan, Judi, MPMrs MOYLAN—by leave—The reports which I have just tabled concern the proposals to redevelop the RAAF Base Townsville and to upgrade existing facilities and construct new facilities at the Darwin Naval Base. The estimated out turn cost of both proposals is $99.45 million. The Public Works Committee has approved the redevelopment works. The first report—the committee's sixth of 1999—involves the stage 1 redevelopment of the RAAF Base Townsville. For this inquiry, the committee held a public hearing into the proposal in Townsville on 16 June 1999 and received a number of written submissions.RAAF Base Townsville is located approximately five kilometres west of the Townsville city centre within the suburb of Garbutt. The base is a joint user airfield, supporting both military and civil aircraft operations. RAAF Base Townsville was developed during the Second World War, and many of the existing facilities have been only slightly modified in this period. The base forms part of a chain of military airfields across Northern Australia to Learmonth in the west. It provides for the air defence of northern Queensland and its approaches. The base's primary function is as a deployment base for combat aircraft during a contingency and as an air head for the 3rd Brigade's ready deployment force.The proposal examined by the committee aims to provide new operational facilities and to upgrade or replace current base facilities, including a purpose built ordnance loading apron complex, a quick reaction alert facility, a dedicated fighter/strike operational and technical support facility, light tactical aircraft facilities, consolidated vehicle and battery maintenance facility and replacement of the existing perimeter road with a sealed all-weather surface.An environmental impact assessment for the redevelopment has been undertaken. The findings of the EIA have led to a determination that there will be no significant environmental impact resulting from the proposed redevelopment stage 1. Concurrent with the EIA process, substantial consultation was undertaken with special interest groups and environmental agencies to assist in determining the environmental issues associated with the proposed project. An environmental management plan for the stage 1 redevelopment construction activities is to be developed and approved before construction commences. The committee is satisfied that the Department of Defence appears to have undertaken sufficient consultation with the relevant authorities and interest groups in the consideration of environmental and heritage issues associated with the redevelopment.When referred to the committee, the estimated cost of the project was $95 million. However, the approved budget figure is $87.05 million. Defence indicated to the committee that attempts will be made to make some savings throughout the project, allowing funding of the full scope of the works outlined in the proposal. However, budgetary restraints may result in some lower priority elements of the project being moved to a subsequent stage.The second report I have just tabled—the committee's seventh of 1999—relates to the redevelopment of Darwin Naval Base. For this inquiry, the committee inspected existing facilities and sites for the proposed works. The committee also held a public hearing into the proposal in Darwin on 6 July 1999 and received a number of written submissions.Darwin Naval Base is located within Larrakeyah Barracks, two kilometres from the Darwin central business district, and was constructed between 1980 and 1982 at a cost of $17.7 million. The base provides support for vessels undertaking patrol activities, the Commander Northern Command, major fleet units, submarines and visiting warships from foreign navies exercising or operating in Northern Australian waters. The operational tempo in Australia's north has increased significantly over the past few years. Defence has advised the committee that the proposed facilities are necessary to overcome occupational health and safety issues and operational deficiencies.The proposal examined by the committee involves the construction of a new 146-metre wharf to accommodate up to nine patrol boats, the improvement and extension of the existing wharf, realignment of the boat ramp to be parallel with the existing wharf, construction of three new hardstands, provision of an additional fuel storage and reconditioning facility, provision of an undercover naval stores receipt and dispatch area and relocation of 36 Water Transport Troop to the main base complex. The proposal will relocate approximately 130 personnel and 120 dependants to Darwin, but the total number of Navy personnel will remain basically the same due to the effects of the defence reform program.The development provides an opportunity for locally based businesses to benefit through contracting, subcontracting and the supply of goods and services. Increased expenditure in the Territory is expected through provisioning and maintenance contracts for the additional ships. It is anticipated that the redevelopment will result in greater opportunities for companies supporting patrol boat maintenance in Darwin.The committee is satisfied that the Department of Defence has adequately addressed environmental and heritage concerns. Defence has completed a flora, fauna and aquatic survey of the area and forwarded the resulting report to Environment Australia and the Northern Territory Department of Lands, Planning and Environment. Both authorities have agreed to the project proceeding. An issues identification study will also be used as a basis for detailed consultation. Factors to alleviate community concern will be built into Defence's plans for the project. For example, relevant concerns will be incorporated into the project environmental management plans.Concern was expressed by local residents that the works may result in an increase in the flow of traffic, particularly heavy vehicles on local roads. The committee has recommended that, in order to alleviate excessive traffic noise related to the operations of the base, the Department of Defence should continue to consult with the Darwin City Council and local residents. This should include consideration of existing guidelines governing the level of noise permitted for the construction activities, particularly those carried out outside normal working hours and on weekends.The committee also heard safety concerns from local residents that the project may result in an increase in the transportation of weapons along residential roads. The committee was satisfied that the movement of ordnance is not an environmental or safety risk due to the limited quantities transported, the nature of the ordnance being transported and Defence's compliance with transportation rules and regulations. When referred to the committee, the estimated cost of the project was $12.4 million. I commend the reports to this House.16:31:0010234Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—by leave—The very recent events we have seen north of Australia underline the importance of the reports that have been presented to the parliament this afternoon. There has been for some time an urgent need to upgrade RAAF Townsville. There has been a priority to get that matter undertaken. These reports this afternoon confirm that urgency. Until now, all armament operations that have happened at Townsville have been done on the cross-runway there. The cross-runway has been closed—it is the runway normally used by the light aircraft—and that has been not only very inconvenient for aircraft operations but also very dangerous. The new ordnance loading areas will solve that problem and allow dual runway operations at all times.The first report recommends the construction of facilities to suit the light tactical aircraft project for the RAAF. This is the aircraft that will relace the Caribou and will be based in Townsville. Some very significant infrastructure will go with that. It certainly underlines the defence department's recognition that it needs to move its defence infrastructure to northern Australia because that is where the need is.With the current arrangements at RAAF Garbutt on Sunday night, eight aircraft were turned away. They could not be accommodated at RAAF Townsville because there was not sufficient hardstand area, not sufficient parking area. That will be addressed in this report. It was an unintended consequence of the report but that will be addressed in the report. I certainly welcome the Public Works Committee's positive recommendation in this instance. I thank the chairman of the committee. I strongly support the reports.Bills10234r77810234Bill returned from the Senate with amendments.Ordered that the amendments be taken into consideration at the next sitting.Bills10234r67210234Bill returned from the Senate with amendments.Ordered that the amendments be taken into consideration at the next sitting.Bills10234r87910234Debate resumed.16:35:0010234Gillard, Julia, MPMs GILLARD83LLalorALP00—Prior to the adjournment of the debate on the Higher Education Funding Amendment Bill 1999 earlier today, I had addressed the provisions of this bill as they reflect the government's broad approach to higher education policy. In particular, I had pointed to the problems that this bill continues. Those problems are the continued underfunding of the sector and the fact that, in terms of the funding formulas, there is no regard to the different capacities of rural and regional universities—universities such as the Victoria University of Technology, which is located in my electorate—to raise private sector funds from the capacities shown by our ivy league universities. I had also pointed to the continuing problem of the government's disregard for access and equity questions in terms of higher education. That is well and truly continued in this bill with the phasing out, as it is defined in this bill, of the higher education equity merit scholarship scheme.Immediately prior to this debate being adjourned I had commenced to address the amendment the opposition has moved and the question of some good initiatives being held hostage to the fact that they are tied to the minister's voluntary student unionism legislation. I indicated that on 12 May this House dealt with the bill concerning voluntary student unionism but it also had within it a number of important provisions regarding Queensland universities. Specifically, those important provisions were to add the name of the University of the Sunshine Coast to the list of institutions able to receive funding directly from the Commonwealth. Until that matter is legislated and the name is put on that list, the University of the Sunshine Coast has to receive its funding through another Queensland university. That is obviously an important provision to the students and staff of the University of the Sunshine Coast and an amendment which the Labor Party supports.Also within that bill is the question of changing the name of the James Cook University of North Queensland to James Cook University, presumably a change much desired by James Cook and something that they would want to see dealt with to finality. But those particular provisions, those particular changes which the Labor Party would support, have become bundled together with the bill that this House dealt with on 12 May which contained the voluntary student unionism provisions. People will no doubt recall that debate. That debate was gagged with many opposition speakers wishing to continue to speak on the question, but the government did not want the debate continued. Ironically, perhaps, the minister did not even turn up for the division on the gag, but the debate was gagged. Here we are, after the passage of 133 days, seeing no progress with that piece of legislation in the Senate. Simply nothing has happened with it. I think we can explain why nothing has happened with it. Nothing has happened with it because it is a bill which will not garner the support of the Senate in the same way that it has not garnered the support of the education community or the community generally.Indeed, I think we can fully explain that bill ever being presented to this House and being dealt with by this House as part of the Minister for Education, Training and Youth Affairs' ideological obsession with the question of voluntary student unionism. As a former student union activist and as a former president of the Australian Union of Students, I am somewhat younger than the minister for education, and I hope better preserved—LS4FERGUSONMr Martin Ferguson—I would not bet on that.83LGillard, Julia, MPMs GILLARD—Unfortunately that is not something that is being agreed to by colleagues. I am somewhat younger than the minister for education. But it was well known amongst the student union community when I was there that the minister in his youth had pursued vigorously the question of voluntary student unionism as a student union activist. On each and every occasion that he pursued that question he failed to make any inroads. I think, given those failures in his youth, he has now sought to do something in his middle age which he could not achieve as a youngster. In his middle age, in seeking to achieve that result, he once again is staring down at a failure because, as we all know, when that idea was presented to the education community it was rejected all round. It was rejected by student unions; it was rejected by students generally. It was not supported by academics; it was not supported by vice-chancellors; it was not supported by student university sporting organisations; it was not supported by those concerned with student welfare and, indeed, it was not supported by a substantial number of members present on the govern ment's own backbench—and they are on the public record in relation to the question.I can certainly say that in my electorate, which contains the Werribee campus of the Victoria University of Technology, the issue of voluntary student unionism most certainly was not supported. I think once again this is the kind of issue about our non-ivy league universities which the government simply fails to understand. The council of the Victoria University of Technology actually wrote to the minister about this question in March and specifically raised its own position on the question of voluntary student unionism. It said:New universities like ours, with a large number of campuses, have not had the opportunity to build up the student support and amenities infrastructure which exists in more established institutions so the inevitable losses of revenue—that is, the loss of student fees should the voluntary student unionism legislation ever pass into law—will be particularly damaging. The problem is made even worse by the lower socio-economic group from which much of our student population is traditionally drawn, making it difficult to raise what would need to be a greatly increased general services fee (GSF) as a voluntary contribution.The letter goes on:The problem is exacerbated by the fact that in an effort to establish the standard of amenities required to attract students to the newer Victoria University campuses the Victoria University Student Union arranged to borrow money from the University to build new facilities. The University lent this money on the understanding that the debt would be served by future GSF proceeds.So we can see there—and I think it is actually a theme throughout the education issues that this bill raises—that the government has no understanding of the needs and issues that face the newer campuses, the campuses that are not ivy league campuses. They have different needs in respect of funding, they have a different capacity to raise private sector funds from those of the ivy league universities and, even in terms of the question of voluntary student unionism—which is objectionable overall—that in and of itself would raise a differential and harsher impact on those campuses than it would on the ivy league universities.So what we are proposing today to assist the minister out of the conundrum that he has got himself into, to assist him to get away from the position where he has tied some desirable reforms with a highly undesirable reform—with a reform for which he can get no support and is unlikely to secure passage of the legislation in the Senate—in order to assist him out of that position that he has put himself in, to help him to get over his incompetent performance, we are suggesting that the desirable bits of the legislation that are stalled before the Senate, by amendment, be dealt with as part of the bill today. I honestly cannot see there being any objection to that, given that they are reforms that have broad support across this chamber and are supported by the institutions in question. I would have thought, given the debacle that the voluntary student unionism debate has been for this minister and for the government overall, that a face saving way out would be what they are looking for. On that basis I urge members to consider the amendment that has been moved and to consider the broader education policy questions which are raised by this bill.16:43:0010236Gambaro, Teresa, MPMs GAMBARO9K6PetrieLP10—I rise today in support of the Higher Education Funding Amendment Bill 1999 . As the pace of change increases in Australia, and as we move towards the 21st century, it is imperative that the government has the appropriate higher education focus to meet the significant challenges that lie ahead. That is why I am so enthusiastic about supporting the bill before the House today. Given the coalition's willingness to provide the opportunity of near universal tertiary education at university, in vocational education and in the TAFE sector, effective higher education outcomes are fundamental and critical to ensuring that Australia can continue to prosper in the information age.When assessing the impact of the government's proposed amendments, it is clear that the coalition is committed to providing flexibility for students to maximise the benefit from their study at higher education institutions. To ensure this, it makes sense for institutions to be lessening their dependence on Commonwealth funding. This poses a challenge to higher education institutions to be much more responsive to students, business and community needs, as well as to be proactive in generating their own income to fulfil goals that they have for themselves as institutions.Currently and in the past universities have provided research and have worked with the private sector, particularly business enterprises, in a variety of communal projects. My own university—the Queensland University of Technology—and the marketing and international department in which I worked, provided regular modelling and worked consistently with the business sector, particularly in marketing consumer behaviour models.The purpose of this bill here today is to provide new levels of maximum grants for higher education in the years 1999, 2000 and 2001. The good news about specific funding for higher education can be observed by considering the figures of Commonwealth financial support. Overall, more than $10 billion is available in maximum grants for operating purposes for the years 1999 and 2001. Given the vital strategic importance of research in higher education, the coalition government has fulfilled its promise of funding for research infrastructure and has said that this will not fall below the 1996 levels. As a consequence of this, total funding for research infrastructure over the next three years will be over $315 million for each year.I know that many people living in my electorate of Petrie will welcome the increasing opportunities available to them to study and to be better equipped for a satisfying career of their choice. In particular I draw attention to the benefits and opportunities to students at the Carseldine campus of the Queensland University of Technology and campuses of the North Point Institute of TAFE at Redcliffe and Bracken Ridge. Obviously, these institutions will continue to be encouraged to be relevant and responsive in preparing today's students for the job opportunities that will be created in the next century. There is no doubt that how these institutions prepare students will have a direct impact on the economic and social fabric within the electorate as well as a wider impact on the country.Recently I had occasion to present a $4 million cheque to the Queensland University of Technology at the Carseldine campus. I have to applaud their efforts in developing their science and information technology program. It is my dream and vision that that particular area of my electorate will become a high-tech information technology triangle, particularly with the development of Mango Hill—or Northern Lakes as it is known now in the middle of my electorate—which will have a housing development as well as an information technology park. This is the way of the future and IT is clearly an area which the universities and colleges of higher education in my electorate are moving towards, and it is one of the most significant areas for job opportunities in the future.Some significant changes have come about in how higher education has been funded since the Commonwealth took over responsibility for higher education in 1974. Of critical importance was the introduction of the Higher Education Contribution Scheme, HECS, by the then Labor government in 1989. The Howard government has improved on this scheme, and very sensibly, by allowing a number of things. Firstly, it has allowed for the differentiation of the rates of repayment dependent on what particular course of study is pursued. The electorate understands very well that it is only fair that students who study towards a degree which leads to a significantly higher income should not be subsidised by other students.HECS is vitally important because its continuation has allowed for real expansion of the higher education sector when there have been very real pressures on government expenditure to guarantee responsible economic management. This year there will be $8.6 billion available to Australian universities. Of this, the Commonwealth will be contributing $5.6 billion, which includes money collected from HECS contributions. There can only be greater benefits for students as institutions are encouraged to obtain alternative sources of income from private sources.As well as HECS, higher education institutions have become less dependent upon government grants by the introduction of fee paying students. These fees were first introduced for overseas students in 1986 and they were followed by some postgraduate courses in 1989. Last year the Howard government took the logical next step by allowing Australian students to be able to pay for some undergraduate positions and they have been received very well indeed.When assessing the financial figures for the funding of higher education, it is important to realise that DETYA has chosen to combine both the higher and vocational education sector into one group under its accrual accounting format. This lack of distinction between the two is highlighted by the Higher Education Report for the 1999-2001 Triennium, where the trends indicate the continuation of the integration of traditional boundaries in postcompulsory education. It is important to note that. As a result of this, there will continue to be even greater pressure on regulatory and financing arrangements to accommodate this trend.The significance of this can be understood in the context of some of the recommendations of the West report, and they have been mentioned by previous speakers before me today. This included the following: public funding should be directed through the student rather than through the institution; there also needs to be greater flexibility for institutions to set tuition fees and to determine their actual student numbers; and there should be student access to income contingent loans.The result of the government's initiatives in higher education means that more opportunities exist for all Australians to study at a postcompulsory level. Eighty-eight per cent of higher education grants are devoted to one program only, namely, the operating grants for higher education institutions. There are two sources of these funds, Commonwealth grants and higher education students. Because of the rise in the HECS payments, the Commonwealth contribution to operating grants will be the same as it was in 1983, although the planned student load will have increased by 58 per cent.Given the growth in the HECS stream and the potential for the pick up in the full fee paying Asian students, there is every likelihood that the Commonwealth grants will drop below 50 per cent in this current triennium. To put that into perspective, this will roughly equate to the proportion that existed before 1974 when the Commonwealth assumed responsibility for funding higher education.The real issue is how financial contributions have affected student place numbers. The reality is that, under the coalition's leadership, there will be an estimated 402,372 students studying towards an undergraduate degree in Australian universities this year.0V5SLIPPERMr Slipper—How many?9K6Gambaro, Teresa, MPMs GAMBARO—An estimated 402,372. This includes the government's decision to allow 1,740 full paying positions to be made available. An extra 12,665 Commonwealth funded places for undergraduate students have been made available in the last two years. Altogether, the Commonwealth will fund 364,400 undergraduate student places in the university sector.However, having record numbers of students in higher education is not an end in itself. Students must have the confidence that the particular institutions that they are attending are pursuing the highest standard of excellence. Part of this responsibility involves the recognition of the vital difference that an inspired lecturer can make in ensuring that students maximise both their potential and their higher education experience, and the coalition government is eager to encourage and reward excellence in teaching.As a result, I would like to draw attention to the Australian Awards for University Teaching. As a Queensland member of parliament, I would like to take this opportunity also to highlight the outstanding contribution of Ms Spegel from the University of Queensland. Ms Spegel was one of the 10 winners of this award and was well regarded for her expertise and professionalism in the teaching field of law and legal studies. That this achievement has been recognised is indicative of the commitment of this government to reward and encourage excellence in the higher education sector.Finally, the coalition government has an ongoing concern about the needs of rural and remote students, and in particular how they may contribute to their local community when their studies have been completed. This is why I welcome the announcement that there will be 60 places at the new medical school at James Cook University in Townsville. Significantly, each year there will be five places earmarked for indigenous students and 15 for students in remote and rural areas.Mr Lindsay interjecting—9K6Gambaro, Teresa, MPMs GAMBARO—I note the member for Herbert is very pleased about the new medical school and no doubt will speak about that later on. This example highlights the commitment of the coalition government to making higher education open and accessible to all who want to pursue further study options and particularly commendable is the fact that there will be a new medical school. It is the first time that a new medical school has been opened in Townsville in 25 years.0V5SLIPPERMr Slipper—Due to the work of the member for Herbert.9K6Gambaro, Teresa, MPMs GAMBARO—Indeed. The work pursued in this area by the member and the government will provide a number of things to the community. Rural communities do tend to lose a number of their medical staff, particularly when they go to university in some of the cities. By encouraging a new medical school, more and more students will be encouraged to go back to the particular regions and country areas where they are from. Hopefully they will continue to practise medicine in those areas and provide welcome relief for their communities, particularly when they have been part of the community for such a long time.To conclude, it is very clear that the funding arrangements that the government is intent on implementing will help higher education institutions to be much more flexible and to be much more responsive to the needs of students, the community and also the economy. Lessening the dependence on the Commonwealth grants can only achieve significant improvements for the sector as a whole. Excellence must be the overriding factor here in ensuring that students are appropriately equipped to make a very meaningful contribution to Australia as we progress to the 21st century. The proposed funding arrangements for the current triennium will help ensure that this is the case. I commend this amendment bill to the House today.16:57:0010239Latham, Mark, MPMr LATHAMK26WerriwaALP00—The member for Petrie is correct in saying it is very important to honour the work of inspired lecturers. It is just a terrible shame for the Australian education sector that we do not have an inspired minister or an inspired Prime Minister. It is quite amazing that, 3½ years into Mr Howard's prime ministership, he is yet to make his first speech on Australia's potential as a knowledge society, a knowledge economy. It is amazing by the standards of international leadership that our Prime Minister has not made one speech in 3½ years on those all important subjects for Australia's future.The last time I spoke on higher education in the House, I set out ideas for a focused research agenda at the University of Western Sydney covering my electorate. I then followed up with an article in the Campus Review on 25 August, setting out a positive agenda for the university's second stage of development, and then the Vice-Chancellor of the UWS, Jan Reid, responded. She put pen to paper and had published in the Campus Review an article on 1 September. It was in fact a very defensive and disappointing response, which does not address my core concerns about the University of Western Sydney.It may be a shock to some publicly funded academics that it is indeed healthy for parliamentarians to cast a constructively critical eye over their performance from time to time. These things may come as a shock, but I am afraid to say they are absolutely necessary in the democratic process and the accountability for the good expenditure of public funds.There was no response to the particular problem I raised at the University of Western Sydney Macarthur regarding poor attitudes towards TAFE links. My comments on the university's federated structure were dismissed by the Vice-Chancellor, Mrs Reid. The House can then imagine my interest when I saw the front page of the Campus Review two weeks later, which stated:PROFESSOR Janice Reid, vice-chancellor of the University of Western Sydney, has been asked by the UWS board of trustees and the university's three member councils . . . to prepare a paper on the future shape or structure of UWS by October 10.The request to Reid, by a special combined meeting of the trustees and the three member councils last week, may signal the end of the statutory UWS "federation", the only such structure among Australian universities.Several senior UWS executives present told Campus Review that the meeting's clear consensus held that UWS could no longer afford a "federated" structure in which services were "triplicated".Obviously, the board of trustees and the member councils did not share the vice-chancellor's enthusiasm that the university was well advanced in addressing these issues arising from its federated structure. The vice-chancellor dismissed the federal department's figures on equity performance as `misleading'. She then said:UWS is by far the strongest equity performer among other metropolitan New South Wales universities.My first response to that statement was to think, `So what?' As I am sure the member for Batman would know from his time growing up in Western Sydney, it is no great achievement to have a bigger equity performance in higher education than the University of Sydney, UNSW, UTS and Macquarie. What state of affairs would we have in Sydney if UWS was not the strongest equity performer?Despite that first reaction of `So what?' the statement itself is not true. Newcastle can be classified as a metropolitan university in New South Wales. It certainly covers an urban area. Its equity performance is quite revealing. Newcastle draws 25.1 per cent of its students from the bottom quarter of socioeconomic status areas in urban New South Wales. Compare that performance with UWS at just 19.5 per cent of its students. The vice-chancellor has still got it wrong. UWS lags behind the University of Newcastle among the New South Wales higher education institutions in its equity performance, measured by the number of students coming from the bottom SES urban areas.To take an interstate comparison, there is still even greater concern about the UWS equity performance. The Victorian University of Technology, which is comparable because it covers the western suburbs of Melbourne, has an equity performance whereby 30.7 per cent of its students are drawn from the bottom 25 per cent of suburbs in urban Victoria. My point is that the University of Western Sydney has much to learn from VUT in terms of equity strategies. VUT, as a dual sector institution with sophisticated equity concerns and strategies, is leading the way in the country. All I say is that there is no shame in UWS learning from that and starting to match the outstanding equity performance of VUT. I wish every single university in Australia could have the VUT equity performance: over 30 per cent of its students drawn from the bottom 25 per cent of suburbs. That is a fine performance and one which the UWS can learn from and, indeed, the Western Sydney region can benefit from.Fourthly, I suggested a focused UWS research strategy using the university's great strengths, that is, some of the economic and social issues in its own backyard, the region of Western Sydney itself. Vice-Chancellor Reid could point out in reply only that the Urban Frontiers Program was in place, trying to leave readers of Campus Review with the impression that this was a longstanding UWS research institution. In fact, it is due to be formally launched in December this year. Its program is not yet 12 months old and its formal launch is some months hence. While welcome, it does not nullify the view which I set out in Campus Review and which I now give to the House:By financial necessity, UWS needs to develop specialities in its research work. This is the only way it can build a national and international research reputation. It needs to pitch its expertise and resources to the establishment of competitive advantages in the global learning environment.In this task, the university's greatest asset is in its own backyard. No part of the nation or even the globe has a more diverse and challenging social and economic environment than Western Sydney. It is a natural laboratory for the study of globalisation impacts, labour market change, modern service delivery, multiculturalism, social exclusion and social capital. The natural resource for research at UWS is the region itself.Unhappily, UWS has not used this resource well. It seems to have dabbled with all kinds of research disciplines except its strategic strength. It has had little to add to current debates about the welfare state. It has no centre for the study of population and settlement along the lines of Monash University. It has no institute for the study of urban poverty on the scale of the University of Wisconsin. It is neglecting the one great service it can do for itself and the people of Western Sydney: new research and new answers to the great socio-economic issues of our time.Vice-Chancellor Reid's Campus Review article does not engage in a positive dialogue about her plans and vision for the future of UWS. As I again pointed out in my Campus Review contribution, a federated university can succeed only with the right kind of leadership at its centre.I now turn to some of the university policy issues arising out of the recent research green paper released by the federal Minister for Education, Training and Youth Affairs. This is a topical document, despite its delay by Dr Kemp. Nonetheless, a research green paper is of the utmost importance to Australia's universities and the progression of this material into a satisfactory white paper is all important. Much work needs to be done to turn this green paper into something more acceptable, as it might translate into government policy in a white paper.I have concerns about the four key flaws in the research green paper. The first of those is on the issue of portability. The key demand of the new economy is for government to fund smart people, to provide research funding directly to the best and brightest in its nation and to allow the funding to be portable. Funding of institutions is likely to be a handbrake on innovation and technological upgrading. Better results can be achieved by funding individuals rather than institutions. Institutions, through their vested interests, their turf wars and their institutional conservatism, get in the way of best practice innovation and technological upgrading. This is the golden rule of the new economy in public policy. I would like to stamp it on the fore head of every single member in this place and every single bureaucrat in Canberra. Pick national research priorities and people. Do not pick technologies, companies or industry winners. That is the golden rule. Public funding needs to be poured into national research priorities and the best and brightest of our Australian researchers. We should not be diverting any of those funds into the flawed government process of trying to pick technologies, industry winners and corporations out for favourable publicly funded treatment.The green paper recommends portable research scholarships but, tragically, it proposes a scheme which is not portable at all. It talks about portability but delivers a situation which may be worse than the current circumstances in the Australian university research sector. It proposes a scheme whereby the scholarships are awarded by the institutions themselves. Surprise, surprise, if the institutions choose to pick those people most likely to stay within their research system. The portability only comes into effect after 12 months of study at the awarding institution. So again there is a massive disincentive for portability. If after 12 months of study students decide they want to move somewhere else, they have to go to the trouble of physical relocation and establishing new supervisors for their studies. Under this proposal they have to start their studies again with no additional resources to do so. The disincentive for portability after 12 months is high. Of course, we also know that in Australia's tight research networks—what some have described as the `research club' in Australia's universities—they can be pretty hard on dissenters in any shape or form.I have the reservation that the portability in this scheme is worse than the current circumstances. The government has fallen into the trap of funding institutions rather than individuals. It is funding the institutions to give out the scholarships. The institutions will favour those most likely to stay within their research system, and only after 12 months does the portability kick in. Even if the students move on to a different institution, they have to start all their studies again without any additional public money. In practical terms, we will not get any portability from this flawed scheme.Just as the new economy and the research agenda are demanding portable research scholarships, the government delivers a feet-in-cement scheme where you can barely move at all. It is absolutely hopeless. What we need is a massive improvement in the white paper. We need a national standard for honours degrees throughout the country, we need an independent awarding body and we need genuine portability for the best and brightest of our undergraduates. We need a major national effort to make sure that Australia's best and smartest undergraduates are kept here through an effective portable research scholarship scheme.The second flaw concerns resources. What is it about education policy statements from this government? Why are they not allowed to talk about resources? In every single country around the world the great burning education policy issue is that of funding. How do you pour more national effort and more national resources into the education sector? We have the absurd situation, the atrocious situation, in this country where every time there is a major education policy report no mention is made of the most important issue.Earlier the member for Petrie mentioned West. As the member for Batman pointed out, he has gone west. His report made no mention of resources, it made no recommendation for an improved funding effort for Australia's universities and, if that was not bad enough, it was just taken by this government and put on the shelf. It was put on the shelf to gather dust. West has made no greater contribution to university policy in this country than he made to disadvantaged schooling during his time as a schoolteacher. It was bad enough that the West report had nothing to say about resourcing—obviously on the orders of Minister Kemp—but now we have a green paper that does not mention resourcing.Why is it that education policy documents are not allowed to mention the funding question when other aspects of this government's effort mention funding? There is talk about greater funding in all areas bar education. Look at the Ralph review released yesterday. It was told to be revenue neutral, but the Treasurer is willing to cop a funding hole of $3.8 billion. It did not even stick to its riding instructions of revenue neutrality. Look at the foreshadowed defence white paper. The minister was in here yesterday on the Timor debate saying that there will be a bucket load of money for defence to pay the terrible cost of bad foreign policy from this government. So other reports—Ralph and defence—are allowed to have strong recommendations about greater public funding but, in the most vital sector of all, education and research, public funding and resourcing are not mentioned at all.My third concern is about the research funding formula in the green paper. The bias is very firmly against any national growth in scholarships and it is against regional newer universities. The Vice-Chancellor of Deakin University, the much respected Geoff Wilson, has pointed out—and I quote:It's amazing, given those particular objectives—that is, in the green paper—that they then reduce the number of research higher degree places in Australia from 25,000 to 21,500.That was reported in the Australian of 8 September. There was Geoff Wilson saying that, by his calculation from the green paper, the number of publicly funded research higher degree places in Australia is going to come down. It should be going massively up. But under this government it will go from 25,000 to 21,500. His own institution, Deakin University, has pointed out they will lose $1.5 million in the first year of implementation and the figure could rise to $3 million by the third year. Jan Reid of the University of Western Sydney—I hope she has got this right—mentioned a funding cut in Western Sydney of $2.3 million on the research agenda.LS4FERGUSONMr Martin Ferguson—She should read the Hansard.K26Latham, Mark, MPMr LATHAM—She may be sent a copy of the Hansard to brush up on some of the public policy matters that get debated around this place, some of the public accountability that comes to weigh on university administrators. 0V5SLIPPERMr Slipper—You seem to have a lot of confidence in her.K26Latham, Mark, MPMr LATHAM—You wouldn't know. You didn't get past kindergarten, so what are you going on about? The fourth problem that I have with the research green paper is its failed attempt to reconcile the research policy tension between pure and applied research. This is a real difficulty in the document. It starts out pretty boldly by talking about how, in the new economy, `some of the locations of research activity are changing and knowledge generation is increasingly crossing the traditional boundaries between institutions and sectors'. It talks about the way in which:. . . the primacy of the universities in basic research is being strongly challenged in a variety of fields such as the computer sciences, many applied sciences and engineering where the emphasis is on application of research. There is an increasing role for applications driven approaches in many spheres of research, and a growing share of the national research effort is occurring in commercial settings. These trends are particularly pronounced in the fields of science and technology research but are by no means confined to them. Similar trends can be observed in a wide range of social sciences and humanities.There is a bold and promising statement at the beginning of the document about the tension between pure and applied research, but then in the policy recommendations there is no reconciliation of this tension at all. I am afraid the green paper has just gone down the standard Dr Kemp pathway of imposing more commercialisation on the education sector. The document talks about bringing users of research into the peer review process. That is just part of Dr Kemp's code for letting business direct research. It is a very crude approach—the sort of crude approach that he has brought to bear on Australia's training agenda.The recommendations in the green paper unfortunately perpetuate the artificial binary between pure and applied research. It should not be just a question of whether we are funding pure research or applied research. There is in fact a third approach which synthesises the two. While I will not have much time to read out the findings of this particular document, I refer the parliament to a book that has been largely overlooked in Australia called Pasteur's Quadrant: Basic Science and Technical Innovation by the late American academic Donald Stokes. It is an outstanding read and an outstanding lesson in how it is possible to synthesise pure research and applied research and develop quite cleverly what he defines as a `use-inspired basic research approach'. Because time is running out for my contribution, I cannot go through all the detail. But those members who read books—books other than my own—might want to turn to Donald Stokes' Pasteur's Quadrant and learn a great deal about these important public policy issues. Most importantly, those working on the research white paper need to read that book and certainly improve the sort of document they produce. There is a long way to go to turn this green paper into something acceptable.17:17:0010243Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—In the debate on the Higher Education Funding Amendment Bill 1999 I would like to focus on the aspect concerning James Cook University in Townsville and in particular the new medical school. The medical school is the first new medical school in 25 years in this country. Its funding is dealt with in the bill before the parliament at the moment.0V5SLIPPERMr Slipper—Was it because of your representations?HK6Lindsay, Peter, MPMr LINDSAY—That is for others to say, Mr Parliamentary Secretary. This is a project that has had a very long history that goes back to 1983 when the then Labor Party leader Bob Hawke promised to establish a James Cook University based North Queensland medical school. History records that that particular promise was never delivered by the Labor government. Indeed, in the lead-up to the 1996 federal election the then Keating Labor government had the hide to resurrect the promise of a James Cook University Medical School as an election promise. I think, if my memory serves me right, that at that time they said it would be implemented within 12 months. That was just not technically possible. The academics—the people in the industry—knew and understood that it was not technically possible to do it in that short time frame.When I became the member for Herbert, I began working with the local community, with James Cook University and the local medical profession, as well as with my parliamentary colleagues Senator Ian Macdonald, the member for Leichhardt, Warren Entsch, and the members for Kennedy and Dawson, to get a medical school proposal back on track. It was a real team effort, and I must acknowledge the efforts even of the former Labor senator Margaret Reynolds, who for a long time pushed the north's cause for a medical school, although she was not successful within her own party. It has taken a long time, but Townsville and James Cook University have finally secured a medical school, with this bill forming one of the last pieces of the jigsaw that will turn this project from a proposal into a reality.The project means a lot, as you could understand, not just for Townsville but for the wider North Queensland and northern Australian region. Queensland is one of the most decentralised states anywhere in the world. While this may not seem much to those who live in the south-east corner of the state—or in the capital cities of Australia—for those who live outside that corner the effects of that extreme decentralisation are certainly very considerable. North Queensland, as I have long told this House, makes up about 45 per cent of the state's total area and about 17 per cent of the population. But it is home to only about nine per cent of Queensland's registered medical practitioners. Indeed, of Queensland's 1,100 or so specialist medical practitioners, about 840 live and practise medicine in and around Brisbane.The consequences of this state of affairs are simple and stark. People in rural and regional Queensland are being denied ready and equitable access to medical services. The nearest medical school to Townsville is in Brisbane, some 1,400 kilometres to the south. With the establishment of the medical school in North Queensland, for the first time students will be able to be taught and trained in regional centres like Townsville, Cairns, Mount Isa and Mackay instead of having to move south to Brisbane, Sydney or Melbourne. I believe this will be central in the long term to encouraging more doctors to live and to practise medicine in regional North Queensland.James Cook's Professor Ian Wronski, the Dean of Health, Life and Molecular Sciences, has in the past equated the establishment of the medical school as rating alongside the formation of the National Health and Medical Research Council in terms of importance to health in Australia. That is a sentiment that I agree with wholeheartedly. I have said it once and I will say it again: I cannot think of another decision that will have a more lasting and positive impact on the long-term health and physical welfare of rural and regional Queenslanders than this decision to establish a medical school at James Cook University.I note that in the second reading speech a few months ago the Minister for Education, Training and Youth Affairs stated that the additional funding to James Cook provided in this bill keeps faith with the coalition's election commitment for 60 medical places at James Cook, with the first intake of students expected at the start of the 2001 academic year, following accreditation from the Australian Medical Council. The starting time of 2001 was cited because the department was under the impression that the accreditation from the AMC would not be forthcoming in time for a year 2000 start-up. The timetable that both I and James Cook have always pushed was for the first student intake to happen at the beginning of the year 2000—next year.I am very proud to have this particular letter in my possession, which is from Dr David Kemp, the Minister for Education, Training and Youth Affairs. It is addressed to Professor Bernard Moulden, Vice-Chancellor of James Cook University. It reads:Dear Professor MouldenI am writing to you to confirm financing for the James Cook University Medical School. The Commonwealth will, when the school receives Australian Medical Council accreditation, expected for the 2000 academic year, be financing a six-year course with an annual intake of 60 students. Funding will be $20,000 per student—that is at 1999 prices—with an assumed retention rate of 100 per cent. The source of the finance will be a combination of already legislated operating grants funds and money being legislated in the Higher Education Funding Amendment Bill 1999, which is currently before the parliament.This is the bill we are discussing today. The letter continues:The Government wishes James Cook University well with this initiative and looks forward to the benefits it will bring to medical care in Northern Australia.This is a historic document. This is the funding for the James Cook Medical School to start at the beginning of next year.It has been a truly awesome effort to get the school up and running. In relation to the accreditation from the AMC, the politics of medicine are more political than the politics of politics. The accreditation council met and decided that James Cook's application was the best they had seen for a number of years and they made the recommendation to the AMC executive. When it came to be considered by the AMC executive, which was scheduled last month, what happened? The politics of medicine got in the way and the AMC executive's decision was not to consider the accreditation council's recommendation. Can you believe that that is how that would go? But we have got around that. We will see the accreditation proceed now, I believe on 18 October. It certainly will happen. The government was resolute in its decision that we would have a new medical school at James Cook and we are going to have that.In confirming the funding, the minister was strongly supportive of James Cook's position in Townsville. I would particularly like to place on record my sincere thanks to Minister Kemp for the positive way in which both he and his staff dealt with this matter, and also, of course, the Minister for Health and Aged Care, Michael Wooldridge, for the way in which he and his staff have dealt with this matter. This means that the only piece that is now missing from this jigsaw puzzle is the formal accreditation and, as I said, that is expected in the middle of next month. I would certainly like to see that accreditation come through sooner rather than later.There are some other points to consider today. I was interested to note in the amend ment to the second reading of this bill moved by the member for Bonython the reference to the government failing the higher education system in relation to export opportunities. Let me respond to the member for Bonython in the same terms that I recently used to respond to a student journalist at James Cook in relation to issues associated with the recent research green paper: do not underestimate the importance of the proposed new James Cook University medical school not only to Townsville and North Queensland but also to other countries throughout the Asia-Pacific region. At the state and national level, the new medical school will play a central role in helping attract future research dollars to regional North Queensland. The University of Queensland in 1999, for example, received more than $12 million in federal funds through the NHMRC to fund some 150 medical research projects. Following the establishment of the JCU Medical School, I expect to see in a gradual way more and more research grants coming north to Townsville.But more than that, getting back to the question of education exports that the member for Bonython raised, the new medical school will also firmly establish James Cook University as the leading research centre in South-East Asia in the areas of rural, regional and tropical health. This is very important indeed. Other countries will look to James Cook in Townsville in the years to come for the expertise we now have and will continue to develop well into the future. James Cook University Medical School will put Townsville not only on the national map but also on the international map. I therefore reject the amendment moved by the member for Bonython.There are some other big issues in Australia in higher education today. I refer to the production of intellectual property and capital. There are a number of countries which have shown that they are able to speed their development remarkably when they develop intellectual capital. This government certainly recognises that. We also recognise that globalisation creates challenges, and higher education needs to be able to grow in this area with certainty and stability. As tertiary education becomes more and more universal, as high school education did earlier in this century, we have got to find ways of funding it and generating best outcomes for society and intellectual excellence. For regional universities such as James Cook, there is now a real opportunity to develop as part of regional economic clusters. I point out to the House the example of what happened in Nevada. They saw a field of expertise in telephony. Nevada, which is basically a semi-desert state in the United States, grasped this opportunity with both hands and has not looked back. These huge opportunities for regions were not there prior to globalisation.In Australia, I would suggest that, when you look at the resources in the regions, Townsville and perhaps Newcastle have the most potential in this regard. Regional universities need to work out what their role should be. James Cook is in the box seat to take advantage of the opportunities to build around economic clusters in its operations. The breadth of diversity in Townsville, with industry, commerce, communications, defence, education and so on, bodes well for James Cook to be able to link in with these economic clusters. It has been my privilege to be associated with the establishment of the James Cook University Medical School, and I look forward to it opening next year with its first 60 students. I wish the school well, and I certainly commend this bill, which funds the university medical school, to the House.17:30:0010246Sawford, Rod, MPMr SAWFORD3J4Port AdelaideALP00—`Australia needs a skilled and educated population to meet the challenges and opportunities arising from new technology, changes in the domestic economy and globalisation.' That statement was made by the Minister for Education, Training and Youth Affairs, the member for Goldstein, in the opening remarks of his second reading speech on the Higher Education Funding Amendment Bill 1999 . That was a reasonable, admirable opening statement, you might say, from the minister. But little else of consequence followed from the minister, as we have come to expect. In just over 20 minutes the minister presented the second reading of the Higher Education Funding Amendment Bill 1999 and then proceeded to present the Indigenous Education (Supplementary Assistance) Amendment Bill 1999, followed by the States Grants (Primary and Secondary Education Assistance) Amendment Bill 1999, followed by the Vocational Education and Training Funding Amendment Bill 1999.In just over 20 minutes the minister presented what was considered to be important by the government on every aspect of education in this nation. Sadly, it did not amount to very much. Sadly, this government does not want this debate on higher education to continue much longer as I understand further debate will be gagged later this evening. It says a lot about this government and its attitude towards education at all levels. But those of us on this side of the House should not be surprised about a coalition whose leader, in a previous life, refused a shadow education portfolio and has little to say about the current and future status of education.The rhetoric of this government simply does not match its actions. Take, for example, the minister's penultimate paragraph in his second reading speech:The measures in this bill continue the government's objectives of fostering a quality higher education sector that is open, accessible and responsive to Australia's future needs.As with the minister's introduction, this concluding statement is also potentially admirable. But he destroyed himself, just two paragraphs earlier, when he correctly told the parliament that the merit based equity scholarship scheme would be phased out from the year 2000. Merit and equity—such foreign words to the minister and to the government.How could anyone reconcile the minister's opening and concluding statements with the phasing out of the merit based equity scholarship scheme or perhaps with the axing of the innovation program or with the government's failure to provide more research funding? Oh dear, innovation and research—such foreign words to the minister and the government.The minister continues, on almost all occasions when references are made to funding and resourcing education, to state in Orwellian terms that more is more when really his exposition is that more is actually less. Let me give some examples as they apply to higher education. I make no apology whatsoever that the real question facing education, including higher education, is a resources question, something that this government does not want to face and refuses to acknowledge.The Commonwealth resources—known as the base operating grant available to higher education institutions per planned and actual equivalent full-time student units—tell a very interesting story indeed. In 1983 the base operating grant was worth $3,196.3 million. This applied to 260,000 planned full-time students and 255,100 actual full-time students. However, the key figure to observe is not the total base operating grant or the numbers of planned or actual full-time students; it is the per capita rate then and now. That rate has fallen dramatically, confirming the minister's `more means less' rhetoric.In 1983 the planned per capita rate for a full-time university student was $12,294. The actual per capita rate was marginally higher at $12,530. In 1999 the base operating grant for higher education institutions is $4,662.9 million. The planned per capita rate, based on 413,000 students, is $11,292. That is 8.1 per cent less than in 1983 but 0.9 per cent more than in 1996, which appears to give the minister and the government some credit—not much but some at least.However, with further examination—and you always need further examination with this government and this minister—a far more accurate picture emerges. By contrast to what I said in the previous paragraph, the actual number of students for 1999 is 463,500, some 50,500 more students than planned. This makes the actual per capita rate $10,060, a massive negative change of almost 20 per cent from 1983 but, as far as the government's rhetoric is concerned, 5.4 per cent less than in 1996. So in fact more is not more, less is actually less.No-one should be surprised by this blatant dishonesty by the government or by the blatant misrepresentation of statistics by this minister; he is very good at it. Take, for example, the Commonwealth investment in education since 1994-95. Expenditure has fallen from about 2.06 per cent of gross domestic product to less than 1.8 per cent in 1999-2000. But it is worse than that. Projected Commonwealth investment in education is expected to fall to just above 1.6 per cent of GDP in the years 2001 and 2002. If people think that is bad, the future will be worse. That is just a disgrace but it reflects accurately the lack of thought, energy and commitment of this minister and of this government when it comes to investment in the current and future human capital of this nation.But the story of education and this minister gets worse. Take, for example, the Commonwealth investment in research and innovation. In the financial year 1993-94, the percentage of GDP of Commonwealth investment in research and innovation, excluding indirect university funding, was just less than 0.55 per cent. In this financial year, the percentage has fallen dramatically to 0.44 per cent, a massive drop in funding measured against GDP of 20 per cent. So we have a 20 per cent fall again.Again, to repeat a familiar pattern by this government and this minister, the projected future Commonwealth investment in research and innovation is expected to fall in the financial years 2000-01 and 2001-02. It is bad now, worse later. One last examination of Commonwealth investment in education training and research continues the sorry saga of this minister's and this government's negligence in all aspects of education. Other productive nations in the world have based their spurts of economic growth on massive investment in education up to a generation earlier.This government enjoys a false dawn in economic growth due to the efforts of governments of both persuasions over the last 30 years. How else could you explain the very considerable reduction in investment by the Commonwealth in education, training and research? It is just madness, as far as the future of this nation is concerned, to report to the House that the Commonwealth investment in education, training and research has fallen, as a percentage of GDP, from three per cent, when this government took office, to less than the projected 2.4 per cent of GDP in 2001-02. That is the real story of higher education in this country.WU5O'CONNORMr O'Connor—Dopey policy.3J4Sawford, Rod, MPMr SAWFORD—Exactly. That is a massive drop in investment of 20 per cent in the nation's future—its own people. When I point these facts out to people interested in education often a first reaction is, `No, no, this is not true. Surely the arguments and supporting statements that you make are exaggerated. Surely you are exploiting political rhetoric. Surely the investment in education is not that bad.' But then I sit down with them and I show them the real figures from the government's own graphs. I show them the tables and they look at me in disbelief. Surely no respected national government could do what they are doing, reducing investment by up to 20 per cent across the board in education. This is real negligence.This is a government without a future plan for its people, particularly its younger people—our future. This is a government oblivious of proper processes in education. This is a government determined to fudge and to distort almost all information on education at not only a higher education level but all levels of education. The minister and the government could be described by some commentators as only being outcome driven. However, the reality for this government is that because real purpose and process have gone missing or, more accurately, have not been recognised by this government, its education outcomes are nothing more than a very simple, motley collection of unconnected issues.For this government, outcomes are not the result of belief and process with appropriate analysis. For this government outcomes are a confused set of issues that bear little relation to each other. Synthesised outcomes are no recipe for improvements in education in Australia. This government has a problem with all aspects of education, not only higher education. Informed people in education in Australia know this to be true. Informed people overseas, including our expatriates, also know, to their embarrassment, that Australia is increasingly less regarded as far as education is concerned. Consecutive Clayton's budgets on education will not alter those views.In fact, what must be worrying to all members of this House is the continuing brain drain of talented Australians overseas. Many ideas people, including those in education, have—to this nation's loss—simply got up and run. They have got the message from the government, from the Prime Minister, the Treasurer and this minister that they are largely to be ignored, that they are superfluous to requirements. If they did not get that message in the 1996 budget, the 1997 budget and the 1998 budget, they have certainly got it now.People with process skills in education are simply demoralised in this country. These people, unrecognised and unacknowledged by this government, who have connected ideas, process and outcomes have, over a period of time, had their lights punched out. Even those in education for whom ideas and process mean little—like the Minister for Financial Services and Regulation, who is at the table—and outcome everything have been divided into winners and losers. The minister made a bit of a losing statement this afternoon that will haunt him forever in his career.Divide, isolate and crush are not unknown in politics, but in education, at any level, it is destructive and against the future of our nation in a world that is increasingly unsympathetic and highly competitive and ruthless.Mr Hockey interjecting—3J4Sawford, Rod, MPMr SAWFORD—You protest too much, sir. It is a great sadness to me that, for many members on the government side and their advisers, education is nothing more complicated than but a mere reflection of their own inadequate personal experiences in education, in various disciplines of learning but none whatsoever in education. There is certainly no real encouragement to the backbench, other than those genuinely committed, to get out there and score a few goals for education. The minister's legacy to education, after his stewardship, will be stonewalling, misinformation and confused statistics, but nothing much else.As I said at the outset of this speech, this minister, in just over 20 minutes, managed to present a plan for all aspects of education—in other words, 20 minutes of very little value represented the total future planning of the minister and the government on every aspect of education for the next year. Like the minister's contribution to coherent education planning for our nation's future, this Higher Education Funding Amendment Bill does not amount to very much. But then, sadly, who would be surprised at that!In conclusion, I would like to make a comparison between Labor and the coalition in government. In Labor's last five years, the percentage of the nation's wealth invested in education, research and training rose from 2.35 per cent of GDP to 2.99 per cent.WU5O'CONNORMr O'Connor—Smart.3J4Sawford, Rod, MPMr SAWFORD—Exactly. In the coalition's first four budgets, they have reduced that investment back to 2.53 per cent in 1999-2000 and they are heading towards less than 2.4 per cent in 2001-02. By the financial year 2001-02, the coalition will have undone all of Labor's good work and will have taken us back 10 years to 1990-91 when investment in education, research and training was 2.36 per cent of GDP.Only when the coalition begins to take on and deliver the broad Labor example of three per cent of GDP—because that is the message, that is the target: the bottom line for you guys is three per cent of GDP on investment in education, training and research—will we take you seriously. Forget the rhetoric of this government. Forget all of those people on that side of the House who get up and talk about education. Get hold of the bottom line, Minister. Get hold of per capita rates, Minister. Get hold of some honesty, Minister. Get hold of percentage of GDP, because that is the only measure that counts.17:43:0010249Vale, Danna, MPMrs VALEVK6HughesLP10—It gives me great pleasure to speak to the Higher Education Funding Amendment Bill 1999 . I warmly welcome the net increase of $183.8 million to 1999 university funding provided in this legislation. I also welcome the boost that this legislation will give to science education by funding new science lecture ships. The increase in funding of research infrastructure by $36.8 million in each of the 2000 and 2001 years comes not a moment too soon.I heartily welcome these increases in university funding and I also welcome this opportunity to further consider the huge challenges still facing universities. These challenges are largely due to the legacy of attrition and an apparent disinterest in the pursuit of academic excellence which characterised much of the Labor years of the 1980s and 1990s. Until recently, our government has been unable to do little to remedy the situation, initially working and concentrating our efforts on putting Australia's economic house in order. Now under the auspices of a robust economy we can turn our minds to our vision for Australia in the 21st century. The 21st century will be a new frontier in time and space where only the clever countries of the world will prevail. The best guarantee we have to ensure that Australia will be one of those clever countries is to invest in our intellectual capital. Sir Robert Menzies knew this 50 years ago. We now have a great opportunity, those of us who would dare to walk in the footsteps of Sir Robert, to seize the day and invest, as he did, to a meaningful degree in the intellectual capital of Australia. We need a Menzies style renaissance to purposely recharge our centres of academic excellence in our universities across the nation.The broadening of tertiary education in recent years has become a welcome development, but I fear that the broadening has not often been accompanied by deepening. Put bluntly, our international cutting edge institutions have paid a heavy price as funds have been diverted elsewhere. This is not a situation which any leading developed country can tolerate for long without paying a huge price. It is a price in lost international competitiveness, a price in losing our brightest and best and a price in the form of dreaded mediocrity.I cannot help wonder what form the new support for infrastructure will take. In an institution as complex as a modern day university, there is a vast spectrum of infrastructure which is essential if our academics are to be free to excel at the research and teaching for which they have rigorously trained. I understand that our great university libraries have been sorrowfully cutting subscriptions to respected international journals because their purchasing power has been hit by a weaker Australian dollar and low university operating grants. There are decaying university buildings, not least those built in sandstone. There is expensive scientific equipment, which simply has to be cutting edge if Australia is to flourish. Perhaps most importantly, there is the essential technical and support staff, whose dedication and expertise is essential if our academics are to be free to research, create, write and teach. These too have been severely cut back in recent years. I understand that this has had serious effects on the morale of our already overworked academics.I applaud our minister's support of investment in infrastructure. It is an excellent initiative which should help reverse decades of neglect. We need to know that coming funds will be sufficient to do all these jobs and more and properly to international best practice. It seems that we have a long way to go to reach the infrastructure standards of quality overseas universities. It would indeed be wonderful if the government could restore the acquisitions purchasing power to our leading university libraries. We need to ensure that operating grants are also sufficient.If our principal universities are allowed to stagnate for want of funds, Australia will also stagnate. Stagnate our universities will if they cannot attract to their staff the best creative intellects, the best critical thinkers and the best inventive minds who will advance the frontiers of our knowledge and perspectives into the new millennium.It seems to me that the real problem—the most fundamental one of all—is funding. I informed this House in June that what Australia needs now is a Menzies-sized injection of funds into our leading universities. With great respect I repeat the plea. The United States, the United Kingdom and Sweden are increasing research investment in their universities to a significant degree. South Korea, New Zealand and China have all committed to the serious funding of selected lead site universities so that they will at least have a few institutions of international standing. Australia cannot afford to be left behind.I have read that in 1998 the United Kingdom government announced a further $A2,600 million over the next three years for research infrastructure. The Wellcome Trust pledged a further £400 million. Singapore announced plans for a $5 billion science hub for science companies. However, we can see that Japan has lost out to the United States in technology based industry because it failed to invest in basic science.Recently, the University of Sydney announced a 15 per cent salary increase for its staff in three increments. It made this decision in times of serious financial stringency because it had no other option. It was by all accounts a difficult decision, but at the end of the day it could do no other. A university has no greater asset than its staff. Its first priority, therefore, must be to ensure that it attracts and retains the very best.Yet if the government does not fund reasonable academic salary increases, as it did in the Menzies era, the universities will have to shed even more vital staff and bleed catastrophically in other areas. Let me put this into context. I understand that Sydney professors earn about $94,000 per annum. The Wellcome Trust, the United Kingdom's largest medical charity, which has disbursements comparable to those of the United Kingdom Medical Research Council, has recently awarded its scientists a 30 per cent increase in salary. It did so in order to prevent a loss of expertise to the United States, where salaries are very much higher.According to the Financial Times in London, this will mean that some medical scientists will earn more than £100,000, which is approximately $A250,000. Yet when you consider that medical science has been principally responsible for the staggering increase in life expectancy this century, can there be any serious objection to paying its leaders about the same as a state supreme court judge?It is also very welcome news that our government is to spend $25 million over the next two years to fund science lectureships. Minister Kemp must be warmly congratulated on this innovation. My hope is that the government will also ensure that these additional lectureships, as well as those posts already existing at both junior and senior levels, are associated with salaries properly commensurate with the serious expertise of the individuals we expect to fill the positions.There is much ground to be made up. The number of lecturing staff at Sydney University's renowned chemistry school has dropped from 43 to 28 in the last decade. Furthermore, it is crucial that our leading edge research institutions maintain a critical mass of scientists and that expertise is not distributed too thinly on the ground. I am glad indeed that Minister Kemp emphasised this in his forward to the higher education green paper entitled `New knowledge, new opportunities'. If you ask why institutions such as Britain's Medical Research Council Laboratory of Molecular Biology in Cambridge have managed to win eight or perhaps now even more Nobel prizes since it was founded after World War II, you will find that the answer lies largely in part in its ability to attract and keep that critical mass of the very best scientists.The same philosophy underpinned the foundation of the Australian National University as told in a wonderful book written to celebrate its jubilee by Foster and Varghese entitled The making of the ANU. It is a matter of some concern to me that university publication data may no longer be considered in assessing university grants. Publications in the international peer review press and their citations in international journals are the standard criteria by which academics are assessed. Of course, there is the potential, as with all criteria, for some data to be misleading. After all, one should never confuse quantity with quality, especially at the individual level. Still, for all their faults, publication data taken over time are generally considered to be one of the most reliable measures of output data in assessing research excellence.Sir Robert Menzies' legacy to high quality tertiary education is with us everywhere, not just in Australia but internationally as well. In a delightful inversion which he would have loved, it must be said that the influence of scientists trained in Australia in the 1950s is now particularly evident in Britain. To name just a few, the Vice-Chancellor of the University of Cambridge, Sir Alec Broers, is a physics graduate from the University of Melbourne; the recently retired Director of the Wellcome Institute in Britain, Dame Bridget Ogilvie, is a science graduate of our University of New England; and Sir Robert May, who is the Chief Scientific Adviser to the British government, is a theoretical physics graduate and a former professor of physics from the University of Sydney. The rigour and depth of their Australian education in the 1950s has stood them and the world in good stead. It is an expensive rigour which Australia risks losing at its peril.The higher education green paper is rightly encouraging of universities to collaborate with industry and to engage its financial support. It would, incidentally, be an excellent thing if the international pharmaceutical giants, who base much of their research in other countries, were to establish major research centres here in Australia in a much more meaningful way than they have done to date. The green paper further ties government funding to the extent of other such external support.But let us not forget that it is not just governments who would seek to add dollar value to areas that already demonstrate excellence and existing support. Private industry too knows what dollar for dollar support is in a converse sort of way. Put another way, private industry will want to support enterprises that others, including the government, have considered worthy of support and usually which have a demonstrated track record to build upon. Corporate donors will want to know for certain that university staff have the flair and potential to take things further. Private industry is not likely to want to move onboard too many apparently sinking ships or to provide money so that the government can bail out with no net benefit to universities.There is another very important angle to this: basic science is an utterly crucial but long-term and sometimes risky activity. Inherently, it may be less attractive to Australian industry than will be applied science and correspondingly more dependent upon government. Unless we increase the total funding base, the transfer of university funds to departments that have the highest success in attracting corporate funding could be at the expense of basic science and the humanities, to our long-term economic detriment. I respectfully ask our minister to keep a firm watching brief on this to ensure that benefits from external support flow also to those high quality departments that are not in a position to attract external funding.The point is that in order to attract private, and particularly private international, money, the government itself must invest not less but more—much more. Excellence begets excellence and money begets money. In this context I point particularly to the United States, whose major companies are endowing the already well-endowed universities of Oxford and Cambridge in particular. Oxford has its Kellogg Business College, thanks to the cornflakes manufacturer, which also sells the odd flake or two here in Australia. Microsoft has given unprecedented sums to computer research in Cambridge because that is where Professor Needham and other similar brilliant minds work. Dr Gordon Moore, Chairman Emeritus of Intel, has given another £7.5 million, which is $A18 million, for a Cambridge science library, because that is where Professor Stephen Hawking works and also because `the University of Cambridge has a long history of doing leading research into some of the most fundamental questions that mankind can ask'. If we wish to entice American money to cross the Pacific instead of the Atlantic, we need to show the Americans that our universities have a great track record and that we employ well-paid, high-flying and well-credentialled staff.Even though I have concentrated on science, I rank the core humanities no less highly. It is science which provides us with the technical wherewithal to enjoy life and the health with which to live it, but it is through the humanities that we all try to understand what it is to be human. Let us not forget, as we approach the millennium, that we are the inheritors of 2,000 years and more of the Western Judaeo-Christian tradition, a tradition which links us inextricably with the ancient civilisations of Greece, Rome and Mesopotamia via the complexities of history and discovery. To adapt Sir Isaac Newton's words, if we in Australia see further, it is only because we stand on the shoulders of those who have gone before. It is the universities which, more than any other institution, are the guardians and conservers of these sacred traditions of history, of philosophy, of mathematics, of literature and of language.Sir Robert Menzies once said, `If a university failed to produce a single doctor, lawyer or engineer its place in a civilised community, with a sense of real values, would be secure.' It seems to me that those who teach and advance the frontiers of these humanities in our universities are principally responsible for their conservation and transmission in Australia and the dissemination of this understanding within the community and to those who teach our children. Yet major university history departments, like chemistry departments, have borne the brunt of the decade's cuts. At Sydney University, the number of history lecturers has also fallen by about half over the last decade.Earlier this month, the Australian government enjoyed the honour of hosting the visit to Australia of the President of South Korea, Kim Dae Jung. President Kim is a most remarkable man. He has spent years in prison and has borne many attacks on his life because of the kinds of values which we in Australia hold dear and because of his support for democracy and for human freedom. I hope I may be permitted to mention that my alma mater, Sydney University, had the prescience to honour him in 1996 with an honorary doctorate of law while he was still fighting his battles from opposition. But now he is President, and we rejoice that he is in a position to promote these values even more effectively.I speak of President Kim in the context of higher education funding because there can be no greater advocate of the need for basic research in universities than President Kim. He emphasised this support for basic science when he addressed the United Kingdom Confederation of Business and Industry at the time of the ASEM conference in London last year. Furthermore, the South Korean government has now pledged to increase spending on research and development by 28 per cent by 2002. All this is in the context of a program of financial liberalisation, which is effectively helping South Korea recover from the depths of the Asian economic recession which marred his taking of office. It is an illustration of how research, democracy and financial deregulation can go hand in hand with financial recovery.This month also provides an interesting conjunction in time and destiny for Australia. Earlier this month, there was a celebration in Parliament House in Sydney to mark the 150th anniversary of the speech that our great colonial statesman W.C. Wentworth gave on 6 September 1849 to promote the building of a university in Sydney to rank with the best in Britain. The public was sceptical and critical of the expenditure, but he went ahead anyway—and what a wonderful result for our national posterity. It is a delight to realise that President Kim and W.C. Wentworth are each celebrated in Australia this month as protagonists of both democracy and tertiary education.In the year 2000 time and destiny again collide. October 1 will be the final day of the Sydney Olympic Games and the eyes of the world will be on Australia and its closing ceremony. Yet exactly 150 years ago, on 1 October 1850, an act of parliament was passed by Australia's oldest legislature to establish Australia's oldest university and so fulfilled the dream of William Wentworth. If we want our young scholars to attain first-rank world status like our young sports stars, the quality of our infrastructure investment for our universities must equal the solid, quality infrastructure that is in place for the Sydney Olympics.Finally, I do encourage our government in its new commitment to research in universities. Our young people have a right to aspire to the highest levels of academic attainment and recognition. Young Australia has a birthright to be taught to world-class stand ards, as their predecessors were. We are moving upwards from what was a very low 1996 baseline, and again I beat the drum: any proposed redistribution of funds cannot be substituted for a desperately needed and dramatic increase in their magnitude.18:00:0010253Hall, Jill, MPMs HALL83NShortlandALP00—The Higher Education Funding Amendment Bill 1999 reflects the Howard government's approach to higher education and the value it places on it. It is about cutting funds to universities, undermining their operations, and reducing the access of ordinary, non-paying Australian students to those institutions.This is the fourth year that the Howard government has cut operational funding to universities, and universities are hurting. Australian universities have been forced to make do with fewer funds whilst other developed countries are spending more on education and universities. Our nation recognises that research is essential for economic development. Australian people know that we must have money going into universities and money being put aside for research if we are to go ahead. We in the ALP certainly know that, but unfortunately members on the other side of the House do not recognise that, and the government's policies and legislation do not reflect it.This government constantly cuts funds for research and development, and this is resulting in universities becoming training schools for students. Instead of needing to go to university to access information, they can pluck it from the Internet, missing out on the valuable interchange of ideas that takes place in universities. Teaching staff are employed not for their ability to teach or for their ability to give students information but rather on their entrepreneurial skills. That is the vision this government has for universities and those who teach in universities.The reduction in funding for research will have an effect on innovation and the independence of universities and it will mean that Australia will be left behind—at a time when it is so important for a country to be a knowledge based society. We are part of a world economy and we are part of a world where we have got to compete with other countries. We are not competing with each other; we are competing with the rest of the world. And if the government does not make an investment in education, then we will be left behind.Australia's future lies in knowledge, in education and in a work force that is educated and highly skilled. Unfortunately, this government is not prepared to make a commitment to see that Australia achieves this. It is constantly cutting funds for education and research, and this will not deliver the work force or the society that we need to meet the new millennium. We live in a changing society where skills, expertise and careers can disappear overnight. You only have to look at BHP. Back in the early 1980s they employed a work force of 12,500. If you worked hard, you could be assured of a job for life. But on 30 September, BHP will no longer exist in Newcastle.We need a society that is able to go ahead with change, and it means a totally different approach to education. It means a whole of life approach to education, where we are constantly developing new skills and where we are able to access education and knowledge. We need strong, properly funded universities, not universities that are reacting to change, putting money in and developing courses at whim.The minister says that this bill enhances the collaboration between universities and industry. What that really means is that he is transferring the funding of universities to industry. This will reduce the independence of universities, and it will reduce our ability to go out to the cutting edge and come up with new ideas, new technologies and new discoveries to put Australia at the forefront of the world. It will lead to a decrease in innovation, and that means Australia will be left behind.The Howard government promised Australians an education budget, but it has given us a 1950s budget. It is not a 1950s Menzies-style budget, as the member for Hughes was talking about, because Mr Menzies had a commitment to the development and fulfilment of individual human potential. Rather, it is a 1950s-style budget that is elitist in its approach to education—not based on a person's ability to achieve but rather on their ability to pay. It is a vendetta against ordinary Australian students, and that can be seen in a number of ways.The government has made changes to the youth allowance, which has made it more difficult for ordinary Australian students to go to universities. What are these changes all about? They are not about making it easier for students to go to university; they are about cost cutting. The independent age for Austudy has been increased from 22 to 25 and the means test has been tightened—every change that has been introduced has been about cuts. These changes are about reducing this government's obligation to Australian students and to universities. The result is that those students who have money have access to universities while those students who do not have money are being deprived of the opportunity to attend universities.Australian students are the future of our nation. Those students will be able to access university education only if this government makes it available to them. The abolition of the merit based equity scholarship scheme was another attack by this government on those needy students who have got the ability. Getting an education should not be about having the money; it should be about having the ability. This government is making it harder and harder for ordinary Australians to go to university. It has changed HECS. The government has increased the charges and it has reduced the threshold for repaying. It is changing the system all the time so that it is more difficult for ordinary Australian students to go to university.What does that mean for the future? It means that those people who have got the money to pay are going to get all the advantages. They are going to get the education, they are going to have the skills and they are going to get the good jobs. That means that we are going to have a two-tiered society in the future. To access university at the moment you either have to have the money or be prepared to work part time and go to university full time, or work full time and go to university part time. It is harder for ordinary Australians to access the universities, and it is all because of this government's cuts. It is all because this government has waged war on ordinary Australians. In Australia, 15 per cent of the population go to university whilst in the US it is 26 per cent.This government continues to slash funds. It is providing $4 million for an advertising campaign to encourage students from overseas to come to Australia but at the same time it is withdrawing funds from the universities. The Howard government sees all undergraduates and potential students as consumers and universities as supermarkets, which is absolutely ridiculous. It trivialises the importance to our nation of university and education. Education is not a luxury of life; it is essential. If Australia is to go forward we must spend money on education. We have to invest in knowledge, expertise, skills and the future, and money directed towards the universities does just that. If we do not do this we will be left behind as we approach the new millennium.We must fight hard to see that this government's plan or picture for Australia does not come to fruition. University education is too important an issue to leave to economic rationalists. We are starting from a point of disadvantage here in Australia because of the policies this government has introduced. This government's philosophy blinds it to the needs of ordinary Australians. It is hurting Australians and it is hurting Australia. Not only is the government axing funds from universities, it is seeking to make student unionism voluntary. This is driven by a hatred of unions, and it is going to have enormous impact. In regions like Newcastle, where we have a strong university, it will definitely cut back services to students. This government is marginalising universities by all the actions it is taking.John Howard and his government have achieved the impossible: they have united the vice-chancellors and students against the government. The education legacy that this government is going to leave Australia is both sad and serious, and was highlighted in the Expenditure on Education report released by the Australian Bureau of Statistics on Friday. This report highlights the damage done to Australia's education system by the Howard government, particularly in the area of university education. John Howard's government slashed funding to Australian universities by a massive 12.7 per cent between 1995-96 and 1997-98. This government is comprised of educational vandals. It has no commitment to education. It is bad news for Australia, bad news for Australian students and bad news for industry and business.I must conclude now because not only has this government got no commitment to education but also it is about to gag the debate on funding to higher education institutions, and I know my colleagues would like to make a contribution to the debate. The simple fact that this government is gagging this debate symbolises the lack of commitment of the Howard government to Australian universities, Australian students and to Australia's future.18:13:0010255Katter, Bob, Jnr, MPMr KATTERHX4KennedyNP10—This is a very historic moment for the people of North Queensland in so far as the Higher Education Funding Amendment Bill 1999 contains the provisions necessary for the commencement of the James Cook Medical School. The 700,000 people who live in North Queensland have no medical school and no way of training their own doctors. The demographic centre of North Queensland, which lies a little bit north of Townsville, is nearly 2,000 kilometres away from the nearest medical school. For all of North Queensland's history we have seen our northern boys and girls who are bright enough to get into the medical faculty go down to a southern university or, almost exclusively, to the University of Queensland. They live there while doing their course for the next six years of their life—very formative years of their life—and the chances of them returning to North Queensland are very small indeed.The figures cited earlier this evening by the honourable member for Townsville were very accurate. He said that there were some 1,100 specialist doctors in Queensland but that around 850 of them were in the south-east corner of the state. When one considers that more than half the intake of undergraduates of the University of Queensland comes from south of the border, one realises that its chances of supplying doctors to North Queensland are small indeed.Over recent years we have once again reached crisis point. There have been mass rallies. Some 400 or 500 people attended the rally at Mareeba protesting at the shortage of doctors there. A large number of people attended the anti-government rally at Tully over the same issue—a shortage of doctors. I was on the receiving end of another rally at Cloncurry, which again was over a shortage of doctors.If we were to go through the historical sequence that occurred in this case, we would turn our minds back to George Roberts, a man from a very prominent legal family in North Queensland, whose energies and vision for the future of North Queensland saw the necessity for a North Queensland university. Whilst there were many other players, I do not think George ever got the acknowledgment that he richly deserved for the formation of the university. I pay very great credit to my father, who with the government of the day instituted the growth of that university.My first memory of the doctors issue was the opening of the Julia Creek hospital. I was secretary of the Chamber of Commerce in Cloncurry. At the opening everyone was there in all of their finest regalia, expecting great speeches lauding the state government and the state minister for health on the beautiful new air-conditioned hospital at Julia Creek. The then member of parliament, Bill Lonigan, venomously attacked his own government and his own minister. He said: `What the hell is the use of having a three and a half million dollar hospital when we have no doctor to man it?' Some 12 months later, little did I expect that I would be the member of parliament representing Julia Creek. I promised myself that if there was one thing that was never going to happen, it was that little Julia Creek was ever going to be left without a doctor again.I could write a history book about my efforts to secure and keep doctors, but suffice it to say that the history books will read that in the three years before I became the state member of parliament Julia Creek had a doctor for six months and in the three years after we were only without a doctor for some three months. I carted around with me for some 16 years of my life—I never went anywhere without it—a list of 12 doctors' names throughout the world whom I knew I could ring up because they were willing to come to Australia and serve in Julia Creek or Richmond or any of those other towns where we needed the doctors.I pay great tribute to that living saint, Dr Harvey Sutton from Cloncurry, who instituted the inland medical service at the cost of his own family's fortune and his own personal fortune, which he lost entirely. But his loss was gain to the area. He went overseas and, out of the little money he had, he secured doctors for us to man so many of our inland towns that had never seen a doctor before. Whilst financially he may have fallen and died, it was over his financial dead body that we were able to secure medical services in those areas.However, we rode once again into very grave and difficult waters some two or three years ago when Aramac and Muttaburra, two little towns very close together and serviced by one doctor, lost their doctor. It was 11 months before that doctor was replaced. There is a statistic for this: if 1,000 people are left without a doctor for a period of two years then someone will die as a result of that doctor not being there. We went without a doctor there for 11 months. This was very public. The situation was venomously attacked by me on numerous occasions through the public media. It was a national issue, even though it was a small area.On top of that, we had the AMA demanding that no doctors come in from overseas. There were moves by the government of the day, of which I was not part, to ban the immigration of doctors into this country to service country areas. The minister said that, whilst it was a general rule, it was a rule that could be broken specifically. I launched what some described as a fairly venomous attack upon the AMA. Bill Coote, the national director, arrived in my office the next day. I had the honour of being president of my university college at the University of Queensland and president of the faculty. Bill happened to be a freshman at my university college when I was the big chief, so I had some psychological one-upmanship on Bill. Dr Bill Coote came in and said: `Look, Bob, you don't understand this.' I said: `I most certainly understand this. Over the riches of the doctors practising in Australia are going to be the dead bodies of we people in the bush. That is what this amounts to, William.' He said: `The only solution to this problem is a medical school in North Queensland. What do you think is the only way we can attack this?' I answered: `The medical school in North Queensland; that has been my belief.'I then went and saw Michael Wooldridge. He sighed and looked to heaven and said: `The only way out of this is the Townsville medical school.' I said: `Well, Michael, that doesn't solve the problem for Australia.' He said: `Two-thirds of this problem is a Queensland problem and two-thirds of the Queensland problem is a North Queensland problem.' At all stages throughout this very historic move I thought that was the intellectual underpinning of the drive for the university to expand that medical school into the area.I went to see Mike Horan, who was the then minister in Queensland. Mike said to me: `Bob, there is only one way out of this situation, and that is a medical school in Townsville.' So the three key players all said that there was only one solution, and that was the Townsville medical school. That was always my belief.Probably Mike Horan—and I do not mean to denigrate anyone by saying this—more than anyone else took it upon himself to deliver that medical school. Peter Lindsay said that we had been promised it in 1983. I think that at about eight elections we had been promised the Townsville medical school. But still nothing had happened in the year of Our Lord 1993. I called a meeting. Rhonda Jones was then acting vice-chancellor at James Cook University. Ian Wronski and a number of other heavies from the university were at that meeting; I cannot remember everyone. There were two representatives from the Premier's Department, one of them Mary Jane Streeton, the Premier's representative in North Queensland.Rhonda Jones suggested that a committee be set up under Lady Pearl Logan, and everyone thought that that was an excellent proposal. I met Dr Ian Wronski for the first time, and he was a bundling ball of nervous energy, drive and commitment not only to intellectual attainment but also to what he thought needed to be done in Australia for the betterment of his country. Ken McKinnon, who was the Vice-Chancellor for only two or three years, was probably one of the most important key players in the delivery of this. Though his time in North Queensland was very short, his contribution most certainly was giant.We were vehemently attacked by the University of Queensland on a continuous basis. They never relented in their attacks to try to stop this medical school from going ahead. They had failed totally to deliver doctors to us in North Queensland and western Queensland but still had the hide to try to prevent us from having our own medical school in the northern half of the state.At the annual conference of the National Party, Lady Pearl Logan got Mike Horan aside and said, `Mike, I want the medical school and I want it now.' He said, `I can't deliver it. It really has to be Bobby Borbidge.' So she said, `Right, get him over here now.' She is a feisty little fighter, even though most people her age should be out playing bingo and watering flowers. Pearl demanded that Bob Borbidge come over, so Bob went over and got a good hammering too. They were both browbeaten into submission and agreed that there would be a decision made immediately about the medical school, and there was. So the Queensland government took its decision in cabinet that there would be a North Queensland medical school.We got immense support from Margaret Reynolds. It would be improper for me not to mention the support and contribution by Margaret. I think she had a lot to do with convincing the incoming minister, Wendy Edmond, and we thank Wendy too for her contribution. Peter Lindsay called a very key meeting in the Snowy Mountains when the coalition was up there with the Prime Minister and all of we players, and I think that had a very real part to play in delivering to us the school.Finally, to the Prime Minister, David Kemp, Michael Wooldridge—all those people who made this decision—we say a very sincere thank you. To date, as the famous journalist in the Australian newspaper Heather Brown put it, we have been left to die in the mud in the bush. That most certainly has been the situation to date. A very serious determination has been made by this government and by the successive governments in Queensland to turn that around, and for this we are very thankful indeed.18:25:0010258O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—The Higher Education Funding Amendment Bill 1999 sets a funding framework for various government initiatives in the education sector. It sets a maximum amount for operating and other grants to higher education institutions by varying the amounts already legislated under the Higher Education Funding Act 1988 for 1999 and 2000, and it inserts an amount for 2001. It also sets maximum funding levels for expenditure on the international marketing and promotion of Australian educational and training services by Australian Education International for the 2001 funding year.As has been referred to by the previous speaker, the member for Kennedy, it amends HEFA to make provision for the funding of 60 medical places at James Cook University for 2001, and it provides funding for the science lectureships of $14.7 million and research infrastructure of $73.6 million. Those initiatives were announced in the budget.The bill before the House really masks the failure of this government as far as higher education funding is concerned. The importance of education to Australians and the future of the nation has been stated in many debates in this House. Access to educational opportunities for all Australians is a central plank of Labor's policy platform. Our policy framework is based upon the creation of a knowledge based society as a driver of economic growth into the future.As far as the contribution of tertiary education to Australian society is concerned, that contribution was succinctly summed up in its length and breadth in the comments of Profes sor John Niland, who is Vice-Chancellor of the University of New South Wales and President of the Australian Vice-Chancellors Committee. These comments were reported in the Melbourne Age on Thursday, 25 March 1999. This statement really sums up succinctly the importance of tertiary education to Australians, to the Australian economy and to our future. He said this:University education generates many significant external benefits to the community. In particular: additional income generated by a highly skilled labor force is returned to general revenue, thereby benefiting all citizens; education helps raise public awareness and integrate new migrant groups into the Australian culture; education reduces income inequality and promotes long-term economic growth; educated workers inspire and raise productivity of co-workers; and the body of knowledge created by university research often results in new or improved goods or production techniques that can save lives, increase welfare and accelerate economic growth.It is a very comprehensive statement of the importance of higher education to Australia. But, sadly, this government, which claims wisdom in so many policy areas, has seen fit to grossly run down our educational resources and our educational infrastructure not only in the amounts of money going from the Commonwealth to the primary and secondary levels but also in the area of higher education.In 1996, the coalition wiped some $2.7 billion from the education budgets of the nation in succeeding years. If we look at our particular record and compare it to the coalition's, the community can well understand why this federal government is selling them short and selling the nation short as far as the resources that it is putting into the tertiary education sector are concerned.In Labor's last five years, the percentage of the nation's wealth invested in education, research and training rose from 2.35 per cent of GDP to around three per cent of GDP. The government, in its first four budgets, has reduced this investment as a percentage of GDP back to 2.53 per cent in the budget projection for 1999-2000.If John Howard had maintained our investment in education and research at three per cent of GDP, the Commonwealth would now be spending an extra $2.87 billion on education and higher education. Of course, ministers and members from the coalition come into this House and lecture us about the Commonwealth budget and the dangers of deficits, and the fact that the sky will fall in if the Commonwealth government happens to run a deficit or even a modest surplus. What they do not tell us is that in the postwar era it was a Labor government that ran surplus budgets for the first time. Most of the budgets in that postwar era were in deficit and they were run by coalition governments. So when you beat your breast about how good this coalition government is, I have to remind you that you are merely catching up to Labor and following Labor's example as far as surplus budgets are concerned.There is an essential difference between the coalition and the opposition in relation to education, and it is simply this. The minister and the government essentially view education as another line item in the federal budget. It is a cost to the budget that has to be substantially reduced to pander to the Prime Minister, the Treasurer and this minister's ideological prejudices. We on this side of the House regard education expenditure as an investment in the future, an investment in our citizens both young and old, and in the nation.There are some significant issues that are of real concern to the higher education community in this nation. It has been articulated in many forums that there has been a decline in teaching standards and a significant increase in student staff ratios in the tertiary sector since this government came to power. Day after day we hear vice-chancellors complaining about the run-down of infrastructure within their institutions. That is an inevitable result of this government's policies. We also hear people from within these universities complaining about the fact that equity and access considerations have fallen by the wayside. For example, in the higher education student population the proportion of students from rural backgrounds has declined from 18.5 per cent in 1991 to 17.4 per cent in 1997. We have seen significant reductions in the access of people from rural backgrounds to higher education institutions under this government.In the remaining time available to me in this debate—I understand the government intends to gag the debate later this evening—let me pay tribute to Deakin University, which is in my electorate. Deakin University owes its existence in Geelong to the efforts of the former member for Corio, Gordon Scholes. The Liberal government of the day wanted to locate the university in a metropolitan environment and it was through the efforts of Gordon Scholes that the university was located in Geelong.In August, Deakin University was named joint winner of the 1999-2000 University of the Year Award. It is the second time that the university has won that title and it is the first time in the history of national awards that the award has been won twice by a particular university. This is an excellent university. I pay tribute to Professor Geoff Wilson and the staff of Deakin University for winning this award yet again. The criterion for the 1999-2000 awards was productive partnerships. Deakin University has very extensive and productive partnerships not only with the Geelong community but with industry in Geelong and corporate companies throughout the length and breadth of Australia. It is a very important award and will do much to lift the morale of the university which has suffered severe funding cuts and difficulties in recent times.What does Deakin University say about the thrust of the recommendations of the government's green paper on research and research training? The vice-chancellor who accepted that award, Professor Geoff Wilson, had this to say:Deakin University was one of several universities that would suffer dramatically by the funding model proposed in the Federal Government's Green Paper on research and research training.. . . . . . . . .I find it surprising and disturbing that Deakin University, recently named joint University of the Year for its outstanding education and training partnerships, is treated so badly in the recommendations of the paper.Deakin is a leader in its professional doctorate programs that are offered in partnership with industry and are aligned precisely with the thrust of the Green Paper. Yet the proposals would cut our research degree places from over 500 this year to under 200 in 2001, with further reductions to follow.So much for the clever country. So much for encouraging a knowledge based society. So much for laying an educational base that will underpin economic growth in our future. So much for securing the future of this country and young Australians in it. This government is to be absolutely condemned for the cuts that it has made to education across the board, particularly in higher education.18:38:0010260O'Byrne, MichelleMs O'BYRNE84SBassALP00—I rise to speak to the Higher Education Funding Amendment Bill 1999 with particular reference to its impact on Tasmanian students and the Tasmanian community, but before I outline some specific Tasmanian repercussions, let us look at the broader impact of the Howard government policies in the area of education. The Australian Vice-Chancellors Committee, in their submission to the West review, called for an increase in government funding of over 20 per cent. They warned that:Without a national vision and sufficient investment in our higher education system, Australia and today's young Australians are likely to be marginalised as the region moves towards higher living standards and more advanced social and political structures.In the lead-up to the last budget this government referred to the production of an `education budget'. This government claims an interest in the furtherance of our educational standards and consistently restates its supposed commitment to education. Unfortunately, the reality is somewhat different. Education has been one of the first casualties of the Howard government. This is the fourth year in a row that the Howard government has reduced the operating grants to the University of Tasmania.Although the number of undergraduate university places has increased, as the Minister for Education, Training and Youth Affairs was very quick to point out in his second reading speech on the bill, the number of applications received by universities is decreasing. This is a direct result of the disincentives that the Howard government has created. Under this government, first generation university students are less likely to explore their potential due to economic constraints. In fact, applications to universities have been driven down by around five per cent. It is hardly worth bragging about allowing universities to lower their entry standards to accommodate those in the community who can `buy' their university place in a course. A total of 1,740 university places were offered in this way by the government. This is not about equitable access—this is about providing privileges for the wealthy. A further advantage to those students with a higher disposable income relates to HECS. With savings of up to 25 per cent for up-front settlement of fees or payments over $500, economically disadvantaged students pay more and, once again, miss out.In the last budget the Howard government attempted to make us forget the ills that it has wrought in education. It speaks of extra funding for literacy, additional Commonwealth funded places and additional medical school funding. These measures are fine, but they do not in any manner redress the $2.7 billion education hole that this government has created. Because that is what this government has ripped out of education funding and that is the reality of its so-called commitment to education.The University of Tasmania has suffered significantly at the hands of this government. Many potential students for the university in Tasmania are first generation students. But this government, with its talk of up-front fees, is putting barriers in the way of families who do not feel that they can encourage their children to pursue further education as an option because they may well not be able to afford it. The university is vital to the future of our state. It needs to be perceived as a viable option for talented Tasmanian students, to give them a pathway to excellence.But this government is not committed to education excellence. In particular it is not committed to educational opportunities for regional students. Perhaps the most offensive issue is the attack on students from isolated or low income areas. There is little doubt that people living in regional Australia suffer a disadvantage when it comes to accessing services such as health and education. And there is little doubt that the problems facing people living outside the major population centres such as Sydney and Melbourne have increased since the Howard government won office in 1996. The government has focused on metropolitan constituencies at the expense of regional Australia. In Victoria, the Kennett government is now learning about consequences.There was, however, surprisingly, one initiative taken in 1996 by the then Minister for Employment, Education, Training and Youth Affairs, Senator Amanda Vanstone, that was actually designed to help people living in regional Australia. It was called the Higher Education Equity Merit Scholarship Scheme. It provided assistance for students from low income families and rural or isolated backgrounds. It enabled some of the cleverest kids from rural or battling backgrounds to go to university. In essence, it provided some measure of equity for disadvantaged students.The introduction of this scheme recognised that if students live in regional areas their chances of going to university are less than if they come from cities. Potential students are in many cases prevented from accessing education due to isolation. Senator Vanstone said that the scheme was designed to bring higher education within the reach of ordinary Australians. I could not agree more. She said it was a practical demonstration of the Howard government's real commitment to fairness and equity in higher education. That statement by the then minister was misleading. This was not a commitment to equity in education by the Howard government. It was a commitment to equity in education by Amanda Vanstone. And when she went so did that commitment.Across Australia this initiative was taken up by 1,127 students from low socioeconomic backgrounds; 375 from rural or isolated areas; 199 indigenous Australians; 188 students from non-English-speaking backgrounds; 149 students with disabilities; and 109 women studying in non-traditional areas. Tasmania was a beneficiary of this scheme. In its first year, 58 Tasmanian students applied for assistance. The number of scholarship applications increased to 121 in 1998 and 225 students applied to access the scheme this year. Out of those 58 applications in 1997, 20 students were successful. The number of students accessing the scheme last year was 46 and this year that number increased to 68.The abolition of the Higher Education Equity Merit Scholarship Scheme was a low point in the 1999 budget. In terms of the total budget it cost very little. But its cancellation was a significant cost to the many students in northern Tasmania who want to get to university. It demonstrates the meanness of this government—that it would tear up with such abandon the opportunity for talented students to overcome disadvantageous circumstances to realise their full potential. The Prime Minister, in the lead-up to the last budget, referred to his education budget and then promptly scrapped a program for clever kids in rural areas.This is a small but very important example of how this government operates. As far as Tasmania is concerned, it is all bad—in particular in the area of research. In the last three years the Howard government has had a devastating effect on university research and development. Cuts to university operating grants of more than $800 million have reduced Commonwealth investment in higher education research by 11 per cent as a percentage of GDP. In order for universities to be successful in obtaining Commonwealth or industry funding, there must be an adequate research infrastructure. This government should embrace education and research as the future of our nation. Yet the Howard government has further plans for attacking university based research.My concern for the future of university research was echoed by the Council of Australian Postgraduate Associations Inc. in a briefing paper prepared on the federal government's research green paper in 1999. Criticisms were also considered valid by the president of the student association at the University of Tasmania Launceston campus, Paddy Dorney. Specifically, there is real potential for commercially profitable research to reign supreme at the expense of less commercially profitable research in the arts and humanities streams.The imposition of time limits on the completion of postgraduate courses fails to recognise the plight of disadvantaged postgraduate students who have been financially unable to follow straight from their first degrees into further university study. What about those students who have family commitments which prevent them from making university a full-time occupation, or those who are working and simply cannot be at school full time? It seems that the government is, in the words of the President of CAPA, of the belief that older students are `a less than optimal investment of limited public resources'. I would have thought universities would have been enriched by the contributions of students who had different experiences to share and offer. It would seem, however, that this government is intent on decreasing access to universities for disadvantaged students and is not prepared to invest in opening universities to allow lifelong educational access to the community.Students with high disposable incomes will be able to conduct their research at interstate universities. Regional universities offering fewer research options will lose talented students because they are unable to offer equivalent research options. Economically disadvantaged students will have no option but to cancel their plans to work towards postgraduate qualifications. Who is the poorer for restricting their access to education? We are. We are the community that will bear the cost of this Howard government's education cost cutting practices. This government's policy is about making postgraduate university studies more elitist and less accessible to ordinary Australians—and it will significantly impact on the people of Bass. I am left with the impression that mature age students, as we used to call them at university, are not important to this government and that full fee paying students who will roll in and out of university quickly are this government's priority.The quality of research completed at the University of Tasmania's Launceston campus may also be reduced because quality research takes time. Significant educational cutbacks coupled with a GST of 10 per cent imposed on books and stationery, added to increasing HECS rates recovered earlier and potential attacks on postgraduate study opportunities signal a difficult time for university students throughout Australia. Regional universities such as the Launceston campus of the University of Tasmania will struggle.To assume that education is not a lifelong journey is a fatal mistake. The Howard government appears intent on destroying access to quality university education in this country. Tasmania has three university campuses which are affected by the cuts to higher education funding. Cost shifting to universities themselves and the private sector is not the solution. This government should be working on guaranteeing adequate funding and providing an educational experience in our university institutions that all Australians can access on the basis of merit.The government's research green paper released in June 1999 proposes significant research changes to postgraduate studies. If adopted by the government, the policy will signal a change in the university culture and environment as we know it today. Imposing time limits on postgraduate studies and decreasing choices of what can be studied and where will alienate many Tasmanians, particularly northern Tasmanians, from a postgraduate university education and/or career. The Howard government would do well to reflect on the World Bank report of autumn 1999, which found:. . . that a key reason for the economic success of the countries [studied] was a high level of investment in education by the state . . . I call on the government to recognise and value the enormous contributions postgraduate students make to the quality of our universities and I urge the government to adopt measures which remove a significant barrier for prospective first generational and rural university students to seek a university education. I remind the government that education is an investment in the intellectual capital of this nation. Need I remind the government of Victoria's message to Kennett only last weekend. Privatisation of basic services and neglect of regional Australia will not be forgotten at the next election.18:48:0010263Sidebottom, Peter, MPMr SIDEBOTTOM849BraddonALP00—Prior to the budget of this year, the Prime Minister said that the budget would be:. . . good for education and what I might call the future intellectual capital of this country.That was very interesting because ever since then we have heard little of support from the universities, vice-chancellors or students involved. Indeed, the ANU annual report of 1999 actually criticises—most unusually—the federal government and its policies. The report says:Federal policies have harmed Australia's ability to sustain high-quality universities with research excellence and outstanding staff that enable the nation to claim a world-class higher education system.Turning to my own state, I refer to a letter to me from the Vice-Chancellor of the University of Tasmania on 20 July 1999. This is his assessment of this government and its policies:The 1996 Commonwealth Higher Education Budget cut operating grants to the University and reduced the number of Commonwealth-funded student places. The Government also discontinued supplementation for salary increases in universities. As a result, at the end of this year the University will have reduced its operating budget in the order of $10 million and will have shed 408 student places. Expansion, not contraction, of the University is needed to confer economic benefits on the State. While the university is acting to diversify its sources of revenue (including industry funding for research), increased Commonwealth funding is required in this, the most educationally deprived of the Australian states.In 2001, Commonwealth funding for higher education will be at around the same level as it was in 1990. This is an unsafe level of public investment. We cannot and should not rely on the market to deliver sufficient additional income to ensure quality and equality of access. By reducing funding to valuable public infrastructure and decreasing subsidies to students, the features of universities which matter to Australians—that is, their contribution to our economy, their contribution to knowledge and the excitement of discovery, and their contribution to improved employment outcomes—are all put at risk.I will not repeat the figures that have been presented by my colleagues on this side of the reduction in all sorts of ways of the actual level of government funding to universities when we take out HECS funding as a proportion. All I know is that those figures have been duplicated in Tasmania. I refer to the Senate estimates evidence, in response to Senator O'Brien's question No. 1181, concerning those figures. All they do is duplicate the criticisms and observations by the Australian Vice-Chancellors Committee on funding.The coalition's policies are limiting participation. For example, in 1998 there were 16,500 fewer fully funded places than had been budgeted for in Labor's forward estimates. At the same time, costs to HECS liable students have increased by between 35 per cent and 125 per cent and the salary threshold for repayment of HECS has been lowered to $21,684. The combined effect of reduced opportunities for fully funded public participation, coupled with increased costs to students, has led to a sharp decline in undergraduate applications since the coalition took office. Although there was a small recovery in demand in 1999, there has been a big cumulative decline since 1996.I turn to the question of participation of students in rural and isolated areas and those students that are affected because of their socioeconomic status and background. A recent study by the staff of the Centre for the Study of Higher Education has found clear evidence that cost is a particular disincentive for participation by students from rural backgrounds or from low SES backgrounds. That relates in particular in my electorate of Braddon, on the north and west coasts of Tasmania. It found that rural students were significantly more likely than urban students to believe the following: their families cannot afford the cost of supporting them at university, the cost of university fees may stop them attending, and there is no point in their going to university.The study found that rurality and socioeconomic status combined to produce the greatest educational disadvantage. The least advantaged students, that is, lower socioeconomic status students who lived long distances from university campuses for example, have significantly different attitudes from the most advantaged students, that is, from urban higher SES students. For example, at least twice the proportion of the least advantaged students believe that the cost of university fees may stop them from attending university—43 per cent compared to 21 per cent. Thirty-one per cent of the least advantaged students believe that a university qualification was not necessary for the job they want, while 15 per cent of their most advantaged counterparts believe the same. Sixty-nine per cent of the most advantaged students believe that their parents want them to undertake university study, while 38 per cent of the least advantaged students believe so.The cost of higher education is identified by the study as a serious inhibitor or barrier to rural students. Rural students were much more likely than urban students to believe that universities are really for wealthy people, and for many financially disadvantaged rural families the costs of education are well beyond their income capacity. Cost, however, is not the only inhibiting factor. The study concludes that present imbalances in higher education partly reflect differences in family and community attitudes towards the relevance of education. These social factors have a bearing on student choices before the final years of school, explaining partly why school completion rates are lower in rural areas. The study concludes that many rural students do not actually reach the point where it is meaningful to consider potential barriers to higher education.These sorts of attitudes point towards the need for policies which address not only the limited access which students from equity groups experience but also the extent to which their aspirations have been blunted by the policies of this government. Dr Kemp, knowing the figures of the CSHE study, chose to suppress them and proceed with such measures as the abolition of merit equity scholarships, claiming that they do not work. I will have a look at this claim. These merit equity scholarships were introduced in 1997 to further encourage the participation of equity groups. A thousand new students each year were to be exempted from HECS charge, building up to a pool of 4,000 students by the year 2000. Up to the present time, 3,000 scholarships have been allocated to universities. Recipients by category of disadvantage in 1998 included indigenous Australians, women in non-traditional areas, people with a disability, people from non-English-speaking backgrounds, people from rural and isolated areas and people from low socioeconomic backgrounds—the latter two, of course, making up the greatest percentage of those who were recipients of the equity scholarships.I cite the parliamentary Research Digest, which says:DETYA has conducted an informal survey of university equity officers and states that the main points to arise were as follows: 85 per cent of respondents claimed that the scheme was ineffective in attracting people into higher education who might otherwise not undertake university study because young people did not value an exemption from HECS and because the universities did not advertise the scheme properly; there was no agreement on whether the scholarships improved retention; HECS exemptions are more attractive to mature age students and single parents, rather than school leavers; and the scheme is administratively expensive for the universities.When you do a little bit of investigation on this, it is interesting to find that phone call after phone call by people investigating the government's claim on the equity scholarships found that they had not been consulted, and that they wanted to see the results that allegedly had been gained through this informal survey of university equity officers. I can cite Robert Main, the Central Queensland University equity coordinator, or Dr Allen Barlow of the University of West Sydney or Jeanette Ryan of the University of Ballarat, and on and on it goes. They did not hear about this informal survey on the equity scholarships.I come from an area that is severely disadvantaged in terms of economic downturn and also in terms of educational retention rates to years 11 and 12 and to further education, those at TAFE and university. Unfortunately, the retention rates in my area are some of the lowest in Australia. Students in my area actually benefited from the equity merit scholarship scheme. In fact, 11 of the 21 offered in 1999 went to students from the west and north-west coast of Tasmania. Since 1996-97, 30 of the 68 scholarships offered by the University of Tasmania have gone to students from the west and north-west. The Australian Vice-Chancellors Committee said, through Don McNicol of this state, that the scrapping of this scheme was incredible; that it was incredible that the one scheme that might offer some incentive to people to go on in areas that are very difficult in terms of retention rates had been scrapped.I will finish now because I would like to give equal time to my colleagues. Don McNicol, the Vice-Chancellor of our university, has said this:Post-compulsory education retention rates in Tasmania have consistently lagged behind the national average. While the gap has been reduced in recent years, Tasmania's retention rates to year 12 remain the lowest of all the Australian States. In a similar fashion, Tasmania's higher education participation rates remain substantially below the national average with participation in the North and North-West regions 25 per cent and 55 per cent respectively below the national average . . .Further reductions in Commonwealth funding to the University will restrict higher education opportunities and have a negative effect on the State economy. An increased number of Commonwealth funded places—not reduced but increased—for the University is justified and required to address the problems of low participation and to meet the State's higher education needs.I will finish by again quoting Vice-Chancellor McNicol:Research has revealed a number of factors that contribute to the low higher education participation rates in Tasmania. However, there is clear evidence that financial considerations are one of the major disincentives for many Tasmanians, who are otherwise well qualified and motivated, to undertake higher education.Instead of scrapping the scheme, in fact they should have added to and expanded the scheme so that more and more people would find an advantage in going on to further education and so break the cycle of those that believe that higher education is out of their reach. When I started my speech I mentioned what the Prime Minister had to say about higher education in his budget. I reckon the government has its fingers around the universities' windpipes and is squeezing them with both thumbs.19:00:0010265Price, Roger, MPMr PRICEQI4ChifleyALP00—I am very pleased to speak on the Higher Education Funding Amendment Bill 1999 . I think that all members from Western Sydney really care very much about the knowledge based society and, inherent in that, about government and society investing in universities and investing in education. We in Western Sydney want our full measure of the jobs that go with a knowledge based society.Some of my colleagues are in fact suggesting that we ought to take the jobs that are associated with Badgerys Creek airport. I want to make a couple of observations about that. The quoted number of jobs that would flow as a result of the building of Badgerys Creek airport would be delivered in full by the year 2026, which is 27 years hence. But for every three jobs that would be created one would be in Western Sydney and two would be in the rest of Sydney. So it is not a great job generator in Western Sydney: only a third of the jobs generated would be there, and you would only get them in full measure by 2026. Bear in mind that by the year 2016 the people of Western Sydney will constitute more than half the population of Sydney. That is why I am not so impressed about the jobs.Why do we have to accept these jobs, which come at such a heavy price in terms of our quality of life and our environment and when it is documented that the airport is going to do so much harm to the people of Western Sydney? Why can't we be excited about getting the knowledge based jobs that so many speak of? As I say, I would like to have these jobs in full measure.I have a profound belief that it is the responsibility of governments to invest in young people, particularly in their education, and in the higher education field I think the Labor government has a great track record. We went through the pain, as the honourable shadow minister at the table would know, of introducing the Higher Education Contribution Scheme. It caused great controversy at the time—the students were very unhappy about it—but we did so from the moral point of view that for every dollar raised under HECS we would turn funds back into the university system and we would expand the university system, which of course we did.We had a fundamental belief that those who aspired to a tertiary education should not be denied it because they came from the wrong part of Sydney or because their parents were battlers and could not afford to send them. The real tragedy of this government is that HECS charges have now risen by $1,130 million and it is not all going back into the tertiary system. That is the real tragedy.In fact, it is fair to say that by the year 2001 the Commonwealth's percentage of funding to universities will be at 1971 levels—around 48 per cent. Isn't that a disgrace? Here we are talking about the need for better trained and more highly skilled people, about the need for their training and retraining throughout their careers and about the need for them to be able to be adaptable and to change from one career path to another, and what is happening in the Commonwealth's investment in the young people who go to universities? It is declining and with HECS, the principal mechanism that the Labor Party introduced to expand university education, the charges have increased by over $1.1 billion with not all of it going back into the university system.Professor Deryck Schreuder is currently the Vice-Chancellor of the University of Western Australia, but he was the Vice-Chancellor of the University of Western Sydney for a considerable period of time. He said:In the face of the extraordinary international emphasis on innovation, new intellectual property and new technologies, we are . . . beginning to reduce national investment in higher education, in research and development, and in basic research.He was quoted in the Australian of 5 May 1999. What a sad indictment of this government. Hal Wooten, the retired Supreme Court judge and foundation Dean of Law at the University of New South Wales, called the cuts to higher education `ignorant vandalism'. He was quoted in the Australian of Wednesday, 19 May 1999 as saying:Once financial benefit dominates the selection of staff and students, and of research projects, an insidious corruption of processes begins.He also said:Academic independence, dearly won over the centuries against the pressures of superstition, populism, potentates and priests, is of incalculable value to the community and the world at large. Under the current policy it is increasingly eroded as universities become more and more dependant on the rich end of town.The students in my electorate have to get to university on the basis of merit. Their parents do not have the opportunity to give them a second chance, to pay for their place in universities. Australia prides itself on being an egalitarian society, a society of a fair go where battlers can succeed, and nothing is more obnoxious to us than the fact that, if you come from the North Shore or the eastern suburbs of Sydney, you get two chances at university and not one. Donald Horne, as quoted in the Australian Financial Review of 29 July 1999, said:Here we are in a society in which business shifts and changes and specialist expertise and job skills can become so quickly obsolete that whole careers disappear, yet we move further and further away from those concepts of general education that provide the basis for adaptability (including commercial adaptability).What a sad commentary, Mr Deputy Speaker, on what your government is doing to the higher education system. Some of the cuts that these people are quoting and complaining of include a reduction in discretionary funding of $215 million and a reduction in operating grants of $623 million. The phased abolition of the Commonwealth Industry Places Scheme will see a cut of $67.4 million. The abolition of the Merit Based Equity Scholarships Scheme will see a cut of $38.9 million—and I will return to that—and a reduction in the Higher Education Innovation Program will see a cut of $16 million. The University of Western Sydney had the second largest number of merit based scholarships, 146, and they were just wiped away. These were scholarships that the battlers aspired to.Discussion about education, particularly in schools, has been replete with the need and the necessity to ensure there is an appropriate ratio of teachers to students, with the emphas is of trying to drive that ratio down so that you would get smaller numbers of students getting the benefit and the attention of the teacher. What has happened in the university scheme? What has happened in the universities of Australia? Are the ratios remaining stable under this government? Have they gone down under this government? No, they have increased by 33 per cent. In fact, the universities are increasingly being pushed into degree factories. You will pay a price for this. It is just like investment in capital goods and machinery: if you fail to invest, if you make the short-term decision, you pay the higher price down the track.There has been a lot of talk in this place about the economy, about trying to improve production methods, and about value adding and increasing exports, but the most precious and singularly important commodity in production is, of course, the people. What are we doing? We are cutting our investment in people. But we are not cutting it across the board, we are sending out young Australians, the future generations, to bear the burden of these cuts and, of course, we are going to pay the price in the future. Mr Deputy Speaker, I would like to say a lot more but, as you know, the opposition, in a disciplined way, are limiting their time in this debate. I must therefore draw my remarks to a conclusion and thank the House.19:11:0010267Emerson, Craig, MPMr EMERSON83VRankinALP00—Australia's place in the world in the 21st century, in the information age, will depend on our ability as a nation to garner the resources of our young people and their innovative skills to become competitive in the production of ideas and services. Yet our place in the world is under threat. It is under threat from the government's persistent program of cutbacks in our most vital service area: that is, our investment in education. Let me give the House a few examples of the cutbacks that have occurred.There has been $840 million cut from university operating grants under this government. There have been increases in the Higher Education Contribution Scheme, or HECS, of $2,258 a year, if the student was considering studying maths, science or engineering. That is a clear deterrent to young people from low income families taking on those courses. Half a billion dollars has been cut from student income support. Under the common youth allowance we have seen the problems that have been experienced as a result of the application of that policy. There have also been cuts of $240 million over four years from the forward estimates for TAFE. Overall, there has been a six per cent cut in investment in public education between 1996-97 and 2001-02.Just last Friday, figures were released by the Australian Bureau of Statistics confirming large cuts in the overall education funding by the Commonwealth government. What does the minister for education do about this? How vigorously does he argue in the Expenditure Review Committee for increased funding for education? He cannot be arguing very hard because he spends all his time on the ideological pursuit of voluntary student unionism. That is all he is concerned about in the education sector—trying to attack student unionism on the university campuses.The minister is doing that because he wants to curry favour with the Prime Minister. He has lost half his portfolio. He is probably a bit worried about his pecking order in the cabinet. He thinks he will have to get on the right side of the Prime Minister. That is pretty hard to do, because the Prime Minister declared in 1987 that he is the most conservative leader that the Liberal Party has ever had. So getting on the right side of the Prime Minister is pretty hard. However, this minister is making a pretty good fist of it.Let us recall where this minister comes from. He displaced Mr Ian Macphee in a preselection ballot in the late 1980s. Why? Mr Ian Macphee was regarded by the Prime Minister of Australia as too wet. The Prime Minister of Australia who declared that he was the most conservative leader the Liberal Party has ever had did not want Mr Macphee to continue as the member for Goldstein. So this man, who is successfully positioning himself to the right of the Prime Minister, defeated Mr Macphee in a preselection ballot.We are witnessing a very ugly transformation in the education policy of this nation through this government. We are witnessing in the minister the behaviour of a person described by Manning Clark in his history of Australia as a punisher and straightener. That is the behaviour of the Minister for Education, Training and Youth Affairs. He has a perspective on literacy and numeracy which says that we need to punish these people and that we need to get lists of all the failing schools and students so that we can publish them in the Melbourne Age, the Melbourne Herald, the Sydney Morning Herald and all the national newspapers. We can then shame these people, punish them and put extreme pressure on them to lift their performance. The reality is that Australian people respond a lot better to encouragement. I am very sorry to say that they get no encouragement under this minister or this government when it comes to education.Nothing can be more fundamental to the quality of Australian life and to the principles of fairness than the provision of education for everyone regardless of their capacity to pay for it. However, the direction that we are being carried is away from that. It is a direction that rewards and entrenches privilege and at the same time entrenches underprivilege.We think of the higher education system as one important way of providing equity and equality of opportunity, and it is. However, another fundamental problem emerging as a result of the government's policies is that young people from disadvantaged communities are not even getting to make a decision about university. I have to report that four in 10 boys in government schools do not complete high school. Fifteen to 20 years ago, that may have been manageable. A young boy leaving school at 15 could go into a trade and use his physical prowess to become a plumber, builder or plasterer. But in the information age of the 21st century, a young boy who leaves school at 15 has very grim employment prospects.We have seen with the business tax review a $4 billion funding hole. I want to issue this warning: we will be watching very closely as a result of the government's unwillingness to take on the difficult issue of closing down tax avoidance through trusts. We will be watching for every budget decision in the education, health and other arenas of vital service to Australians to identify the government's agenda of making them pay for the government's unwillingness to take on the difficult issue of trusts. I close by saying that we must restore equality of opportunity in this country. The government is committed, through a right-wing political agenda, to move in precisely the opposite direction.Debate (on motion by Mr Tuckey) adjourned.Bills10268r71710268Message received from the Senate returning the bill with requests and amendments.Ordered that the amendments be taken into consideration at the next sitting.Bills10268r73910268Debate resumed.19:20:0010268Murphy, John, MPMr MURPHY83DLoweALP00—The Higher Education Funding Amendment Bill 1999 will have a grave effect on those who wish to further their education through universities. It deals a fatal blow to those in our society who may never enter a university or other tertiary institution but who rely on such skills and expertise in their daily life. The passage of this bill has ramifications for all Australians. In summary, it means (1) despite a tertiary student load that has increased by 82 per cent since 1983, Commonwealth based operating grants, or the equivalent full-time student unit, to tertiary institutions have decreased by 37 per cent since 1983; (2) the actual dollar amounts of budgetary allocations have declined from $12.3 billion to $11.3 billion in the 2001 financial year; (3) tertiary institutions have had to meet their running costs through charging overseas student fees, tuition fees and the Higher Education Contribution Scheme; (4) there has been the phasing out of the Higher Education Equity Merit Scholarship Scheme.The purpose of this bill is to provide new, yet lower, levels of maximum grants available for higher education in the triennium 1999-2001. There are several relevant issues in this debate. The first is that the increase in financial pressure from decreased governmental financial support has resulted in diminished teaching standards. The Australian Vice-Chancellors Committee report of May this year noted that the student-staff ratio has increased from 13.5 to 1 in 1989 to 18 to 1 in 1999. The report also noted that only 75 per cent of students are satisfied with the teaching received.The second issue concerns the progression rates of university students. I refer specifically to an article in the Sydney Morning Herald of 5 June this year which cited a report from the Department of Education, Training and Youth Affairs. The report found that one-third of students who started an undergraduate degree in 1992 dropped out of university completely, and 40 per cent of these students had not completed their degree within five years. The primary reason for this fall in progression rates is cost. A growing number of students are simply economically dissipated.The third issue is that of maintenance of infrastructure. I note that the roll-in of capital gains grants into operating grants has provided tertiary institutions with improved flexibility, but it is entirely possible that recurrent funding pressures have resulted in some neglect. The Department of Education, Training and Youth Affairs has recently written to vice-chancellors, seeking confirmation that the capital roll-in of components of operating grants was being used to maintain their capital asset base. If this is the case, then we are witnessing a major meltdown in capital maintenance. In short, the buildings are falling.The fourth issue is of equity and access. I have left this cost until last because it most graphically demonstrates the social impact and cost of this government's policies. In particular, the proportion of students from rural Australia and from isolated and low socioeconomic backgrounds declined between 1991 and 1997. Indigenous Australians remain significantly underrepresented in higher education enrolments. The most graphic example of the government's contempt for those seeking access from disadvantaged groups is none other than the phasing out of HEEMSS, the Higher Education Equity Merit Scholarship Scheme.I cite the higher education budget statement. HEEMSS was introduced in 1997 `to further encourage the participation of equity groups'. One thousand new students were to be exempt from the HECS charge, building up to a pool of 4,000 students by the end of the year 2000. Up to the present time, 3,000 scholarships have been allocated to universities. Scholarships are awarded by universities in accordance with guidelines published by the Department of Education, Training and Youth Affairs. The guidelines specify that recipients should be commencing students and should belong to a prescribed equity group. Such groups include indigenous Australians, women in non-traditional areas, people with a disability, people from non-English speaking backgrounds, people from rural and isolated areas and people from low socioeconomic backgrounds—in short, your classically disadvantaged groups that are deserving of special assistance.I beg this House to preserve the Higher Education Equity Merit Scholarship Scheme. In this day and age, it is unthinkable that we could sacrifice these 4,000 places, whilst at the same time allowing in this bill a further spot-appropriation to James Cook University for 60 medical faculty places and allocating $14.7 million for science lectureships. When I gave my inaugural speech in this House on 12 November 1998, I made the following concluding statement:I commit myself to the pursuit of job creation, social equity and a diverse economy that can sustain the growth necessary to enable my constituents and all Australians to live with dignity and happiness, and to achieve harmony in a more independent, tolerant and egalitarian Australia.This bill violates every precept I gave in my maiden speech. This bill is a recipe for an elitist society, inequitable income distribution, a less tolerant Australia, an Australia that makes a mockery of Aboriginal and Torres Strait Islander reconciliation, an Australia that discriminates against the low and disadvantaged income earners, an Australia that divides people economically, an Australia that ensures drop-out rates of people unable to fund their way either into tertiary education or through that education system; and, finally, an Australia that has a new underclass of academically dispossessed.This House will also remember that I am a country boy myself, born and raised in the New South Wales country town of Dunedoo. What can the National Party and country-representing Liberal Party members say to their constituents about this bill? What can possibly be their reply? Yet again they have made it even more difficult for a young man or woman from the country finishing their higher school certificate to complete their education—as if the economic circumstances in the country are not hard enough as they are.Finally, I wish to touch on the subject of research. It is the lack of research funding in this bill which will reduce Australia's competitiveness. I again refer to the press release of 13 May 1999 of the shadow minister for education, Michael Lee, in which he notes:In Labor's last five years, the percentage of the nation's wealth invested in education, research and training rose from 2.35 per cent of Gross Domestic Product to 3 per cent. In John Howard's first four budgets he has reduced that investment back to 2.53 per cent. . . . The crisis in education and research is made worse because reduced investment by the Commonwealth has led to reduced investment in R&D by the private sector.Whilst I do not oppose this bill, I endorse the opposition's second reading amendment, which condemns the government for the budget's higher education cuts—to merit based equity scholarships and innovation programs—and for its failure to provide more research funding. The losers are any persons who participate in tertiary education, those who are employed in tertiary education and those who use tertiary education—in short, all Australians. There are no winners. The government, Australia Inc., will reduce its budget by a paltry amount, which cannot compare to the irreversible damage that will flow from this budget.Debate interrupted.Adjournment1027010000SPEAKERMr SPEAKER—Order! I regret to say that not even courtesy to the member for Lowe can prevent me from observing that it being 7.30 p.m., I propose the question:That the House do now adjourn.1027019:30:0010270Hall, Jill, MPMs HALL83NShortlandALP00—I would like to start by congratulating the Hunter based Liberal senator, Senator Tierney, on formally declaring himself a republican. Like him, I will be voting yes in the republic referendum on 6 November, and I look forward to working with him to achieve a strong yes vote in our region, the Hunter.Senator Tierney's decision to vote on 6 November for Australia to become a republic with an Australian head of state will show the people of the Hunter that it is not a political issue; rather, it is a decision about Australia's future—a decision that will determine whether Australia has the courage to become a truly independent and proudly Australian nation.One hundred years ago, the six colonies came together to become a nation with a constitutional monarch. Now it is time to become a republic with an Australian President as our head of state. The beauty of having an Australian as our head of state is that each and every Australian can aspire to become President—unlike the current system, where only members of the British royal family can become our head of state. If you are not born into that family, if you do not have that birthright, you can never become the head of state of Australia. Under a republic, a person will be able to become head of state through ability rather than birth.It flies in the face of Australia's egalitarian system that we have a head of state who is the Queen of another country and that she represents our nation throughout the world. Further, it flies in the face of our egalitarian Australian ideals that whenever we toast our head of state we toast the Queen of England.Unlike Senator Tierney, I grew up believing Australia should become a republic. My mother, who is 80 years of age, instilled in me her dream of a truly independent Australia. I must say that this has developed further over the years, and I can see the advantages of having an Australian President representing Australia and only Australia.In his speech in this parliament, Mr Baird, the member for Cook, talked about when he was trying to obtain the Olympics for Australia. He tells the story of Princess Anne arguing against Australia, arguing for England rather than Australia to be the country that had the Olympics. She had split loyalties. Her loyalties were to the UK and to England, not to our country.Mr Abbott—interjecting—10000SPEAKERMr SPEAKER—Order! The minister is defying standing orders, and I will deal with him if I need to.83NHall, Jill, MPMs HALL—To say, `If it ain't broke, don't fix it' trivialises the issue. It is not about fixing our Constitution and our system of government but about making it better and taking the best of our current system and making it truly Australian. That is why it behoves the government to ensure that all Australians are in a position to make an informed decision. Unfortunately, to date it has failed, and some members of the government even seek to misrepresent the question and the argument.My office has been inundated with requests for copies of our Constitution but, as a member of this parliament, I am entitled to only 50 copies of the Constitution a year. Mr Speaker, I would be most grateful if you could look into this, because it means that I can give a copy to only the first 50 people who contact my office, which is just not good enough. Further, the government-run $9.5 million neutral public education program that is currently being run has been accused of being blatantly biased by the republican movement, whilst the constitutional monarchists have endorsed the advertising campaign wholeheartedly. To me, this level of disagreement supports the claims of bias, which is particularly disgraceful as the campaign is publicly funded and supposedly unbiased. This government even bypassed the expert panel which was appointed to oversee the program and to ensure balance and untainted information. I think the government really needs to look at making sure that this issue is put to the Australian people in a fair and unbiased manner.1027119:35:0010271Thomson, Andrew, MPMr ANDREW THOMSONFB6WentworthLP10—This is a very delicate time for Australia. To venture forth, bearing arms, into another's territory—albeit with a UN Security Council mandate—is a very grave step with profound consequences for all Australians.Indonesia is a young country. Its institutions are still developing, sometimes in sudden bursts, sometimes with glacial slowness, and sometimes in directions with which we deeply disagree. But above all, Indonesian people are very proud of their nationhood, and I hope very sincerely that mutual animosity does not become the norm between Indonesia and Australia. We cannot afford to lapse into enmity. We are close neighbours.Indonesia must hold together, because the consequences for Australia of a fragmented and ungoverned Indonesian archipelago would be terrible. Primary health care would collapse, as it has in rural Papua New Guinea, bringing an explosion of disease, especially the HIV virus. Piracy on the seas would flourish, and Australians living in Indonesia would live in great peril. Indeed, the increased smuggling of illegal immigrants would be the very least of our worries. The stakes are truly that high.The legacy of Portugal's colonialism in East Timor and its abandonment of East Timor have been awful for all concerned. Now, the ballot being over and the result being clear, it is we Australians who shoulder the burden of rebuilding in East Timor what the Indonesian military has, via its brutal surrogates, so wickedly destroyed. This is a debt being repaid.But this must be a special case. Australia cannot become Asia's policeman—the overwilling guardian of its moral standards. There will in the future be other cases of peoples in our region—and probably within Indonesia—seeking autonomy or independence. So we must now enunciate very clearly the principles on which we will conduct ourselves in the face of these pressures in this region. Without such clarity I think we risk being misunderstood by our peer nations, and that brings with it the risk of animosity towards us—animosity that might be reciprocated within Australia. Such an outcome would be a disaster for all Australians—not only the many who live and work in Asia but also those within Australia who remember with fear and with some bitterness the darkest days of Hansonism. Without a clear message being sent to our regional neighbours about our foreign policy, ultimately the opprobrium, the bitterness and the wretched unfairness of it all would fall on all of us.1027219:38:0010272O'Byrne, MichelleMs O'BYRNE84SBassALP00—I rise tonight to speak on an inspirational event I attended in my electorate of Bass last week. In an electorate office, receiving an invitation to the opening of an art exhibition is not unusual. I was not expecting anything too different when I attended the opening, but it was an exhibition with a difference—an exhibition of Aboriginal art by inmates of Risdon Prison and Hayes Prison Farm in Tasmania.This is the first time this event—funded by the Indigenous Branch of the Australia Council, TAFE Tasmania and the Department of Justice and Industrial Relations—has been held in Tasmania. The exhibition has created a great deal of talk and excitement in the Aboriginal community and is said to be the biggest exhibition of Aboriginal art ever held in Tasmania. It attracted over 1,000 visitors whilst on display in Hobart and it is expected to have equalled this number during its display in my home city of Launceston.The program has involved Aboriginal community artists and tutors going into the prison system and working with the Aboriginal inmates. Over 35 Aboriginal inmates have been involved with the project. Twice weekly for a period of approximately six months, the tutors have visited the education centres at Risdon and Hayes prisons. This has seen a building of trust and confidence between the inmates and the tutors. The majority of inmates who participated in the project had never before attempted art. The program has been available to all Aboriginal prisoners, whether short or long term. It has been expressed that those who were at first reluctant have had a greater amount of personal benefit and satisfaction from the program than many of the others.The concept of art in traditional Aboriginal society is very different from the concept of art in European society. In traditional Aboriginal communities, activities like dancing, singing, body decorations, sand drawings, making implements or weaving baskets were not considered to be separate activities called art and design. All of these activities were part of the Dreaming and a part of normal daily life. There was no concept of a special type of person or artist because, in a sense, everyone was an artist. This has changed as tradition oriented communities adapted to aspects of Western culture, although the number of `artists' in many Aboriginal groups would generally be far greater than in non-Aboriginal communities.With this in mind, the inmates have been encouraged to go within, to get in touch with their spirit and to allow for their hands to be used by the spirit to create these unique pieces. They have been encouraged to paint their feelings and emotions, and the result has seen a lot of them dealing with their own individual issues through expression on canvas. This has then allowed for the healing and cleansing process to begin. Some of the stories behind the paintings are of a very personal nature, and the artists involved have requested that these stories not be told. These pieces are also not offered for sale. And, as it has always been in Australian cultural history, traditions born of our own experience dominate the Australian cultural landscape. However, many of the other paintings are available for sale, and many have in fact already been sold. They feature works in acrylics and ochres, emu and ostrich eggs, abalone shells, driftwood, decorated mirrors, seed beads and shell jewellery and shell fridge magnets as well as tie-dyed and printed cloth.The major piece of work was done by four prisoners and two tutors, measuring approximately seven feet by three feet. All six artists involved with this piece have related their own individual stories with acrylics on canvas. The six individual stories together make up the story of Inside Art/Out, which is the title of the art exhibition. It is hoped that the sale of this piece will help contribute to the much needed funds for the continuation of the program for a further period.It was an emotional experience to wander through this gallery. Even more inspiring was to actually speak to one of the artists. He had heard about this program whilst he was on remand and then sought a transfer to Hayes Prison Farm where the program could be accessed and became involved with the project. This young man, who did not have an awful lot of a future before, now has an incredible future as an artist and intends to pursue this. When I spoke to him it was the day before he was to start his framing course, and he has already enrolled to do a fine arts degree. The program has given him an alternative future. It is certainly a much brighter one, and one I think most of the community will benefit from.I felt a true sense of spirituality when I looked at the pieces around me and also the very personal emotion that had been put into so many of the works of art. Some of the inmates who had participated in the program were lifers who had found another way to focus a lot of the aggression that had led them on the path that they are currently on. I have no doubt that many of the people who witnessed this magnificent art exhibition would say that they also got that kind of emotional impression from the work. This is testimony to the intrinsic power and quality of the works that we viewed. I congratulate the artists, tutors and all involved in this truly inspirational exhibition.1027319:43:0010273Lawler, Tony, MPMr LAWLER834ParkesNP10—I rise tonight to draw the attention of the House to the plight of a group of people who are suffering greatly now and to the plight of a group of people who will quite likely be suffering in a similar way in the not too distant future. The first group I talk about are the wool growers of western New South Wales and eastern South Australia who are in the position condemned by the McLachlan report of being amongst the 80 per cent of non-viable wool growers. These people are proud families and proud pastoralists and have been growing wool profitably in this area of New South Wales and in a large part of my electorate for generations. This situation they find themselves in, with extended periods of drought and low commodity prices, has brought together a combination of circumstances for a length of time probably not ever experienced before. Though they have been able to cope in the past with hardships such as these, they have usually been one at a time or, when occurring at the same time, have not lasted anywhere near as long.I recognise the part that the West 2000 program has played in making the businesses of these people more viable, but I believe that the work has only just begun. The people who are involved in West 2000 have put their heart and soul into this project and they have been on a learning curve themselves. I believe that, though this project ends shortly, the long-term benefits of this program should be ensured by enabling the West 2000 concept to go for a little bit longer.Those who do not fit into the group of people who can be assisted by West 2000 and existing assistance programs face a major social crisis. There is an enormous problem with the social issues that are associated with the re-establishment of families exiting the wool industry and the time and understanding that this requires. A concern of mine is that none of the services already in place focus on the emotional, social and practical implications for rural communities of so many families needing to exit farming. It is quite clear that the lack of recognition of these needs is now identified as a major issue confronting these rural families. Services and information in relation to banks, debt levels, exceptional circumstances, poor commodity prices, type of management and diversification are already on the agenda.However, to assist landholders to exit agriculture with dignity we need to ensure that blame in terms of poor management or bad farming practices does not enter the debate. Landholders have faced years of low income from drought and low commodity prices leading to the build up of levels of debt that they are unable to service. These circumstances have been sufficient to erode self-esteem and confidence in the families who need to exit. To this end, I believe we need to employ a worker to assist landholders to exit the industry with some dignity. I envisage that the worker will lobby or negotiate with credit providers to give producers with whom they wish to sever their relationship 12 months in which to sell out or make alternative refinancing arrangements. We need to allow them to establish a time frame to exit the industry, and a close relationship between the worker and the rural financial counsellor should be encouraged. This worker should assist in the development of a package that includes housing, health, education and employment opportunities for families exiting.I believe that the social implications of the further erosion of the wool industry in many areas of western New South Wales certainly justify this small extra expense in providing this type of counselling. To this end, I envisage that a similar type of specialised counsel will be needed to assist the exiting dairy farmers in the event that deregulation occurs in Victoria, and with subsequent problems for farmers in New South Wales that will lead to an enormous exit from this industry as well.Dairy farmers by and large work seven days a week, 12 hours a day and have their heads down and their bums up. They have little time to develop networking for financial and emotional support amongst each other. I believe it is essential that special dairy exiting counsellors are provided for, in the eastern states certainly and perhaps in Western and South Australia, to assist in this transitional stage for similar reasons to those I expressed when talking about the wool industry.I implore the relevant ministers and cabinet to look seriously at these issues and give some consideration to the plight of these proud Australians who have been amongst the hardest workers we have had in our history only to find themselves in an unenviable position as they need to exit from the industry they are in, into a totally different life. The cost to revenue of providing these services would be minimal. The cost to the social framework of our area of Australia would be incalculable.1027419:47:0010274Sidebottom, Peter, MPMr SIDEBOTTOM849BraddonALP00—Mr Speaker, this time last night you and I had the pleasure of listening to the Capital Hill singers. I notice one of them is in the House tonight. I would have thought they missed a great opportunity to give you a rendition of Master of the House from Les Mis . Perhaps they could commence that at the beginning of the next parliamentary year. Anyway, consider it.More seriously, the winds of change that continually sweep our vast continent are right now no more evident than in my home state. Tasmania's Hydro Electric Corporation is embarking on a visionary plan to build Australia's largest wind farm to harness a world-class wind resource and turn it into a renewable energy source for the future. Like much that is unique about Tasmania, the geography and weather patterns of the far north west of my electorate in the Woolnorth region of Circular Head and the rugged west coast are ideally placed to capture the powerful forces of the winds dubbed `the Roaring Forties' off the southern ocean to generate power.I might just add—and others may be interested to know—that at the remote Cape Grim weather station located at Woolnorth on the north-west tip of Tasmania scientists lay claim to measuring the cleanest air in the world. Indeed, Tasmania's internationally recognised clean and green reputation is something we are very proud of. We in Tasmania are no doubt the envy of those who rely on finite and polluting fossil fuels for their energy source. Already Tasmania is Australia's largest producer of renewable electricity built around no less than 27 hydro-electric power stations.Many hundreds of millions of dollars have been invested in Tasmania's hydro infrastructure and for more than 80 years we have enjoyed the benefits of electricity. In fact, the state's hydro-electric power stations produce more than half of Australia's renewable greenhouse-friendly electricity. Yet the approach of the 21st century brings new challenges in the quest to meet our future energy needs. Despite all that is good about Tasmania's power generating history, the fact is our hydro assets are ageing and we find ourselves in somewhat of an energy dilemma. The problem is that we do not have enough of it. It is a problem that the people of my electorate are now acutely aware of and one that I have no doubt will give added impetus to the wind farm proposal.The reality is that Tasmania and the north- west region in particular do not have the available energy to accommodate major industry coming to the state. Indeed, our economic future is in no small way reliant on securing a reliable and competitive energy source. We in north-west Tasmania until recently had hopes of attracting a $700 million magnesium refinery to process rich and abundant reserves of magnesite in the region. But during the planning process it was highlighted that we did not have the energy required to drive such a project. Although the energy question did not ultimately lead to the demise of the project, it did serve to highlight the region's energy deficiencies.The fact that we are resource rich is of little consolation for being energy poor. We now know how critical the energy factor is for development, yet it is my region's achilles heel and must be seriously addressed if we are to stay in the race for major investment in the future.There are currently two major energy projects on the drawing board in Tasmania and it is crucial they come to fruition. A $2 billion magnesite refinery being proposed for Bell Bay in northern Tasmania is now largely dependent on the go-ahead of a natural gas pipeline from Victoria and plans are well advanced for the Basslink undersea power cable that would link Tasmania to the national electricity grid. The economic and social spin-offs to the north-west coast and Tasmania as a whole would be enormous. However, I am concerned that the Prime Minister continues to play politics over Tasmania's efforts to bring natural gas to the state. On a visit to Hobart recently he was non-committal about the Tasmanian government's request for assistance to help with the $300 million in infrastructure funding being sought for the magnesite project, primarily for the construction of the proposed Bass Strait pipeline to Bell Bay. The Prime Minister is still trying to pressure Tasmania into selling off the Hydro-Electric Corporation, clearly against the wishes of the people of Tasmania, before he will formally commit his government to helping secure the delivery of gas.The people of Tasmania want the Hydro to remain in public hands, a message delivered loud and clear to his defeated Liberal colleagues at last year's state election. If the delivery of gas and the construction of Basslink come to fruition, that will go a long way towards eliminating the state's power shortages but it will not diminish the hunger for clean, renewable energy. Wind energy potentially fits the bill—and it works. The success of a trial wind farm at Huxley on King Island proves that wind can be a viable long-term renewable resource. According to the Hydro-Electric Corporation, in its first year of operation the Huxley farm saved $400,000 in diesel fuel, reduced carbon dioxide emissions by 1,900 tonnes and reduced the reliance on diesel fuel by about 20 per cent. That is why the Hydro now plans to put its expertise and practical know-how to use on a much bigger scale. It is planning a staged development of its wind farm project in the north-west and on the west coast of Tasmania, and tomorrow night will outline its proposal in detail to the people of Circular Head. It wants to build 150 wind turbines on 3,000 acres of land—a $100 million investment in our energy future. (Time expired)1027519:52:0010275Katter, Bob, Jnr, MPMr KATTERHX4KennedyNP10—I would like to continue with some more words on the proposed James Cook University Medical School. The University of Queensland were trenchantly opposed to this proposal in a most disgraceful exhibition of self-indulgence. The pursuit of academic excellence at the University of Queensland has led them to get more than half of their intake of undergraduates from south of the border, meaning that the chances of getting any doctors out of that institution back to North Queensland is almost negligible. The university have proceeded on the basis that they have no responsibilities to the health and welfare of the people of Queensland. But they have deservedly been beaten.I want to praise the people who put this proposal together because they have not gone into the pursuit of academic excellence. They have seen themselves as a university whose duty it is to relieve pain, human suffering and misery for the people of North Queensland and also inland Queensland. Instead of working just on a basis of academic excellence—we heard a lot of that during the debate today—it has produced doctors who are egocentric and, I must say, social and intellectual cripples, people whose narrowness of perspective, intellectually, socially and psychologically, has left them incapable of doing their job properly.The intake at James Cook University will be on a basis of suitable people. I know the downside of that sort of approach, but all I can do is praise these people in the strongest possible terms. In sharp contrast to the University of Queensland taking half of their intake from south of the border, James Cook University will make 20 places for people from regional centres, from the small towns, because they know there is a far greater chance of those people going back to the small towns if in fact they come from the small towns; and for this we must thank them very sincerely.I also wanted to thank today Mary Jane Streeton who, in her job with the Premier's Department as the Premier's representative in North Queensland, was tireless in her energies and almost obsessive in her pursuit of this objective. She has worked subsequently at the university with Dr John Stokes. I want to thank Dr John Stokes and his curriculum team—I single out Maggie Grant-Wronski and I will say a bit more about her husband in a moment or two—for the excellent work that they have done and the approach they have taken. I also thank Bob Porter, the planning dean from Monash University—a gift from the gods for us. I must single out Bernard Moulden, who took Ken McKinnon's place, which were very big shoes to fill. It was very hard for him to come in after a person such as Ken, but we would simply not have got this medical school without Bernard's compassion, intelligence and determination.Finally, I come back to Ian Wronski—he has spent probably two decades in Broome and such other regional centres—with his passionate commitment, unbounded energy and unquenchable enthusiasm. This project was dead at least 12 times, and every single time his unbounded enthusiasm took us back to the coalface once again. Every time I think of Ian Wronski, I cannot help but think of the last scene in the famous Christopher Columbus movie with Gerard Depardieu in it where Christopher Columbus is talking to the Director of the Madrid Academy of Science—the most distinguished institute of learning in the entire civilised world. In that scene the Director of the Madrid Academy said, `Christopher Columbus, no-one will ever remember your name. We have decided that Americas founded America. It will be called America, and you will be forgotten,' and he looked very pleased with himself. Christopher Columbus looked out on the city of Madrid and said, `Look out there, what do you see?' The director of the academy said, `I see civilisation. I see learning. I see beautiful buildings. I see every achievement that man can put together.' Christopher Columbus then said, `Men like me built this city. Men like you had nothing to do with the building of this city.' I cannot help but think of that final scene when I think about Ian Wronski. We owe him a very great debt of gratitude.1027619:57:0010276Murphy, John, MPMr MURPHY83DLoweALP00—In keeping with the seemingly inexorable drive towards a republic, it is timely that we as parliamentarians reflect on the great philosopher of old, Plato, who wrote The Republic some 300 years before Christ. The Reverend Peter Hastie, a Presbyterian pastor in Ashfield, Sydney, has kindly provided me with a copy of Mr Barney Zwartz's article in the Australian Presbyterian titled `The PM Paradox'. The article notes:Plato would be appalled at the idea that we should encourage those driven by desire for reward or power to rule us, for these are precisely the people who are least qualified.Mr Zwartz also says, `The idea that if you paid the Prime Minister five times as much, you get five times the quality of government is laughable.' The utilitarian ethic grips Australia like a vice. It is a vice! It offends Plato's early recognition that self-interest does not generate the best decisions. Self-interest does not, cannot and never will do this. Utilitarianism is a false ideology.Parliamentarians must be motivated by ethics higher than utilitarianism, which is in direct opposition to the natural law, the rule of law and codes of ethics which must be the foundation of any republic. We must oppose utilitarianism for the imposter that it is. Zwartz notes:The secular Australia of 1998 may not esteem devotion to God but we all prize the other items on the list . . . e.g. the central Christian ethical priority of setting others above ourselves.Utilitarianism is the antithesis of our cultural heritage. We must strive towards Plato's academy and make for a society governed by philosopher kings.EZ5ABBOTTMr Abbott—And the monarchy.83DMurphy, John, MPMr MURPHY—I thank Reverend Peter Hastie for bringing Mr Zwartz's article to my attention and thus providing me with this brief opportunity to bring this message to the notice of members of this House. Unlike the minister at the table, the Minister for Employment Services, I look forward, like the majority of members in this House, to a republic. I hope that on 6 November Australians say what they really believe—that they want one of us, an Australian, to be our head of state.10000SPEAKERMr SPEAKER—It being 8 p.m., the debate is interrupted.House adjourned at 8.00 p.m.Notices10277The following notices were given:Mr Hockey to present a bill for an act to amend the Diesel and Alternative Fuels Grants Scheme Act 1999, and for other purposes.Mr Hockey to present a bill for an act relating to the conduct of, and the disclosure of information by, life companies, life brokers and life insurance advisers, and for related purposes.Mr Horne to move:That the House:(1) acknowledges the oyster industry as a responsible industry that is a large employer of people both directly and indirectly in regional Australia;(2) recognises that regional jobs are rapidly diminishing and the loss of a viable oyster industry would result in the loss of thousands of jobs in coastal Queensland, New South Wales and Victoria; and(3) calls on the Government as a matter of urgency to exclude oyster farmers from having to value their oyster crop as an asset and therefore be considered as income for taxation purposes starting in the year 2000-2001.Mr Albanese to move:That this House:(1) supports the United Nations Organisation of African Unity Referendum for the Western Sahara;(2) applauds the efforts of the UN Secretary General Kofi Annan and his special envoy for Western Sahara Mr James Baker to ensure that a free and fair Referendum is held in Western Sahara to allow its people to exercise their right to self-determination; and(3) calls on the Government to reintroduce its contingent to the United Nations Mission for the Referendum in Western Sahara (MINURSO).Mr Hollis to move:That this House:(1) calls on the Government to reverse the decision on the transmitters at Cox Peninsula near Darwin; and(2) urges the Government to recommence broadcasting from Cox Peninsula as a matter of urgency.1999-09-2210000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—took the chair at 9.40 a.m.Statements by Members102781027810278Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—The Victorian state election held on Saturday in my view was not a referendum on Jeff Kennett, though he tried to make it such. It was an election about competing policies for Victoria and for communities. Many people treated the poll as a referendum on local services and what the Kennett government had done in their area and planned to do in the future.In my local area the referendum was about the future of the Austin and Repatriation Medical Centre. The Kennett government had decided to sell this fantastic hospital, the largest teaching hospital in Victoria. The Austin is also one of the leading medical research hospitals in Australia, with the Austin Medical Research Institute being at the forefront of research into cancer and other life threatening illnesses. It is also important, with yesterday having been Alzheimer's Day, to acknowledge the research done at the Memory Loss Clinic at the Austin and, in particular, the clinical trials performed on Aricept, a drug that many in the field see as groundbreaking in the treatment of memory loss. There are many other very important areas of research that the Austin undertakes but, given the time, I have not got the capacity to go through those today.The two state electorates where the Austin and Repat sits recorded large swings to Labor at the recent election. In Ivanhoe, the swing was one of the largest in the metropolitan area, at over 4.4 per cent, and in Bundoora it was around 3.3 per cent. Ivanhoe is a seat that has been held by the Labor Party for only six years since 1955. We can be sure that the Liberals have lost the referendum on the sale of our hospital.During the election campaign we had the now departing Minister for Health, Rob Knowles—he lost his seat with a 9.6 per cent swing—visiting volunteers at the hospital to attempt to assure them of the future of services at the site and the ongoing importance of their role. To say that the reception he got was frosty is a vast understatement. They made it clear that volunteering to work for a for-profit company was very different from working for a publicly owned and operated hospital. They rightly felt betrayed by the Kennett government. I hope now that we have won the fight to save the Austin and Repatriation Medical Centre.I know that the Labor Party has listened and is committed to public hospitals. If we do end up with a Labor government, we will have a strengthened, publicly owned Austin and Repat. If the Liberals do scrape back, they must end this ideological obsession with the first sale of a major teaching hospital in Australia. The local community deserve to be heard. They do not want their hospital sold.1027810278Worth, Trish, MPMs WORTH8V5AdelaideLP10—Today I want to acknowledge the achievements of the 1999 Voices of Youth National Roundtable participants. The 50 young people, aged 15 to 24, who comprise this task force have shown themselves to be eminently capable of communicating the priorities and expectations of the young Australians they were selected to represent to government some 12 months ago.Few of these young people had prior experience in managing the kinds of demands that they have been challenged with and the issues they have been challenged to confront. They are a credit to themselves, their families, their schools and their local communities, and I have found them truly inspirational.At the time the Minister for Education, Training and Youth Affairs announced the establishment of the youth roundtable there were a small band of critics, largely from the opposition, who said that they would never be taken seriously, that they would be inadequately funded, and that they were not broadly representative. Having spent many hours with these young people, I can say that these critics were very wrong. I am full of praise for the work that has come forward from the participants in the youth roundtable.At the March meeting of the youth roundtable, members prepared a draft preamble to the Constitution, which was formally presented to cabinet. I understand that they had some success, with some of the words that were put forward bearing fruition as to what other Australians will now be voting for on 6 November. The environment group submitted a paper to Senator Hill's environmental education discussion paper entitled Today shapes tomorrow.The roundtable participants have also had an effect upon my own work. The health and wellbeing group, which is self-selected, has assisted me greatly as I have looked at issues confronting drug use and misuse among school children and what can be done about educating them. They have shown themselves to be big picture thinkers who have given careful consideration to all their own ideas. The team was united in their belief that, irrespective of how `in your face' or how graphic drug education is, some young people will continue to glorify drug use until they are made aware of the horrors involved and how personally destructive drug misuse and abuse is. This is a very important observation, and I have made sure that this message has been communicated to the media and health and education professionals.The ability of roundtable participants to inspire the confidence of others is reflected in their selection to serve on a wide range of national, state and local committees. I am pleased to have personally endorsed the selection of Mr Simon Baptist to the UNESCO national education group committee, and I have made another recommendation for a special task force membership which is yet to be announced. I also recognise the efforts of Ashley Couzens in consulting with Aboriginal elders and indigenous young people in his own community. (Time expired)1027910279Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—I rise to praise the role of Australian troops in East Timor and, in particular, to draw the attention of the Australian public to the role of Major General Cosgrove in going to Dili before his own troops did. That act of courage is something that should not be underestimated and, in my view, it has played a key role in allowing Australian troops, and UNAMET forces generally, to ease their way in there relatively peacefully. I have only limited military experience—two years in the officers school in the Army Reserve in the early 1980s—but a couple of months ago I had the privilege of visiting, with the Labor spokesman on defence, Mr Steve Martin, the 3rd Brigade in Townsville. From my own limited military experience, I could see that those troops in the 3rd Brigade, some of whom have already been deployed in Dili and other places, are extremely capable. I believe that, together with Major General Cosgrove, they will acquit themselves in the fine military tradition of Australia.I want to turn to two aspects of this Timor affair that particularly concern me. One relates to a program that will appear on the ABC on Thursday night. This shows the interception of secrets during the Second World War by GCHQ Cheltenham and the effort that the British had to go to during the Second World War to intercept German Enigma messages and the war-winning secret known as Ultra. Australia, its allies and people in Asia do not have the problem of intercepting messages about what has happened in East Timor. We know what has happened, according to newspaper reports, because of the open communications that took place between elements of the Indonesian military and some of their militia thugs in East Timor.I believe that subsequently, further down the line, it is very important that the United Nations and Australia push for an international war crimes tribunal so that the people whose role is known will be tracked down and will attract the appropriate international opprobrium. This is very important for the people of Indonesia, as well as for Australia. It is very important that Australians make clear that we are frustrated with the Indonesian military—not with the Indonesian people. If Indonesian democracy is to flower, we will have to make sure that the role of the people who perpetrated those deeds in East Timor is well known.The other matter that I will come to at a later stage during the Timor debate is my belief that Australia-US congressional liaison and our diplomacy in the United States need a great deal of improvement. I think that explains, perhaps, the American lack of appreciation of our role. (Time expired)1028010280Cadman, Alan, MPMr CADMANSD4MitchellLP10—I want to make some remarks about the tragedy that has occurred in Taiwan in the last few hours and extend my sympathy and support to the people of that courageous island. Recently a democracy, Taiwan is making great economic gains and showing the way to Asia in so many areas. It has tremendous strategic reserves and a self-reliant people offers an example that matches anything which the nation of Japan has achieved.The tragedy that has occurred there is an earthquake of, I am told, 7.6 on the Richter scale, equivalent to the earthquake that caused the tragedy in Turkey, but in a very highly populated community. According to Australian sources from the minister's office, there are 1,546 people confirmed dead, 3,841 injured and 2,304 unaccounted for. Whilst the epicentre was not in Taipei, it was close by. Buildings and dwellings are shattered, many people are out on the streets, afraid to go back in their dwellings. The Japanese and the Americans have offered full support. I notice the government of China has also offered support. The estimates on the homeless numbers are that about 100,000 people are homeless at this stage.Australia has strong links with Taiwan and many people from Taiwan have settled in Australia over a long period of time. They have a long and historic settlement program in Australia. I have found them to be outstanding citizens. No doubt their concerns for family members and friends would be pre-eminent in their minds at this moment. I would like to convey to Po-Lun Liu, Representative, and to Maggie Tien, Director-General, the unofficial representatives in Australia, the warm regards and the sympathy and condolences of myself and of the Australian parliament, if I may take that on myself, Mr Deputy Speaker, and maybe it is something you might wish to pursue later.The people of Taiwan are amazingly productive. From a resource scarce island, they have produced amazing results. So at this time I trust that Australia, stretched as we are, can do more than express our sympathy. In any small way at this time, a nation in our sphere of influence should be encouraged and it should understand that family members in our region feel for the families that have suffered loss or destruction of property.1028110281Latham, Mark, MPMr LATHAMK26WerriwaALP00—Other members have dealt with global matters. I would like to bring to the Main Committee's attention an intensely local matter—the success of the Labor Party teams for the Campbelltown and Liverpool local government elections in my electorate on 11 September. The Labor team in Campbelltown increased its numbers from three to five in a resounding result. I particularly congratulate the two new Campbelltown councillors, Aaron Rule and Stephen Chaytor. I am sure in coming years—Mr Sercombe interjecting—K26Latham, Mark, MPMr LATHAM—I am involved in all campaigns in Campbelltown, Bob, and they are all successful. I congratulate Councillors Rule and Chaytor on their election. They are bound to play a very important role in coming years in the modernisation of Campbelltown City Council. But the most stunning result was at Liverpool, where the ALP increased its numbers to seven out of a total of 11 councillors. This is a stunning result, particularly in the increased majority for Mayor George Paciullo. It puts to bed two myths about politics in Western Sydney. The first of those is that the proposed development of Badgerys Creek airport is electorally unpopular.Liverpool council is the only council in Western Sydney that publicly supports the development of the second airport. Mayor Paciullo has been leading that campaign for a number of years. His result is proof positive that Badgerys Creek is a positive development, particularly given its employment impact. He increased his majority, recording a resounding 58 per cent of the vote. His main anti-airport opponent, Councillor Colin Harrington, received just 16 per cent of the vote. So the people of Liverpool have given a very clear indication, putting to bed one of the myths about our politics in Western Sydney—the idea that the airport might be electorally unpopular.But look also at the results in the South Ward, where there was a candidate called Joane Vella, who also ran against the airport development. I am told that Joane Vella is the sister of the hysterical and unlovely Kay Vella, who has been leading the campaign against Badgerys Creek in Western Sydney. Joane Vella in the South Ward of Liverpool council received just 259 votes, a result that somewhat matches Kay Vella's poor performance when she stood for the Lindsay by-election in 1996. The Vellas are out. Paciullo and an increased Labor majority standing for the airport development are in. That is a very clear sign for the federal government, dispensing with some of these myths about the politics of Badgerys Creek.The second myth put to bed is the idea that vested interests can influence votes. In fact, the misguided campaign by the existing licensed clubs in Liverpool to stop the development of a competitor club at Woodward Park was also a dismal failure. Their donations to Colin Harrington were a waste of members' funds and, as I pointed out earlier, Harrington went backwards, receiving just 16 per cent of the vote. This is a triumph for Labor in south-west Sydney and, as the member for Maribyrnong pointed out, I am very pleased to have been associated with it. (Time expired)1028210282Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I want to hail the success of the government's International Year of Older Persons program and its celebrations. Part of this program is the giving of Commonwealth Recognition Awards for Senior Australians, and I want to congratulate the Minister for Aged Care, Mrs Bishop, on its success. There have been a number of excellent nominations from a wide cross-section of the community in my electorate of Fisher. The most outstanding winner will come to Canberra in November to celebrate the International Year of Older Persons with representatives of other federal electorates. All of these people have contributed, and continue to contribute, to our community in a number of special ways.The leading nominee in Fisher, as selected by the committee, is Mrs Nan Cullemore, who established Meals on Wheels in Caloundra and has looked after this wonderful facility for many years. Nan is very well known in the community and has been a tireless worker for the elderly and those less fortunate on the Sunshine Coast. She is thoroughly deserving of this award, and I look forward to seeing her in Canberra in November to celebrate the International Year of Older Persons.Other awardees include Janet Okines, a former President of the Sunshine Coast Art Group, who has managed a three-stage construction of the Sunshine Coast Art Group Centre, and Agnus Crosthwaite, who runs the craft group at Buderim Gardens with as many as 60 members assisting in a number of community groups with their craft work.Bruce Weston has lived on the Sunshine Coast for 30 years and, during that time, has been a foundation member of Kawana Waters Bowls Club, where he was on the committee for a number of years. Eight years ago, Bruce formed the Kawana Senior Citizens Association and is still a very active member.Mrs Maureen Kingston has been actively involved in the community for over 30 years. She was the first National President of the Association of Independent Retirees and has spearheaded many changes in government legislation. She was also awarded a Medal of the Order of Australia in 1995 and in 1996 she was appointed by the Department of the Prime Minister and Cabinet to the Conference for Older Australians.Mr Herbert Fielding, who is 91 years old, has made an outstanding contribution to the Sunshine Coast community for many years. He was Captain and Treasurer of the Buderim Cricket Club in the 1930s and Secretary-Treasurer of the Buderim School of Arts. He has also been involved in many other ways.Mr Edward Field has been active on the Sunshine Coast lawn bowls scene for many years and is currently manager of the district team and chairman of the coaching panel. Mr Des Dobson, at 81 years of age and a war veteran, has established a rainforest in his backyard and has planted over 200 native trees.The Reverend Thomas Scarlett served with the HMAS Canberra and the HMAS Shropshire and, following the war, entered the Methodist ministry and eventually served as President of the Conference for the Methodist Church in Queensland. Margaret Thomas has been a leading advocate for the Red Cross. Gifford Milner has been active in the Golden Beach community since 1990. Mr Ron Warwick is donating his kidney to his grandson Riley, and the operation is in Melbourne today. I wish him and his grandson all the best.Mrs Ailsa Mountney set up the first government funded child-care centre in Queensland. Mick Graham is a former union official and a very active member of the Golden Beach community. Jan Picton has worked for over 10 years to encourage older Australians to participate in exercise, and Maria Dregmans established the Maroochydore Share and Care Association 22 years ago. I congratulate all of these wonderful senior citizens on their awards.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! In accordance with standing order 275A, the time for members' statements has concluded.Miscellaneous10283Debate resumed.10:00:0010283Plibersek, Tanya, MPMs PLIBERSEK83MSydneyALP00—Cassandra was given the gift of prophecy and the curse that she would never be believed and, like Cassandra, many people raised their voices to predict the tragedy that is currently occurring in East Timor. Their fate and the fate of the East Timorese people has been to be ignored until it was almost too late. When Portugal withdrew from East Timor almost a quarter of a century ago, it was easy to predict the Indonesian response. A nod and a wink from the international community and the fate of the East Timorese people was sealed.The outcome of this ballot and the violent aftermath were also predicted and these predictions ignored. The overwhelming support for independence has not been a surprise to anyone who has taken an interest in East Timor. Indeed, the East Timorese community in Sydney were confident about the results of the UN sponsored ballot; they were confident that it would be an overwhelming vote for independence. Militia leaders knew this and made no secret of the fact that they would not respect the outcome of the ballot if the result was for independence. Interviews with militia leaders on Australian television meant that every Australian knew what the Minister for Foreign Affairs claims not to have known—that the potential for violence after the ballot was high.There is no question that adequate security arrangements should have been made for the ballot. It was at this stage that Australia should have called for post-ballot arrangements which guaranteed the safety of the East Timorese. Instead, we took the side of the Indonesian government against the United Nations and Portugal. Sections of our own security organisation warned the government of the potential for violence. Indeed, as early as 4 March, our Defence Intelligence Organisation gave the government a clear assessment of the role of the Indonesian military in the ongoing violence in East Timor. They said that the Indonesian military were `clearly protecting and in some cases operating with' pro-integrationist militias and that the Indonesian military, if it wanted to, could control such groups but had chosen not to.The DIO warned that General Wiranto was at least turning a blind eye to the involvement of Indonesian military forces and that violence would certainly continue. With this background knowledge, the government continue to claim that they were unprepared because no-one could have predicted this violence. Not only could this violence have been predicted, it was—not just by our own DIO but also by the Australians who were on the ground in the lead-up to the ballot and by Bishop Barreto, who so tragically lost his life in the violence he predicted. The massacre in Liquica should have been warning enough on its own.Once again, Australia has let East Timor down. We seem destined to repeat our tragic history in this area. We deserted our friends after World War II; we abandoned them to their fate in 1975; and now we have urged them to participate fully in a UN ballot for self-determination and deserted them in their hour of need. Implicit in our support for the ballot was a promise not only that any process run by the United Nations would deliver a fair and democratic outcome but that that outcome would include the safety of the East Timorese people participating in the ballot. Australian journalists asked people who were queuing up to vote how they would vote. What has happened now to those people who told the world that they supported independence?After the murders and destruction, especially of the last two weeks, an overwhelming majority of Australians will be pleased that a United Nations peacekeeping operation has begun in East Timor. Australians have long felt a special bond with the people of East Timor, who risked their lives side by side with Australian soldiers in World War II. I recently submitted a petition with 4,000 names calling for the Australian government to protect the people of East Timor. These were ordinary Australians who have long been far ahead of their political leaders in recognising the right of East Timor to self-determination. I hope, and I know that the people of Sydney hope, that Australia's involvement will save lives in East Timor. All our thoughts are with the East Timorese people and the brave Australians who are standing side by side with them to build a peaceful nation.Sending in peacekeepers is not the end of the struggle; it is only a beginning. The challenge for the East Timorese people is to build a new nation, and I believe Australians want to be there supporting that nation building process from the beginning right through to the end. Of course, the first step is to stop the violence, the murders and the destruction of property. The disarming of militias is integral to this. The other immediate priority is to get food, water and medical supplies to those tens, or hundreds, of thousands who have been displaced. Indeed, it could be that the situation now in West Timor is as urgent as, or more urgent than, the situation in Dili.It is only then that the process of rebuilding East Timor can truly begin. We face a situation where the major physical infrastructure of the capital, Dili, has been completely destroyed. Australians arriving in Dili as part of the peacekeeping operation have described a town where hardly a building has been left intact. Medical facilities and food distribution systems will all need to be built from scratch as a priority. This is still just the start. The East Timorese people will need to develop an independent system of government, a judicial system, an education system and a civilian police force—the infrastructure of civil society. Australia must now be prepared to commit resources in the long term to this task and to encourage the involvement of the international community. We cannot allow the world to turn its back when this is no longer the lead item on the nightly news.The challenge for Australia is to take a long-term role in supporting nation building in East Timor. This means an increase in our aid budget. The international community must also address the issue of East Timorese who have been forced into West Timor or other parts of Indonesia. They cannot be left at the mercy of nationalist sentiment in other parts of Indonesia. We have to ensure that humanitarian organisations have adequate access, we must help the Timorese bring the perpetrators of recent violence to justice, and we should immediately remove de jure recognition of Indonesian sovereignty over East Timor.There is an additional challenge which has not been spoken of much at this time when our attention is focused so much on East Timorese people and the Australian troops who are in East Timor at the moment. But we must distinguish between the ordinary people of Indonesia and sections of the military. Many ordinary Indonesians will tell you that they believe their army to be unresponsive to the demands of the civilian government, that it has a will of its own. As a nation, we must continue to seek a peaceful resolution to this conflict with a minimum of lives lost and to make some distinction between the nationalists and the militarists in the Indonesian army and the ordinary Indonesians who may well support East Timorese independence.Had this government not destroyed Radio Australia in its usual short-sighted way, we would now have a resource which would allow us to communicate directly with our troops in East Timor and also with civilians in East Timor and with ordinary Indonesians, many of whom may well be unaware of the extent of the horrors in East Timor today.Finally, this measure is welcomed by all Australians. It is overdue. My constituents and I wish the Australian forces serving in East Timor the best of luck and a safe return.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Before I call the next speaker, I would like to remind the committee that the question is that the paper be noted, and the paper we are talking about is the United Nations Security Council resolution of 15 September 1999. I have no difficulty with the debate being wide ranging over the subject, but I think it would be appropriate for speakers to at least give a passing mention to the subject of the debate.10:06:0010285Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—It is never an easy decision in a liberal democracy such as ours to commit our armed forces to action overseas. The events in East Timor demanded that such a commitment be made, and the Australian government has shown leadership in responding to the East Timorese tragedy.Following the East Timor ballot agreed to by Indonesia, Portugal and the United Nations, the international community was presented with an unambiguous vote for independence by the people of East Timor. Honourable members will need no reminding of Indonesian obligations to maintain order in East Timor during the vote and during the transition to independence following the vote. But, despite assurances that its outcome would be respected, what followed the ballot was killing, arson, the exodus of refugees, the removal of East Timorese and the militia running riot. The imposition of martial law made no impact on this. It was transparent for all to see that Indonesian forces would not or could not stem the lawlessness.The violence inflicted on the people of East Timor following the free expression of their will was something that Australia and the international community could not condone. As the situation deteriorated rapidly the world saw the devastation wrought on the East Timorese people, and it became clear that the only effective means of response was the deployment of an international peacekeeping force. The Indonesian government initially indicated that it would not agree to such a force, and it was only after considerable diplomatic effort by Australia and other countries that the Indonesian government accepted such a force being sent to East Timor. Last week the United Nations Security Council carried resolution 1264 authorising the establishment of a multinational peacekeeping force to restore order to East Timor.Australia is to lead that force with a contingent that represents the largest Australian Defence Force deployment in a generation. We are well placed to lead that force because we have enhanced our operational readiness and made ourselves available to respond to United Nations requests. Australia and, in particular, the Prime Minister have been vital in bringing the force together. I do not think we should underestimate the enormous scope of that diplomatic achievement.The United Nations resolution has been passed in record time. Joining Australia in INTERFET are Thailand, Singapore, the Philippines, New Zealand, the United States, the United Kingdom, Canada, France, Brazil, Italy and Malaysia; and many other countries have expressed a willingness to contribute. I think it is noteworthy that there is significant Asian participation in the force.INTERFET, under Australian leadership, is tasked with restoring peace and security, the protection of the United Nations mission and the facilitation of humanitarian aid. Australia is now seeking to make a substantial contribution towards not only translating the referendum outcome into a peaceful reality but also significantly alleviating the serious humanitarian crisis that has developed.The Australian peacekeepers follow in the footsteps of other Australians: the Federal Police, military liaison officers, consular officials and the United Nations workers who have worked under extremely adverse conditions to alleviate the suffering of the East Timorese. No-one in this place, I believe, underestimates the danger involved for the peacekeepers, for the Australians and for personnel from other nations who are participating in the INTERFET force. Standing up when it counts does often entail serious risks.The loss of life, the driving of people from their homes and the indiscriminate violence that has been the recent history of East Timor remind us that we live in a region beset by stark difficulties. I do not think anyone believes that the difficulties in East Timor will be resolved overnight. Indeed, our commitment there, like the commitment of other nations, is likely to be a protracted one, involving several phases of UN peacekeeping if we are to do the job that is expected of us.Today much of East Timor is in ruins. Even if peace were to be restored quickly—as is surely the fondest hope of all of us here—much would remain to be done. The aid and assistance required for reconstruction will be significant. We will have future obligations to the rebuilding of Timor, its infrastructure and its transitional political stability as it evolves into an independent state. These are important obligations, and I believe the leadership which the Prime Minister has displayed during this period of crisis and the overwhelming outpouring of support by the people of Australia ensure that Australia continues to carry out its commitment to the people of East Timor.Australia is proud of the role that its forces are performing in East Timor. The people of Timor have been subjected to the most appalling devastation. The Australian forces will be coming to the assistance of those in distress to restore peace and security to the population of East Timor. But let us not forget that, even though our forces have been provided with a clear mandate and rules of engagement allowing them not only to defend themselves but to use appropriate levels of force to fulfil their UN mandate, our forces, our military personnel, are in harm's way. They, their families and their loved ones must have our continued support, assistance and backing. We are proud of the efforts of our forces and we pray for their success and safety.10:13:0010286Gillard, Julia, MPMs GILLARD83LLalorALP00—I am grateful for the opportunity to speak in this debate to note the United Nations Security Council resolution which centrally raises the question of the crisis in East Timor and the issue of bringing peace there. As a representative of this parliament I had the opportunity to travel to West Timor in June this year to act as an international observer in the Indonesian elections. During the week that I spent in Kupang and in the outlying areas of West Timor, the issue of East Timor was raised with me and with our party on a number of occasions as we travelled. Already there were refugee camps on the border between East Timor and West Timor, with displaced persons gathering there because of militia activity in East Timor. Already the question of insurgency across the border from West Timor to East Timor was being debated and addressed and was well known throughout West Timor.As I travelled throughout West Timor accompanied by a member of our Department of Defence, Steve Lyon, our driver was an East Timorese man called Vince. He talked to us, during that week, of growing up in East Timor as an orphan, of being brought up by his brother and of his family who remained in East Timor. Given the heartbreaking events that have happened since the June Indonesian election, I can only wonder now where he is and how he is faring in the current circumstances.While in West Timor I also met and talked with an East Timorese man who told me how he remembers his family, when he was a young boy during World War II, assisting an Australian soldier to hide from the Japanese. He told me how he would take a branch off a tree and brush the ground with it to obscure the Australian soldier's footsteps to prevent him from being tracked. Once again I can only wonder how this man is faring now.These are, I know, small incidents, personal incidents, but they have put a face and a name to this tragedy for me. And what a tragedy it is—thousands killed, hundreds of thousands displaced. Having travelled in West Timor—and I think my colleagues are right to say that perhaps the greatest humanitarian crisis is now in West Timor rather than East Timor—I am left with an impression of how poor a nation it was before this crisis and what a disaster it must be now with hundreds of thousands of displaced people.When you travel in Kupang you are at one minute outside a two-storey or three-storey building and 50 yards down the road you are in a village atmosphere, with pigs tied to stakes and goats wandering freely. When we travelled to the outlying areas in West Timor we saw the critical health and nutrition problems that the people there were already struggling with. You would walk through villages where women would have the goitre lumps visible in their necks from insufficient iodine in their diet—health problems that are unimaginable to us in Australia today and that are easily resolved through the provision of iodised salt.That was the situation in West Timor in June when, apart from the refugee problem at the border between West Timor and East Timor, in reality the West Timorese were just trying to go about their business and feed and clothe and look after their own health care needs. Given that they were struggling with poverty then, with the question of nutritional problems then, with grievous health problems then—and I spoke to a nurse who worked in the outlying villages trying to provide what health care could be provided in West Timor; there were already major health problems facing the West Timorese people—you can only imagine how far that humanitarian problem must now be multiplied when, on an already poor and struggling place, you put hundreds of thousands of displaced people who have come presumably with no more than the clothes on their backs and who have critical needs for water, food, medical assistance, shelter and everything else that goes with looking after hundreds of thousands of people. We can only imagine, and never feel, the real need in the circumstances that must be in West Timor now.Moving from those issues, I suppose that, having participated in the Indonesian ballot, the thing that has struck me as the events of the last few weeks have unfolded is how critical and, indeed, depressing it has been to move from the triumph which was the Indonesian ballot for its own election in June to the tragedy that we have now. In the course of the Indonesian elections, as our team moved throughout West Timor and other Australian observers moved throughout the other provinces of Indonesia, we were all struck by how peaceful, how ordered and how enthusiastic the Indonesian people were about having their first free and fair election in 35 years: a triumph of democracy, certainly a transitional democracy, not without some forms of trouble on the day but generally peaceful and generally participated in with an enthusiastic spirit.One wonders now, as the events associated with the East Timorese crisis unfold in Jakarta, whether or not the birth of Indonesian democracy will turn out to be a stillbirth or a birth that is delayed in getting to maturity because of the impact of this crisis. It would be a tragedy indeed to see the enthusiasm which accompanied the Indonesian ballot dissipate and to see some form of undemocratic rule once again assert itself in Indonesia. But that might well be the consequence of where we are now.The other thing that struck me as we travelled throughout West Timor monitoring that ballot was how welcoming people were of Australians and how reassuring they found our presence as we assisted with the Indonesian election. The very fact that there were international people there watching the election provided a form of reassurance to the people that it would be free and fair. We were emblazoned well and truly as Australians, with caps and T-shirts with the Australian flag on them and with lettering in bahasa which declared us to be part of the Australian election monitoring team. Wherever we went, no matter how far out into the West Timorese provinces, we were greeted with smiles and enthusiasm, and there was obviously a real affection for Australians amongst the people.It is once again a tragedy that, as the events have unfolded in East Timor, that is no longer the case, either in East Timor or in Indonesia generally, and that the Australian-Indonesian relationship—not only at the elite level but also between the peoples—has suffered so grievously during this process. I think that is something that ought to concern us now and concern us over the next few years, because to have a good relationship between our people and the people of Indonesia is obviously where we want to be.In the debate yesterday, in respect of the whole issue of East Timor and the course that Australia has charted, the Prime Minister said:Ours has been the correct and only responsible course of action.I must confess I am left a little, I suppose, disturbed by that comment—`disturbed' is probably the best word—because I find it impossible that we are able to conclude that, when tens of thousands of people have died, when hundreds of thousands of people have been displaced, there was no other course of action that could have got us to a better result. How can a course of action that has those consequences be the correct course of action? Are we so intellectually and morally limited that a course of action that results in those sorts of grievous problems can be described by us as the `only responsible course of action'?I believe there had to be a better way and our shadow minister Laurie Brereton for many months now has been pointing to a better way. A better way would have been to secure the East Timorese people and the province through peacekeepers fielded before the ballot—not afterwards—and not to allow the many days to pass between the ballot and the outbreak of real violence in East Timor and the time that peacekeepers have actually arrived. None of us should sit here in some self-congratulatory way saying that we have done the right thing. Clearly, if that has been the outcome, we cannot have done the right thing. It is impossible.Before I conclude my remarks, I would like to say that I have had the opportunity, and indeed my colleague from Melbourne Ports who is next to me has had the opportunity as well, to travel to Lavarack Barracks in Townsville and to meet with a number of people who now would have been deployed to East Timor as part of the peacekeeping force. When we travelled there, which was the week before this session of parliament reconvened, already the troops were talking about the likelihood, as they then believed, of going to East Timor and their readiness and, I would have to say, enthusiasm to do so.Having met some of those people face to face, my thoughts are well and truly with them. I trust that, as a parliament and as a government, everything that can be provided to them is provided and that every step that can be taken to make their way easier is taken. Those troops in part have a connection with my electorate because it houses the language school at Point Cook. Many of the people who have been fielded in this deployment and who can speak the local languages would have undertaken that language training in my electorate. Once again, my thoughts are with them as they go about this very dangerous and difficult work. We wish them all the best.10:23:0010289May, Margaret, MPMs MAY83BMcPhersonLP10—It is an honour today to rise in support of the United Nations Security Council resolution on East Timor. As Australians, we often take for granted the fact that we live in a democracy. We often do not consciously consider how lucky we are to live in a country where we can think freely and voice our public opinions in the open without fear of retribution. We tend to take for granted that we live in a country which, at its heart, is founded on all-round equality. We enjoy equal rights and being treated with equal respect regardless of race, colour, creed or origin.Australians who are born in this country are blessed with democratic rights. Those people whose birthplaces are outside Australia and who join the formal membership of the community of the Commonwealth by becoming Australian citizens also have the rights to freedom of expression and to sharing democratic beliefs.Unlike Australia, freedom of rights was not automatic in East Timor. Two weeks ago, the people of the territory had the opportunity to express their views and to chart their future through the implementation of a ballot. The United Nations carried out an operation to allow independence to be born in the territory. Instead, this operation came with a blatant assault on the rights of thousands of innocent civilians.During the Four Corners report on the ABC last Monday evening, we heard from many United Nations observers who had been stationed in Dili during the ballot process. They said that while few words were exchanged by the East Timorese people during the vote, there was a sense of relief that these people were free to have a say in their own future.As we have heard on many occasions since the result, more than 78 per cent of the people voted for independence. As the result was announced, there were waves of emotion and scenes of liberation as families, friends and strangers hugged one another. This euphoria was short lived.Recent events in Indonesia have galvanised Australian public opinion, activating an overwhelming response in favour of Australia taking steps to stop the escalation of violence and the campaign of terror being waged by the militias against the East Timorese people.My office, like those of all federal MPs, has been inundated with telephone calls, faxes, emails and letters calling on the Australian government to help with the humanitarian tragedy. We have done so. Like other nations who have joined us in the peacekeeping mission, we could not sit back and watch.Likewise, we could not initially allow our Australian troops to enter East Timor without the support of the United Nations and full agreement of the Indonesian government. We could not have gone into East Timor until President Habibie was persuaded to accept a peacekeeping force.Contrary to what the opposition has said, the Australian government did not turn a blind eye to the suffering of the East Timorese people. We acted in the best interests of the nation. We took a leadership role and we have gained the support of other nations in the region to restore peace in East Timor.The Australian government has been and remains steadfastly committed to ensuring that the wishes of the people of East Timor are honoured, that independence is granted and that the ballot result is protected and carried out.As the Prime Minister has said on many occasions, Australia's aim is to achieve a situation in East Timor where a multinational peacekeeping force can supervise the peaceful transition to independence of the territory.In the past two weeks the Australian community has experienced a sense of frustration and mixed emotions as we have witnessed, from the comfort of our homes, the devastation of East Timor and the displacement of thousands of East Timorese people. We have watched and read stories of killings, intimidation, displacement and destruction of property.As I, along with millions of other Australians, watched the Prime Minister deliver his address to the nation on Sunday night, I reminded myself that thousands of people are reported to have died at the hands of armed militiamen and that the humanitarian crisis has claimed many more lives. As the Prime Minister said, the Commonwealth government's decision to commit Australian troops to the multinational peacekeeping operation in East Timor was not taken lightly. The decision was made in the national interest and to ensure that the UN process moves back on track so that the will of the East Timorese people is implemented.I strongly support a move for the United Nations High Commissioner, Mary Robinson, to pursue the establishment of an international commission to investigate human rights violations in East Timor. I passionately encourage and champion the establishment of an international commission to gather and analyse evidence of the events in East Timor. There must be accountability for the violations against human rights. It is necessary that the United Nations sends a message that we do not condone such suffering. It is vital that justice is done on behalf of those innocent victims who have fallen prey to the militia.I quote Mrs Robinson:To grant amnesty to the authors of the most atrocious crime for the sake of peace and reconciliation may be tempting, but it contradicts the purpose and principles of the UN Charter. To end the century and the millennium tolerating impunity for those guilty of these shocking violations would be a betrayal of everything the UN stands for, regarding the universal promotion and protection of human rights.Earlier this week, as we watched on our television screens the first troops leave for East Timor, all Australians' hearts went out with them and remain with them as well as their families. To those brave men and women go our prayers and hopes that they will remain safe and well.Last Friday I was speaking with a military man at Canungra army base in Queensland. His son aged 21 was one of the 2,000 young men and women who have been deployed to East Timor to restore peace and stabilisation, to protect the United Nations Mission and facilitate humanitarian aid. His son was one of those 2,000 young men and women who are highly trained and capable to participate in our nation's largest military engagement for 30 years.Australians are not only proud of each individual participating, but confident that they have the skills and training to achieve their objectives. As the Prime Minister stressed in his address on Sunday evening, our soldiers go into East Timor as part of a great Australian military tradition which has never sought to impose the will of this country on others, but only to defend what is right.Finally, I want to say that I support the United Nations Security Council resolution on East Timor and congratulate the Prime Minister, the foreign minister and the Minister for Defence for the role they have each played in achieving what I believe to be a positive outcome to a very delicate situation. Australia does not want to be in conflict with our nearest Asian neighbour. We want to be part of a resolution to the situation and ensure for the future that we have a strong, balanced relationship with Indonesia based on mutual respect, stability and cooperation.The Prime Minister, on behalf of the Australian government, has responded to the crisis in East Timor with leadership and measured determination. The practical and balanced proposals that the Prime Minister, the Minister for Foreign Affairs and the Minister for Defence have pursued will hopefully bring peace to this troubled region and work towards strengthening our relationship in the long term with Indonesia.10:31:0010291Livermore, Kirsten, MPMs LIVERMORE83ACapricorniaALP00—From the outset, I want to make it very clear that I wholly support the motion that is before the chamber. As we have seen over the last few weeks, the support of the Australian community for the people of East Timor is indeed overwhelming, and that sentiment has now been expanded to be expressed towards those Australian soldiers who have taken the lead in forming part of the international peacekeeping force which has now been deployed to East Timor.The unanimous support for the motion that is before the chamber will send a very clear and important message. It is a message to both the Australian and international communities that the Australian parliament is very serious about assisting in the search for a peaceful solution to the current situation in East Timor. The only solution is the cessation of violence in order for the East Timorese people to be able to live in safety and to live in the way for which they have voted overwhelmingly in the last few weeks—as an independent nation.The annexation of East Timor by Indonesia has had a devastating impact on the East Timorese people. Estimates have been made that between 100,000 and 200,000 East Timorese have lost their lives as a direct result of the conflict in East Timor over the last 24 years. Over the last few weeks, we have all seen the destruction of Dili and the murder of thousands. The television coverage of the situation in East Timor has been disturbing, but it has brought home to the Australian community the importance of Australian participation in moves to assist the East Timorese.The government's recent actions in the leadership of the multinational force which entered East Timor yesterday need to be congratulated. I also take this opportunity to join with the people of Australia to applaud the decision to deploy Australian troops in East Timor to keep and enforce the peace.I completely agree with the Leader of the Opposition who, on the departure of our troops for East Timor, said:. . . all forces in Australian politics, all parts of the Australian community are right behind our troops in the endeavour that they are undertaking here on behalf of our country, on behalf of the East Timorese people, on behalf too of good order and stability in the region in which we live.However, I am very concerned that the situation in East Timor has degenerated without the Australian government having adequately prepared for these very predictable circumstances. According to the shadow minister for foreign affairs, the member for Kingsford-Smith, there are two main reasons for the situation in East Timor reaching this crisis point.First, there was the decision to allow the independence process to move quickly and to disregard the intelligence outlining the potential for bloodshed should the TNI remain in force with the so-called militia forces. There have been numerous accounts over the past months indicating quite clearly that the militia forces were operating with, at the very least, the tacit support of the Indonesian military.Secondly, there was a delay in involving the United States. Once the US became diplomatically involved in the process of providing both United Nations and Indonesian sanction for a multinational force, the people of East Timor saw the formation of the force, which landed earlier this week.In November 1998 Xanana Gusmao suggested a timetable for the territory to gain independence from Indonesia. The essence of it was that 18 months should be spent solving problems relating to security in that region, including disarming the paramilitary groups. That initial period was to be followed by a transition process lasting at least three years during which there would be a political education program and the establishment of an East Timorese police force, as part of a possible deployment of peacekeeping forces. Gusmao suggested that it might be a good idea for East Timor to have a decade of autonomy before a referendum on independence. Those sentiments were echoed by other East Timorese leaders, such as Ramos Horta and Bishop Belo. It is clear that these three people, so involved in the movement for an independent East Timor, felt that the safety of the East Timorese people was best ensured through a gradual process.When it was decided that the East Timorese should vote as quickly as possible on whether they wanted autonomy within Indonesia or complete independence, neither the Australian Government nor the United Nations acted to oppose this decision. In fact, the Prime Minister and the Minister for Foreign Affairs acted to expedite the process of independence. They ignored the views of the US Assistant Secretary of State that peacekeepers would be essential if the vote for independence was not to become a trigger for violence and retribution. The consequences of these inappropriate actions are there for all to see—the destruction of cities like Dili and their vital civil infrastructure, the creation of an enormous refugee problem within West Timor, the razing of the United Nations compound and, most seriously of all, the loss of thousands of lives.Those are some separate points that can be made, but the overall sense that I know people in my community felt when they saw what happened in East Timor in the last few weeks was the understanding that we had betrayed the East Timorese people. The international community—and Australia, as part of that community—has really led the East Timorese down the garden path without properly assessing the situation and responding to that assessment, which was quite clearly available to us.The recognition by Xanana Gusmao of the potential violence and the need for the internal security of East Timor to be established was unfortunately not shared by the Australian Government. Indeed, it appears that intelligence reports indicated that there was a high risk of violence following the conduct of the ballot for independence. We have heard the grim predictions from the Defence Intelligence Organisation's report of 4 March a number of times in this debate and there is no need for me to repeat those. But it was quite clear that we had the available information in Australia to make a proper decision on how to deal with this vote for independence.I believe that, through planning and with regard to appropriate risk assessments, much of the bloodshed in East Timor leading up to and following the independence ballot could have been avoided. What a different situation we would be dealing with right now if we had taken those steps in preparation for the ballot. I would have been saved the very difficult task of responding to things like this letter from a Year 7 student at the Sacred Heart school in my electorate. It reads:Dear Ms Livermore, As a 12-year-old student and hearing, watching and reading the news this week, I feel disheartened because of all the bloodshed in East Timor. It is so close to home and the police and military who could have stopped it are standing back. I think it is Australia's duty to pressure the Indonesian Government to give the 78.5 per cent of East Timorese their voting wish—that is, independence and peace. So please think about what I said and what is happening, such as innocent people dying at random by the militia.Would it not have been much better for that Year 7 student to see the birth of democracy in a peaceful and orderly way in East Timor? What a great lesson in the power of freedom to achieve great results for a new nation. But how sad to have to say to him, `Well, the best we could do was to deploy peacekeepers after the event'—and after thousands of young children, just like him, had lost their lives.Due to the lack of foresight by this government, and its apparent unwillingness to heed advice on the situation in East Timor, the Australian troops—a significant proportion of the multinational force—are entering a potentially dangerous situation. Like other members, I have received a huge amount of correspondence regarding the situation in East Timor. First of all that correspondence was overwhelmingly in support of a peacekeeping force, and it now overwhelmingly expresses support for the individual soldiers who are going to East Timor and for their families in Australia who hope and pray that they will return safely.The friends and families of Defence personnel are justifiably concerned about the safety of these Australians, but I believe they appreciate the importance of this commitment to peace. When entering the military, people are making a commitment to the security of Australia and, in times such as this, to the safety and security of our region as a whole. While these Defence personnel accept the risks associated with their career choice, where there are any movements into areas of conflict the potential for harm increases and our appreciation for what they achieve for our country deepens. I wish to thank those people for their commitment to Australia and wish each of them a safe return home to their families and friends.I would like to spend a short time in my speech to pay tribute to the people of my community of Central Queensland. They have shown themselves to be very compassionate in a number of situations this year—firstly, with their expression of care and goodwill towards the people of Kosovo and now to the people of East Timor. In a matter of only a couple of days, we were able to circulate a petition that attracted well over 700 signatures from schools, churches and community organisations in Capricornia. I thank the people of Capricornia for sending that very strong message to the Australian government through that petition.I would also like to recognise the efforts of our community and church leaders in Capricornia in leading the way. When the history of the last few weeks is written, the actions of the Australian government will certainly be under scrutiny, but the moral authority that the Australian people have shown in their swift and very compassionate response to East Timor will be seen as the true legacy that we have from this situation. I wish the soldiers well, and I hope that we see peace in East Timor in a very short space of time.10:43:0010294Bishop, Bronwyn, MPMrs BRONWYN BISHOPSE4MackellarLPAged Care10—I rise to speak in support of this motion and, in doing so, I want to commence by congratulating the Prime Minister for the vision, skill and leadership that he has given in this most difficult international tragedy. No repetition in this place of the vision of human beings cut down with machetes can make it any more awful than the truth of what has occurred. What we needed in this time was strong leadership to bring together a force under the United Nations which would act to bring pressure to bear on the government of Indonesia to allow a peacekeeping force to enter that land and bring about peace.Invasion was never an option. The Prime Minister, using all the negotiation skill that we could have wished him to have in this situation, brought about a result of which I can personally say I am enormously proud. As I walk the streets in Australia, I meet other citizens who say exactly the same thing. It was his ability to pull together, in a positive way, the nations who will join under Australian command the INTERFET peacekeeping force. I think you can truly say that would never have occurred without the Prime Minister. More than 12 countries will join this force. It is particularly important that we have people joining from the Philippines, Malaysia and New Zealand and that the Thai government is providing the second-in-command.We ask of our ADF more than we ask of any other citizen in our land in terms of what they can be ordered to do and what impact that has on their own lives and that of their families. They are the only people whom can be ordered to go into a situation where their life can be ended. They recognise it. We recognise it. Their families live with it. They are people who accept that responsibility on behalf of the nation. They make me proud. I know they make the rest of the nation proud.They are well trained. As a previous minister responsible for defence personnel, I can say that when I became that minister there was an ethos around that said, and it was repeated I think as late as 1995 by the previous government, that we really did not have to worry about anything much for 15 years, there was no real risk of military contingency.We did not accept that. We did not accept the relaxed attitude that flowed from it and was perhaps epitomised by regarding our personnel as public servants in uniform. That is something we have never done, and never will do. They are special. They stand apart. Even in training their lives are at risk, as we saw in the Blackhawk tragedy when we lost so many of our able and well-trained personnel. But on this occasion I know that our troops, who we are deploying into the most dangerous environment we have entered in decades, are well trained. I know that they will do this nation proud.As we think about the courage and the bravery that they will take with them we can well remember that our spirit of nationhood here in Australia was not forged in bloody revolution, rather, it was forged in bloody battle at Gallipoli. And the spirit of Anzac that came from that and grew from that is the spirit that is carried by our serving men and women today. They share that spirit of Anzac with our returned veterans who have fought for their country in so many wars over the rest of this century.As the upholders of that tradition, they know that when our personnel fought at Gallipoli it was in a foreign land but it was for a cause that was right. They know, when they go now into East Timor, into a land that is not part of our Australian continent, that they are still going there to fight for something that is right. Their lives will be in jeopardy, as will be the lives of those who join with them, but in General Cosgrove we have a man in whom we can have great confidence.It never gives a nation anything but trepidation to see our men and women deployed into a dangerous field, but it can give us a surge of pride to know that they are well trained, that they have a commitment to doing what is right, and to know that the cause that they are engaged in is one that has the full backing of the nation. I would like to think that the rather petty lack of bipartisanship that we saw yesterday could be put aside and that the same spirit of bipartisan support that was given to the deployment of personnel at the time of the Gulf War would be followed again now because our men and women who are going to that dangerous territory deserve no less.10:49:0010295McFarlane, Jann, MPMs JANN McFARLANE83CStirlingALP00—I stand here today with mixed feelings as we debate this motion on East Timor. I have feelings of great relief that the United Nations peacekeeping force led by Australian troops has arrived to liberate the oppressed people of East Timor, but at the same time I also have feelings of great sadness because again my family is directly involved in conflict.My family has been involved in most of the conflicts that Australia has participated in in this century. My family has willingly answered the call of government to serve overseas and in Australia to protect the rights of democracy. I felt extremely proud, yet also sad, to see the youth of this country again answering the government's call to fight overseas. My nephew sailed out of Darwin at 6 o'clock on Saturday night as part of our Navy contingent taking personnel, equipment and supplies to the UN force in East Timor. My family is extremely proud of my nephew's involvement. However, his departure raises anxieties about the effect of involvement in conflicts on the families of service people.I have personal experience of the effects of war. My brother Ron sailed on the Condamine to Korea and experienced the trauma of war. Fortunately, he returned safely. I hope that my nephew is spared the trauma of being fired upon and I look forward to his safe return.I have also experienced what happens to families when the government fails to support returned personnel. I would like to share with you a passage of my first speech which deals specifically with past governments' failures to support returned service personnel and their families:I was born into a caring family in the 1940s. However, at the end of World War II my father, a returned serviceman, left my mother with three children under the age of four years.The government of the day provided little in the way of income support, public housing or support services to my mother and us children—or for my father, who I understand would have benefited from counselling and support services. Many returned servicemen have never fully recovered from their wartime experience. My family was one of many who suffered this experience.There are other members of this House who have expressed the same anxieties regarding this lack of support. In his speech yesterday, the member for Cowan called on the Prime Minister to ensure that our East Timor troops are not treated in the same way as we have treated our Vietnam and Gulf War veterans. We owe it to the personnel and families involved in this conflict to make available debriefing and support services.In community work and now as the member for Stirling, I have assisted veterans and their families in obtaining health services, family support services and I have also assisted them with appeals for benefits. From these experiences I have gained great respect for the role and work of the RSL clubs and Legacy in providing welfare services to veterans and their families. I would like to acknowledge the work done by the Nollamara-North Perth RSL sub-branch and the Osborne Park RSL sub-branch, both of which work hard for veterans and their families in my electorate.But, to provide these services, more funding is needed. I will quote a brief passage of what the Prime Minister said yesterday in this House:I was also very deeply warmed by the characteristic Australian responses. One of them looked at me as we ate and said, `Well, John, now I've got you, let me tell you what's wrong with the Army.' It was so Australian; it was so reassuring; and it was a reminder of the sorts of values that are important to the Australian community.Well, let me tell the Prime Minister, on behalf of the veteran community, about what is wrong with support services. It is simple: they need more funding.The sorts of values that are important to the Australian community include looking after the young men and women who place their lives on the line for their country. The member for Cowan, in his speech yesterday, identified this government's failure to provide justice for Vietnam veterans and their families, and its failure to hold an inquiry for Gulf War veterans into their health issues. I say to the Prime Minister, `You are committing our troops into an overseas conflict. Why don't you practise the values you spoke about yesterday and commit to providing justice to these veterans and to providing essential services to the East Timor service personnel and their families now? This would show that you and the government are genuinely committing to recognising the sacrifices they have made and may make, and the sacrifices that will be made in future by our service personnel.'Another of the Australian values that the Prime Minister alluded to is supporting your friends and neighbours. This brings me to the plight of our friends and neighbours, the East Timorese people. I, like many Australians, have been sickened and saddened by the carnage in East Timor. The fact that the many people massacred were killed for exercising their democratic rights fills me and many other Australians with a sense of anger and outrage.I have received many faxes, letters, phone calls, emails and visits from people in my electorate, as well as from people across the country. They all share this common theme: what can Australia do to stop these atrocities, and what support are we going to provide to the people of East Timor? Many of these people reminded me of our history in the region, and the assistance and support the East Timorese people gave to our World War II troops. These people also reminded me that we had promised the East Timorese people that we would always remember the torture and trauma they suffered when protecting the Australian troops.There are East Timorese people living in my electorate and I am aware of torture and trauma they have suffered and the great distress they now experience in seeing and knowing what is happening in East Timor. As a community worker and activist, I was able to provide some service and assistance to the East Timorese community in Australia. I worked with such wonderful organisations as ASETTS—the Association for Services to Torture and Trauma Survivors—the Friends of East Timor, the Northern Suburbs Migrant Resource Centre, the North Perth Migrant Resource Centre and the Catholic Migrant Resource Centre. I am aware from my experience how stretched these services are. With the arrival of more refugees from East Timor, these services will not be able to cope. I understand that some of these refugees will be placed in Leeuwin barracks, where the Kosovar refugees have been, so they will be in my area and they will be connecting with some of their family members and communities in the electorate.Prime Minister, if we are going to honour our commitment to the East Timorese people, then you must address the issue of additional funding and resources now. The government talks about being preventive, about how much better it is to have preventive services and preventive programs so that, down the track, the health, counselling and housing budgets do not blow out because of the negative impact on people's lives which takes them into circumstances that end up costing the government a lot of money. The preventive measure is to have the services in place when the people arrive.It took many years for the government to identify that many of the migrants who surfaced in our psychiatric system were really victims of torture and trauma and needed speciality services. It took many years to develop the kind of counselling services and model that ASETTS now provides to the victims of trauma and torture. We are aware of this, we have now commenced those services, but they are very stretched. As a community worker, I would find it would take many weeks to get people into the speciality counselling they needed because of the kind of torture and trauma they had suffered in their own countries before coming to Australia. Surely the preventive measure now is to look at the funding situation of these services and to increase funding now because we have additional East Timorese people arriving in Australia on a daily basis. All across Australia they will settle, not just in Western Australia or Sydney or Melbourne.In supporting the government, I think what we have done in being part of the UN peacekeeping force is wonderful. What we need to do, what the government needs to look at and the coalition needs to support, are the important things that need to be done. I would now like to say that I support the motion.10:57:0010297Cadman, Alan, MPMr CADMANSD4MitchellLP10—I want to read to the House something the House may find interesting. I quote from Hansard :The Government welcomed the outcome of the talks last May and June in Dili and Macao between the Portuguese Government and the principal parties of Portuguese Timor. In our view, the program mapped out at Macao, providing for steady forward movement towards decolonisation and free elections for a constituent assembly, went a long way towards the objectives we support for the territory. It also follows, however, that the Government is most concerned by the present situation in Portuguese Timor. What began as a show of force by the UDT party on 10 August has deteriorated into virtual civil war with widespread loss of life. The UDT and the rival Fretilin party are struggling for power in Dili and in many parts of the interior. The Timorese police appear to have sided with UDT, while the much more numerous military is predominantly for Fretilin.That was on 26 August 1975. On the following day, the Prime Minister, in response to a question from a Mr Ian Viner—the year is 1975 and the Prime Minister is Whitlam; I am quoting Whitlam, for the House's knowledge—concluded his answer to Viner's question on the second day of concerns being expressed at what was happening in Timor:So we have been in touch with the ASEAN countries; we have been in touch, of course, with Portugal; we have been touch with the Secretary-General; we have been in touch with the Committee of Twenty-Four. We are making preparations, if it is desired, to transport Dr Santos— of the International Red Cross—and the advance representatives who are already here, to the island of Atauro to which the Governor of Portuguese Timor has transferred the seat of government.He had talked to everybody but with no results. I would like to contrast, for the sake of the House, what occurred 25 years ago with what has happened over the last few weeks. The role which the government has taken in the last few weeks resolves those discussions that Prime Minister Whitlam held without any outcome, which produced just continuing concern and lack of support for any independence of Portuguese East Timor, as it was then known. Yet today, we have a Prime Minister of conservative outlook who has achieved what the great democrat himself could not achieve. Whitlam, who strolled the halls of power of the world proclaiming democracy, could not bring about what this government has achieved in Timor.Whilst I do not wish to say this in a party boastful way because I know that the Labor Party in this instance is also supporting the outcome—and that is a good thing—we have achieved over the last few weeks what has taken 25 years to achieve. Some of the carping remarks of the opposition I do not think bear any really close examination. This attitude of `We're with you but we're going to be highly critical and, in a grudging way, say that Australia has done the right thing.' I do not think you achieve much by that. Constructive remarks, offers of support, assistance and advice from experience by past ministers for defence are helpful. But surely the Labor Party understands that the Australian people, as a nation, understand the seriousness of what has occurred in Timor and the seriousness of the situation in which Australia finds itself and in which we have placed ourself. We all acknowledge that the future is unclear but we must all acknowledge that we are proud of what we have done because we have done the right thing in Timor at last. We are going to get a resolution gradually of that process.One of the advantages that we have in this relationship that we have with the Indonesian government is that there is a long history, encouraged by both sides of politics, of a close relationship with Indonesia. The professionalism of the armies and their close regard, respect and understanding of what the other one is up to is part of the success of what is occurring there now.The handover from Indonesian army control to Australian-led UN forces has gone smoothly, basically because these professionals know and understand each other. Whilst we can misunderstand words, either deliberately or unintentionally here in this place, there is no misunderstanding of the codes of conduct with which either the peacekeeping group from the UN or the Indonesian army is going ahead. That is one of the brilliant things about what has occurred. No other nation could lead this changeover in a difficult period in the way in which Australia has and I pay tribute to the professionalism of the people who are involved.It is interesting to look back over the process of the agreements and why the thing came unstuck. The tripartite agreement between Indonesia, Portugal and the UN on 5 May 1999 earlier this year has within it—right within the centre of it—the statement:Noting the position of the Government of Indonesia that the proposed special autonomy should be implemented only as an end solution to the question of East Timor with full recognition of Indonesian sovereignty over East Timor.The stuff that the Labor Party was talking about—early intervention and military presence at the polling booths—is just sheer rubbish. The tripartite agreement clearly states the official Indonesian position. They are not going to wear it. In a treaty with Portugal, Indonesia and the UN, they made it clear they were holding sovereignty of that area and they continue to hold that position. The Portuguese position is clearly stated in the next paragraph:Noting the position of the Government of Portugal that an autonomy regime should be transitional, not requiring recognition of Indonesian sovereignty over East Timor or the removal of East Timor from the list of Non-Self Governing Territories of the General Assembly, pending a final decision on the status of East Timor by the East Timorese people through an act of self-determination under the United Nations auspices.That is the very centre of the agreement, the statement of difference. We have the Australian Labor Party saying, `You know Australia should have been tough and got in there, despite that agreement.' You cannot raise those arguments with any merit in this place.The conditions of resolution 1246 adopted by the Security Council on 11 June 1999 are also of interest. Two of the paragraphs say:Taking note of the pressing need for reconciliation between the various competing factions within East Timor—Welcoming the fruitful cooperation of the Government of Indonesia and the local authorities in East Timor with the United Nations—This was a move towards the setting up of the process by which observers, the civilian police force and military liaison officers under the control of the UN supervised the referendum of self-determination.What I would like to say on this issue is that, serious though the matters are, the future holds uncertainty. I believe that the Australian government needs to look at the processes of rollover and returns from Timor and at our reserve situation. The Australian Labor Party has been raising matters of workplace relations concern and the allowable matters for reservists to take time off to give service.Of even greater significance, I believe, is the six weeks continuous service now required under the conditions of reserve service. I think that ought to be changed. There ought to be a more flexible approach than we have currently. The skills of semi-professionals and technologists who are in the reserve, or who would want to join the reserve, ought to be drawn upon by having a process which encourages them to affiliate with the Australian military. We cannot do this in the long term without the reserve. We cannot have a strong, established force without calling on the reserve. Our next steps over the next few weeks will be critical for Australia to maintain its presence and its strength in East Timor. I also encourage the Australian government to look at the resources of the Australian defence system to see whether or not we have gone as deep as we can into cutting expenditure and whether we ought to have a restoration of a reasonable expenditure on defence.11:07:0010299Ripoll, Bernie, MPMr RIPOLL83EOxleyALP00—I fully support the motion on East Timor, moved by the Prime Minister:That this House:(1) notes the overwhelming choice for independence exercised by the East Timorese people on 30 August;(2) welcomes United Nations Security Council Resolution 1264 authorising a multinational force to restore peace and security in East Timor, protect the United Nations' mission in East Timor and facilitate humanitarian assistance;(3) endorses Australia's agreement to the United Nations Secretary General's request that Australia contribute to and lead the multinational force; (4) expresses its full support for the Australians serving with the multinational force and its full confidence in them; and(5) looks forward to their safe return home.I would like to start by congratulating the people of East Timor for their courage in voting for independence on 30 August this year. Unfortunately, although they achieved a result of over 78 per cent in favour of independence, the outcome for them has been catastrophic. They have taken great risks for independence and paid the highest price possible.While we may argue here as to just how much we knew about the possible violence after the ballot, there is certainly no argument from the East Timorese people, because they knew very well what would transpire the day following the ballot. They knew, because they have seen the killing, they have seen the murder, and they were threatened before the ballot. But, in spite of all the threats, death and destruction, they went ahead with the ballot and voted for independence. Since that day, the East Timorese Australians that I know in Ipswich and Brisbane have been through a range of emotions and agonies of distress arising out of the violence from the militia and the military in their homeland. They are unable to contact their families and friends and are forced to watch daily while their country and people are destroyed.It is a very dark time for the East Timorese people, but, despite these dark times, they maintain their vigilance and their struggle for peace and freedom. They have expressed to me relief in watching the international peacekeeping force setting foot in East Timor, in watching historic images of Australian and other soldiers walking along the streets of Dili and in seeing a professional army in East Timor—the liberation force that will end the nightmare of 24 years and which has been very much welcomed by them.As a nation, Australia should be proud of what we are doing. For Australia it is a clear break from our past policy. Some people have asked me why we need to do anything, why we should lead the peacekeeping force, or why we should send troops and commit money and resources. Well, that question is very easy to answer—it is because it is the right thing to do. It is a decent thing to help defenceless people being butchered. It is no less than what we would expect and hope others would do for us if we were ever in need.Of course, some time ago we were in need. As is well known, during World War II our diggers engaged the Japanese in East Timor and if it were not for the courage and efforts of the East Timorese people then, many of our returned soldiers would not be here to tell us their stories. We made a promise to those people that in return for their support we would always be there for them. All they had to do was to call out and we would be there.We all know this from history, but last week I had the privilege, at an Ipswich rally for East Timor, to speak to one of those returned soldiers. Stan Kent, a former commando, recounted to the rally how he survived in East Timor and fought the Japanese, but he made it very clear that he would never have returned if it were not for those people.Stan Kent, like many others, knows exactly why we need to help and why East Timor is part of our responsibility. The thought that any civilised country such as ours could sit by and watch people being butchered and not help them is not an acceptable concept. The very basis of our society is that we will help our neighbours when in need. We cannot be an idle spectator. It is not who we are. This is an important part of our history, an important part of our heritage, and everything to do with what makes us uniquely Australian.Like the people of East Timor, I believe we are a people of great forgiveness. That is why a clear distinction must be made here between the military and government, and the people of Indonesia. It is not the people of Indonesia who are to blame for they are victims of similar oppression as that faced by the people of East Timor. The blame lies squarely at the feet of the military and the militia. The military have run East Timor as a personal enclave for the past 24 years. They have used its resources and its people. They have raped and murdered. All this has happened while we, and the rest of the world, largely looked on or turned a blind eye.The suffering over the last 24 years of the people of East Timor will be synonymous with the suffering of the people of Indonesia if the reign of the military is left unchecked by the Indonesian government. It will be up to the Indonesian government to take bold steps along a path in the direction of human rights and to start to redress these failings. It is a path that I believe they have started to travel. But make no mistake, it will be a long road.It will also be up to the international community through economic pressure to ensure that human rights abuses are eliminated and that democratic processes evolve. It will also be up to the Australian government through aid and other means to help in this process. The damage that has occurred to Australia-Indonesia relations over the last few weeks will take a long, long time to repair. This is not an apology for the Indonesian government, military or militia, for they are very much responsible for what has happened and they should be held accountable. But the reality for Australia is that we are part of this region that includes Indonesia and in the future we will need to repair the relationship if we are to live free of animosity.The relationship will have to be rebuilt if we are ever to help the people of East Timor and if they are to live in peace with their neighbour Indonesia. This must be done, but not at the expense of the people of East Timor or at the expense of human rights. This situation has demonstrated that Australia must take a bigger role in the region, that we should not rely too heavily on other countries for defence, and that we should take more seriously our defence force capabilities. The current level of about 50,000 ADF personnel is too low. Our country has one of the world's lowest expenditures on defence as a percentage of GDP, and our reserve force last year failed to recruit significant numbers and fell short by thousands of the required target. These are just facts, they are not criticisms.These issues must be addressed as a matter of urgency. Australia needs to investigate our real defence needs. The government needs to ensure that our service personnel are given the best training, resources and support possible. It also needs to know that issues of family and remuneration and conditions are considered as important as the job they do. The troops need to know that Australia and the government are 100 per cent behind them in every respect.Joe Teixeira, an East Timorese Australian from Brisbane, has organised a prayer vigil later this week for the East Timorese community to pray in solidarity and support with the Indonesian community in Brisbane. For a person who has lost 70 per cent of his family to the brutality of the Indonesian military and militia, this shows a level of understanding not many of us could fully appreciate. But this is not about the Indonesian people. As I have said before, this is about the Indonesian military and government.The people of East Timor are talking about peace, forgiveness and reconciliation. For them to be speaking these words at this time demonstrates incredible courage and resilience. I would like to quote Joe Teixeira, who spoke to me at a recent rally in support of East Timorese people and our troops. He said:We pray for the dead but we fight like hell for the living, and carrying out recriminations will not bring back our 300,000 dead. What the people of East Timor are looking for is compassion and care from the Australian community to help rebuild their shattered lives. If we can do that as a community, we will help to build a civil society that not only the East Timorese people will be proud of but also the Australian people will be proud of.The courage of these people can never be taken for granted. On the night of the ballot, Paul Toon, a community development worker from Brisbane, was sitting in the village of Lete Foho talking to a man who had been threatened by the militia. The man said:If I die tonight before the ballot I have a problem, but if I die tomorrow then I have no problem because our children will carry forward our independence.There are many stories of people who, immediately after the vote, packed up their belongings and headed for the hills because they knew they would be killed. But they still voted. This is the courage with which the East Timorese people voted for independence. Australia and the international community should have the courage to match this by pushing harder for a resolution that would include saving the East Timorese people now in prison in concentration camps in West Timor. The reality is that there is not much left in East Timor—either people or infrastructure.The need to be repatriated and helped to rebuild lives is the current great humanitarian need. In Brisbane, church and community groups have already established a coordinating committee to take volunteers to East Timor and to provide a safe haven for East Timorese asylum seekers in Australia. There are many people in my community who have to be thanked for their work. There are in fact too many to mention, but I would like to thank the Ipswich Churches Social Justice Group, the Ipswich City Council, the Ipswich Labor movement and the Ipswich and Brisbane East Timorese community.I would like to pay particular thanks to the many service personnel who will be going over there. Many of them are my friends. I wish them very well in their peacekeeping. In closing, I want to make it very clear that I support the government on this motion and applaud their commitment to support our defence personnel and to help rebuild East Timor. Our thoughts are with our troops and their families. I pray that all our troops return quickly and safely. (Time expired)10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Andrews)—Before calling the honourable member for Eden-Monaro, may I remind the chamber that the paper being noted is United Nations Security Council resolution 1264 and not the motion that was before the House yesterday.11:18:0010302Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—I am certainly pleased to speak to the motion before the Main Committee that the paper be noted and also to support the resolution passed in the House yesterday. In taking the opportunity to speak today, I am confident that I will be expressing the feelings of the people of Eden-Monaro in condemning the violence and destruction that has taken place over the past couple of weeks throughout East Timor and in sending best wishes to our troops in the peacekeeping force for a successful operation and a safe return. I particularly wanted to speak on this motion as I suspect I am one of the few federal members of parliament who have visited East Timor. I would like to take this opportunity to add some personal insights and experiences to this important debate.I did not visit East Timor with a parliamentary delegation or an official delegation. In fact, I visited East Timor in 1994—just five years ago—in my previous occupation as a consulting surveyor. I travelled there by light aircraft from Darwin with a couple of my business colleagues to assess a variety of potential infrastructure projects. In thinking back now, I am reminded of just how close Timor is to that very northern part of Australia.We took off from Darwin in a six-seater light aircraft to do a number of things while we were away. It was only a very short trip by light aircraft across the water from Darwin to Kupang in West Timor, where we went through immigration and customs. From Kupang, we crossed into East Timor, to Dili. It saddens me greatly to think that at that time we were looking at the sort of projects which were designed to assist the East Timorese to have access to some basic services, to help to develop new industries—in short, to modernise and help them move forward.Not only has much of that infrastructure that we looked at not occurred, but we have now had to witness the destruction of much of what they did have. I heard a news report only in the last few days that one of the main banks in the middle of Dili was still burning. I suspect that it is probably a bank in which I spent quite some time back in 1994, trying to weave my way through some complicated processes of changing some money. It was quite an interesting exercise that we went through. Even that sort of infrastructure has possibly been destroyed and will have to be rebuilt.It also disturbs me to think of the many people who we met during that visit and to wonder about their fate. In that respect I would like to mention the Carrascalao family who were particularly helpful to us on that business trip. They gave us introductions in a variety of areas and helped us to work through some of the bureaucracy extremely well. I know that the Carrascalao family have lost many members of their family over the years because of the problems in East Timor. My last images of Manuel Carrascalao were at Dili airport when he successfully helped us to negotiate the release of our aircraft. Certain groups had decided they were going to take control of it and not allow us to take off without substantial monetary exchanges. It was terrific that the Carrascalao family were there to help us to get through some of those difficulties. At the end, they came racing out, saying, `Hang on, I've got to give you some coffee before you go,' so we got loaded up with some of their coffee to take with us. It certainly disturbs me to think of what might have happened to many of those people.The people we met when we were there came from very diverse situations. Some, superficially, were working quite closely with the Indonesian bureaucracy—very successfully, in fact—while at the same time they were always planning for the day when they would have independence. I met others very late one evening, when I was taken to a safe location, who kept well clear of Indonesian officials. The coming together of these two groups was seen as dangerous and was only done with great care. I was honoured to have been part of some of those get-togethers at the time. I was privileged to have had the opportunity to discuss a range of matters with these two groups together.I was able to get a very good insight into East Timorese history as a result, but it also made me aware that, at the same time, there were competing forces among the people advocating independence. On that particular evening, which I remember quite well, I met in a hotel with some people who were involved in business, who were working closely with the bureaucracy and were wanting to help to get up and going some of these infrastructure projects that we were looking at. They thought it was very necessary that we should meet with some of these other groups that you would not find during the day. So at about midnight one night, we were taken to a location to be able to meet with the various groups together and talk through the long-term future of East Timor. At that stage, in 1994, they certainly had no idea how long it might take before they might see independence.I talked about the fact that there were competing forces, even within the independence groups at that time. Since that time, I understand that much has been achieved with respect to the unification of pro-independence groups. However, I believe that this will remain an area of high priority once peace is fully restored and the road to independence is further advanced.There is no doubt that East Timor has some huge challenges ahead. From my recollection, very many difficulties will be faced in establishing basic infrastructure. For example, water supply alone is no easily solved problem. This was an area we were investigating in 1994. Many parts of East Timor are unique in that it is in the tropics but is often affected by rain shadows. This can, effectively, create drought type conditions when normally a wet season should be occurring.I am sure Australia will have an ongoing involvement in East Timor well beyond its role in the international peacekeeping force. The rebuilding of East Timor alone will be a huge task and one in which Australian expertise can play a leading role. Hopefully, many of those infrastructure projects I was assessing back in 1994 will ultimately become a reality.I would like to add my congratulations to the Prime Minister, John Howard, to the foreign minister, Alexander Downer, and to the defence minister, John Moore, for the superb job they have done during this most difficult time. Many people in my electorate have expressed their relief to me that John Howard was in charge. They have recognised his cool-headedness and the tremendous leadership he has shown. He has achieved something quite remarkable, considering the last 25 years' history of East Timor.Allow me to read from one of the letters I have received in my electorate office. It comes from Mr Al Armstrong, from Eden—who, quite coincidentally, was recently chosen by the electorate selection committee set up for the International Year of Older Persons as the person to represent Eden-Monaro for that celebration. I hope to talk a little bit more about that in the House at a later time. Mr Armstrong said:Dear Gary,Please convey my congratulations to the Prime Minister of Australia, for his speech on Prime Television to-night, Sunday 19/9/99.I fully support as an individual, his . . . expression of opinion of the ability and the readiness of the Australian troops committed to the Peace Keeping Forces.He then talks about some of his experiences in that region during the war, and finishes by saying:Please pass these sentiments of total loyalty to your Government and Prime Minister, especially for the courage and dedication he has shown in this very critical time.Yours faithfully,Al ArmstrongIn closing, on behalf of the people of Eden-Monaro I extend best wishes to all of our personnel involved in this operation in East Timor. I express our sympathy to the many East Timorese families who have gone virtually to hell and back in recent times, and certainly to many of the people whom I met during my time in East Timor in 1994, when they gave such assistance. I certainly feel for the difficulty that they have been through.I wish our troops every success and hope that they are able to establish a peaceful and safe environment for East Timorese as soon as possible. I wish them a safe return to Australia.11:28:0010305Cox, David, MPMr COX83UKingstonALP00—Australia's forces go to Timor with the full support of all members of this parliament and the overwhelming support of the Australian community because it is a moral cause: to stop murder, terror and destruction. It is an Australian responsibility to help our nearest neighbour, and it is in our national interest—to restore peace on our doorstep.We recognise that Australia's participation in this force may well be at a significant cost. There may be casualties. Putting young Australians in harm's way should never be done lightly. If the military involvement is protracted, as it may well be, it will have a high budgetary cost. When the situation is stabilised, Australia, amongst others, will have to make a significant contribution of foreign aid to help rebuild East Timor. We will also have to make a substantial contribution to assisting refugees.Australia's intervention has meant a serious deterioration in our relationship with Indonesia. While we have contributed to a number of peacekeeping operations and the Gulf War, we have not faced issues of this magnitude so close to home for decades.The position of Bishop Belo and those associated with Falintil was that there should be a lengthy period of transition, to facilitate reconciliation, followed by a ballot on independence. It is a tragedy that the views of those in a position to understand the forces at work in East Timor were not given more weight, not only by the Indonesian government but also by the Australian government and the rest of the international community.Whatever our views about whether the circumstances now faced in Timor were either avoidable or capable of substantial mitigation, events unfortunately reached the situation where Australia and the international community had no other option but to act. When Timor became a holocaust, some Australians felt we should act unilaterally. Action of that kind would inevitably have made the situation worse. Whatever miscalculations had been made which precipitated the crisis—miscalculations by Indonesia and the rest of the international community—they had been made months before, not in the days leading up to or following the ballot.Unilateral action by Australia may have been interpreted as a hostile act. The worst scenarios flowing from that could quite possibly have been beyond the capabilities of the force Australia had prepared, and therefore the lives of a great many Australian soldiers would have been put in jeopardy. Whatever our views about a situation which did not directly threaten our territorial integrity or the lives and safety of Australians, it would have been a dangerous precedent to act alone when it was not only possible but appropriate to seek collective international intervention through the United Nations. The appropriate response was a multilateral one in cooperation within Indonesia.Because of the situation into which Timor has descended, there is a risk that our involvement will be for a very considerable period. However long it takes, we have an obligation to ensure that we remain steadfast in our support for the military personnel we have committed to this task. That unwavering support must be maintained until the task is complete. And when the task is complete, if there are veterans who still bear a burden from their service on Timor when they have returned home, then that support must be continued.Fortunately, the members of the Security Council who drafted resolution 1264 have learnt the bitter lessons of some recent United Nations peacekeeping operations. A United Nations presence can be inadequate to keep the peace if it is not given authority to `take all necessary measures' to fulfil that mandate. Massacres and acts of terror have actually occurred in the presence of United Nations forces because the perpetrators were aware that those forces did not have the necessary authority. Resolution 1264 gives that authority and, like any effective deterrent, in so doing greatly improves the chance that lethal force will not have to be used.The difficulty of maintaining a peacekeeping operation in a potentially hostile environment cannot be overstated. It is important to recognise that the objectives of the multilateral force are entirely for the benefit of the East Timorese people. Resolution 1264 clearly defines them as: to restore peace and security in East Timor; to protect and support the United Nations mission in East Timor in carrying out its tasks; and, within force capabilities, to facilitate humanitarian operations.The deployment of Australian military forces to lead International Force East Timor fulfils our moral obligation to our nearest neighbour. Australia had to act to stop the slaughter of innocent Timorese people. Ensuring peace in our region stands second only to the defence of Australia as a justification in the national interest for the use of force. It is a matter of deep regret that a peacekeeping force was not put into East Timor before the vote on independence. That could have both avoided the violence and greatly lessened the danger to peacekeeping forces. The Australian government needs to review in a rigorous way what additional actions it should have taken on the diplomatic front to influence these events.What other lessons must we learn from this experience? While Australia is contributing 2,000 highly skilled military personnel to INTERFET, the operation has also been a demonstration of some of the limitations of our military capability. There is already some consensus that this is something that needs to be addressed and that there will be a need to increase defence spending. That will have two components. The first is the actual cost of the deployment. If it is protracted, it will become very significant with the need to rotate military personnel committed to the force. Secondly, there is the general question of how we should enhance our military capability. That does not necessarily mean that the lesson we have learnt is the need to have a long-term increase in the number of regular forces. Nor is it a reason to restructure our forces specifically to meet larger peacekeeping requirements. What has been demonstrated by this experience is that, as a country with a relatively small population, there are obviously limitations to the size of any force we can raise.If we have found some of the limits of our capabilities in preparing for the East Timor operation, then we need to think carefully about how we should structure our forces to meet a worse contingency. Nothing that has happened in the last few days should move Australia from the fundamental principle that we should structure our military forces for the defence of Australia. If we do that and, unfortunately, it is a principle which the Howard government has drifted away from with notions of forward defence, then we will be in a much better position to deal with contingencies like East Timor.There are two main components of that. The first is focusing on our capacity for expansion, which includes an appropriate and capable reserve element, such as the ready reserves which were established by the Hawke government, but sadly abolished by the Howard government. The second, given this demonstration of the inherent limitations of the size of force elements which we can mobilise, is that we need to focus on developing those capabilities which are necessary to meet higher level direct threats against Australia, principally our strike capabilities.11:36:0010307Andrews, Kevin, MPMr ANDREWSHK5MenziesLP10—I rise today to support the motion before the chamber and particularly the United Nations Security Council resolution. In the world of Orwell's 1984 , `history was bunk'. The Orwellian state's public servants worked diligently at censoring and rewriting old newspapers, so that history would always apparently conform with whatever version of the truth the leadership wished to assign to it in line with changing international relationships. I have been reminded of Orwell's 1984 as I have listened to some intone piously about what the Howard government should have done on East Timor.It is certainly agreeable to find that an issue which one has done one's small bit to champion over the years, namely the independence of East Timor, has become fashionable. But I am here to remind the House that this was not always so. There are only a couple of faces that I can remember from the other side speaking out for East Timor and they were the member for Melbourne, Lindsay Tanner, and the member for Reid, Laurie Ferguson. Regrettably, there were few on this side either.While I commend the member for Kingsford-Smith, Laurie Brereton, for breaking with official Labor Party policy on East Timor earlier this year—it is certainly better late than never—it must also be remembered that it involved a massive U-turn after 24 years of appeasement by the Labor Party, all the more marked because it had the power in government, both in 1975 when this problem arose and, more recently, to really make a difference, but it did not. The member for Kingsford-Smith made this remark yesterday:One is always tempted by what might have been.He went on:Had we fulfilled our responsibilities, we could have prevented Timor's triumph from turning into tragedy.Well, I am not going to resist this temptation. I will tell you what might have been. Had Paul Keating remained at the head of government, there would have been no pushing for any ballot for independence in East Timor for starters. Paul Keating, like all Australian leaders from Whitlam on, liked to think that we had a `special relationship' with Indonesia. Every time we made the mildest of objections to some dreadful infringement of human rights, we were quickly smacked on the wrist and we were made to go on our way with our tails between our legs. Had one been describing the relationship between two people, one would have described it as deeply dysfunctional and certainly masochistic on our side.As there would have been no ballot, we probably would not have seen such a bloody maelstrom, but certainly the killings of East Timorese supporters of independence and anyone else who got in the way would have continued, though not on such a grand scale. We would have been left with the steady drip drip of routine violence and bloodshed in East Timor, and the Labor government would have continued to tell us that Indonesia would deal with its own internal security problems.Let me take the chamber on a brief trip down memory lane to the first speech I gave on East Timor in this place in March 1992. That day I reminded the House of the Whitlam government's response to the invasion of East Timor in 1975; it endorsed it. The Liberal shadow foreign minister at the time, Andrew Peacock, at least protested the inactivity of the Whitlam government. The Whitlam government, as I said then, gave the green light to the invasion and sealed the fate of the East Timorese people.Moving along in our time machine, let us revisit the Hawke Labor government's response to the 1991 churchyard massacre of over 100 people, including a New Zealand student studying in Australia. The then foreign minister, Gareth Evans, told us that the response of Indonesia was `credible'. He was quick to make sure that the crosses blessed by a Catholic priest set up outside the Indonesian Embassy in Canberra to represent the slain in East Timor were removed posthaste to appease Indonesian sensibilities.What struck me in that debate in March 1992 was how apparently decent human beings on both sides of the House, in the matter of a small foreign territory, far too close for comfort, consumed like a rabbit by a very large boa constrictor next door, could be quite impervious to decency or humanitarian concern and be totally focused on the economic advantages of our relationship with Indonesia and our gains from the Timor Gap Treaty. In international relations, morality tends to become what we can afford or think we can afford. I said then that pragmatism is really only a euphemism for allowing practical exigencies to excuse anything at all.Against this sorry background the Howard government's achievement on East Timor would not have been believable 12 months ago. It constitutes a revolution in Australia's foreign policy. Not only did the Habibie government consent to a ballot for East Timor, for which it should be given great credit, the Indonesians subsequently invited the UN to send in a peacekeeping force. None of this would have come about but for the enormous work done by the Prime Minister and the foreign minister in convincing the international community that it was the right thing to do to protect the people of East Timor and to support Indonesia in re-establishing order.While the calls for immediate action by the Australian public have flooded into all our offices and people have been critical of the time it has taken, it should be remembered that it took only two weeks between the ballot result and the sending in of the peacekeepers, a world record for United Nations missions.The various `might have beens' urged by the opposition belong to cloud-cuckoo-land. They are now manufacturing a new, seamless pseudo history where it would have been perfectly possible for the Indonesians to have been convinced both of the need for a ballot and for peacekeepers. The Prime Minister tells us that in his discussions with President Habibie, this was not possible, although it was suggested time and again to Indonesia. More importantly, China and Russia would have vetoed a peacekeeping force before the ballot. It took a vote of 78 per cent in favour of independence and, unfortunately and tragically, the mass slaughter and forced exodus of the East Timorese population that followed, to convince the international community that anything needed to be done. The opposition in this glib rewriting of history's possibilities tells us we could have kept good relations with Indonesia and secured the peacekeeping force for East Timor. This, I believe is just wishful thinking. It was obvious that Indonesia was going to be shocked and affronted by our sudden acquisition of moral sense after 24 years of craven appeasement at any cost.The Prime Minister has been enabled to stand up for the people of East Timor and take a firm moral stance because he had the Australian people behind him. No member of this place could not have been moved by the enormous passion of ordinary, unallied Australians who protested their desire for the Howard government to go to the aid of little East Timor. I believe that this is the result of a sense of history. We have done this because we remember that during the last war 40,000 East Timorese people died, many of them helping Australian soldiers to survive in Japanese occupied territory. What we have seen in the Howard government's push for a ballot in East Timor and now our leadership of an international peace enforcing force, signifies a reversal of policy held for almost a quarter of a century by both parties in government. The holocaust of slaughter of men, women and little children who did nothing more than vote for independence has shown us that, as I said in my March 1992 speech, the price of appeasement is too high. That policy is now in the dustbin of history.I believe that history will look kindly on the Prime Minister and give him the credit that is his due. I hope that we will be able to find some new and more genuine level of friendship with Indonesia and watch our neighbour grow in international prestige and esteem as its yet fragile democracy takes root. I sincerely hope that good may come from the terrible sacrifice made by the people of East Timor so that they may live free from fear in a prosperous new nation. We must not forget the hundreds of thousands of East Timorese people who find themselves stranded in West Timor in refugee camps or elsewhere and urge that they be permitted to return to East Timor.If there is any glory to be had in this tale of suffering and endurance, it belongs to the brave people of East Timor. I would like to honour them today. In particular, I would like to mention an East Timorese leader, Mau Hodu, who came to Parliament House here in Canberra several months ago and addressed a meeting of Parliamentarians for East Timor and other people involved in this cause, a visit already mentioned in this discussion by the member for Calare. In the most recent information to hand, I have learned that Mau Hodu was taken into custody on 7th or 8th of September and transported to Kupang. He has not been heard of since then and there are fears that he is, in fact, dead. Mau Hodu represented both the gentleness and the strength of the East Timorese people and I would like to remember him here today. For those like him who have given their all for their country, I will end by saying, `Viva East Timor.'11:45:0010309Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—Like many others, I have waited a long time to see the scenes that we have seen on Australian television over the past few days of Australian soldiers being greeted in Dili by the East Timorese people. Finally, after 25 years, we have found the courage and strength to take action to assist the East Timorese. I applaud the Australian soldiers who are making a commitment and putting their lives on the line, placing their lives at risk, in order to ensure that we can both restore our national honour—wipe out what has been a great source of national shame for Australia over 25 years—and make our contribution to ensuring that the East Timorese people who have not already suffered death as a result of the recent tragedy can look forward to building a new nation on the back of the independence vote that occurred a couple of weeks ago.I do not want to focus today on the policy failures of the Howard government in this respect. I think there have been policy failures by the Howard government but, as the honourable member for Menzies implicitly pointed out, all Australian governments have had failures with respect to East Timor going back into the mid-1970s. I think it is a fruitless exercise to try to determine who was more complicit in the failure of Australian policy on this issue since that time.The fact is, a ballot has finally occurred. The East Timorese people have voted for independence—as we always knew they would do. We now have peacekeepers there on the ground. We now have the opportunity to recover from the appalling tragedy that has occurred over the past few weeks. We now have the opportunity to assist the East Timorese people in building a new nation.It is critical that we focus on the positives in this situation in spite of the appalling recent tragedies that have occurred. These recent tragedies, it is important to recall, are just another instalment in decades of tragedy for East Timor. They are not new, they are not novel, they are things that the East Timorese people have been living with for a very long time. But the positives are that finally, after 25 years, we have had a genuine expression of self-determination by the East Timorese people. They voted overwhelmingly for freedom. They voted overwhelmingly for independence. The positives are that these people have fought tenaciously against a brutal and corrupt authoritarian regime and against the oppression of invading occupiers. They have never resorted to terrorism against civilians. They have never bombed Jakarta. They have never used tactics other than simply attacking the invaders in their own country. And now they have an opportunity to build a new nation.So, instead of wringing our hands about the cost that this may entail to Australia, or indeed focusing on the policy errors of the Howard government, let us commit ourselves to making sure that we can assist in the rebuilding of East Timor, help bring a new nation into being, and restore the freedom and democracy that these people are entitled to, just as anybody else in the world is entitled to.I would like, however, to make one note of criticism of one group of people in Australia who deserve enormous condemnation for their role in the unfolding of the events over the past 25 years, and that is the pro-Indonesian lobby. That lobby comprises a handful of academics, journalists, diplomats and Australian foreign affairs officials who have been prepared to condone any atrocity no matter how extreme; who have been prepared to explain away any act of brutality or corruption by the Indonesian regime no matter how outrageous; and who have been prepared to applaud and apologise for the Suharto regime no matter how brutal it has been to its own people.Sadly, these people have influenced some Australian politicians. I note that when the member for Farrer resigned as Deputy Prime Minister, none of the glowing media mentioned the fact that he was the same person who, only a couple of years ago, said that if we were looking for a man of the latter half of the 20th century we should look at President Suharto. In fact, if we were looking for one of the most brutal and corrupt dictators of the second half of the 20th century and one who was responsible for hundreds of thousands of deaths, then President Suharto would have been a pretty serious contender.So, this craven, myopic group who have foisted their views of how Australian foreign policy should operate onto Australian opinion leaders have got a lot to answer for. Yet, we have not heard one word of apology, not one word of retraction, not one word of recantation of their policy which they masqueraded as Realpolitik, as the appropriate thing to do, as the necessary thing to do, to ensure that we had good relationships with Indonesia.This posturing ignores the reality of our relationship with Indonesia. Neither country—not Indonesia, not Australia—can afford to have bad relations: Indonesia, because Australia is an economic power in the region and a strong military power; Australia, because Indonesia controls the shipping lanes and aviation access to our country. And there are many other issues. Both countries need good relations. Although it is understandable that there is an anti-Australian backlash in Indonesia at the moment, in this period of considerable pain when Indonesian society is facing up to the reality of its recent past, I do not believe that this backlash will be sustained or highly damaging to Indonesian-Australian relations.The reality is that Australia has been a good friend to Indonesia. It was Australia that argued for a better deal for Indonesia from the IMF during the recent Asian economic crisis. Australia is well positioned to continue to be a good friend to Indonesia. It would be obvious to all Indonesians that, contrary to some of the rhetoric that is around at the moment, Australia clearly has no colonial or territorial ambitions and no intention to dominate outside our existing borders. All we are doing is attempting to assist in setting right a great historical wrong which has occurred partly because of our previous inactivity.I would like to conclude by paying tribute to a number of people, firstly, as the honourable member for Menzies has said, to the East Timorese people themselves—many of whom are refugees in Australia, many of whom live in my electorate, many of whom I have dealt with many times at demonstrations, meetings and gatherings over the past few years and going long into the distant past. For their enormous courage, their enormous endurance, their enormous strength and their enormous integrity they cannot be beaten. To look at what the East Timorese struggle has consisted of, and how these people have endured and have continued to fight, provides an extraordinary example of human strength for all of us.I pay tribute, secondly, to the Australian armed forces, those people who are risking their lives in East Timor. My heart goes out to them. My undying and absolute commitment to the cause that they are part of is stated here today and has been stated many times before. They will restore Australia's honour in this very sorry episode of history, and I pray fervently that they do not suffer casualties and do not suffer the sorts of consequences that clearly they are putting themselves at risk of suffering.I would like also to mention a few individuals. The shadow minister for foreign affairs, Laurie Brereton, deserves great commendation for having had the courage at the beginning of 1998—well before the fall of the Suharto regime, well before it was even seen as possible that Suharto might fall—to break with the past, however difficult it was for him personally in many respects, and change Labor policy on East Timor. He has been absolutely vindicated by subsequent events.I pay tribute to US Senator Tom Harkin, whom I had the pleasure of meeting only a couple of weeks ago in Des Moines, Iowa. I listened to him speak about East Timor, explaining to American citizens why he has been actively involved in this issue, going back as long as 1976, and why he feels passionately about it. I commend Senator Harkin's extremely moving speech to all Australian members of parliament, for them to take some note of it. There have been plenty of people around the world committed to this issue, as well as many of us in this House and elsewhere in Australia.Finally, I pay tribute to a person whom I consider to be a true Australian hero, somebody whom very few people in this House would have heard of, somebody who I think is representative of the groups of people who for many years have contributed in Australia to fighting this battle for East Timorese self-determination. I refer to John Sinnott, who is the key person in the Australia East Timor Association and who has kept alive this battle, going back as far as 1975 when he was involved with a number of others in setting up the Campaign for an Independent East Timor. He has worked tirelessly since then.He has been in Melbourne for many years. He worked part-time as a teacher for a while, while working de facto full-time on the East Timor campaign. In more recent years he has taken a package from his job as a teacher to work full-time, without pay, for a number of years on the Australia East Timor Association campaign for an independent East Timor. You would have seen him, I have seen him, at every demonstration, every activity, every gathering. He is always there, unassuming, in the background, just working, not seeking glory. He was embarrassed at the suggestion that I was even going to mention his name in parliament.While we are honouring the Australians who are risking their lives in East Timor at the moment, we should also recall those in this country who, like John Sinnott, have dedicated their lives to pursuing the cause of justice for the East Timorese people. When I see some of the rather doubtful individuals who get Australian honours, I think of people like John Sinnott, people who selflessly commit themselves to a genuine, very important humanitarian cause like the cause of East Timor.As a longstanding Australia East Timor Association member, I say here today that I am very proud of John Sinnott. I am very proud of the many Australians like him who have played a very active role in this campaign. I hope that when East Timor honours its heroes, once it is established as an independent nation and the country is rebuilt, it finds space also to mention people like John Sinnott who have played such an important grassroots role in ensuring a decent outcome for a long-suffering people. (Time expired)11:55:0010312Bartlett, Kerry, MPMr BARTLETT0K6MacquarieLP10—No Australian could fail to be deeply troubled by the suffering of the East Timorese people over a long period of time, but especially in recent weeks. Australia's commitment to assist the people of East Timor in the terms of the motion before us was both right and necessary. Equally right was the courageous and determined role Australia has played in recent months in providing the greatest financial and logistic support to UNAMET, in providing the largest civilian police force to oversee the ballot, in its pivotal role in the evacuation from Dili of 1,800 UNAMET staff and East Timorese civilians, in organising and delivering humanitarian aid, in pressing for agreement from President Habibie for a UN peacekeeping force and in galvanising international support for such a force.We have an undoubted moral obligation to support the people of East Timor, to support their courageous stand for justice and to help end the 25 years of suffering which have seen over 200,000—a quarter of the country's population—die from violence, disease or starvation since 1975. For too long over those 24 years, successive Australian governments accepted the Indonesian annexation of East Timor. This acquiescence is even more inexcusable given the sacrificial assistance which cost the East Timorese over 40,000 lives in supporting Australians against the Japanese in World War II. It has taken this government to finally support the East Timorese stand for independence.Australia has done what had to be done. Australia has done what was right. We needed to stand against the brutality, against the appalling atrocities, against the inexcusable bloodshed which we have witnessed in recent times. To have turned a blind eye again would have been unthinkable. Australia and the world needed to make it clear that such brutality cannot, and will not, be tolerated.The 30 August plebiscite should have removed any hesitation the international community had. In the face of extreme intimidation, almost 99 per cent of the 450,000 registered voters turned out to cast their vote. Over 78 per cent gave a clear message of support for independence—independence come what may. The tripartite agreement of 5 May between Portugal, Indonesia and the United Nations confirmed the international community's obligation to support the result of that referendum.The newspapers at the time of the poll carried some quite moving stories of ordinary East Timorese people who, in spite of that intimidation and in the face of the enormous risks, did turn out to vote. I would like to read two of those which I think really epitomise the nature, the determination and the courage of ordinary East Timorese people:Brushing aside threats by pro-autonomy militia, Jubamal Salvador, 58, started walking at 4 a.m. yesterday to make sure he could cast his historic ballot on East Timor's political future. Clutching his registration paper, the slight villager, in a worn, checked sarong, was among the first of thousands in line when United Nations electoral officials opened the doors to the sports hall in south-west Maliana. Despite enduring months of militia terror and intimidation in a district with the worst reputation for political violence in East Timor, Jubamal said he had stuck to his choice. "We have been thinking deep in our hearts," he said.The other story was the story of a young widow, Florentina Dos Santos:Florentina Dos Santos is too young to be a widow, and her marriage to Vigilio Da Costa was too short. They had wed just two days before he fell to the ground, shot by an Indonesian policeman in the chaos that gripped Dili last Thursday. Yesterday, dressed in a black skirt and clutching a framed photograph of her handsome young husband, she went to a polling station just a few hundred metres from where he died and she voted the way Vigilio would have hoped. With tears streaming down her cheeks she said, "I feel obliged today to vote for what we have been fighting for, which is our freedom."The tragedy is that since that ballot, the violence has escalated. Perhaps as many as 200,000 to 300,000 people have been displaced and perhaps 10,000 to 20,000 killed.Australia has done all it can to bring this bloodshed and brutality to an end. Australia's military commitment to East Timor represents our largest military operation in 30 years. This is an indication of the seriousness of our commitment to the East Timorese, of the gravity of the situation there and of Australia's leadership in restoring peace and stability. Australia's military commitment will involve some 4,500 personnel. I would like personally to take this opportunity to commend the members of the Australian defence forces for their professionalism, their preparedness and their commitment to a cause for which it is worth taking risks. These are qualities which have marked Australian defence forces throughout this century, qualities which have brought immense pride to Australia.Only the families of those departing can really understand the anguish of seeing their loved ones leave for action overseas. One of the weekend papers carried the story of a young woman who had just farewelled her husband. She was quoted as saying, `In spite of the risks, he is proud to be doing something worth while'. We are all proud of our ADF personnel, who are doing something which is undoubtedly worth while, something which is so obviously worth while, to bring an end to the suffering of these innocent people and to support their courageous struggle for freedom.I would like to make special mention of personnel from the Richmond RAAF base in my electorate, many of whom are now in Darwin and Dili as air crew and ground support crew, as part of 36 and 37 Squadron of the airlift group. For them, and for all Australians involved in this cause, I want to assure them that the thoughts and prayers of our community and of our country are with them. We are proud of them and are behind them all the way.I would like to make two other points. Firstly, I must record my disgust at Labor's hypocritical politicisation of this matter. Given their appalling record of neglect and denial towards East Timor, to be trying to score cheap points based on a totally dishonest appraisal of what, according to them, we ought to have done, is just shameful. I make no further comment on that.I would like to close by making some observations regarding what lies ahead. Firstly, there will clearly be a need for considerable and long-term humanitarian aid for East Timor. There is widespread poverty in the country, GDP is less than $200 a year per head, adult literacy standards are less than 65 per cent, malaria and TB are endemic and infant mortality rates are amongst the highest in the world. In addition to this, recent events have destroyed much of the country's infrastructure. Australia announced yesterday an additional $4 million in aid to be administered through the Red Cross and other NGOs and much more will be needed in coming years. Our commitment will be long term and vital. Secondly, given the instability in the region, Australia's defence capabilities will need to be boosted. This is going to require significant increases in defence spending, yet I sense in the Australian community an acknowledgment and support for the need for this.Thirdly, Australia remains committed to a strong ongoing relationship with Indonesia and will, I am confident, continue to assist and support the Indonesian people. Australia has provided much economic support to Indonesia in the past and remains committed to being a good neighbour. It is clearly in the interests of Australia and all within the region that Indonesia remains strong and stable. While recent events have created understandable and unavoidable tensions, it is important that we work to rebuild the bridges once the current crisis is resolved.The struggle of the East Timorese people over such a long period of time has been a tortuous and bloodstained one. The journey ahead will be far from easy. However, it is hoped that with the support of the international community and certainly the support of Australia, it will lead towards peace, stability and security for the people of East Timor.12:04:0010314Kerr, Duncan, MPMr KERRRH4DenisonALP00—I certainly share the views of the member for Macquarie that Australia's task is not complete. The good news that thus far the Australian troops, who have landed on the ground, have not yet come in harm's way is to be welcomed and one would hope that that continues. But, even if that is so and the best case scenario evolves, which we can yet be uncertain of, the task of physical reconstruction, and psychological and social reconstruction of a people ravaged by the terror of the past few weeks, can only be lightly imagined. It can hardly be understood.I might say that only a handful of members have matched the rhetoric of their current participation in this debate with their actions in the past. There has been a longstanding organisation in this parliament called Parliamentarians for East Timor which always struggled for membership. I was inducted into Parliamentarians for East Timor—I want to make a bipartisan point here—by my predecessor Michael Hodgman who took a strong and leading role in the establishment of Parliamentarians for East Timor. He has continued to act as an advocate and an activist for the interests of the people of East Timor.Since my entry into this parliament some 12 years ago, I have belonged to that group and, I suppose, to some extent because of that, I suffer less from the sense of disillusionment that some in this debate are expressing. I think it was to be entirely expected that there would be some violent reaction from those who have, since the Indonesian invasion of East Timor, been complicit with the Indonesian regime. It is hardly likely that those persons were going to move aside without contest, and we knew that they were well armed and that they were working in conjunction with the armed forces of Indonesia.I have had particular responsibility in the opposition for the Australian Federal Police since the last election and, whilst it is now our troops who are in harm's way, prior to the contingent leaving, it was our Australian Federal Police who stood on the front line, unarmed and in harm's way. I think it is important to record how significantly valuable has been the service of the Australian Federal Police, not just in East Timor but also the contingents that have served in Cambodia, Haiti and a range of other locations, and which have continued to serve, for example, in Cyprus in circumstances where they face the possibility of physical threat, harm and loss of life. That is rarely noticed, at least to the same degree as it is with others who are presently going in an armed capacity to stand between the militia and the people of East Timor who are trying to remake their lives.It would have been so much better if this Australian government, when it was making the commitment to send unarmed Australian Federal Police to assist in the balloting process, had also engaged in a serious commitment to pressing the Indonesian authorities and engaging the United States and the international community to say, `These people should not be going in unarmed in harm's way without the backup capacity of a peacekeeping force.' It has not happened before. This is the first occasion on which the United Nations has supervised a ballot of this nature without the capacity of a peacekeeping force coming to assist.I think it is a blessing that none of the Australian Federal Police who were there in those circumstances have come out, as best I understand it, with anything other than psychological disturbances. They must be psychologically disturbed by what they have seen. Some have been subjected to being shot at and stoned. They have witnessed people being killed and have been impotent to do anything other than to stand by, trying to separate those attacking from those being attacked in circumstances where they were unable to call on the sort of support that you would expect in those circumstances.I understand that the Prime Minister defends his position by saying, `We did raise this with the Indonesians once and they rejected it, and I had lunch with the President of the United States, during which I discussed the security situation in East Timor.' I do not think that is adequate. I think it is wrong to focus too much on the past, but there are issues in the past and the way we dealt with this which need to be addressed. For example, in the parliament on 2 September, the Attorney-General, representing Senator Vanstone, was asked about pay and conditions for the Federal Police. It was revealed in that answer that even on that date the security assessment that was being enacted by the government was one which assessed the risk in East Timor as being in either the low or moderate band, rather than the high band. So the AFP personnel, who were manifestly subject to violence, intimidation, threats and watching this terror occur, were still then, as late as 2 September, being paid on an official security assessment—this government's official security assessment—that the risk in East Timor was not high. That is extraordinary, given all the advice the government was receiving.There is one other person who comes through this debate with signal honour—that is, the shadow minister for foreign affairs who, at some risk to his reputation, dissociated the Australian Labor Party from some of the positions that it had previously held. He accepted the legitimacy of criticism directed against his own party in respect of some of the previous actions that we had taken, but laid it plainly on the line that there was now a changed circumstance which required a different response, and said that the risk of terror, violence and massacre after a ballot was extraordinarily high. On his behalf, as he left to attend the balloting process, I delivered a speech to the Australian Institute of Foreign Affairs in which each of these matters and the warnings he had set out were specified. This is not a matter of making criticism after an event; it is identifying a criticism that was made by our foreign affairs spokesperson consistently and directed towards the government. And the government failed to react.I know that the government, once its attention was focused on the magnitude of the disaster, did respond in a different way. I pay all commendation to the Prime Minister for the actions he took in New Zealand and the way he engaged the attention of the international community and then worked with the Indonesians to secure their assent. But would it not have been far preferable for that effort, where we could have engaged the interests of our allies and others, to be put in before that tragedy, so that our troops did not leave to attend a scene of massacre, a bloodbath or, in the language that people talk about, `supporting the courageous people of East Timor'? The courageous people of East Timor have lived with the circumstance of Indonesian invasion for 25 years. They do not need those words. They have lived with that. They needed a government that was attentive to the fact that they might face a massacre, and which acted to anticipate that and to minimise it. And they did not get that from Australia.Finally, I do not wish to end on a critical note, but I should say that there was a very poor practice in terms of briefing the opposition. When it was first announced that an AFP contingent should be sent, I sought a briefing in relation to the terms of engagement and a whole range of issues that had logically come up: how are they going to be paid? What is their security? There were all those sorts of issues. Weeks passed during which we were fobbed off. That is not acceptable. When the crisis emerged, when it was plain that people were dying in their scores and in their thousands and when there were questions about the contingent, I again sought a briefing. I have not had the courtesy of a formal reply. Fortunately, I had informal advice from those within the Australian Federal Police, as you would anticipate. But I think that the government has botched some issues. I wish well those now standing in harm's way and I recognise the contribution that all are making in this cause. (Time expired)12:14:0010316Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—I rise to acknowledge the bipartisan elements in the remarks of the member for Denison and to state that I do not rise with any sense of righteousness or triumphalism. I am not animated by any spark of partisan feeling. Like all members of the House, I deplore and am frankly sickened by the humanitarian tragedy which we have seen unfold over the past three weeks, 730 kilometres north of Darwin. I am proud of Australia's troops, but it is not my principal purpose today to honour their efforts. That has been ably done by former speakers. I readily and sincerely defend the performance of the government, particularly the Prime Minister, the Minister for Foreign Affairs and the Minister for Defence, in their efforts to build an international will to defend the East Timorese.My principal purpose in rising today is to respond to two recent acts of protest—one in Jakarta; the other in my electorate of Parramatta. The first was from an apparently distraught Indonesian woman, who is reported to have joined nationalist protests outside the Australian embassy in Jakarta shouting—according to yesterday's Daily Telegraph—`All I feel is shame. Why has Australia done this to us?' The woman was, I believe, a patriotic Indonesian, mystified by Australian activism in mobilising international sentiment. The second protest took place outside my electorate office in Parramatta and involved the splashing of red paint on the footpath of Church Street and the smearing of red hand prints on the doors of my office to signify the blood on my hands and, as the protest organisers said `the hands of all Australian politicians who have made this genocide possible'.So what do I say to the woman outside the Australian embassy in Jakarta and to the protesters gathered outside my office, all of whom were condemning the Australian government? I suspect that we in Australia see Indonesia through an Australian prism, which is very different from the prism through which the Indonesians see their own country and indeed see Australia. To the woman outside the embassy, I would simply note that the East Timorese are Australia's nearest northern neighbours. We do not entertain a messianic view of our ability to solve the world's problems, and we prefer to exercise restraint in meddling in the problems of others, not least because we have plenty of difficulties about which to be humble on our own shores. It is likewise, however, impossible for us to stand by and do nothing when there is any instrument in our power capable of alleviating the great human distress, loss of life, lawlessness and displacement of tens and probably hundreds of thousands of people, the details of which have been beamed into Australian living rooms over the past two weeks.Because of our proximity, Darwin is already acting as host to 1,500 East Timorese refugees. While we happily and readily provide that humanitarian support—as we have to the Kosovars and, indeed, as we would to others—Australia has a direct interest in a peaceful resolution to the problems of East Timor. I feel, to some extent, a resonance with the famous remarks of John Donne—that, when we see that suffering, we do not ask for whom the bell tolls, because no man is an island in spite of the geography of our two respective nations.To those gathered outside my office, I would simply note that, since this government was elected in 1996, it has been an imperfect government—and perhaps imperfect in relation to East Timor—but I would nonetheless maintain that we have taken the most activist role on Timor of any government since the abandonment of the East Timorese by the Portuguese in 1975.The Australian prism, through which we have viewed the problems up there, involves a range of different refractions. For example, Australia has a population of 19 million people on an island so vast that it is described as a continent. Indonesia has 211 million people on over 17,000 different islands, atolls and reefs. From the southern tip of Tasmania to the Gulf of Carpentaria, the English language is a unifying force of communication; often you cannot even tell from their accent which region an Australian comes from. By contrast, over 530 different languages and dialects are spoken across Indonesia, which, aside from the practical difficulties of communications and governance, give some insight into the inhospitable terrain and the diversity of the regions.In East Timor alone there are 12 different ethnic groups each speaking its own language. By contrast, while modern Australia had its national institutions developed on the back of an overwhelmingly European, Christian culture, Indonesia has always had to contend with a multiplicity of faiths and ethnic backgrounds. The result of that is that Australia's territorial integrity is a settled certainty with 100 years of peaceful continuity. Our colonial experience has been so good, if you like, that we are now trying to decide whether or not, as an act of volition, we will walk away from our links with England. By contrast, the experience of the Indonesians, with both the Dutch and the Portuguese, has not been so congenial.I accept that in the mind of the leadership in Jakarta, both civilian and military, East Timor is seen as part of the question of Indonesia itself. There is a genuine and real possibility that the Indonesians will not be able to hold together the 211 million people, the 530 languages and the 17,000 different islands. I do not underestimate the very great challenges facing the Indonesian leadership. I understand the subtext which East Timor presents to them. In that context I salute the recent leadership of President Habibie both in agreeing to the poll in the first place, and more recently in urging the acceptance of its outcome by the Indonesian people. I understand that in doing so he is probably compromising, perhaps terminally, his own political future for an outcome which I believe to be in the interests of the whole Indonesian nation.As far as our own strategic interests are concerned, I note that Australia is defended by an army of 25,000. The Indonesian army constitutes 260,000. Australians sometimes do not fully appreciate the geographical proximity of our two countries. The Australian adventurer Peter Tressider has paddled a sea kayak from Darwin to Timor and back again without stopping.As every government's first sacred duty is the defence of its own citizens, I understand the sense of stewardship which previous Australian governments have felt about the relationship with Indonesia. Nonetheless, I join other members in being critical of the extent to which that relationship was based on fear and the inferior policy outcomes which that produced. Our change of policy, our current direction, does involve an act of faith. We hope that history will vindicate the act of faith which this government is taking.We must be mindful that the lessons of history are bitter. When the Portuguese left East Timor in 1975, 200,000 East Timorese were killed in the civil war which followed. That is almost exactly double the number of war casualties that Australia has suffered in the past century. Therefore, we politicians need to exercise a certain restraint in the warm inner glow which comes from speeches about autonomy, democracy and independence when the consequences for human life can be so catastrophic. At the same time we walk that fine line of defending and acknowledging the universal principle that every human life has a sacred right to defence.This government, with the support of the opposition, seeks to uphold that principle as we engage now in a peacekeeping force in East Timor. It is my hope that in defending the East Timorese we can avoid gratuitous insult to the Indonesians, and it is likewise my hope that the forces of civil government, of respect, of democracy, will gather force in unifying the Indonesians over the years ahead. (Time expired)12:24:0010318Sercombe, Bob,MPMr SERCOMBEQK6MaribyrnongALP00—In speaking in support of the motion before the Main Committee today I want to indicate that, like all Australians, I have been appalled by the extraordinary violence we have witnessed in East Timor in recent times. As the member for Parramatta indicated, there is a history to all this, but this particular outbreak of violence has been particularly appalling and shocking to all Australians. Like all members of the House, I also support the deployment of the Australian-led peacekeeping operation and wish our troops well in the difficult task they have in front of them. Like almost all Australians, I look forward to an independent East Timor following the clearly expressed wishes of the East Timorese people.Other opposition speakers, particularly the Leader of the Opposition, have exposed in a very effective way the inadequacies of the way in which the government has conducted its policy with respect to East Timor in recent times. I do not wish to rehash those points. I want to focus my remarks very much on the future, especially on issues relating to the future relationship between Australia and Indonesia and between the Australian people and the Indonesian people.Despite the horrific events of recent times, we need to continually focus on opportunities for taking forward the relationship between the Australian people and the Indonesian people. Peace, stability and prosperity, not only for Australia and Indonesia but for the whole region, including East Timor, depend considerably on the success we have in that relationship.I am old enough to recall the early 1960s—I think I was just out of short pants at the time—and I recall the attitude that existed in the Australian community in relation to Indonesia taking over what was then known as Dutch West New Guinea. I certainly recall as a teenager that by about 1964 Australian troops and Indonesian troops were shooting at each other in Kalimantan, so I do take with a grain of salt some of the claims that our relationship at the moment is at bedrock. I certainly remember the early 1960s, and I would suggest that the success in taking the relationship forward from those days gives us some cause for optimism about the potential to move in a careful and rational way into a productive future.Australia does have vital interests in Indonesia. I understand our exports are running at about $1.7 billion annually. There are 300 Australian companies actively involved in Indonesia. Something in excess of $25 billion of Australian trade passes through Indonesian waters, particularly to North Asia. Despite the difficulties Indonesia is experiencing presently, Indonesia may well become the largest economy in our immediate part of the world over the next 20 years. We do have important people-to-people connections as well. I know that in my part of Melbourne there are very close relationships with both tertiary and secondary Indonesian students who are studying in the area. Those relationships are very important and productive on a people-to-people basis.From a security point of view there are fundamental issues which are not just of an obviously military nature. The Australian National University's Strategic and Defence Studies Centre recently produced a monograph on transnational crime and illegal immigration in the Asia-Pacific region. I think focusing on those sorts of issues underlines how important it is for Australia's longer term interests that there be a satisfactory and cooperative relationship between Australia and our large neighbour to the north.I think all Australians are aware of the devastation in our community caused by the narcotics trade. Close relationships to counter many aspects of that trade are obviously important in the way in which Australia controls the maritime environment and the maritime approaches to our country. It is desirable that Australia has effective and cooperative arrangements with Indonesia for that sort of task.In recent times, illegal immigration has come very much into focus in the Australian thinking. This is a trade where, according to the document I have just referred to, some tens of thousands of people are involved internationally and where profits are upwards of $7 billion. Once again, the control of maritime approaches to Australia and the cooperation that Australia can achieve in those approaches are vital to our success in protecting our security.Another area is piracy. South-East Asian waters are notoriously the worst in the world with respect to piracy. This represents a direct threat in many circumstances to Australian interests and Australian trade. So we do indeed have very powerful national interests which ought to focus us in the longer term. Despite our very powerful objections to so much of the way in which people associated with the Indonesian military have conducted themselves—we should not for one moment resile from those objections—nonetheless we need to look at the broader context of the importance, over time, of retaining focus on the broad scope of the relationship.We have an important interest in the democratic process and its development in Indonesia, as have the Timorese people. The very generous comments in today's press by Xanana Gusmao in relation to Indonesia, after all the events that have occurred, are very encouraging. The democratic development of Indonesia is most important from that point of view.The history of Indonesia has not been one which has been characterised by democratic transition. The first two presidents of Indonesia came to power in the context of bloody upheavals: Sukarno in 1945, in the context of the revolution against the Dutch, in which Australia earned considerable prestige in Indonesia by our support for their anti-colonial struggle, and then Suharto as the second president, in the context of the events of 1965.Suharto's departure from the political scene coincided with the end of three decades of economic growth and the economic catastrophe that struck Indonesia, with massive increases in unemployment and poverty, huge price increases, a falling through the floor of the Indonesian currency. I think Australia has developed some capacity for influence because of its response to that situation. The bipartisan support for Australian participation in the IMF rescue package, and the representations Australia made to the IMF and the United States to ameliorate some of the harsher aspects of the austerity program imposed on Indonesia by the IMF package, I think are matters that Australians of all political persuasions can take some pride and credit in. They form a basis for a sounder relationship in the future.We all hope that Indonesia perhaps takes a path that is more comparable to that of the two other Asian countries that benefited from an IMF package, Thailand and Korea. The economic progress of those two countries appears to have recommenced, and that has clearly been associated with the process of political evolution and democratic development in those countries. Australia has a very powerful interest, as do the whole region and the Indonesian people themselves, in the process of democratic evolution. Australia can, I believe, play a useful and important role in supporting that process.To conclude: the leader of the Islamic movement in Indonesia, Abdurrahman Wahid, has been quoted as saying, `Once you open the door, you can't shut it completely. That is the lesson. What happened to Nikita Khruschev after he opened the door by criticising the Communist Party? It accumulates during the Brezhnev era, after that with Gorbachev and then in the emergence of Boris Yeltsin. All those things show that, however little, sediments of democratic spirit will come through the filter and accumulate. So I do not think the next government will be able to reverse the situation.'Let us hope that the next government in Indonesia does not want to reverse the process of democratic development. Both for Indonesia's interests in terms of economic progress, and certainly for Australia's and East Timor's interests, it is very important that we do go into the future in a region of peace, stability and prosperity. We as Australians, irrespective of our party politics, have got a vital interest in contributing to that.12:34:0010320Neville, Paul, MPMr NEVILLEKV5HinklerNP10—At a time when the fabric of our nation is being tested internationally, it is appropriate that all of us make a contribution to the national sentiment. In the cut and thrust of international politics and diplomacy, we at times become subsumed in the enormity and complexity of the issues. We are numbed in our sensitivity to the human dimension of government-to-government decisions, on the one hand, or international expediency, on the other.If there is one thing we should have learned this century it is that expediency is no substitute for principle. Whether that expediency is generated by appeasement or pandering to jingoistic national sentiment is not the point. The result is inevitably the same: a community or ethnic group is suppressed so that diplomats can rest easily in their beds and the world at large can delude itself that lasting peace has been achieved. It is a sad lesson of history that that is never so. There is no more potent an image of this than the picture of Neville Chamberlain waving over his head the piece of paper signed by Adolf Hitler and saying that he believed it meant `peace in our time'. It was the exact opposite.Whether it was Hitler marching into the Rhineland or the occupation of the Sudetenland or the Anschluss with Austria in the 1930s, or the artificial imposition of the border between southern and northern Ireland, or the suppression of the Kurds who have never had a nation of their own for centuries, or the continued belief that Tibet is an integral part of China, we should all have learned that appeasement leads to no real peace and that salving the world's anxieties is paid for in human currency. It is no less so in Timor.As Churchill succinctly put it: an appeaser is one who feeds the crocodile, hoping it will eat him last. Sadly, the crocodile is now right on our doorstep. And it is largely there because governments of both persuasions have opted for appeasement and expediency. The human currency in this instance has been the people of East Timor. One could hardly have envisaged a more horrific image than the ethnic cleansing and genocide that occurred in the land that is our second closest neighbour. Nothing can be more horrific than the sight of people being hacked to death with machetes, of whole communities on fire, of civilians being rounded up and marched along beaches to God only knows where, to an uncertain future, if not death. It has an eerie similarity to Poland just 60 years ago almost to the month.We have all been forced now to take a step back and confront this horrific circumstance. Against that background, the government, indeed the nation, has contributed 4,500 troops, the largest movement of Australian forces since the Vietnam war. The fact that so many of our former allies and friendly nations have contributed significant troop numbers and logistic support to this action, and notably over such a short period of time, is a tribute to the negotiations and diplomacy of the Prime Minister and the Minister for Foreign Affairs. No international force of this size has ever been assembled in such a short time span.I am appalled that the opposition has used this circumstance to endeavour to point score off the government. I am appalled that in supporting the resolution the subject of today's debate and then, while the eyes of the world are watching this debate and its implications, when other nations are probing our determination and the efficacy of our actions and assessing what our real sense of unity is or is not, the Leader of the Opposition should use his speech to chastise the government for some fictional deficiencies in diplomacy. This, I remind you, is from the leader who was a senior minister in the previous government, the government of Paul Keating, who showed the depth of his feeling for the people of East Timor with his dismissive outburst that he was not going to hock Australia's Indonesia relationship on East Timor.What an appalling indictment—to come into this parliament with this two bob each way attitude on such a seminal issue for our nation while you are up to those sorts of tricks yourself. Furthermore, to say that the current Australian government has been deficient denies the facts. The process that we see today commenced late in 1998 when the Prime Minister took up the matter of a period of autonomy leading up to an act of self-determination in East Timor. He took that up with President Habibie. He recognised the problem of security. That is why he wanted the period of autonomy first. In the event, President Habibie thought otherwise and opted for the quick decision. That left Australia nowhere to move.It should also be remembered that the conduct of the ballot arose out of a tripartite agreement between Portugal, Indonesia and the UN—Australia was not a party to that agreement. There were no provisions for peacekeepers as Indonesia insisted that it would be responsible for all security. The Prime Minister raised this with President Habibie when they met in Bali in April. The President made it clear that he would not accept any peacekeepers.Despite this, Australia was a principal player in persuading Indonesia to accept a civilian police contingent, of which we provided 20 per cent of the number. It is a simple fact of life that, despite the shadow foreign minister's exhortations, in the event of armed peacekeepers being insisted on, the act of self-determination simply would not have occurred. Nor do I believe that China or Russia would have allowed it to have occurred in the United Nations. What I am saying is that there is no substance for this attack on the government and I think it really, if anything, depletes the merit of the opposition's standing in this whole debate.Indonesia has no cause to be cranky with Australia. Certainly they may be hurting at present but Australia has supported Indonesia from the very time it broke from its Dutch colonial rulers and as recently as the Asian crisis when we assisted them financially. Australia has been a good friend and, if friendship means anything, it should be able to weather this current circumstance. But one thing should be made very clear—and Indonesia should not forget this—the days of appeasement over human rights are finished and Australia will not tolerate it again.There is a human dimension to this. Three young men are identified in my local daily papers today—they are Grant Polson and Wayne Williams from Bundaberg and Johnny Craig from Gladstone, which is also in the northern part of my electorate. As the Bundaberg News Mail observed, Wayne Williams's mother, Jean, has seen three generations of her family serve this country: her father in New Guinea in World War II, her brother Kevin in Vietnam, and now her son in East Timor. They are indicative of a lot of Australian families.I would also like to quote a little from the editorial today in the Gladstone Observer which says:Spare a thought for Johnny's family, the Craigs of Craig's Bakery.Let us hope, as some respected commentators predict, that the security force's passage into East Timor passes without incident, not only because it comprises hundreds of Australian sons and daughters but because there are far more important things to be done than fighting militia.Overall these men and women should be allowed to get on with the mammoth task of restoring peace and providing safe passage for the estimated 300,000 displaced East Timorese, the sooner those jobs are done and the sooner they are home with family and friends.I presume he means `the sooner the better'. I pray that these young Australians who hold the proud tradition of our country in their hands are protected by God and come back safely to this country.12:44:0010322Irwin, Julia, MPMrs IRWIN83ZFowlerALP00—With Australian forces now on the ground in East Timor, we firstly wish them well and pray for their safe return. When governments commit armed forces, whether to the battlefield in defence of their country, or to the role of peacekeepers in a country suffering internal conflict, governments take on a grave responsibility. It is not something to be done lightly. Only when the defence of our nation is at stake, when required under our treaty obligations, or as is now the case, when human suffering results from the collapse of civil order in a neighbouring country, should governments place Australian lives at risk.Now at the request of the United Nations, Australia will lead a peacekeeping force in East Timor. This is a role that Australian personnel have some experience in. I am sure this experience will enable them to perform their task in a professional manner.The role of the peacekeeping force is a difficult one. It lacks the glory of combat and, instead, offers the prospect of a long and, at times, frustrating campaign. It is a role which many Australians do not appear to understand. For the many who have called for our personnel to kick butt over there, there is a real concern that the Australian force, as the leader of UN forces, will face a diplomatic as well as real life minefield. Our leadership of the UN force will be a test of our military leaders and the front line personnel in the field. It is no place for Rambos, but for well disciplined professionals with a clear understanding of their difficult role.The operation in East Timor will not be a short one. We may be committing our forces for many years—some would predict for up to a generation from now—although the level of our involvement may decrease in time. We must consider the impact of such a campaign on our defence personnel. Looking well into the future, there may be no victory parades for those who serve there although the risks are just as real as in a full combat role. For all those personnel, now and in the future, who will serve in East Timor, they must know that they have the full support of the Australian people. They must know that their sacrifice will be seen to be important now and in the future. It is all very well to be waving flags and cheering as service personnel depart for East Timor; we also need to be here when they return.While we hope and pray that our personnel do not suffer any casualties, we should not underestimate the risks faced. We should be prepared to offer the highest standard of repatriation to those personnel who serve in East Timor and, in particular, give due recognition to their service. We must not repeat the mistakes of the past when dealing with Defence personnel who have suffered as a result of their service on behalf of the Australian people. I would expect this government to make an up-front commitment to ensure all who will serve in East Timor that they will not be forgotten when they return.As I have said, we can expect our commitment to the East Timor peacekeeping force will be a long-term one. We cannot, as we have often said in the past, say that this will be all over by Christmas. It will not and, indeed, we may be looking at a decade or more of participation. Given the scale of Australia's involvement, this will be an expensive commitment. Already the government has indicated that additional resources will need to be provided to our armed forces in this budget year. Already the government has indicated that the money will be obtained by cutting into existing government services. This is not on. This government has already cut the level of services to the bone. Any further cuts could result in the total collapse of many valuable programs. If the situation in East Timor is critical to our national security, as it is, and if it is necessary to avoid a humanitarian disaster, as it is, then it should be funded in the fairest way—through our taxation system. The burden of our commitment to East Timor should not be carried by the less well-off in our society, as it would if it were funded through cuts to government spending for vital services.Australian forces in East Timor, as part of the United Nations peacekeeping force, will face a humanitarian disaster. Their task will be not only to establish a peaceful environment, but also to rescue a population on the brink of starvation and to restore basic services to allow even the most basic living standards to exist. After the optimism of 30 August, when the people of East Timor recorded an overwhelming majority vote for independence, has come the nightmare of retribution by the militia.Instead of hope for the future for a free East Timor has come death and destruction, far worse than anything seen during the grim 24 years of Indonesian occupation of East Timor. Instead of setting about building an independent and democratic country, tens of thousands of East Timorese have been driven from their homes, driven into the mountains, to West Timor, and to Australia. If East Timor is to become a viable independent nation it could not have had a worse beginning. The task for Australian peacekeepers in the short term will involve restoring basic services in East Timor. No doubt there will be a further role for Australian aid organisations to assist in the rebuilding of facilities to enable civilian government to be restored.As we consider the future we can see an independent East Timor emerging. This may be a long process, but some would say it is inevitable. A newly independent nation on Australia's doorstep will create many challenges to ensure the economic development of East Timor which will underpin the stability of the region. It is in Australia's best interest to ensure that the population of East Timor is assisted to rapidly rebuild their homes, farms and businesses. This will require additional aid to that already provided by Australia. We cannot skimp on the cost of this aid. If we do not provide this assistance we can expect the long-term stability of the region to be placed at risk.The humanitarian disaster in East Timor has led to 1,300 refugees being accommodated here so far. The conditions imposed on those refugees anticipates their speedy repatriation in a similar way to that arranged for refugees from Kosovo. We should be clear right from the start that the situation in East Timor may well turn out to be different to that in Kosovo. It may be many months before refugees are able to safely return to East Timor. Without a major aid program, many will have no homes to return to and there will be little in the way of basic services. The main difference, however, is that East Timor is one of our closest neighbours and Australia is already home to many East Timorese who have established permanent residency here.If East Timor is to be rebuilt into a viable, independent, democratic country, it would be of great benefit for refugees from East Timor to be allowed longer stays in Australia. This would enable them to develop skills and to acquire the necessities to re-establish themselves in their former homes. If Australia is to enjoy good relations with East Timor, the close links already established between East Timorese living in Australia and their fellow countrymen will be crucial to our relationship. As part of our humanitarian program for East Timor we should give special status to East Timorese refugees to enable longer stays in Australia rather than shipping them back at the first opportunity.The torture, displacement, murder and beatings we have witnessed in East Timor in recent weeks have brought to world attention the plight of the people of East Timor. These have not been isolated events. The history of Indonesian occupation of East Timor from the time of the takeover has been one of systematic abuses of human rights and frequent incidents of atrocities against the people of East Timor.While we might reflect on the background of how this humanitarian crisis developed and question the judgment of previous governments, it is what we do here and now that matters. The actions of governments over the past 24 years—the response of the Whitlam government to the Indonesian invasion in 1975, the de jure recognition of Indonesian sovereignty over East Timor by the Fraser government in 1979—may be regretted. However, they did occur in a different time and world situation. The world of 1999 is a different place to what it was in 1975 or 1979, or even during the 1980s or early 1990s. In the world today, East Timor can be seen to exist as an independent nation. Australia has accepted an obligation to ensure that East Timor becomes free and independent. Now at last, after a quarter of century of suffering and struggle, the people of East Timor can look forward with confidence to a free and peaceful future. (Time expired)12:54:0010325Stone, Sharman, MPDr STONEEM6MurrayLP10—I rise today to join with my colleagues, and, indeed, all Australians, in supporting the Prime Minister's motion on East Timor which was moved in the House yesterday. This is one of those rare occasions when there is very little debate in the House other than to agree that we need to do urgently what we can for East Timor. It is a shame, though, that in agreeing on the broad principles there is some point scoring in terms of politicising the issue. As we know, all Australians are most concerned that we assist East Timor in every way that we can. What has happened in the past was, at that point of time, regarded as being in the best interests, too.Australians are often labelled as apathetic, as treating our way of life and our freedoms, our democratic government, fairly casually. In reality, we are very different people. We have always responded to a call to protect the freedom of others, especially other nations who have found themselves to be pushed too far by greater forces. We were, of course, the first nation to assist in the Korean War, which took place in the 1950s, when the United Nations moved to help to defend the South Koreans. The South Koreans remember us as one of the first nations to respond to their call for assistance. In Vietnam, it was likewise the case. We responded to that call for help from a community who saw themselves as under threat.So Australia is not casual when it comes to defending the freedoms of others. We are certainly not casual when it comes to dedicating the lives of our young men and women to protect those freedoms. We have always been, and we continue to be, a voluntary force. Australia right now is leading the contingent into East Timor. It is only right and proper that we do so, given that we have a very special relationship with this island community. They were the people who stood between us and the Japanese at a particularly difficult time during the Second World War. They are people who are so close to us, only several hundred kilometres north of Darwin. East Timorese people have sheltered in Australia over the years when they have been trying to bring about their independence.A division having been called in the House of Representatives—Sitting suspended from 12.57 p.m. to 1.09 p.m.EM6Stone, Sharman, MPDr STONE—The images beamed back from East Timor have spoken loudly to us of the devastation and the destruction that has occurred throughout the country, in the city of Dili and the provinces. That has been heartbreaking, of course, for the East Timorese and it is been extraordinarily frustrating for Australia and, indeed, the international community.Of course, 78.5 per cent of the people of East Timor were courageous when they voted for independence at the ballot on 30 August. That was a courage that a lot of other communities perhaps could not understand, given that it was inevitable that their times ahead would be tough if they voted for independence. But there was this overwhelming majority in the face of a concerted campaign of hostility and threats by the pro-Indonesian militia. We need to acknowledge that courage on the part of the East Timorese community. It is the sort of courage that is a real lesson to us in the rest of the world where we often take our democracy for granted.The international community has a duty and a responsibility to respond to the crisis in East Timor that was sparked, finally, by the autonomy vote. Of course, Australia, in particular, has a special duty of care given our historic ties with the country and our closeness. We have both a moral and a strategic interest in promoting peace and security in East Timor. The tireless efforts of our Prime Minister John Howard, our Foreign Minister Alexander Downer and our Defence Minister John Moore in bringing the crisis in East Timor into the international spotlight are a very great thing. Securing diverse international support for the peacekeeping force must be properly acknowledged as indeed one of the most important things that this country has been able to achieve in international affairs in the last few years. The efforts of these ministers and of our Prime Minister over recent weeks and months have been integral in ensuring the true situation in East Timor was squarely placed in the international arena. It has played an integral part in the establishment of a peacekeeping force that is now deployed in East Timor.Our clear objectives in sending Australian troops as part of the international peacekeeping force are to ensure the UN process in East Timor moves back on track so that the will of the East Timorese people and the mandate of UNAMET is implemented. The main tasks of the international peacekeepers as authorised by the United Nations Security Council resolution No. 1264—that was, of course, unanimously adopted—are to restore peace and order in East Timor, protect and support UNAMET in carrying out its task and to facilitate humanitarian assistance operations. Australia is only one of 12 nations contributing to the INTERFET coalition of peacekeeping forces operating under the umbrella of the United Nations, but we are proud to be leading that coalition of peacekeeping forces.Our Australian infantry and support troops, in particular, have been preparing for this day for months and, in some cases, for all of their professional lives. Likewise, their families, wives, mothers, fathers and children have been preparing for this time when the troops actually go into active peacekeeping or combat situations offshore. As a mother of an Army captain myself, I understand only too well the great concern but, at the same time, the pride that mothers feel as their sons go off to work in this environment as professional soldiers representing the great nation of Australia. Like so many other young Australians in generations before, our armed forces, we know, will deploy in a way that will make us all proud and will also be an example to other nations that we work with. The Australian peacekeepers, as they follow in the footsteps of many other Australians, will be combining with the Federal Police, military liaison officers, consular officials and United Nations workers—all of whom have done so much in East Timor since the establishment of the UNAMET team some weeks ago.In recognition of the sacrifice of our forces and their families here at home, the Australian government has made sure that there are benefits appropriate and suitable for our ADF personnel serving as part of the INTERFET forces in East Timor. The troops will receive special allowances, compensation coverage under veterans entitlement to military compensation schemes, appropriate and additional leave, home loan assistance and special re-embarkation and reunion leave. As well, there will be the counselling and contact services support should individuals need that when they return from this period of working in East Timor.In my electorate of Murray, where I have been the member since 1996, it is this issue that has brought the biggest response to my office in the way of faxes, phone calls, letters and personal representation as the men and women of Murray have come out in very strong support—first of all in apprehension wondering what could happen, what Australia as a nation could do, and now in full support of what this government has managed to undertake in the international arena in support of East Timor.I want to make sure that this government understands that the men and women of Murray, many of them veterans who have been engaged since the earliest times—we had Boer War contingents from the electorate of Murray—fully support and wish our troops well as they try to do their bit to secure peace in East Timor.Our own local paper the Shepparton News has carried feature stories about the contribution of our young men and women who have lived in the electorate who now serve in the peacekeeping forces. In particular, Private Tim Nathan of Echuca will be serving in the 3rd Royal Australian Regiment and his proud but worried parents, Sue and Malcolm Whiteford, have all of our concerns and support going with them. Private Carl Van Zeist of Shepparton of the 2nd Royal Australian Regiment and his mum, Julie Reed, likewise carry the support of our community for the contribution they make at this time.Shepparton is also the place where we have Radio Australia. The antennae are transmitting to our troops, making sure they keep in touch with the rest of the Australian community, that they hear our messages of support and that they hear from their own families. It is important, too, that we acknowledge that Shepparton is playing that very particular role right now in making sure that the airwaves move across the country and are received loud and clear in East Timor.This is a very important time for Australians. It is a time that makes us proud in one sense that we can contribute and support a country that is at risk, a country that historically has been there for us in our hour of need. All Australians want to wish our soldiers and our government well. We know that our soldiers will serve proudly and bravely and help to re-establish peace and stability in East Timor. (Time expired)13:17:0010327Emerson, Craig, MPMr EMERSON83VRankinALP00—In addressing the issue of the tragedy of East Timor, I want to speak about symbols and realities. The realities are these: the shadow foreign affairs minister, time and time again, from early March of this year, implored the government to insist on a peacekeeping force in East Timor during the ballot—not weeks after the ballot, but during the ballot.The second reality is that the government said no. It refused to do that. In fact, I understand the government went so far as to send an official to the Portuguese to argue against a peacekeeping force. Why did the government ignore these repeated calls for an international peacekeeping force during the ballot? I fear that one part of the explanation is that the government is obsessed with trying to outmanoeuvre the opposition at all times. I hope that is not the explanation but I fear that it is. I fear that the very fact the shadow foreign affairs minister called for this led to a negative reaction, that the government said, `Because you say we should do this, we will not.'I have evidence of this in the Prime Minister's treatment of the Aboriginal statement of regret rather than apology. He told his own party room that he was not actually changing his position, but that this was a rather good manoeuvre because he was—to use his words—`blind-siding Labor on the issue'.The next reality is that slaughter followed the ballot in East Timor. What I would like to see happen now is a reappraisal, an assessment by the government of its handling of this issue. Instead of the speeches that were made yesterday extolling the virtues of the government's handling of the issue—saying we handled it, in effect, in an excellent manner—a reappraisal should be made. Mistakes were made and I know we must move on from that. But I do urge the government, at least internally, to have a look at the procedures that it adopted and the interpretations of the intelligence that it adopted and ascertain where mistakes and misjudgments were made. This is a big issue and a big tragedy in our region and we must learn from our mistakes, and the first stage of learning from a mistake is to acknowledge that one was made.I wish the peacekeepers a safe mission and I wish them an early return. I think I am able to speak for both sides of the parliament when I say I want to express the gratitude of the parliament to the families of the peacekeepers who must be going through a time of great stress by not knowing precisely what is happening to their sons and daughters, nor the level of danger that they face. It must be an awful time for them. I believe it is important for us all to think about those families and to indicate that we are very, very grateful for their sacrifice.They are the realities; now to the symbols. Australia has betrayed East Timor on four occasions. The cock has not crowed thrice—as in the Bible when Peter was told by Jesus that he would betray him before the cock crowed thrice the next morning—in this tragedy the cock has crowed four times. Those four occasions were: in 1942, when we left the shores of East Timor, and slaughter followed at the hands of the Japanese; in 1975, when effectively we turned a blind eye to the Indonesian invasion of East Timor and we allowed that to happen without even so much as expressing concern; in the late 1970s, when we extended de jure recognition of Indonesian annexation of East Timor; and most recently in this latest debacle of 1999 when we told the people of East Timor that they should come out and vote without the fear of violence. And what happened? Violence on a massive scale followed.In terms of symbols we can today, as a parliament, withdraw Australia's de jure recognition of the annexation of East Timor forthwith. When the Prime Minister was asked about this a few days ago he said, `What good would it do? What is the practical benefit of this?' That is why I am here talking about symbols and realities. That action would be not a practicality so much as an important symbol.I would like to tell a very quick story. On the weekend, two good friends of ours were married. When the groom was leaving the house the door was locked and in the first car was the person holding the house key, one of the groomsmen. The car sped off. But left in the house were the two wedding rings. The wedding rings were symbols of the love and respect with which those two people held each other. They were just symbols, Mr Deputy Speaker. The groom said to his brother-in-law, `Would you please kick down the door of the house?', which he did, for the symbols, to get the symbols. They got the symbols, they got married, and I am very happy to congratulate Grant and Lena Musgrove and wish them every happiness in the future.But as a symbol of our affection and respect for the people of East Timor I would dearly love the government and the parliament to withdraw forthwith Australia's de jure recognition of the Indonesian annexation of East Timor. It is, after all, the least we can do.13:24:0010328Nugent, Peter, MPMr NUGENTUT4AstonLP10—I am obviously pleased to speak to this motion on East Timor. I would like to comment initially perhaps on public reaction to what has happened in East Timor. I think we all agree that quite clearly, from the very graphic pictures we have seen on television, it is an appalling circumstance. It is perhaps an interesting sidelight to the times in which we live that these days wars and atrocities are very much committed in the full glare of television and they are brought right into people's homes.I think there has been widespread community frustration at the time that it seems to take to get things done. And in spite of the fact that the government was able to get the United Nations to move, for the United Nations, extremely rapidly, we did have that period of time when it appeared that things were going unchecked. That certainly has been a frustration for the community.We have been asked quite frequently why there was no peacekeeping force in advance. I do not intend to go into that in great detail other than to say that I think the Prime Minister has made it very clear that, to have tried to do that against the wishes of the Indonesians, would effectively have meant an invasion of that country and, with their superior numbers, we would have seen large numbers of Australian body bags coming back. That would not really have achieved what most of the community desired.There is great confusion in the Australian community about who is in control in Jakarta and who is in control on the ground. I think that most of us now understand that President Habibie probably is not in control. There are question marks as to whether General Wiranto is in total control, because what has happened on the ground in East Timor is not what we were being told in Jakarta would happen. Clearly, there has been some dysfunction in terms of control. We are now committed, with a number of other countries, and we wish our troops well in the very important work that they are going to do.What of the future? It seems to me that we need to think about what is going to happen in the future. We need to understand that the peacekeeping force must be multinational. It will take a long time. It means that, therefore, we will have commitment of our forces and commitment of very substantial dollars for a long time into the future. Because of the proximity of East Timor to this country and the long association with it, inevitably Australia must be heavily involved.We also need to understand that what is going on there is going to have a very heavy impact on politics in Jakarta. They are about to elect a new government and a new president and, clearly, there is some positioning of different people there. There is some ducking and weaving; there is some shifting of responsibility; and local domestic politics is playing a heavy role in terms of Jakarta's reaction. Unfortunately, there may even have been some religious overtones in what has happened, given that East Timor is a heavily Catholic country and the rest of Indonesia is largely Muslim. We also have concerns about West Timor—the refugees are there—and whether that will be used as a potential base for terrorism against East Timor in the future. We have also heard about not only Timor but the flow-on into other regions of Indonesia such as Aceh.To me, all of that poses the question: what have we learnt? What has come out of this whole exercise, not only for East Timor but for Australia, our foreign policy and the way we conduct ourselves? I think Paul Dibb summed it up fairly well with a comment he made a few days ago when he said:We are now more alone than we have been probably at any time since the 1930's . . . I think he is right. As a country we do feel very much more alone in the world than we have done for a long time. Apart from the fact that the security treaty with Indonesia was torn up—and there are different views about the value of that exercise, nevertheless the symbolism was important—throughout this whole process we have had to talk to a lot of countries, and we found that the world out there is probably not quite as many people in the Australian community thought it might be.A number of other Asian states were frankly cautious about getting involved, but it is to their credit that they have done so. There was significant community disappointment with the apparent reticence of the United States to lend their moral support, if not their actual support, and that has been a concern in the community. The United States link is one in which this country has had confidence since the Second World War. We have been unswervingly giving them public and swift support whenever asked, but it seems that the rules of the game have changed. We are told that there is still a very valuable exchange of intelligence data, but unfortunately none of us in this place and most of the public are not privy to that.Since the end of the Cold War, it seems to me, the US has started to question whether it should be the world's policeman. It is increasingly saying, `Someone else should take responsibility. Our resources are not unlimited. It is not an issue that directly affects our national interest.' Timor seems to have fallen into that category. So our relationship with the United States has changed and we can no longer blindly assume that it will support us in our part of the world, at least not to the extent that we had previously thought. It seems to me that that raises a whole range of issues. I seek leave to continue my remarks when the debate is resumed.Leave granted; debate adjourned.Main Committee adjourned at 1.31 p.m.Answers to Questions in Writing10331The following answers to questions were circulated:10331(Question No. 323)32310331Sidebottom, Peter, MPMr Sidebottom849BraddonALP00 asked the Prime Minister, upon notice, on 9 December 1998:(1) Did the former Tasmanian Liberal Government and the former member for Braddon provide him information about proposed magnesite mining and processing in Tasmania and related energy options for Bass Strait; if so, what information.(2) Did he indicate to the former member for Braddon that (a) he would personally take an overview of the proposal and (b) Mr Bob Mansfield of the Government's special projects team would be asked to take a leading role in advancing the proposal.(3) Is the proposed Crest Resources 51 billion magnesite project in Tasmania on the Government's special projects priority list; if not, why not.10331Howard, John, MPMr HowardZD4BennelongLPPrime Minister10—The answer to the honourable member's question is as follows:(1) The former Liberal state government and the former Member for Braddon both argued strongly for support of the project. I received information which was provided to the Commonwealth on the nature of the proposed investment and its importance to Tasmania.(2) During the last federal election, the former Member for Braddon announced that the Major Projects Facilitator attached to my Office, Mr Bob Mansfield, would oversee the project and make sure there were no unnecessary delays or impediments in terms of satisfying Commonwealth government requirements. This announcement was cleared with my Office prior to release.10331(Question No. 694)69410331Bevis, Arch, MPMr BevisET4BrisbaneALP00 asked the Minister for Transport and Regional Services, upon notice, on 7 June 1999:Has a Department or agency for which the Minister has portfolio responsibility entered a contract with or made a grant or payment to an organisation registered under subparagraph (a) 188(1)(a) or (b) 188(1)(b) of the Workplace Relations Act 1996; if so, in each case, (i) which organisation, (ii) what sum was received and (iii) in what State or Territory is the organisation located.10331Anderson, John, MPMr Anderson4K4GwydirNPDeputy Prime Minister10—The answer to the honourable member's question is as follows:The Department of Transport and Regional Services did not enter into any transactions of this nature between 31 December 1996 and 7 June 1999.Portfolio agencies have entered into contracts with or made grants or payments to organisations registered under subparagraph (a) 188(1)(a) or (b) 188(1)(b) of the Workplace Relations Act 1996 during this time frame and the details are as follows:Civil Aviation Safety Authority Australia(i) Organisation Name(ii) Amount Received(iii) State/TerritoryThe Community and Public Sector Union $7,848.87NSWThe Association of Professional Engineers, Scientists and Managers, Australia$390.72VICThe Australian Federation of Air Pilots$6,752.64VICAirservices Australia(i) Organisation Name(ii) Amount Received(iii) State/TerritoryThe Association of Professional Engineers, Scientists and Managers, Australia $400VICThe Community and Public Sector Union$58,490NSWCommunications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia$2,283NSWThe Civil Air Operations Officers Association of Australia$24,716VICUnited Fire Fighters' Union of Australia$2,142SA$55,527QLDAustralian Maritime Safety Authority(i) Organisation Name(ii) Amount Received(iii) State/TerritoryThe Association of Professional Engineers, Scientists and Managers, Australia$4,400VICThe Australian Institute of Marine and Power Engineers$3,933.82NSWThe Australian Maritime Officers' Union$284.50NSWAutomotive, Food, Metals, Engineering, Printing and Kindred Industries Union$3,361.33VICThe Community and Public Sector Union$5,865.09NSWNational Capital Authority(i) Organisation Name(ii) Amount Received(iii) State/TerritoryThe Master Builders' Construction and Housing Association of the Australian Capital Territory$5,000ACT10332(Question No. 796)79610332Albanese, Anthony, MPMr AlbaneseR36GrayndlerALP00 asked the Minister for Veterans' Affairs, upon notice, on 9 August 1999:How many Australian ex-servicemen who were Japanese prisoners of war were alive on 30 June 1999.10332Scott, Bruce, MPMr Bruce ScottYT4MaranoaNPVeterans' Affairs; Minister Assisting the Minister for Defence10—The answer to the honourable member's question is as follows:3,078. This figure is based on the number of Australian prisoners of war of the Japanese who are currently receiving disability, service pension, and /or associated medical treatment through the Department of Veterans' Affairs, plus the number of deaths in this group of veterans since 30 June 1999. It is unlikely that there are other former prisoners of war of the Japanese who have not received benefits form the Department of Veterans' Affairs.10332(Question No. 804)80410332McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister for Transport and Regional Services, upon notice, on 9 August 1999:Further to question No. 2619 (Hansard , 24 June 1997, page 5365), has the Bureau of Air Safety Investigation (BASI) conducted an ongoing study of compliance incidents since 24 June 1998 to determine if trends emerge as to why pilots sometimes fail to comply with air traffic control clearances at Sydney (Kingsford-Smith) Airport; if not, why not; if so, what trends has BASI identified. 10333Anderson, John, MPMr Anderson4K4GwydirNPDeputy Prime Minister10—The answer to the honourable member's question is as follows:No, the Bureau of Air Safety has not conducted a specific ongoing study of `failure to comply' incidents since 24 June 1998. However, routine analysis of the Bureau's occurrence database has not revealed any adverse trends in relation to `failure to comply' incidents generally and, more specifically, at Sydney (Kingsford Smith) Airport.10333(Question No. 811)81110333McClelland, Robert, MPMr McClellandJK6BartonALP00 asked the Minister representing the Minister for Family and Community Services, upon notice, on 9 August 1999:Has the Government undertaken negotiations with banks with a view to banks removing or reducing the fees that they charge pensioners for accessing their pension payments; if not, will the Government commence negotiations.10333Anthony, Larry, MPMr AnthonyXJ6RichmondNPCommunity Services10—The Minister for Family and Community Services has provided the following answer to the honourable member's question:Yes. Centrelink, Treasury and the Department of Family and Community Services have jointly held discussions with representatives of banks, building societies and credit unions about ways of improving the information provided to social security customers on:. low cost banking products and options; and. banking practices customers could adopt to reduce or avoid the impact of fees and charges.The Government's view is that customers will be able to maximise the benefits of competition amongst financial institutions if they have accessible and understandable information on these matters. These discussions have been held in this context.10333(Question No. 818)81810333Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister for Transport and Regional Services, upon notice, on 9 August 1999:(1) Is the Commonwealth responsible for the construction of on and off ramps on national highways.(2) Has his attention been drawn to the damage being caused to the economic development of the Ingleburn industrial estate in south-west Sydney by the absence of on and off ramps to the F5 highway south of Brooks Road, Ingleburn.(3) Is the Government taking action to construct the ramps referred to in part (2); if so (a) what action and (b) when will they be constructed.10333Anderson, John, MPMr Anderson4K4GwydirNPDeputy Prime Minister10—The answer to the honourable member's question is as follows:(1) Works that are eligible for possible Commonwealth funding include the provision of adequate access to and from the National Highway.(2) The Government is aware of statements from local community interests that have drawn attention to the issue.(3) The Government is currently funding a planning study expected to be completed within the next few months, which examines the need for, and feasibility of, additional ramps on the F5 between Casula and Campbelltown in Sydney's south-west.Decisions on any further steps, including priority and timing of construction and possible shared funding arrangements will be considered when the study results are at hand.10333(Question No. 821)82110333Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister representing the Minister for Family and Community Services, upon notice, on 9 August 1999:(1) How many persons with disabilities have received labour market assistance since the Job Network commenced in May 1998, either through (a) the Job Network or (b) services within the Family and Community Services (FaCS) portfolio, including the Commonwealth Rehabilitation Services (CRS).(2) How many persons on a Disability Support Pension (DSP) have received labour market assistance since the Job Network commenced in May 1998, either through (a) the Job Network or (b) services within the FaCS portfolio, including the CRS.(3) How many persons identified in part (2) as being assisted through the Job Network were provided with (a) Flex 1, (b) Flex 2 or (c) Flex 3 assistance.(4) How many persons on a DSP provided with assistance through (a) the Job Network or (b) services within the FaCS portfolio, including the CRS, have achieved some job outcome, either as (i) full-time or (ii) part-time employment.(5) Are statistics kept on the numbers and percentage of persons who, having been granted DSP, subsequently move off it into employment, training or education; if not, why not; if so, what do the figures reveal.10334Anthony, Larry, MPMr AnthonyXJ6RichmondNPCommunity Services10—The Minister for Family and Community Services has provided the following answer to the honourable member's question:(1) (a) Job Network is the responsibility of the Minister for Employment, Workplace Relations and Small Business. I have asked the Minister responsible to respond to your question.(b) Data on Specialised Disability Open and Supported Employment is not available for May 1998 to June 1998. Data from July 1998 to end June 1999 will be available in late September 1999. 31,567 from 1 May 1998 to 20 August 1999 from CRS Australia.(2) (a) See 1 (a).(b) For Specialised Disability Open and Supported Employment see 1 (b) 8,812 from 1 May 1998 to 20 August 1999 from CRS Australia.(3) See 1 (a).(4) (a) See 1 (a).(b) For Specialised Disability Open and Supported Employment see 1 (b). 2,016 from 1 May 1998 to 20 August 1999 from CRS Australia.(5) Yes. During 1998-99 around 10,855 DSP customers had their payment cancelled or suspended because they returned to work or their earnings precluded payment.In addition many DSP customers who commenced work at reduced hours or a pay rate would still receive part-payment of DSP. In the financial year 1997-98, around 7.3% of DSP customers reported some earnings from employment. Customers undertaking training or educational programs, generally part-time, can continue to receive DSP.10334(Question No. 828)82810334Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Education, Training and Youth Affairs, upon notice, on 9 August 1999:Did Chubb Security, or any associated company, access Commonwealth funds under the New Apprenticeship Scheme and worker incentive payments for the purpose of training security officers; if so, (a) was the training related in any way to requirements in any State or Territory to changes in licensing requirements, (b) what sums were paid to Chubb Security or any associated company in each State and Territory, (c) how many employees were included and (d) how many employees in each State and Territory were (i) existing and (ii) new apprentices or trainees.10334Kemp, 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:My Department has examined the payments made to Chubb Security for employment of Security New Apprentices in each State and Territory.(a) The Department is unable to comment on any State or Territory licensing requirements for Security officers as this is under the jurisdiction of State authorities.(b) As at 22 July 1999, the following claims for New Apprenticeships Incentives have been paid to Chubb since 1 May 1998. Numbers of claims exceed numbers of employees as several claim types (for example- commencement, women in non traditional) may apply to any one employee. ACT—29 claims totalling—$36,250 NSW—86 claims totalling—$105,250 VIC—1209 claims totalling—$1,480,500(c) Total number of employees- ACT—346 NSW—1203 VIC—1090 WA—1(d) Break up of existing workers and new workers-StateExisting WorkersNot existing workersNot defined in systemTotalACT44302346NSW1190131203VIC97522931090WA11Note: Those undefined are where an entry in the existing worker field has not been made. Valid entries of either YES or NO could only be made after 21 December 1998. 10335(Question No. 845)84510335Danby, Michael, MPMr DanbyWF6Melbourne PortsALP00 asked the Minister for Trade, upon notice, on 12 August 1999:(1) Further to the answer to question No. 730 (Hansard , 9 August 1999, page 6344), what export insurance on the national interest account did the Export Finance and Insurance Corporation (EFIC) provide to (a) Algeria, (b) Iraq, (c) Iran, (d) Libya, (e) Sudan, (f) Syria and (g) Yemen in each financial year since 1978-79.(2) What contingent liabilities are being carried by the Government on the national interest account or EFIC insurance written for exports to (a) Algeria, (b) Iraq, (c) Iran, (d) Libya, (e) Sudan, (f) Syria and (g) Yemen.10335Vaile, Mark, MPMr VaileSU5LyneNPTrade10—The answer to the honourable member's question is as follows:(1) As per the attached table. EFIC has advised that reliable data on exports supported is not available prior to 1990-91.Exports Supported by EFIC Export Credit Insurance on National Interest Account—A$mCountryAlgeriaIraqIranLibyaSudanSyriaYemenTotal1978/79nananananananana1979/80nananananananana1980/81nananananananana1981/82nananananananana1982/83nananananananana1983/84nananananananana1984/85nananananananana1985/86nananananananana1986/87nananananananana1987/88nananananananana1988/89nananananananana1989/90nananananananana1990/9100000046461991/92047000027741992/9300980000981993/940018400001841994/9500600000601995/960035900003591996/970060100006011997/9800560000561998/99002320000232na = Not available; EFIC's records do not have reliable data on exports supported for years prior to 1990-91.(2) As per the attached table.Contingent Liabilities as at June 1999—$AmAlgeriaIraqIranLibyaSudanSyriaYemenNational Interest Account001860000EFIC Commercial Account00230001Total00209000110336(Question No. 846)84610336Crosio, Janice, MPMrs Crosio7T4ProspectALP00 asked the Minister for Trade, upon notice, on 12 August 1999:(1) What sum did Australia earn through exports to (a) Denmark, (b) Norway, (c) Sweden, (d) Finland and (e) Iceland in the financial years (i) 1995-96, (ii) 1996-97, (iii) 1997-98 and (iv) 1998-99.(2) What sum did Australia spend on imports from (a) Denmark, (b) Norway, (c) Sweden, (d) Finland and (e) Iceland in the financial years (i) 1995-96, (ii) 1996-97, (iii) 1997-98 and (iv) 1998-99.10336Vaile, Mark, MPMr VaileSU5LyneNPTrade10—The answer to the honourable member's question is as follows:(1)(a)Denmark(i)FY 1995-96 $116.628 million(ii)FY 1996-97$99.814 milion(iii)FY 1997-98$205.068 million(iv)FY 1998-99$77.466 million(b)Norway(i)FY 1995-96$100.502 million(ii)FY 1996-97$140.785 million(iii)FY 1997-98$146.730 million(iv)FY 1998-99$158.551 million(c)Sweden(i)FY 1995-96$199.508 million(ii)FY 1996-97$219.901 million(iii)FY 1997-98$156.697 million(iv)FY 1998-99$160.332 million(d)Finland(i)FY 1995-96$334.790 million(ii)FY 1996-97$302.542 million(iii)FY 1997-98$295.199 million(iv)FY 1998-99$190.770 million(e)Iceland(i)FY 1995-96$1.637 million(ii)FY 1996-97$3.750 million(iii)FY 1997-98$6.072 million(iv)FY 1998-99$3.954 million(2)(a)Denmark(i)FY 1995-96 $335.801 million(ii)FY 1996-97$382.533 milion(iii)FY 1997-98$398.799 million(iv)FY 1998-99$459.117 million(b)Norway(i)FY 1995-96$137.249 million(ii)FY 1996-97$180.130 million(iii)FY 1997-98$206.047 million(iv)FY 1998-99$206.046 million(c)Sweden(i)FY 1995-96$1,617.104 million(ii)FY 1996-97$1,497.302 million(iii)FY 1997-98$1,557.265 million(iv)FY 1998-99$1,576.284 million(d)Finland(i)FY 1995-96$683.706 million(ii)FY 1996-97$605.537 million(iii)FY 1997-98$686.204 million(iv)FY 1998-99$600.914 million(e)Iceland(i)FY 1995-96$2.047 million(ii)FY 1996-97$6.526 million(iii)FY 1997-98$4.429 million(iv)FY 1998-99$3.469 million10337(Question No. 856)85610337Thomson, Kelvin, MPMr Kelvin ThomsonUK6WillsALP00 asked the Treasurer, upon notice, on 23 August 1999:How does the Australian Bureau of Statistics assess the price increases of (a) groceries and (b) house prices for the purpose of calculating the rise in the Consumer Price Index.10337Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honourable member's question is as follows:The Consumer Price Index (CPI) is designed to measure changes, over time, in the prices actually paid for a representative basket of goods and services, including food items and new housing.Prices of food items and new housing are collected at least once per quarter in each capital city by experienced ABS field staff. For food items, prices are collected from a cross-section of retail outlets, and for new housing, prices (excluding land) are collected from builders of project homes.Full details of the procedures followed can be found in the publication A Guide to the Consumer Price Index (ABS Catalogue No. 6440.0).