1999-11-253914REPS1261101999-11-25Mr SPEAKER(Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Bills12611r96412611Bill presented by Mr Costello, and read a first time.1261109:31:0012611Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.Today, I am introducing the second group of bills which will implement a New Business Tax System for Australia. More legislation will follow later this year and in the new year. This bill introduces a range of capital gains tax reform measures and builds on those CGT measures already introduced into the House on 21 October 1999 and passed through this House yesterday.The key measures included in this bill are:. the streamlining of the existing CGT concessions for small business taxpayers;. the introduction of a CGT exemption where a small business taxpayer sells an active asset which has been held for at least 15 years and the taxpayer is at least 55 years of age and intends to retire or is incapacitated;. CGT rollover relief for shareholders in a company, or unitholders in a fixed trust, who exchange shares and units during a takeover of the company or fixed trust; and. an exemption for certain non-resident tax exempt pension funds in relation to gains they make on venture capital investments.The government's CGT reforms are an important aspect of the new tax system and are consistent with the government's objectives of making Australia's taxation system more internationally competitive and reducing compliance costs through simplification.These are the measures which complete the legislation for the government's historic capital gains tax reforms. The legislation which passed through the House yesterday was to cut the assessable capital gain for individual shareholders by 50 per cent so that only 50 per cent of the capital gain for an individual would be taxable. The government's historic capital gains tax reforms involve doing away with the complexity of indexation and averaging—averaging being a measure which allowed the taking of a rate based on the average of a capital gain over a period of time—and reducing capital gains tax rates.In addition, this legislation extends the government's historic capital gains tax reforms into other areas. It makes it possible for small business, where they have an active asset which they have held for 15 years and the person wants to retire or is incapacitated, to sell that active asset capital gains tax free. In particular, this will be of enormous benefit to farmers. Farmers, who might have worked a property for 15 years and who, heading up to the time of retirement, want to sell the property and use the proceeds to buy a house in town, can do that under these proposals capital gains tax free.The changes in relation to rollover relief relate to where there is a takeover and somebody sells their shares because of the takeover and takes shares in the new company. They are essentially exchanging the scrip they have for the scrip of the company making the takeover. They will be able to do that capital gains tax free. That will give enormous benefits to small shareholders throughout Australia and it will free up the market for competitive takeovers and give an improvement in the economic benefits that that will bring.Also, the changes will allow tax exempts from overseas that do not pay any tax in their home jurisdiction to come and invest in Australia, again capital gains tax free. It does not cost revenue because they do not come into the jurisdiction at the moment. If you allow them into the jurisdiction, such as the US pension funds, this will free up a lot of finance for venture capital. They will be able to provide venture capital that can be invested in new sunrise industries and they will be able to do that capital gains tax free.CK6HARDGRAVEMr Hardgrave—More jobs!CT4Costello, Peter, MPMr COSTELLO—As the member for Moreton reminds me, that will mean more economic growth and more jobs for Australia. This is a historic reform. I welcome the fact that it will have the support of the opposition. I have already indicated to the opposition that if we can stand this bill down until such time as they are ready then why not pass it today, get it into the Senate next week and get these historic changes through the Senate. These changes will be great for Australian small business, great for shareholders, great for economic investment and good for jobs. I commend this bill and present the explanatory memorandum.Debate (on motion by Mr Melham) adjourned.Bills12612r96312612Bill presented by Mr Costello, and read a first time.1261209:38:0012612Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.This bill contains a measure to remove averaging of capital gains for individuals. This measure is part of a package of fundamental changes to Australia's CGT regime that will remove impediments to efficient asset management, improve capital mobility and make the regime internationally competitive.Other significant parts of the CGT reform package are included in the New Business Tax System (Integrity and Other Measures) Bill 1999, introduced into the House of Representatives on 21 October 1999, and in the New Business Tax (Capital Gains Tax) Bill 1999 which I introduced today.I commend this bill and present the explanatory memorandum.In closing, again, if we can stand this legislation down to a later hour this day, with the opposition's consent because the opposition supports this legislation, we could pass it through the House today. It could go to the Senate, which, as I understand it, would be in a position to debate it on Monday and Tuesday, and then it could become law before Christmas—a new capital gains tax system for Christmas, in place for the new year.Debate (on motion by Mr Melham) adjourned.Miscellaneous1261212612Bill presented by Dr Wooldridge, and read a first time.1261209:40:0012612Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I move:That the bill be now read a second time.The amendments provided for in this bill are necessary to extend the regime of the Australia-European Community Mutual Recognition Agreement (EC-MRA) to incorporate the three European Free Trade Association (EFTA) member states, Norway, Liechtenstein and Iceland. The bill will allow Australia to remove or minimise technical barriers to trade that exist in relation to trade between Australia and the EFTA member states in a manner consistent with the Australia-EC MRA.The EFTA-MRA in conjunction with the EC-MRA will ensure that uniform conformity assessment provisions apply to all products covered by the agreements, and will facilitate free movement of Australian goods between all countries of the European economic area.This amendment will allow the implementation of an agreement on mutual recognition in relation to conformity assessment, certificates and markings between Australia and the EFTA member states. The agreement on mutual recognition will allow the secretary to accept conformity assessment certificates, issued by conformity assessment bodies in the EFTA member states. These will certify that registrable medical devices manufactured in the EFTA member states to which the certificates apply meet with all Australian regulatory requirements relating to good quality, safety and efficacy and that, in addition, listable devices specified in the certificates meet with all requirements as to good quality and safety. Acceptance of these certificates will preclude the need for further evaluation or assessment of the devices before they may be included in the Australian Register of Therapeutic Goods and approved for general marketing.In relation to medicines, the bill also provides for acceptance of the results of inspection of overseas manufacturers. These are required to meet Australia's good manufacturing practice requirements which have been carried out by conformity assessment bodies in the EFTA member states.I commend the bill to the House and I present the explanatory memorandum to this bill.Debate (on motion by Mr Melham) adjourned.Bills12613r95012613Debate resumed from 24 November, on motion by Mr Fahey:That the bill be now read a second time.09:43:0012613Martin, Stephen, MPMr MARTIN8I4CunninghamALP00—The legislation before the parliament this morning deals with further changes to the government's proposed new tax system, indirect tax and consequential amendments. The A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 contains a further 151 amendments to the government's tax package which will introduce a goods and services tax. What this now does is bring to a grand total of well over 200 the number of amendments the government is making to its own proposals for the introduction of a goods and services tax in the new millennium. A new tax for a new millennium, that is true, but now massive changes as well have to be put in place before the government is satisfied that the legislation will do what it is intended to do.It is part of the broader view of the government that the GST is something which every Australian craves. It is part of their view that the first thing that most Australians do in the morning when they wake up is get up and say, `I can hardly wait till 1 July 2000 when the GST starts; it is going to be terrific.' And then, in their next breath, they say, `All those tax cuts that are coming in and that wonderful surplus that the government keeps talking about having is a surplus that has come on the back of 3½ years of pain and of cost cutting by the government in a whole variety of areas.' That leaves the people of Australia feeling less than thrilled, less than comfortable and relaxed and, I have to say, quite insecure about their future.This legislation contains 151 technical amendments which go to a range of matters, some of which I will touch on during my presentation. What it demonstrates, however, is that there is still widespread confusion about this dog's breakfast of a tax. The government is talking about the tax cuts that are coming and then, of course, we are presented with this bad piece of policy that is going to see the Timor tax imposed on Australians, asking them to pay, yet again, for government policy action. So confusion surrounds people and they are coming to a realisation that for the last 3½ years they have had to bear massive cuts to government services.In my own area of Wollongong, as I have commented in the past, services have been cut dramatically. We have seen the immigration office shut down and other similar government services have been completely decimated. In fact, electorate offices like my own have become de facto government offices instead of being offices run by members of parliament, allowing them to do the work which they have to do. It is interesting that these cuts to government services are felt even more in regional Australia. Yet the government is turning around and saying, `Wait for it; it's all going to get so much better after 1 July 2000 when the new tax system starts'—this new tax system borne on the back of cuts to government expenditure and on the pain and suffering of people in regional and mainstream Australia.There are three provisions in this legislation on which I would like to concentrate this morning. The first is the confusion that exists with respect to the Olympic tickets fiasco and this government's view that a GST is now going to apply there as well, breaking yet another promise. We all remember this Prime Minister's promise that the GST was dead and that it would never again be on the agenda. Yet here it is. We always remember the Prime Minister's promise that there would be no new taxes introduced and no increases in existing taxes under his government. What do we see? The same sort of thing here.When it came to the Olympic tickets, in a fit of pique which could only be described as belittling to someone of the status of a Prime Minister of this country, he decided, having been forced to step down from opening the Olympic Games—his long cherished dream—that he would slap on the GST and break yet another promise to the SOCOG board members, to the SOCOG organisation, to the Olympics organisation and to the Olympic movement. I find that regrettable. What it means is that a tax obligation is now going to be imposed for which SOCOG had not budgeted.At the end of the day, there are some questions being asked as to just who will end up paying that and what that will mean for the taxpayers of New South Wales in general. Legitimate questions have to be asked about that because, quite obviously, when an organisation is put in place to run such a significant event for Australia and budgets are very carefully targeted, the last thing they want is difficulties being encountered through governments breaking their word in respect of taxation obligations. This GST being imposed on Olympic tickets is one such obligation which is going to cause great concern for SOCOG.The second issue in this legislation, which goes specifically to the impact of the GST on elements of industry, refers to the Australian financial system, in particular to an increase in bank fees. If there is one issue which excites the minds of people in Australia and unites them, it is the fact that they understand that the Australian financial industry underpins absolutely every facet of their everyday lives. With the competitors in the banking system at the minute and banks continuing to operate extremely efficiently and effectively, and generating profits, people are not quite sure why the fees they are required to pay not only continue to be imposed but increase. The effects of the GST on these sorts of areas are also worrying and confusing.We understand that in comparable countries overseas where exemptions are applied to financial services it becomes reasonably easy to disaggregate some of those. But there are some uncertainties still surrounding the implication for bank fees and charges of the impact of the GST when this legislation is introduced here in similar circumstances.I take myself back a number of years to when my friend the assistant clerk at the table here and I were involved in an inquiry into the Australian banking industry where this issue of fees was on the agenda. As I recall, Mr Speaker, you had an interest in that as a participant on that committee. I can recall most vividly that, when we were talking about the way in which the deregulation of the Australian banking industry had been put in place by the Hawke-Keating government, we came to the conclusion that by and large that deregulation had seen benefits flow to the Australian community which far outweighed the disadvantages. I am still of the view that that is the case. I am absolutely committed to that view.People tend to become concerned when fees and charges being imposed by banks seem to be getting a little out of control and, as I say, with the implications of the GST applying to every aspect of their working and daily lives, people are going to start to ask fundamental questions about just how any benefits that the government says are going to come their way with tax cuts may be offset in the future by things like bank fees and charges being imposed or the similar sorts of fee structures now coming in in building societies, credit unions and the like, where once perhaps that was not the case. These issues are quite significant and, in the terms of this legislation, we need to focus some attention on them.The final thing I wish to comment on is the question of insurance. Under the GST regime, insurance is a very complex matter indeed. The insurance industry has faced significant costs. It has not got the transitional arrangements it originally wanted. In the Financial Review of 17 November 1999, at page 45, the industry is reported as having racked up something like $200 million in losses over the transitional impact of the GST. For example, the NRMA is reported as facing an expense of something like $81 million and HIH $50 million. General insurers are also reported as increasing their premiums on more than 30 million policies to recoup part of the $1 billion shortfall once the GST takes effect.If you have your home, your household items or your car insured and your premiums happen to be falling due around this time, you will be interested to read on the premium notice coming your way that already the impact of the GST is being felt. Already you are being expected to contribute towards the cost of the GST for that proportion of time into the next year that will be affected by the GST start-up date of 1 July. I know that is the case at my place. Insurance premiums, which for some reason all seem to fall almost at the same time, making it impossible to budget, all contain this component of the GST. People are now starting to see the insidious nature of this tax and just how much it permeates their entire lives.I know the old argument that `people will get tax cuts and therefore the disbenefits associated with the GST being imposed in areas where previously there was no tax will certainly dissipate'. I do not think that is going to happen. How do you go and tell people on average income or below that having to pay tax on clothing, shoes, some foods and in a whole variety of areas—if they can actually work out if there is a GST liability or not—is going to make their lives easier? Are the tax cuts supposedly going their way going to compensate for all those areas where they have never had tax imposed in the past? Now, there will be tax on going to the footie, going to the cricket, going to the movies and renting a video. Have you ever had to pay tax on that before? Answer: no. Will you have to pay tax on it after 1 July 2000? Answer: yes. Every time you think you want a little bit of sunshine in your life, a little bit of light entertainment or light relief or when you have Foxtel on the TV, it will all be subject to GST. Those are not necessarily seen as necessities of life—although some would argue about that when it comes to access to Foxtel with the cricket and then the football. But when you start buying clothing, food, shoes and all those other sorts of things where you have never had to pay tax before, you will suddenly find it is going to eat into your household budget.That is one of the reasons why Labor has been implacably opposed to this tax and why in the last election we fought it so hard. We understand that the government is going to push on with this. These amendments are not going to receive opposition from us on the way through, but we certainly are going to continue to point out to the people of Australia how unfair and inequitable this particular tax is. I do not think people have realised half the disbenefit that is going to come. They are starting to see it now. Insurance is one area where that is the case but it is certainly not the only one.Whilst we are talking about insurance, I would like to take the opportunity to commend the NRMA as one of the major companies that have actually shown a bit of initiative—although, of course, down the track with the imposition of the GST we will all end up paying up a little bit extra—in their approach to people affected by storm damage which insurance companies in the past have always interpreted as being flood damage and therefore not covered under people's home insurance policies. From comments I have made in this House on a number of occasions, members would be aware that in August of last year Wollongong was affected by a dreadful storm and as a consequence of that many people lost every possession they had and homes were destroyed. We had a natural disaster on our hands the ramifications of which are still being felt today. We had prime ministerial visits. We had deputy prime ministerial visits. We had the Governor-General visit. We had the Premier visit. We had everything there. We had a lot of tea and sympathy out of the Commonwealth government but not a lot of financial assistance.At the time, there was not a lot of sympathy or understanding from insurance companies either. Insurance companies were at a stage where they were saying that they would not pay out to genuine policyholders, many of whom had had policies with those companies for over four years, the right and just and fair and equitable entitlements that those people should have had. People were staring down the barrel of losing everything they had. Those same insurance companies are now going to be affected by the GST. The premiums that we have to pay on policies are going to be increased by the GST. But the insurance companies, in the main, have started to look at this issue in a positive way. I commend the NRMA as one that has done so.However, that same praise cannot be extended to the QBE insurance company which, like the NRMA, will be subject to increased costs because of the GST. QBE still refuse to pay out insurance claims to people in Wollongong. QBE have actually said they will refuse to do so because they want to keep this issue on the political agendas until they get some major changes for the insurance industry.Well, here is another major change for the insurance industry—the imposition of the GST on premiums. I am not sure that is exactly what they had in mind. But those constituents of mine who are still out there waiting for QBE to put their hand in their pocket to pay up for house replacement, contents replacement, cars, et cetera—which they have refused to do in the past—would really like to see some changes in the legislation that affects insurance companies and would like to see some changes in attitudes by some of them as well. QBE is at the top of our hit parade—and I do mean `hit' parade.Let me just conclude where I started. The opposition will not be opposing this legislation in this chamber, nor its implementation over time. What we do say, however, as we have said from day one, is that there is confusion about the application of the GST which has still not been clarified. We had the nonsensical example earlier this year where the Treasurer was trying to tell us whether a cooked chook and a non-cooked chook were going to be subject to the GST. We had the spectacle of people in roast chicken shops having to have a thermometer in one hand or in their pocket to test whether it was a cold chook or a hot chook. We had the spectacle also of people saying, `If I buy it as a takeaway food, it is likely to be subject to a GST—or maybe it's not. But if you eat inside, maybe it will be. Then again, maybe it won't be.' If you buy it and say you are taking it away, then change your mind and sit down in the restaurant, are you going to pay the GST? The complexity of these sorts of issues leaves people absolutely staggered.As I said early on, I do not think people have fully appreciated the extent to which this insidious tax is going to touch every section of their lives. We talk about tax cuts, and that is the great fall-back position of this government every time: let us give you some tax cuts. As I said earlier, we have already seen some of those tax cuts starting to be eaten away because of what I consider to be bad policy options by the government.Nevertheless, we are going to see this dog's breakfast of a tax introduced. We are going to see concessions that are going to be allowable for the high rollers in casinos, but we are not going to see concessions offered to ordinary people on things like their insurance premiums. We are not going to see concessions being offered to mums and dads trying to bring up their kids when they want to take them on an outing, to a movie or something like that. Are there any concessions there? No. What about high rollers in casinos? You had better believe it; concessions will be there on the GST.I say to the House, as I have done on a number of occasions when I have spoken on the GST, that it is an unfortunate tax to say the least. It is unfortunate that the people of Australia are going to be subjected to it. The fact that we are dealing with 151 amendments alone in this legislation today says that even the government does not believe that it has it all perfect. The government's preferred modellers have also indicated that the costs associated with this are going to have some effects that, I think, have still been understated, particularly when you start talking about inflationary effects and so on. Macro questions about what will happen to interest rates down the track—will they be increased?—are going to have to be addressed.There are some fundamental problems associated with the introduction of this tax that this Treasurer and this government are going to have to address. The Labor Party will be vigilant about this. We will certainly be keeping an eye on what the government does. We will certainly be raising with the public at large in Australia our continuing concerns about this and the further ramifications of its introduction.10:03:0012617Morris, Allan, MPMr ALLAN MORRISFI4NewcastleALP00—We are speaking this morning on A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 and amendments to the bill to be moved on behalf of the government. So we actually have here amendments on amendments. Of course, we previously had 750 amendments on the original legislation. I would defy any member of this House to try and work out what is going on here and to tell us they know what this is about.This has been a much vaunted simplification of our tax system. Remember that last year the government spent some $25 million of taxpayers' money, one way or another, on promoting the advantages of an open, transparent and simple tax system. Yet we have here the most amazingly complex, obscure and opaque set of proposals that one could imagine. It takes a special kind of imagination and skill to generate the kind of obscurity that we now have.This tax has been described as a dog's breakfast. Let me tell you there is enough here to feed a thousand dogs not just breakfast but lunch and dinner as well. This is an absolute feast for the dog population of the country. Is it simple? No. Is it transparent? Not at all. This is the biggest hidden tax of all time in any country. I defy the government to show us a country in the world that hides away such a major part of its revenue raising.We are talking about $30 billion of revenue to be raised by this tax that is being hidden. People will not know whether they paid tax or not. They will have no way of telling whether the goods have gone up in price, whether there has been profiteering or whether it has been fairly applied, because it is hidden. It will not be displayed on the sales docket. It is not required to be.We had several months and millions of dollars spent on railing and pillorying about hidden taxes, yet what do we end up with? A $30 billion hidden tax. Why is it hidden? That is now becoming obvious. The embarrassment of this tax is so massive for the government that they do not want it to be known. They realise that every time it is on a docket it is going to be a reminder to the community of their duplicity and their hypocrisy.Every member of this House is now aware that the community at large is finding this tax hard to come to grips with. We are getting inquiries on a constant basis and we are having examples brought to us of anomalies and misconceptions. I expect that more people would go to the government members than to opposition members because people recognise that we oppose the tax and we do not profess to be the experts on it. So I do not doubt that government members will be getting more people coming to them seeking clarification and assistance.Some of the reasons for this would include the example of prepaid funerals, which has come up again just this week. We had the Prime Minister last year tell this House that prepaid funerals should increase by about four per cent. We now have people paying the tax—and people have been paying it for some months—and the amount they are paying is 10 per cent, which is the full GST. An example was raised this week in the House of a lady in Perth paying $500 tax on a $5,000 prepaid funeral. The point of the question was that this was at odds with the Prime Minister's assurances to the community of Australia last year that the tax increase would be about four per cent.If one talks to a funeral director to try to clarify these issues, as some of us have done, we find that there is very little in a funeral cost that is not taxable. Perhaps the medical certificate is non-taxable, but that is questionable because it is not necessarily for medical purposes. If the service is conducted by a clergyman, it would be non-taxable, but GST is applicable to all the other things. As for possible savings for a funeral director—the so-called hidden taxes being removed, and what a joke that has become—there are actually very few. They are very hard to find. So a funeral director would be most unwise to charge less than the full 10 per cent. That gives the lie to the Prime Minister's assurances last year when he was seeking to placate those who were concerned about the effect on their prepaid funeral costs.Of course, a similar thing occurred with air fares. We were assured that air fares would not go up at all and might even go down, but the increase imposed just a few months ago was in fact eight per cent. So we are now getting example after example of charges going up at a greater rate than that which the government assured the community they would go up at. So the charges in most cases will be hidden, and working out the GST is going to be incredibly complex. So small business people are now approaching us in a serious way.My experience is no different from that of everyone else in this House, except that I think government would have more experience in this than we have. The feedback that I am getting from people who are attending the so-called information sessions is that they do not answer the questions. To a lot of the questions that are being raised, they are being told, `I'm sorry, we don't know that yet. That isn't resolved yet.' The answers from these seminars to questions on the most important areas are, `We can't tell you; that's yet to be resolved,' or, `We're not sure.' So the whole point of those seminars is lost because all they do is leave more questions than answers. The confidence of the small business community who have been involved in them is being destroyed.They fell for the line last year—who wouldn't when there was $25 million worth of advertising?—that it was going to be simple and easy, with no more hidden taxes and with lots of savings. They got a big shock, and those small business people who acted in good faith and went along to these seminars to try to clarify the tax for their own purposes are finding that they cannot. I have talked to some accountants who have been to those seminars and they are saying, `Unbelievable!'Mr Deputy Speaker, I have a really interesting story which I am sure you will enjoy. A person I know well who as an accountant has specialised in wholesale sales tax for many years was concerned last year about the possible change in taxes. His view was that the wholesale sales tax was a really interesting piece of legislation which everyone could work with very easily if they knew what they were doing. It did not put costs on business or on exporters at all, as long as people went about it properly—including all the things that you would normally give people in professional advice. On the other hand, the GST was going to be `a very boring tax'. Those were his words to me in March or April of last year: `a very boring tax'.I bumped into him around May and I said, `How's business?' thinking that his business would be destroyed because the GST was now coming in and the WST was going out. He said, `It's terrific. You know, this GST is absolutely terrific. It is absolutely fascinating. It is so complicated—I'm just loving it!' He thinks that it is very complicated. It is not the boring, simple tax that it was said to be; it is actually a very complex, highly difficult tax to understand, and from his point of view it is absolutely fascinating. He is loving it. He is very grateful to the government because he is loving his work now when he thought he would be hating it and would be retiring as a special tax consultant on these kinds of taxes.I think that is a wonderful example: if he is loving it, we are all going to hate it, because his kind of mind and the kind of work he does thrive on complexity, difficulty and obscurity. He was absolutely exultant when I spoke with him. I have not seen him since then, but I do not doubt that by now he is even happier and enjoying it even more. For him, it is not the money that is involved; it is the challenge. He sees a tax that is so complex and so difficult and it makes his day. So all those stories about boring accountants are not true in this case. This man is far from boring and the kind of mind he has got beggars description.4T4MELHAMMr Melham—He sees the dollar signs.FI4Morris, Allan, MPMr ALLAN MORRIS—That is there as well, but he does not need the money. He likes the challenge of pitting his wits against the tax system and against the tax commissioners. I must give him a call to get his opinion on all these amendments. What are we up to now—1,100 amendments? And we have only just got started! Within the first six months of the legislation being passed, we have got over 1,000 amendments already. How many will there be by this time next year? It beggars the imagination. I must give him a call, because I do not doubt that he is in seventh heaven right now as these amendments come through.Can I give some examples of the uncertainties that are going to be caused by some of the complex areas in the legislation. Let us take the example of the small business person who buys a car for their business. Of course, part of the car usage will automatically be private because, for a small business person, that is their only vehicle. So part of the usage is for business and part is private. When they buy the car they have to pay the GST, but part of it will be for business, so that is rebatable, they can get some of that back, and they have to work out the proportionality. If 20 per cent of its usage is private, they get back four-fifths of the tax. Apparently, what they have to do as well as that is to report again on the proportionality each year for five years, to report on how much was used each year for five years. In other words, they have to revalue and review their vehicle usage each year. And it is not just their vehicle usage; apparently it applies to a range of other capital items as well. There is going to be a constant valuation process going on so that they can adjust upwards or downwards the amount of GST that they pay or are required to pay.I do not profess to be an expert on this stuff—in fact none of us could even hope to profess that. I doubt that anyone in the community could profess that. When the tax experts at the seminars cannot give answers, I do not see how any of us can profess to do so. But from what I have been advised by some accountants, that particular part is just one example of the complexity that small businesses are going to face, and it is one of the reasons why accountants are warning small business people to be very wary of what they are doing and of every decision they make and of every transaction they undertake from July of this year. They cannot wait until next year when it comes in. These things are there here and now. They are not things that are going to occur in the future alone.The previous speaker had some comments about issues in the insurance industry, which is such a broad industry. Life insurance policies, for example, will not be taxable but will be input taxed. In other words, the provisions for life insurance look like being different from those for other types of insurance, yet most companies have a range of products. Does that mean that the life insurance companies are going to have to quarantine their costs and not pass those on to their client base as a whole? Do they have to run separate businesses, with some kind of firewall around each type of business so that they do not bleed their taxable and non-taxable items across those different business areas?The same will apply, I think, to a lot of financial services, like banks. Financial services are in general not taxed. Many of those organisations do offer other services of a non-financial nature, which have normally been a part of their overall general business profile. Will they need to pull those out and keep them separate so as not to be seen to be misapportioning, for example, business expenses such as vehicles between areas where GST is chargeable and areas where it is not? I can see enormous difficulties for these organisations, but I also see great difficulties for the consumer trying to evaluate which businesses they should deal with and how those businesses handle GST.As I said earlier, there are two sets of amendments before us today. We have the explanatory memorandums on those. The original memorandum runs to 48 pages and the supplementary memorandum on the same amendments runs to 76 pages. These are amendments to amendments to amendments to amendments—when will it ever stop? The explanatory memorandum, for the actual bill itself which is before the House, runs to 48 pages; the memorandum for the amendments to those amendments runs to 76 pages. We are getting a compounding, cascading effect with amendments and more amendments.KL6ANDRENMr Andren—The quo vadis tax.4T4MELHAMMr Melham—It's bigger than Quo Vadis !FI4Morris, Allan, MPMr ALLAN MORRIS—I actually see it more as a Julius Caesar tax: `I came, I saw, I taxed.' I think that is the Prime Minister's motto and has been since he came to this House. This is his great achievement; this is Mr Howard's crowning glory. The Prime Minister says that this dog's breakfast is his greatest achievement in his political life. That is an amazing insight—but, mind you, he was not an accountant but a lawyer. Those people who think he was a suburban accountant have that wrong. It would take a certain kind of mind to claim that this tax is their crowning achievement, and I will not try to understand that.The difficulty we have is that this tax is now law, as imperfect as we now see it to be and as the government now recognise. Every time they bring in amendments they are admitting their failure and that they got it wrong in the first place. What they will not admit is that they need to get it correct. They will also not admit the inequity, injustice and the unfairness of this tax or the unnecessary nature of it. This tax is not what the country needed at all. This was not a requirement to make us a better, more effective or fairer country. This tax is about ideology and the past.The Treasurer has gloated here in recent days that Australia's role in the OECD and the world is somehow made more prestigious and that we have now joined the European club because we now have a value added tax. Forty years later we join the European club and put on a value added tax and somehow this makes us acceptable and puts us at the forefront of world taxing theory. What a perverse view of the world. We must be the laughing stock of the world—bringing in a tax of this nature at this time in history and then amending it as we are now, creating mass confusion and spending millions of dollars on seminars where people cannot get answers. Frankly, people are not going to these seminars now. The feedback from my community, from people who have made inquiries, is that there is no point going because you will not find out the things you really need to know. They know the simple stuff, but not the complex stuff.The irony of it all in this time of high unemployment is that, as I was reading in the newspaper, the Australian Taxation Office is having trouble recruiting people to work in this new unit. That in itself sends another interesting message. It is pretty obvious that the people being retrenched from the tax office are not being looked favourably upon for employment in the new GST section set up to administer the tax and ensure compliance. We now have two tax offices—the old ATO, which we have all known and worked with over our political lives, and the new GST division, which clearly has a different corporate ethos and is looking for different kinds of people. That new section is not part of the same tax office apparently because you cannot transfer from one to the other. The jobs are being advertised separately. It is quite clear that people who are currently being retrenched from the tax office, particularly in places like Newcastle where we are losing our face-to-face tax support, are quite pessimistic, justifiably, about being able to obtain a position with the tax office in the GST division.We now have two tax offices, and in a way this reflects this government. On the one hand, we have last year's $25 million promotion of the idea of getting rid of hidden taxes and introducing transparency, fairness, equity and modernity and, on the other, we have reality—complex, opaque, unfair, difficult to decipher and dishonest. It is dishonest because the things people were told about it—how much it would cost on things like funerals, air fares, education, health and a range of things—are just not true. As for being transparent, this is the biggest hidden tax we have seen in world history. This is the mother of all hidden taxes.We have had the Treasurer and Prime Minister gloating and boasting about their tax reform. That is another great misnomer. We hear this word `reform' constantly. This is no reform—reform is about improvement and progress. Not one part of this legislation can be argued to be a reform. This is a regressive tax, not a progressive tax. It is not an advance or an improvement to our taxing system. We are going backwards. We are going back to a tax of 40 years ago, to a time when it may have been current.I expect that we will have this issue before us again and again in this parliament, and in the next parliament and the one after. This tax will be the most amended tax of all time. It is huge already and it is going to get a lot bigger with a thousand amendments in recent times, and I do not doubt one or two thousand more before July next year. But no amount of amendments, no amount of gloating, boasting and smirking by the Treasurer can soften up the fact that this is a bad tax. It is a tax that people do not want. It is a tax that will not work in the way it was supposed to. This tax will be both the millstone and the hallmark of what history will see as a very regressive and backward looking government.10:23:0012621Andren, Peter, MPMr ANDRENKL6CalareIND00—The A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 , the second consequential amendment bill to the GST legislation, adds around another 150 amendments, as we have heard, to the 450 contained in the first bill of the same name which passed this place last session. That bill made what its explanatory memorandum describes as `minor policy and technical amendments' to the application of the GST. Those amendments, of course, came on top of the 370-odd changes forced on the original bill by the Democrats. The second raft of amendments contained in this bill are also apparently what its explanatory memorandum describes as `minor policy and technical amendments' aimed to, as the member for Fisher said when introducing it, `provide a smooth transition to the new tax system'.Rather than help facilitate such a transition to the brave new world of the GST, what this bill does is highlight once again how many uncertainties there are about the GST and how much more complicated the legislation will become to clarify the many grey areas. It reinforces the message I am consistently getting from my electorate, that the transition to the GST is going to be anything but smooth for many businesses, but particularly so for not-for-profit and charitable organisations. Above all, this bill demonstrates that, if there were ever any doubts, the GST, and especially the one Australia will soon be saddled with, is far from a simple tax. In fact, it reveals that in many cases our GST will be a very complicated and onerous tax, only decipherable by the lawyers and accountants who stand to make a killing out of this change.I note with interest the comments of the member for Wannon on this bill about the simplicity of filling in GST returns. According to him, it is so simple it can be done on the back of an envelope. If that is the case, I wonder why the business activity statement released early this week comes with 130 pages of explanatory notes. How simple is that? The member for Wannon must have either a very big envelope or very small writing. The cost of a computer necessary to deal with compliance will mean the difference between survival or not for at least one small shop owner in one of my electorate villages. Rather than a broad based flat rate tax with few if any exemptions, we are going to have a complicated, burdensome tax which will become only more complex and burdensome with each raft of amendments. Given that one would expect that most anomalies will become apparent after the tax's start-up, I predict we are going to see many more hundreds of these types of amendments in the years ahead, as the previous speaker said.We already know that the GST will apply differently to some foods as opposed to others, some rents as opposed to others and some services as opposed to others. But with this bill we find that it will apply differently to the production of some metals as opposed to others, some insurance policies as opposed to others, some leases as opposed to others and services provided by some organisations as opposed to others. What it demonstrates is how flawed the initial GST bill was and how the government has already realised that it just cannot paint the GST broadly across all sectors and expect it to apply evenly, logically or fairly to all. The bill reflects just how much confusion there is surrounding the GST. While it answers some questions that needed answering, I suggest these are but the tip of the iceberg of unanswered questions out there about what the tax will mean for businesses with particular vagaries.As one goes through the bill, it is not hard to see which interest groups have had the government's ear since the first passage of the GST in June. This bill largely implements changes in those areas of concern to stakeholders that have had the resources, the capacity and the time to analyse the legislation. There do not seem to be many prompted from the small end of town. Part 1 of the bill attempts to clarify the treatment of grants to local government, the precious metal industry, financial supplies, so-called GST groups, telecommunications supplies, the insurance industry and second-hand dealers, for which I read motor traders. I dare say that further amendments will inevitably follow as an understanding of the GST filters down from big business to smaller business, to not-for-profits, to charities, to education institutions, to providers of medical services, to the primary industry and food processing sector and to the building industry.I must say, regardless of the government's information seminars, 13 phone lines, mail-outs and Internet services, the feedback I am getting, through attending through my office some of the seminars, is that the majority of small businesses and not-for-profits in Calare are struggling to come to terms with what the GST will mean for them. For example, a feedlot operator wrote to me recently about how the GST would apply to cattle consigned direct to abattoirs on an over-the-hook fee basis. We know the GST applies to the live cattle and to parts of the slaughtered beast such as offal and skins but, as for the food part, when does it become food, what portion of the hook fee is GST free or GST liable and how will this be accounted for? It would turn anyone into a vegetarian just to ponder the complexity. These are the practical kinds of problems frustrating rural businesses. With such a dearth of information out there about how it will apply, the only way businesses seem to be able to get quality answers is by paying for it through the teeth. With all due respect to those conducting the seminars, I am not convinced that they are in a position yet to give any sort of proper interpretation of this legislation to small business.The same constituent goes on to say that, so far as he can see, because he has to pay GST on live cattle but cannot collect on the slaughtered animal, he will require a constant pool of money to cover the GST outputs for which there will be delays in reclaiming. That is assuming he has got the resources and that the cattle market stays reasonably buoyant, and that is only a three- to six-month proposition at best in this farming climate.I have some questions on notice—and I will be fascinated with the answers—particularly asking the Treasurer the following:Is it a fact that it is common practice for abattoirs to charge an all inclusive fee for the slaughter, preparation and processing of livestock, and that part of that fee will relate to the production of GST free and GST liable goods; if so, will the costs have to be apportioned; if so, how.I look forward to the answers. This man's situation will be like that of health or education providers or charities—or any industry, for that matter—providing GST-free services. In a sense, they will be giving the government an interest-free loan for the 3½-month period before they can reclaim their inputs. The manager of the Bathurst diocese of St Vincent De Paul has estimated his organisation will have to employ at least one person simply to comply with the GST requirements, when all the services it provides are GST free. How is that for a not-for-profit organisation? As he rightly points out, the wages of that person would be better spent directly on its programs and would more than likely eat up any inputs able to be claimed back.St Vincent De Paul is running a $3½ million business out there—covering a raft of services, opportunity shops, aged care facilities and other organisations—and he has never had to hire people to run these organi sations. It has been all voluntary, part of that $16 billion worth of voluntary assistance given to the community in this country and saving the taxpayer and government an enormous amount of money, and yet he has to put on board a $40,000 job, because nobody could do it on a voluntary basis, to soak up money that is there for public humanitarian purposes to just comply with this bill.Thankfully, with this bill we will now know that appropriated payments from a state or federal government to a local government will not be subject to GST. That is a matter which local government has been seeking clarification on for some time,, but one may ask why it had to be clarified in the first place. It just does not make sense for a government to subject its own appropriations to the GST or, for that matter, to subject local government grants to not-for-profit community organisations to it.The amendments to the treatment of GST groups contained in the bill also warrant some comment. One aspect of the GST's impact that did not receive much coverage during debate on, and inquiries into, the original bill is the tax's regressive impact on businesses. In this context I mean regressive in terms of the tax's impact on small businesses, as opposed to big business and multinationals.The grouping provisions treat large organisations preferentially by effectively treating associated organisations as a single entity. Supplies and acquisitions made within such a group are deemed to fall outside the GST system and so they occur in a GST-free world. How is this regressive? Well, the bigger the company the more likely it will be to be able to purchase goods and services from within its so-called group and thus not be burdened by the GST in terms of lost cash flow for outputs and compliance. This is why, as the New Zealand experience showed, the GST was regressive not only for individuals but for many businesses too. The smaller the business, the more of a burden the GST became.In fact, the GST put smaller businesses and small players in the market at a distinct competitive disadvantage. Take a credit union like Reliance, based in my electorate—in fact in the building that I am usually in—which I have discussions with on numerous occasions and which is an active participant in the transaction centre in Eugowra recently opened by the Prime Minister. Reliance has done so much in filling the financial void left by the major banks in regional New South Wales. Reliance is not big enough to provide all of the services it needs in house. Whether it is legal advice, facilities maintenance, IT or—dare I say—GST advice, this credit union must pay for services from outside. Each one of these will attract a GST and the same applies to others—Calare Credit Union I can think of as another which has brought this matter up. They believe they will be at a distinct competitive disadvantage in a very competitive financial marketplace. Sure, they will become business inputs but there will be cash flow and compliance costs that Reliance must bear that its group competitors will not have to.I welcome the amendments to the GST treatment of second-hand goods contained in the bill but urge the government to do far more to explain how the GST will apply to this sector. Judging from the Taxation Office seminars, this is one of the areas where there is greater than the general level of confusion. But what is being done to help motor vehicle manufacturers and traders make a smooth transition to the GST in the face of rapidly declining car sales? Whatever the government tries to say about comparing this year's sales with previous years' sales, the industry is telling me that their sales are on a rapid decline in real terms and that they are very nervous about not only their own prospects for the next six to eight months but those of their employees. According to the Motor Traders Association, consumers do not seem to realise that, while new car prices might come down after the GST, the fall in used car prices will most likely wipe out any savings. According to the association, the anticipated car bargains will prove illusory.What about second-hand houses? What about a house that builders build and then move into themselves? I am advised that in these cases the house will be treated as a new home even if the builder has lived in it for 10 years. It is pretty common practice for builders to build their own homes but, unless they want their houses to be at a distinct disadvantage in the marketplace, it would appear they will have to buy them off themselves and pay the GST.The telecommunication supply amendments contained in the bill are yet further examples of the snowballing problems the GST will face once operational. The GST system is designed to tax consumption of goods and services in Australia. But, in the increasingly globalised world, Australian purchasers of goods and particularly services will be able to choose whether they want to purchase them here or overseas. Under the current act, supplies of telecommunications services provided from overseas by foreign suppliers may fall outside the scope of the GST system. The amendments in this bill aim to ensure that telecommunications services used or enjoyed in Australia are subject to the GST, regardless of where the supplier is based. I predict this will be the first of many amendments that will be necessary to prevent erosion of the GST's base. This amendment demonstrates how the GST, while perhaps more modern than the wholesale sales tax, is itself an out-of-date tax, unable to keep pace with the modern world.As I have said on numerous occasions, in a globalised economy where national boundaries are becoming less and less relevant, we need to look at global forms of taxation. But, more than anything else, this amendment raises the question of what commitment the federal government will have in the future as the imposer and collector of the tax to maintain its base when the GST revenue will be going to the states. I predict that inevitably when the states complain about this erosion the feds will come back and say, `Rather than doing that, why don't you just agree to put the rate up? That is the easiest and best way we can guarantee you the revenue. Put it up and the consumers will not even know because, unlike other countries with their value added taxes, we've embedded our GST in the price of goods and services.' How clever! Why, I ask, after deriding the wholesale sales tax for being a hidden tax, has the government decided to hide its GST? I guess I know the answer to that one: because, inevitably, the rate will have to go up.The bill's clarification of how the GST will interact with state stamp duties is welcome, as this is an area which has caused much confusion to consumers and, it would appear, to some state governments. My office raised this issue with the New South Wales Treasurer's office over a month ago and has yet to receive a response. Perhaps that is because the state government is laughing all the way to the bank, charging its stamp duty on some insurance policies on top of the premium and other levies such as the fire service levy and the GST. The change confirms that the GST will be calculated on the insurance premiums exclusive of the stamp duty, but it would appear that it will still be charged on top of other levies. The end result for the consumer is the same as stamp duties being charged on top of the premium and other taxes. It seems clear that double dipping is occurring on the part of at least the New South Wales state government and, considering the states stand to receive all the funds from the GST, I hope they will soon amend the stamp duties, as the government has done, so that they apply only to the GST exclusive price of premiums. All in all what we have here is a bill that points to an emerging behemoth of a tax system. It is a pervasive, regressive and complicated tax—regressive in its impact on individuals and businesses. It is a system that will force many businesses out of business and others into the black market, that will make the life of not-for-profits and charities that much harder and that will benefit only the professionals employed to explain and exploit the tax and the anomalies within it. Sure, it is going to generate employment—it is going to generate one $40,000 job for the Bathurst St Vincent de Paul diocese that it did not have to pay for before. That is the sort of job it is going to generate. I put the government on notice that, if it is concerned about the election results in Victoria and the referendum result, it should look closely at the reasons for those votes, which were not all about republics and such things. It should be extremely concerned about the backlash that will follow this tax across the country and, I would suggest, particularly in rural and regional areas. If the government does not pick up its game in communicating and implementing this tax the Prime Minister told us would never be on his government's agenda, I have little doubt it will suffer the consequences at the first post-GST election.10:40:0012625Snowdon, Warren, MPMr SNOWDONIJ4Northern TerritoryALP00—Other contributors from this side of the House to this debate on the A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 have illustrated, I think quite aptly, the regressive nature of this government's tax and the fact that we are seeing as a result of these amendments increasing not only confusion within the government and its Treasury advisers about how this tax will in fact work when it is implemented after 1 July next year but also confusion upon confusion for those people out in the electorate who do not understand how the GST will be applied and do not understand its implications for them.And they are becoming further confused by the statements coming from this government. Earlier this week, we heard the Deputy Prime Minister and the Leader of the National Party making comment about petrol prices in the bush. I note what the previous speaker said about the government being put on notice about regional Australia. I have to say that, on the issue of petrol prices, the government will be marked down significantly. While it is true that earlier this week we saw the price of crude oil rise substantially as a result of decisions taken outside of this country, the fact remains that we are going to see, after the implementation of the GST, in some places in regional Australia a substantial increase in the price of fuel for ordinary, everyday Australians. The government maintains that its GST package will bring lower fuel prices to business, and the implication is that they will flow on to consumers and that consumers will feel the benefit of those lower fuel prices in the prices of goods on the shelf. I think the government is fooling itself. Some years ago I had cause to ask the Bureau of Transport Economics, as it then was, to do some work on the implications for the prices of goods on shelves as a result of the introduction of road user charges. So they did fairly substantial analyses of the unit costs of transporting goods from places like Adelaide to Darwin, which, as you know, Mr Deputy Speaker, is the major urban centre in my electorate. What they were able to show very clearly was that, despite what appeared to be the substantial increase in the dollar amount of the road user charges, its implications in the final prices of the goods on the shelves of Darwin supermarkets was minuscule, a fraction of a cent. When you look at the total cost of running a road transport operation from a place like Adelaide to a place like Darwin and you take into account all the other factors that are involved in the final price of commodities on the shelves of Darwin supermarkets, you do not have to be Einstein to work out that the reduction in fuel prices for business that this government is crowing about will not bring about substantial cuts in the prices of commodities on the shelves in Darwin.I think it is about time the government owned up to what the real implications of the GST will be on regional and remote Australia, particularly for those people who live in what I call the bush, which is the whole of the Northern Territory, the north-west of Western Australia, most of North Queensland and the northern part of South Australia—the bulk of the Australian continent. Apart from the seat of the Northern Territory, all of the major bush seats are held by the National Party or the Liberal Party. I do not know what goes on in the Liberal Party party room or the National Party party room, but I suspect that, when it comes to accounting for the dissatisfaction in the bush about the proposed GST, their judgment seems to have been clouded by the sense of power they believe they have because they are in government. Let me say to them that they have been fooled.I want to give one significant example of how some of the poorest people in Australia will be affected by the increase in fuel prices that will doubtless come about as a result of this GST package. I want to talk about a community in north-eastern Arnhem Land. Minister Vaile is sitting at the table, and he is a person who I think comes from a metropolitan area of the bush, or a small urban area which is probably on the main train line or the main road leading from somewhere to somewhere else. Let me tell you that Ramingining is nothing like that. Ramingining is a community which is a few hundred kilometres to the east of Darwin, and the population is largely Aboriginal people. It is right in the middle of Arnhem Land. It has no highways and no bitumen roads. It has a dirt road which is unusable for a number of months of the year during the wet season.I am sure the minister will not know the answer to this question, but it is a rhetorical question in any event. Does the minister know the price of petrol at Ramingining? Minister, the current price of petrol at Ramingining is $1.30 per litre. Under the scenario which has been painted for the introduction of the GST, the price of fuel in Ramingining will, by my calculations, increase by 5c a litre. That is, of course, on current prices and does not account for any future rises in the price as a result of any change in the price of crude oil. These people, like others in similar communities around remote Australia, are amongst the lowest income earners of all Australians. They are the most impoverished of all Australians. They pay more for food, clothing, electricity and travel—in fact, they pay more for everything you could possibly imagine. A substantial proportion of this population are, unfortunately, on CDEP which is the equivalent to Newstart. A married couple receives around $600 a fortnight, and if they have children they will of course get a family payment. But they are in substantial ways the most impoverished of all Australians.I want to bring you back to the statements made earlier this week by Mr Anderson, the Leader of the National Party and Deputy Prime Minister. He was at pains to point out that he thought there would be no need for petrol prices to rise because of the GST. I am not a mathematician, but I am not bloody stupid and neither is the bulk of the Australian population. On 11 September last year, in the lead-up to the election, the then Deputy Prime Minister, Mr Tim Fischer, said:The petrol price for business usage will come down. Petrol otherwise will neither go up nor down.Whom are these so-called leaders of the rural communities trying to fool? Do they honestly think that the bulk of those people who live in rural and remote Australia believe them? The facts speak for themselves. They need to admit to those people who live in the bush that their lives will be severely affected by the introduction of this GST.It is absolutely clear that the price of petrol will rise in remote communities. I have insisted that this will be the case from the outset. But it is not only my view. The Motor Traders Association and the Australian Automobile Association both said this prior to the last election. The President of the Motor Traders Association, Mr Robert Allen, said just days before Mr Fischer's comment in September last year:In many cases, most notably in rural and regional areas, the amount of GST to be paid on petrol may well exceed the seven cents per litre reduction in fuel excise.You do not have to be Einstein to work it out. If you take seven cents from $1.30 and add 10 per cent, you have $1.35—up five cents at Ramingining. Mr Allen said that the price of petrol would rise and the gap between city and country petrol prices would widen. He said:We expect that increase in non-capital city locations to be in excess of one cent per litre and to be compounded and increased as excises rise over time.Lachlan McIntosh of the Australian Automobile Association—whom I have known for a number of years, and who I would not have said is a great supporter of the Labor Party—said in Darwin in that same week that prices for petrol could rise by two cents per litre in the Northern Territory bush. Lachlan, unfortunately in the case of Ramingining, you are substantially out—by a factor of 120 per cent. He also said:We are going to see, progressively, higher fuel taxes.Understand, Mr Deputy Speaker and minister at the table, this is not what I have said. It is certainly not what you have said. It is certainly not what the then Leader of the National Party, Tim Fischer, said. It is certainly not what Mr Anderson, the current Leader of the National Party and now Deputy Prime Minister, said this week, because he fundamentally disagrees with it. But who is right? The fact is that prices will rise in the bush, and that fact speaks for itself. As I said, the simple maths of it make it very clear.I ask the minister at the table to contemplate the following facts. Currently in Darwin, where we have the lowest fuel prices in the Territory, petrol is 84c a litre. Of course, with the change in crude oil prices, it may well go up further. In Katherine, just down the track—under 400 kilometres; not a long way—fuel is 89.5c a litre. If you happen to be driving through Ti Tree, which is 300 kilometres north of Alice Springs, and you need to fill your car up you will pay$1.02.5 a litre—and we do well in the bush!—and we will see a substantial increase in the price at Ti Tree as a result of this GST. Who are the people who are going to suffer? These people who live in the bush are not going to get any rebate like the high rollers—not on your nelly. They will pay full tote odds, and they will feel it in the pocket. I have already pointed out that the price of fuel in Ramingining is currently $1.30 a litre, and that is typical of the price of fuel in remote communities. I put an open challenge to the government: why don't you just come out and say that you can guarantee—guarantee in inverted commas, underlined and in bold type—that there will be no increases in fuel prices in the bush? Will you guarantee it, Minister?DT4CREANMr Crean—No, he's got his head down.IJ4Snowdon, Warren, MPMr SNOWDON—No, he is writing an undertaking. He will hand it across to me shortly.DT4CREANMr Crean—He was going around during the election campaign guaranteeing it.IJ4Snowdon, Warren, MPMr SNOWDON—Exactly. This is what these blokes are about. The shadow Treasurer has just come into the House. I pointed out, shadow Treasurer—you are a bit late, unfortunately—what the Deputy Prime Minister said in my own electorate. These people are trying to mislead the Northern Territory community. They are misleading the people in the bush. They are telling us lies, and they have no defence against it.Through the course of this debate we have already heard about insurance, but let me raise another issue which is important to people who live in regional and remote Australia, and that is the issue of air fares. Let me tell you what it costs for a resident of Ramingining to visit a relative in Melbourne—not Canberra; you do not have to live in the leafy suburbs of Red Hill. I am talking about people who live in the bush. If you live in Ramingining, a return air fare from Ramingining to Darwin is $360 and a return air fare from Darwin to Melbourne is $1,400. As a result of the proposed introduction of the GST, we have seen that Qantas and Ansett will increase the prices of their tickets by seven per cent. So the impact on a single person flying from Ramingining to Melbourne will be $123. Minister, are these Australians going to be worse off as a result of the GST? What other people in the bush are going to be worse off as a result of the GST?I might also say that that has the potential to have a severely adverse impact on the tourism industry in the Northern Territory. A report by the Tourism Task Force to the Senate in March claimed that 2,000 tourism jobs would be lost in the Territory as a result of the GST. Tourism is a major employer in the Northern Territory. The other major private sector in the Northern Territory that is going to be severely affected by this GST is the construction industry. Already over the last 12 months we have seen a 25 per cent reduction in new housing starts in the Northern Territory. The construction industry is haemorrhaging. As a result of this GST we are going to have a black hole following 1 July next year, and there will be a further haemorrhaging of the construction industry.The people who are directly responsible for this sit on the Treasury benches of this country. We have the Treasurer waxing lyrical about what he has achieved with the Democrats. What he has achieved with the Democrats is a means to punish ordinary Australians for being ordinary. If you are rich you may do well as a result of this GST. Indeed, if you are a high roller who happens to live in Indonesia, Singapore, the United States, the UK or somewhere else and you come to Australia you will get the benefit of a rebate. You will have given to you the positive benefits of this government's GST. But if you are a resident of Ramingining, Ti Tree, Tennant Creek, Alice Springs, Katherine or Darwin you will get no benefit; all you will get is pain—and that pain is something that this government seems to be proud of. I say to the government: if you believe that somehow or other you can fool the people in the bush, let me just remind you that you can fool some of the people some of the time but you cannot fool them all the time, and the people of the bush will not be fooled by you.Let me just put this little figure in your mind, Mr Deputy Speaker. Currently, if you are in North-East Arnhem Land and you are buying groceries, if you live in Ramingining or thereabouts, on a given basket of goods nominated by the Northern Territory Department of Health and Family Services, you will pay $614 per fortnight for that basket of goods. If you live in Sydney or in another capital city, the average price across all capitals is $310. In Ramingining you will pay 100 per cent more.Minister, when you go back to your party room and you tell your National Party colleagues that somehow or other the GST is going to benefit the residents of the bush, especially people on average and low incomes, do you have a straight face? When you tell your party room that people who live in the bush will enjoy a fall in petrol prices, do you have a straight face? (Time expired)10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Before calling the Deputy Leader of the Opposition, I caution the member for the Northern Territory to be careful about how he puts his remarks through the chair and the use of the second person `you'. I know it was a bit difficult and he was interchanging them along the way. Also, the member should be careful of expressions which in other contexts might have been seen as unparliamentary.11:01:0012628Crean, Simon, MPMr CREANDT4HothamALP00—It had been my intention to speak earlier in this debate but that was not possible because of events surrounding another series of bills before the House in relation to business tax measures. It was critically important to ensure that we obtained revenue neutrality in those business tax measures, essentially because the introduction of the GST required that condition. I will come to that a little later in the exercise but I thought that for the purposes of reporting back to the House, and also because these bills are to some extent linked, I would take the opportunity to report on where we are at in relation to business tax as well.Yesterday, during the debate, the Treasurer indicated that he had responded to my offer and he had agreed to all points. On the basis of that, I indicated last night that we have an agreement and I sent this response to the Treasurer last night. I will read it into the Hansard. It says:Dear Treasurer,Thank you for your letter of 24 November 1999 in which you, on behalf of the government, accept all the conditions set by Labor for passage of the business tax legislation. As I spelled out in my letter to you in the House today, acceptance of these conditions is essential to the achievement of revenue neutrality, the key condition set by Labor for passage of these business tax proposals. I reiterate that Labor would not have designed the same tax package as the one before us and restate our concerns about individual elements of the package outlined in the recent report of the Senate inquiry into the business tax legislation.Nevertheless, I welcome your personal guarantee that the government will deliver in full all the business tax changes announced, recognising that any slippage on these measures in the future could expose the government in terms of its commitment to maintaining the integrity of the tax system. I also note the detail you have provided on the measures not yet before the parliament and the significance of your statement in the House that these should be understood to constitute legislative drafting instructions.Finally, I welcome your offer to bring forward an anti-avoidance measure that fully reflects the intention of the amendment moved by Labor earlier today. On the basis of these commitments from the government, Labor can support the business tax legislation in the House and the Senate.When the measures not yet before the parliament are introduced as legislation, it is important that they include a certification by the Treasury or the Tax Office that the revenue generated by the measures is consistent with the estimates provided in your statement of 11 November.I look forward to the introduction of a tax package which is both revenue neutral and preserves the integrity of the tax base.That was the response which I sent. As a consequence of that, the legislation will pass, but I want to underpin the point that the revenue neutrality test was essential because of the GST being introduced and, quite frankly, until the discussions yesterday we had only dispositions from the Treasurer of an intention to do certain things.This revenue neutrality aspect is best summed up in attachment O of the Treasurer's press release of 11 November where the revenue neutrality test is met—in fact, it is exceeded—if all the measures that the government say they will introduce are introduced. It was our concern that they would not be introduced and so we sought, importantly, two conditions: one, that they give us more detail; and, two, that they actually undertake to proceed with them and not deviate from them. The ultimate test of that is going to be against attachment O because, in attachment O, revenue from these measures is listed—the fiscal impact of the stage 2 measures is listed.So the drafting instructions that have now been sent to the Parliamentary Counsel require that that which is returned for legislation and debate in the parliament reflects the calculations contained in that document. If it does not, if there is any watering down, if there is any attempt to walk away from any of the conditions and commitments, then that will be reflected in the figures and it will mean that the government has broken the deal—it has called the deal off. I also indicate that we believe it is the first time that the government has given such a strong commitment.The Treasurer's letter back to me yesterday was on behalf of the government. He, as Treasurer, was saying that the government will introduce all the business tax changes announced in full and that, `Since the government has agreed to your three conditions'—that is, Labor's three conditions—`I look forward to written confirmation that the opposition will vote for the package in full.' That confirmation has been given, but I think it is important to place on the record the significance of that commitment from the Treasurer and the tests against which it will be judged. It will be a question of the detail of the legislation complying with the drafting instructions, because those drafting instructions are what Treasury have already calculated will be the fiscal impact and have included in attachment O. We will want to see that same sign-off by Treasury when the legislation comes back before us.Ideally, it would have been better to have had the draft legislation. I accept the fact that that is not available, so judgments had to be made as to whether we should delay the whole package or whether we should take the government on trust. Given the spirit of the negotiations we are prepared to take them on trust—I hope it is not abused—but we have set down the tests against which it will have to be judged.The importance of that package is this. It is a package that will now pay for itself and it is also a package that cannot be exploited by tax dodgers. It is that latter aspect that is the significance of the commitment we have—not just to amend part IVA but to introduce an effective anti-avoidance mechanism to catch those people who enter into schemes that convert income into capital gains for the purposes of avoiding tax. And that we have an agreement on. We have still got to finalise the words, but I think it is a very important achievement that we have, with this tax package, got bipartisan agreement on the integrity measures. Integrity, as far as the revenue base is concerned, is essential, Mr Deputy Speaker, as you would be aware, because it fundamentally determines where our fiscal stance ultimately will finish up.In that regard I might say that there is a significant difference between the agreement we have reached with the government on business taxation and the agreement that the Democrats did with the government on the GST, because it was that Democrat deal that undermined the integrity of the budget. It was that Democrat deal that cost an additional $1.8 billion from next year's surplus, which is an interesting contrast with the $1.1 billion hit to that surplus next year that the Prime Minister has used to justify the tax increase through the Medicare levy to fund the troops in Timor.We support our troops in Timor. That has been said many times in this place. And we will support initiatives that resource them properly. But let there be no mistake: the deal with the Democrats undermined the integrity of the budget and it is on evidence because of the events over the last two days. Within four months of that deal, they are back in here changing it. Within four months of a deal that the Treasurer hailed as the greatest tax reform of the decade, saying that we would not need significant tax reform for the next 50 years, they are back into this House introducing a new tax. Within four months—which is seven months, I might add, ahead of when this great new system is due to come in place.The reason for that is because the package did not have regard to the integrity of the budget. It was prepared to buy the GST at any cost to save the Prime Minister's face. It was prepared to get a deal on the GST at any cost. Apart from the close to $20 billion cut in the surplus or the $20 billion out of the surplus over the next three years in terms of tax cuts, you had the $1.8 billion component that was the dirty deal done dirt cheap with the Democrats.By contrast, the deal that the Labor Party did with the government yesterday when the government agreed to the conditions that Labor set down is that deal, in paying for itself, and also ensuring that the tax dodgers could not exploit it, was fundamentally about restoring integrity to the budget, to securing the revenue base into the future, to recognising that these changes did open up the potential for greater tax avoidance. They could be seen as a green light for people seeking to use arbitrage between the different rates—the lower capital gains tax rate and the higher marginal tax rates.As I have said before, had Labor been in office making changes to the capital gains tax, which we promised to do, we would not have done it this way. We would have given far greater emphasis to encouraging and rewarding the high risk takers, particularly venture capital; to getting the new ideas into commercial activities into this country; and to driving the economy of an innovative, entrepreneurial nation. That is where we would have directed the changes in capital gains tax because we think that is in the national interest. It is about underpinning investment; it is about tackling our current account; it is about getting jobs for the Australian economy.But if in fact the government was insisting on the across-the-board cut making no distinction between passive and active investments, it had to recognise the potential for tax avoidance that was being opened up. And you cannot introduce a mechanism that does that, that opens, which does not have the anti-avoidance mechanism put in its place.We have this agreement now and we will ensure that the government honours it. We will ensure that, in bringing back the detail, the government demonstrates that the revenue claimed will be delivered. That will be an important process for all to watch in the coming months. Nevertheless, we have the basis for business tax reform, we have the basis for giving certainty against which businesses can make their investment decisions and, importantly, we have the basis for ensuring the integrity of the revenue base into the future.John Ralph, who reported to the government on taxation reform, indicated in relation to the alienation of personal services income that, unless changes were made to stop continuing tax avoidance in this area, the loss to revenue could be up to $3 billion per year. That is not in relation to what is happening now; it is what will happen if nothing is done. Three billion dollars is a lot of schools and hospitals. It is certainly an aspect of our revenue base that we cannot allow to leach out. Therefore, this too is an important dimension of what the government has committed to introduce in full, just as it has undertaken not to water down—at least the Treasurer has—its announcement on trusts. The Treasurer has indicated that he has no intention of departing from that commitment—not one iota. There are figures in this document which show what the fiscal impact will be if it is implemented in full. If there is any watering down, that figure will reduce. If there is any watering down of their intentions concerning the alienation of personal services income, that figure will reduce. That will be the basis upon which judgments can be made as to whether the government is honouring its promises. We have the lock-in by the government now to introduce these measures. We always said if those measures were committed to, if they were going to be done, if they could guarantee it satisfactorily to us, then this package will pay for itself and meets the revenue neutrality test. We are satisfied it does. We now want to see the government deliver on all aspects.The issues directly before the House at the moment are related to further amendments to the GST. Earlier this week, I asked rhetorically: what would come first, the millennium or the 1,000th amendment to the GST? When we came back to the parliament this week, already it was indicated to us that there were going to be 151 amendments coming before the House. The legislation that was introduced earlier now has another 119 amendments added to it. So the Treasurer is the millennium man. He has beaten the millennium with his GST amendments.This piece of legislation was supposed to be so simple, so easy to understand, yet seven months before it has even been introduced it has 1,000-plus amendments. That highlights what a dog's breakfast of a tax it was that the dirty deal with the Democrats produced. What sort of incompetence is it by a government that says it has been across all of the detail in working up this great new tax package for the new millennium, yet before the ink is dry it has introduced more than 1,000 amendments? I can guarantee you this: there will be more to come because this GST, foisted on this country by the government and the Democrats, is a nightmare. Not a day goes by now in which there are not consistently stories in newspapers about new problems associated with the GST, and this from a government which said that we have to approach the new millennium with this brave, new, simple tax. It's hogwash!This is a ridiculous tax. That is why we fought so hard against it and why we will be debating it constantly in this chamber. The government will be forced to keep coming back in to try to fix up their own measures, not necessarily to make it easier on people, because this tax is a huge burden on the Australian public. They just have not properly thought through the implications of what they were telling the Australian public at the last election—that it was so simple, so easy to understand. They even say that this is an easy tax for small business to understand because all they have to do in registering their number and dealing with compliance is fill out a two-page document. What they did not tell you was that the instructions that go with that two-page document are at least 100 pages of complex calculations and draft suggestions as to what small business needs to do to comply with this tax. It is an administrative nightmare. And this government is going around saying rhetorically that it is a simple new system which is easy for people to deal with. That is a nonsense.I know from my own constituency and from my colleagues on this side of the House—I am sure there are many on the other side of the House too; perhaps in your own constituency, Mr Deputy Speaker—that people are constantly raising the problems associated with the introduction of the GST and the inability to get accurate concise information. When they do get information it is always heavily qualified and when they get told that the simple new approach involves only two pages but—wait for it—`When you fill those out, you had better read the 100 pages of instructions,' they just say, `What is this government on about?' Anyway, time will tell and we will be making sure that the government has drawn to its attention the continuing problems associated with it.So up until today we were dealing with the government's new set of amendments, that is, 907 amendments; we now have another 119. This Treasurer has passed the millennium well and truly. He has beaten 1 January 2000. He has more than his 1,000th amendment and there will be more to come. This is what the new, simple, streamlined system is supposed to be all about.Remember that it was the Treasurer who told us how simple this new tax would be. He said that there would be only one rate and he was getting rid of seven—six as it turned out—rates of wholesale taxes applied under Labor. But the Treasurer has not told you that, with the ducking and weaving and compromises they have had to make on the GST, we have multiple rates for it now. We have a zero rate for the ones that are exempted, a five per cent rate for long-term residential accommodation, the standard rate of 10 per cent, a higher rate for the wine industry and a higher rate for luxury cars. In addition to those five rates, we have the input taxing rates for residential accommodation of around three per cent and for financial services of around four per cent. The government has replaced a seven staged wholesale sales tax with the so-called simple, single rate for the GST which itself has now effectively got seven rates. That is before we get to the differential treatment now associated with the Olympics tickets, which we know the Prime Minister gets very testy about every time he is asked about it in question times.If the Prime Minister genuinely wanted to do something about taxing the wealthy, as he said was his justification regarding the elite tickets for the Olympics, why does he not put the GST on the high rollers in casinos? What did they do for the high rollers in casinos? They effectively moved a provision that exempted them. Labor moved an amendment that that exemption should not apply, and the government and the Democrats voted it down. When this bill is considered in detail, we will be putting that amendment up again because we want to expose the hypocrisy of the Prime Minister. He cannot have it both ways—railing against the wealthy when it comes to Olympic tickets but prepared to wash his hands when it comes to his high roller mates or the high roller mates of others in the government associated with the casinos. It is absolute hypocrisy and we will be interested to see how government members flinch when they have to make the decision about backing the Prime Minister's rationale on Olympics tickets but turning a blind eye to it when it comes to the high rollers in casinos.The other amendment which we intend to move is to require that receipts indicate the level of GST paid. This is a government that told us you did not need to put it on receipts because it was a simple tax. I remember asking the Treasurer how much tax is paid on a grocery bill of $189.30. He of course said, correctly, `It is one-eleventh.' I said, `Well, tell me how much is the tax. Divide the one-eleventh now.' If the Treasurer of the nation cannot divide the one-eleventh quickly, what does he expect the ordinary punter to do when they get their shopping list? But of course that was before the deal done with the Democrats. We now have a situation in which the bill from the supermarket will contain GST on some items and not on others. So it is not as simple, even if you could do it, as the one-eleventh division. It is a much more complex thing. We say there is more urgency now to consider the requirement that, when people purchase, the receipt should show the amount of the GST. That is what we are arguing.I must say we have to thank the Prime Minister for his decision on the Olympics tickets because what he did was to put the GST back on the front page of every newspaper in this country. He said, `My solution for dealing with problems is to fiddle with the GST. I am going to hit the rich. But I am not going to hit the high rollers; we will leave those alone.' It shows how flexible and how easy it is to make changes to who pays and who does not. It is an interesting opportunity for us who are arguing that we want to roll back the impact of the GST. The government, of course, want to roll on and roll up. They want to make sure that those exemptions disappear and they want to put up the rate. That is their long-term agenda.Labor is saying that every time people make a purchase, whether it be for a good or a service, they should know that John Howard and Peter Costello have got their hands in their pockets taking out 10 per cent extra. Why should that not be on the receipt? What have they got to hide? They used to talk about Labor's hidden taxes and yet they have introduced their own hidden taxes—this great new tax that they are so proud of. Proud? They want to hide it. They do not want people to know it is being paid each time they purchase. Well, we will remind them and we will remind them often.There are provisions in this bill which make some important changes which we essentially agree with. But I make the point that these amendments highlight the problem in a number of areas. We know that bank charges will go up as a result of the GST because the banks have said its introduction is going to cost them $430 million and they are going to pass it on. They are making billions of dollars of profit. Of course, they could not think of cutting their margins. They have quite blatantly said they are going to pass it on to consumers. What did the government say when it was announcing this package, going to the last election? It said banks would make savings and therefore the cost of banking should come down. The government on the one hand is saying the inflation impact on banks is less. The banks are saying they are going to pass it on. The ACCC has no power to stop them because if they can demonstrate that the increases are as a result of the GST impact it is quite legitimate for them to pass it on.What these amendments do is to highlight again that the GST is going to result in higher bank charges, just as the GST is going to result in higher petrol prices, as the member for the Northern Territory indicated before. What they have done with petrol is to take 7c off the excise as the equivalence of the introduction of the GST. But understand this simple proposition. If the price of petrol is at 77c and you take 7c off and put 10 per cent back on, there is no difference—that is true. But what does that mean? Any time the price of petrol is over 77c, the GST is going to raise it. The GST is going to impact on the price of petrol.Yet you had this government running around the country at the last election saying, `There will be no increase in the price of petrol as a result of the GST.' Let them come forward and tell us what the excise deduction is that is going to deliver that guarantee, because there are people sitting up in the gallery who know what the price of petrol is today—and it is well over 77c. That is before the price hikes occur. We also know that, in the regions, it is higher again. (Time expired)11:31:0012633Slipper, Peter, MPMr SLIPPER0V5FisherLP10—in reply—Initially I want to refer to the comments made by the Deputy Leader of the Opposition with regard to the government's momentous business tax reforms. The opposition are now supporting the government's changes and today is therefore a welcome day for Australia. We will have a business tax system that will help small business, rural Australia and indeed the community at large. It will undoubtedly make Australia a much more competitive place.The good thing about this is that we can reduce company taxes, we can change depreciation arrangements, we can reduce capital gains tax, we can simplify capital gains tax treatment and we can make Australia an even more competitive base for this region. Most importantly, we can create more jobs. We can have a higher standard of living as a consequence of all that and, of course, that is a very good thing for Australia. So today is a historic day to build on the government's tax reforms which have previously passed through the parliament. We now have an indication that the parliament is going to support the business tax reforms, and that is building on the government's successful record.I would like to respond to some issues raised during the second reading debate on A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 . It is regrettable that the opposition have barely touched on the content of the bill but rather have used the second reading debate, as they have the entire debate on the new tax system, as an opportunity simply to rant. They have taken the opportunity to scaremonger further and to spread even more inaccuracies. They have completely, totally and comprehensively failed to talk about the substance of the bill, and they have not mentioned their alterna tives. They are policy vacuums, and they will be treated with contempt by the Australian people.Apart from their support for the outdated and inequitable wholesale sales tax, the Labor Party have no tax policies. This is a fact which the honourable member for Rankin confessed in his address to the House by way of contribution to this debate. All he could muster was a particularly ham-fisted attempt to defend the indefensible—Labor's outdated and inequitable wholesale sales tax. Let us look at that policy. It is a tax policy that taxes goods at zero, 12 per cent, 22 per cent, 32 per cent, 37 per cent, 41 per cent and 45 per cent. The wholesale sales tax is a cascading tax which is embedded in the price of most goods we buy.The honourable member for Newcastle, in his address, claimed that the amendments to the GST were cascading amendments. The member for Newcastle is clearly confused; he was really intending to refer to the cascading wholesale sales tax, which has been a disaster. The member for Rankin failed to mention that the goods and services tax will remove between $7 billion and $8 billion a year from business costs because it is not a tax on business like Labor's wholesale sales tax. We have had contributions from members of the opposition on the issue of inflation, but not once did they mention that, for most of the time that they were in government, the average inflation rate during the 1980s—those dark years of Labor rule—was 8.2 per cent.The honourable member for Wills claimed that the legislation would increase red tape for small business, yet he failed to bring forward any substantive evidence that what he said had any validity. His rhetoric was simply that—empty rhetoric. The simple fact is that the tax legislation which has passed through the parliament will cut red tape for small business—Opposition members interjecting—0V5Slipper, Peter, MPMr SLIPPER—and will simplify matters for business. He also criticised the impact of the goods and services tax on petrol prices, yet in doing so he ignored Labor's appalling record on the petrol excise. It has been only a few years since the motorists of Australia knew too well of Beazley the Bowser Bandit. The member for Wills, unfortunately, had a particularly empty contribution.I return to the member for Rankin, who claims that the new tax system is cumbersome. It simply is not so. It is a very positive change for Australia. We are the government which sought a mandate from the Australian people and we have implemented that mandate with the support of the parliament. I found it impossible to understand how the honourable member for Rankin could defend the wholesale sales tax. He actually argued that it was more streamlined than the new tax system Australians will have. The member for Rankin, unfortunately, is out of touch on this particular matter, as are many of his colleagues.The honourable member for Corio, who is never short of a word—in fact, he never uses one word when 10 words will do—claimed that the legislation before the chamber was pernicious, choosing to ignore its enormous benefits. Strangely, he asserted that the devil was always in the detail of the ANTS package. Yet he and his colleagues have shied away from talking about the detail in this debate, as someone said to me, rather like Dracula running away from a wooden stake.The Labor Party in this debate have failed to concentrate on the policy detail. They have sought to rediscuss the issue of Australia's new tax system without concentrating on the amendments currently before the chamber. It is a tragedy. When the record of this part of Australia's history is written, it will be recognised that the Labor Party in government were scared to tackle real and meaningful reforms that would deliver substantial benefits to Australia, were condemned by the Australian people and, ultimately, were rejected at the 1996 election.However, I want to concede one point that the honourable member for Corio made when he said that Labor's years in government were 13 long, hard years. And so they were—long, hard years for the Australian people.The honourable member for Blaxland—I suppose you could say Keating's apprentice—came into the chamber and blindly praised the failed wholesale sales tax. It is hard to under stand how, since this particular tax is so totally discredited, people who claim to be intelligent can enter the House of Representatives and support something that is clearly indefensible. He supported a 32 per cent tax on refrigerators, videotape recorders and most electrical goods. I wonder what the constituents of Blaxland would say if they were to read the contribution made by the honourable member. Like other Labor luminaries, he ignores the fact that the wholesale sales tax is an embedded tax that progressively adds to the cost of goods throughout the economy, and that is something which everyone ought to recognise.The honourable member for Paterson also continued to sing the tune—it was a discordant tune—of those opposite, who have failed to come to terms with the result of the last election when the government stood up seeking the support of the Australian people for a new tax system. We received that support, and as a result we will have a new, more equitable and fairer tax system. The honourable member for Cunningham, a former Speaker, also cheered on the failed wholesale sales tax. He raised the question of the GST and insurance, and the honourable member for Mackellar in her interjection quite rightly accused him of pedalling Labor's fibs on this issue. It is obvious to everyone listening to this debate that Labor is opposed to lower personal taxes, and the Labor Party has traditionally been the party of high taxation in this country.Returning to the honourable member for Newcastle, he hypocritically called this a hidden tax, but he and his colleagues stand and support the greatest hidden tax of all—the wholesale sales tax, which a number of them continue to support in the chamber. Most Australians would find that eminently regrettable.The honourable member for Calare, who often makes a thoughtful contribution—he is not always right, of course, but he makes a thoughtful contribution in the chamber—referred to abattoirs and the question of over-the-hook sales. The Australian Taxation Office is issuing a fact sheet to clarify the issue, and there is no need for the treatment of over-the-hook sales to be different from the treatment of live sales. The GST treatment of over-the-hook sales depends on the terms of the contract between the buyer and the seller and when property passes from the farmer to the abattoir. If the property passes at the saleyard, GST is payable on the full amount paid to the farmer, as a taxable good is being sold. If property passes after processing, what is being supplied is GST-free food and taxable goods, and the GST would need to be apportioned in the same way as with other supplies of GST-free and taxable goods.DT4CREANMr Crean—That sounds simple!0V5Slipper, Peter, MPMr SLIPPER—It is simple, it will be simple, and I would commend to the Deputy Leader of the Opposition the Australian Taxation Office fact sheet when it is issued because, if he can read, he will see just how simple this will be.Opposition members interjecting—0V5Slipper, Peter, MPMr SLIPPER—The honourable members opposite make a lot of noise but never make any sense. They have mentioned nothing of substance in their contributions, nor do they talk about their appalling record—increasing the wholesale sales tax after the 1993 budget after saying that taxes would not rise. We all remember the broken promise when the l-a-w tax cuts were removed.The Labor opposition also complained about the fact that the government is consulting on the A New Tax System legislation and amending the legislation to address legitimate concerns. It is a fact of public record that there have been a number of amendments to the tax legislation. This is not surprising, given the momentous and important nature of the reforms proposed by the government. We are a consulting government. We go out there and talk to the Australian community. We go out there and listen. And when there is a need for a minor change to the legislation to improve its operation we do not hesitate to make it. I have to say that we as a government disagree with the arrogant, typically Labor proposition that we have heard from those opposite. As many government members have already mentioned, we have been involved in this extensive consultation process. This process will continue, and it has involved a broad cross-section of industry and community sector representatives, the states and territories, the Australian Taxation Office, other government departments and the community at large.Throughout this process we have assessed the finetuning required to ensure that the GST is implemented in the most effective way possible. This bill includes amendments that the government considers necessary to provide a smooth transition to the new tax system. I want to remind the House briefly of the main points. This bill and the regulations that have already been notified finetune the tax treatment of financial services without changing the fundamental policy outlined in the A New Tax System. The government also proposes a number of amendments relating to the application of GST and state regulated insurance schemes—in particular, amendments to simplify the application of GST to workers compensation and compulsory third-party insurance. The bill also proposes an amendment to remove the value of any state stamp duty from the calculation of GST on insurance premiums. The bill contains amendments to make sure that the domestic telecommunications industry is not put at a competitive disadvantage to foreign competitors because of the goods and services tax.In relation to second-hand goods, the bill proposes changes that will better achieve the original policy intent of the second-hand goods provisions. The bill also contains amendments to remove GST from the calculation of the tax base of the petroleum resource rent tax. Further details of the measures contained in the bill are contained in the explanatory memorandum.I want to praise the very capable contributions of government members who have spoken on this bill. I include amongst those the honourable members for Cook, Barker and Mitchell. The honourable member for Cook acknowledged the historic nature of these tax reforms—the most significant tax reforms since Federation. He highlighted lower personal income taxes, enormous benefits for exporters and the abolition of Labor's wholesale sales tax. He also pointed out that when one has historic reform there is the need for some small refinements, such as those contained in this bill. The honourable member for Barker pointed out, and it was admitted by some of those opposite, that the Labor Party is the only party that wants to retain the wholesale sales tax. He emphasised that the new tax system is simpler.83VEMERSONMr Emerson—Mr Deputy Speaker, I raise a point of order. The Parliamentary Secretary to the Minister for Finance and Administration was just talking about the wholesale sales tax. Earlier he claimed that refrigerators had a wholesale sales tax rate of 32 per cent. I ask him to correct the record because the wholesale sales tax rate on refrigerators is 12 per cent.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Mossfield)—There is no point of order.0V5Slipper, Peter, MPMr SLIPPER—It is interesting that the member for Rankin seeks to divert the attention of the House from the very important reforms we are discussing. The member for Rankin stands condemned by his constituents and by the Australian community for supporting the outdated wholesale sales tax. Returning to the contribution made by the honourable member for Barker, he referred to Labor's boundless negativity.Mr Horne interjecting—0V5Slipper, Peter, MPMr SLIPPER—When one listens to the hot air being emitted by the honourable member for Paterson, it is pretty clear that the negativity remains in this place, at least on his part. The honourable member for Mitchell highlighted the policy vacuum of those opposite. They are bereft of ideas or policies of their own.UU5HORNEMr Horne—The member for Mitchell!0V5Slipper, Peter, MPMr SLIPPER—The member for Mitchell is a very competent member and he speaks often in relation to financial matters and the words of wisdom he utters are listened to by the people of Australia. Returning to the principal matters of this debate, I commend the provisions in this legislation to the chamber, but I want to foreshadow that the government will be moving amendments to this bill during the consideration in detail stage.DT4CREANMr Crean—How many?0V5Slipper, Peter, MPMr SLIPPER—These amendments were circulated on Tuesday and contain two major issues. The Deputy Leader of the Opposition, on behalf of the Labor Party, failed to circulate his amendments until just a couple of minutes ago, but the government has given all members of the chamber two days notice of the important amendments we are currently proposing. The two major issues relate, firstly, to the announcement made by the Treasurer on 19 August that there would be an immediate income tax deduction for small and medium sized businesses for expenditure incurred in acquiring or updating plant or software to prepare for the goods and services tax, and we will be moving amendments to that effect. Secondly, amendments will be moved to simplify the treatment of general insurance. This will mean that businesses will not have to pay GST on any payouts that they receive, and business will welcome the simplification. Other minor and technical amendments are also included, and these are explained in the supplementary explanatory memorandum which will be circulated shortly. The Labor Party stand condemned. They have failed to address the important issues contained in this bill and it is with a great deal of pleasure that I commend the legislation to the chamber.Question resolved in the affirmative.Bill read a second time.Message from the Governor-General recommending appropriation for the bill and proposed amendments announced.12637Bill—by leave—taken as a whole.11:50:0012637Crean, Simon, MPMr CREANDT4HothamALP00—I move opposition amendment (1):(1) Schedule 1, Part 1, page 5 (after line 15), after item 11, insert:11A After section 29-80Insert:29-90 Tax receiptsWhen a business provides a consumer with a receipt or docket issued in respect of a taxable supply the receipt or docket must separately include: (a) the price of the goods or services excluding the GST; (b) the amount of the GST; and (c) the total price including the GST.This amendment goes to tax receipts and the requirement for the government to come clean about what this tax actually involves when people make a purchase. The amendment seeks again to get the House to consider a requirement that, if we are going to get the GST, the government at least be brave enough to show people how much they are being taxed—don't hide it. At the moment the government has said that it wants to get rid of hidden taxes and that this is what the GST will do. The problem is that, with the way its legislation has been introduced, the GST will remain hidden.We have moved an amendment in this place that all receipts should show the amount of GST a person pays whenever they make a purchase. We want them to know that every time they go into a shop, supermarket or anywhere else Peter Costello's and John Howard's hands will be in their pockets taking 10 per cent of almost everything purchased. But they do not want to tell you that on the receipt. So proud are they of this tax they want to hide it. We will be campaigning on this issue in every marginal seat in this parliament on that side of the House.While the government might like to think that this is an issue that has been accepted and has therefore gone away, it has not. I am sure that their polling is showing them that. The very fact that they have actually got their own people up answering dorothy dixers on the GST indicates how much this is hitting them. The very fact that the Prime Minister is so sensitive to his Olympics tickets fiasco is an indication as to how sensitive it is every time they put GST back on the front page. We will be making sure that the GST is on the front page, the second page, the third page and the fourth page, and not only in the daily newspapers but also in the local and provincial papers. We will be making sure that people understand at the next election that the people sitting on the government side of the House are responsible for introducing this insidious new tax.The consequences of this GST will be felt, and people are entitled to know what they are. All actual pricing of items will have to be on the correct basis, either with GST or GST free. It is not a simple question of saying, `Everything is taxed and therefore you know what it is,' because amendments have been made, compromises and dirty deals have been struck that have introduced complexity into the system. Remember the bags of lettuce, the cooked chooks and the thermometers and the cans of soup? These are all items, I must say, that when we introduced them into the parliament were so embarrassing to the government that they exempted them from the GST. Had we kept the debate going longer and brought more products into the place, we may have had some more exemptions on that principle.If in fact people going into a supermarket do not know whether a product is GST free or GST taxed, why shouldn't there be a requirement to disclose it on the receipt so that people know precisely what amount of GST they are handing back to the government when they make their weekly or monthly purchases in the supermarket? These will be daily occurrences, of course, in milk bars and mixed businesses, where the same complexity will apply. The simple answer is that they will not know what they are paying, firstly, because there has been new complexity introduced into the system and, secondly, because the government will not tell them. We are going to make sure that we keep campaigning on this issue. We will move this amendment every time they come back with new amendments to this GST package, and there will be more to come.They say it is a simple system. The Parliamentary Secretary to the Minister for Finance and Administration has just foreshadowed 119 new amendments, and he said that the detail is in the explanatory memorandum. Do you know what the explanatory memorandum runs to: 76 pages. Some simplicity! This is a nightmare of a tax. No wonder they want to hide it. We want to move this amendment to make sure that they cannot hide it, so that people know when they make a purchase that this is a government slugging them 10 per cent for just about everything they purchase. (Time expired)11:55:0012638Slipper, Peter, MPMr SLIPPER0V5FisherLP10—It certainly will not come as any surprise to honourable members opposite that the government reject this amendment. We are not going to apologise for rejecting this amendment. We do, however, want to expose the absolute naked hypocrisy of the Labor Party in so far as the wholesale sales tax, supported by the honourable member for Rankin and others, does not have the amount of the tax built into the price and yet, despite the fact that they administered that particular tax—one of their favourite taxes which is levied at zero, 12, 22, 32, 41 and 45 per cent—at no time did they ask that the separate amount of the tax should be shown.The amendment sought by the honourable member for Hotham is completely unnecessary. It would make the tax more complex and it would add to compliance costs. He knows that.Mr Horne interjecting—0V5Slipper, Peter, MPMr SLIPPER—Why don't you just keep quiet? Why don't you try and be relevant? Why don't you in fact apologise to the Australian people for opposing the new tax system which the Australian people voted for at the last election?Returning to the amendment, it is unnecessary because this is a simple tax, and in most cases under the goods and services tax the amount of tax included in the price of the purchase could be readily calculated as simply one-eleventh of the purchase price. This provides a level of transparency that has never been present under Labor's wholesale sales tax. Again I say that they charged zero, 12, 22, 41 and 45 per cent rates. They had this very complex tax and they did not at any time show consumers what they were charging. The goods and services tax in most cases will simply be one-eleventh of the purchase price. This provides a level of transparency that they have never been prepared to support for wholesale sales tax, the effect of which is differential and hidden and which has never been required to be displayed separately on invoices at the retail level.Requiring businesses to itemise the amount of GST paid would lead to greater compliance costs for businesses by forcing them to increase unnecessarily the information contained in displayed prices and to adapt cash register equipment to print out three amounts for every item sold. Even if the proposed changes were to apply only to subtotals and not to each item, separate receipts would need to be issued for GST-free or input taxed items. So the Labor Party is hypocritical. The Labor Party administered the wholesale sales tax system for 13 years in government and did not ask that the wholesale sales tax be shown separately, yet they come into the chamber and effectively say that now that we have a new, simple GST coming in they want something quite different. In fact, the GST is simple because usually the GST can be calculated by taking one-eleventh of the price. The government, as I said at the outset, does indeed very strongly oppose the amendment moved by the honourable member for Hotham.11:59:0012639Emerson, Craig, MPMr EMERSON83VRankinALP00—I support the amendment. Mr Deputy Speaker, you may recall that before the last election, in a very heavily taxpayer funded advertising campaign, the government said, `The wholesale sales tax is this insidious tax and it does not appear on dockets.' They campaigned very strongly on that. So we simply ask that, with this so-called streamlined new tax for a new century, the Treasurer live up to his claims that the GST will be simple and transparent. We know it will not be simple and we know it will be not be transparent.It is a fact that, even if you ask people in a shop how much GST is being charged, by law they do not have to tell you, so you cannot check whether you are being correctly charged GST or not. As a particular result of the grubby deal done between the Democrats and the government, there is a range of items that are GST free and a range of items that have GST on them. Just to give you some examples of goods that are taxed by the GST, let us go through some of the foods: cake slices and pastries; sandwiches; soft drinks; most fruit and milk drinks; pies; pasties; sausage rolls; biscuits; chocolates; lollies; prepared supermarket meals; potato chips; corn chips; nuts; doughnuts; croissants; scones; McDonald's; Hungry Jack's; Burger King; meals at clubs, pubs and restaurants; KFC and Red Rooster; fish and chips; Asian takeaway meals; ice-cream and ice blocks; pizzas, both frozen and takeaway; Sizzler's; and steakhouses.We have the Democrats saying, `Oh, we essentially removed the GST from food.' But there are a lot of food items in there and, I might add, a lot of the food items in there that will have GST are consumed in very large measure by lower income people and pensioners. But then you get some foods that are GST free, such as fresh fruit and vegetables, meat, chicken and fish, butter and margarine, milk, bread, tea and coffee, canned food and soups. So what happens if someone walks into a supermarket and says, `Has this got GST on it or not?' There is no way of knowing because some items will have GST on them and some items will not.Other items which have GST on them include furniture, carpets, curtains, light fittings, kitchenware, linen, gardening equipment and—here is a beauty—pharmaceuticals. If it is an over-the-counter medication, then it will have GST on it. But if it is a prescription pharmaceutical, it will not have GST on it. However, if a pain relief tablet has one active ingredient then it will be GST free, but if it has more than one active ingredient it will have GST on it. Panadol has one active ingredient, so it will be GST free. But Panadeine, if you have a really bad headache, will have GST on it. And I think most Australians will have a really bad headache from 1 July next year because that is when they have an appointment with the dentist.All Australians have an appointment with the dentist from 1 July next year. As you know, if you do have an appointment with the dentist, the last thing you need is for people to remind you that in seven or eight months you have an appointment. Well, we will be reminding the Australian people but, more importantly, everyone who puts advertisements on TV every day saying, `Get in before the GST,' are reminding Australians that they have an appointment with the dentist from 1 July next year. That goes for every advertisement that goes into a letterbox and every radio ad. And the government is doing the work itself by coming into this parliament and tabling more and more amendments. We are now up to 1,026 amendments. The millennial man has achieved the milestone before the millennium. The first set of amendments arising from the grubby deal between the Democrats and government total 302. At the last sitting of this session of parliament another 454 amendments were introduced and passed through the House of Representatives, still to be debated in the Senate. Until yesterday there were 151, but the Parliamentary Secretary to the Minister for Finance and Administration very proudly boasted, `Oh, well, we've got another 119 amendments,' taking the grand total to 1,026 amendments.We say quite reasonably and quite rightly that people will not know whether the GST is on a particular product or not. By law, the shop owner does not have to tell them. This was the key criticism that the Treasurer launched against the wholesale sales tax and against Labor's position before the last election saying, `We've got to simplify this.' But it is not simplified; it is a dog's breakfast, it is a nightmare and it is an appointment with the dentist that is going to be kept, unfortunately and sadly, by low income earners, pensioners and all Australians from 1 July next year. (Time expired)Debate interrupted.Miscellaneous1264012:04:0012640Slipper, Peter, MPMr SLIPPER0V5FisherLP10—It is with a great deal of pleasure that I present the Mid-Year Economic and Fiscal Outlook 1999-2000 statement by the Treasurer and the Minister for Finance and Administration, pursuant to the Charter of Budget Honesty legislation.Bills12640r95012640Consideration resumed.12:05:0012640Rudd, Kevin, MPMr RUDD83TGriffithALP00—One of the great things about being in the House of Representatives is that you get to see first-hand the disparity between the looks on the faces of those who sit on the government front bench and the looks on the faces of those who sit on those benches behind them. What we have seen most particularly in the debate on the consumption tax is the disparity between the look of triumph on the face of the Treasurer as he explains to the parliament and the nation the great virtues of this tax as opposed to the look of mounting despair on the faces of those who sit behind him. In fact, the greater the triumphalism on the face and in the manner of the Treasurer as he struts and frets his hour upon the stage in this chamber, the greater the mounting levels of despair on the faces of those who sit behind him as they see their respective political careers going down the political gurgler.The reality is simply this: each of our electorate offices right across this country is now being inundated with calls from small business, pensioners, community organisations and charitable organisations about the massive compliance costs which this dog of a tax, this dog's breakfast of a tax, is about to visit upon the nation. If government backbenchers were in fact welcoming of this new tax, I would think they—as the local members for Moreton, Petrie, Herbert, Leichhardt and Hinkler—would be putting press releases into their local newspapers announcing the day and saying, `We are ecstatic about the arrival of this tax.' But, surprisingly, in my part of Brisbane I have not seen any such press releases. In fact, there has been a predisposition, I would suggest, to not engage in this discussion.83VEMERSONMr Emerson—And they won't speak on this in parliament.83TRudd, Kevin, MPMr RUDD—As the member for Rankin has just pointed out, in this debate today we do not see a large number of those opposite leaping to their feet defending, on their one and three per cent margins, the enormous benefits that this tax is about to deliver to their respective electorates. Of course, the reason is that they know that the political consequences of the introduction of this tax are disastrous for all of them. In fact, as the member for Hotham, the Deputy Leader of the Opposition, pointed out before, so proud are they of this tax, so welcoming of it are they, that they are in fact leaping to their feet to join us in support of the Deputy Leader of the Opposition's amendment that the tax be recorded on dockets issued at the supermarket. But maybe I have that wrong. Perhaps in fact their level of cowardice on this question is reflected by the fact that the chamber is so empty as we participate in this debate right now. The political hardheads opposite know that this tax is political poison. Of course, we as members of parliament can all encourage and support political courage when it is linked to right policy and good policy when there are political consequences and political costs to be paid. But the great tragedy of this entire exercise is that we are engaging in a debate about a taxation change in the country when the taxation change being proposed is in fact bad policy. It is bad policy because it is bad for economic growth. It is bad policy because it is bad for equity. It is bad policy because it imposes an enormous compliance cost. It fails all the normal public policy tests. So what we have is this extraordinary situation where a political cost is going to be paid at a huge level in the electorates of those represented opposite, all in pursuit of a policy that will deliver no substantial economic good to the nation as a whole and that will deliver substantial negative equity as far as its social consequences are concerned.The compliance implications of this tax change are enormous. The government at present is supposedly engaged in an education campaign, particularly targeted at small businesses across Australia to make them familiar with the new implications which flow from this tax. One of the problems that the government faces is that the ATO does not have enough staff. We have all seen the ads and the newspaper articles about the fact that the ATO cannot recruit enough staff. Why? Because the big five and all the other accounting firms around the country are taking all the relevant qualified professionals into their own offices in order to staff them to cope with the compliance costs that business is going to have to bear. The big winners, of course, are the accounting firms, the big five in this country, not individual businesses.DT4CREANMr Crean—Small businesses will have to pay.83TRudd, Kevin, MPMr RUDD—Absolutely. ATO staff are also not competent to provide these briefings. ATO staff in their briefings are saying, `We don't have enough determinations yet to answer your specific questions,' whether they be in relation to the training industry, to health services or to the responsibilities of agents to remit taxes to the ATO. In fact, I have a small businessman in my electorate who produces and sells ice to the frozen food industry in Queensland and he cannot get a determination as to whether that is GST exempt or not. (Time expired)12:10:0012641Secker, Patrick, MPMr SECKER848BarkerLP10—One of the greatest complaints of the opposition suggests that what we have at the moment will be a nightmare for business. I will tell you what happens with the current tax system, the one that the Labor Party supports. This requires a small or medium manufacturing employer, for example, to make in the space of 12 months at least 12 payments of tax instalments on behalf of employees, four income tax payments, 12 sales tax payments and, perhaps, four fringe benefits tax payments. That is 32 separate interactions with the Taxation Office, plus income tax and fringe benefits returns as well as other obligations, for example, lodging group certificates. Under our proposal, we will have one double sided page, which will be reported on four times a year. Compare that with the 32 under the present nightmare system of Labor's wholesale sales tax system and you certainly have a much simpler system. So to get up here in this parliament and suggest that it is a nightmare of compliance is absolute nonsense. It seems to be, when we look at streamlining business and registration report ing, that under the present system, Labor's system, we have 12 taxes that businesses have to comply with. There is provisional tax, company tax, PAYE tax, PPS, RPS, mining withholding tax, natural resources payments, farm management deposits, film industry withdrawals, no TFN withholding and non-resident dividend interest royalties. That is 12 under Labor's present wholesale sales tax system. We will replace it with five much simpler taxes: pay as you go; GST; luxury car tax, which I am sure the Labor Party would support; wine equalisation tax, which certainly makes our wine industry more competitive not only in exports but also locally—because, as I said in my speech yesterday, the wine industry will be far better off than they are presently, especially with cellar door sales—and FBT instalments, which are no different from the present system. One of the greatest complaints from the Labor Party opposite is that of compliance costs. As anyone with any sense of understanding of the tax system would know, for every exemption there is a compliance cost. For instance, we have exemptions for medical, education, financial transactions, food and things like WET. Those exemptions do cause compliance costs. But what is the alternative? The alternative is not to have an exemption for medical, and I do not think those opposite would support that. The alternative is not to have exemptions for education, financial transactions or food. If those opposite had been prepared to sit at the table with us on a reasonable basis, then we might have been able to make the system simpler than it is. Unfortunately, the party opposite decided to be purely political and say no.As we know, Labor's record on tax is appalling. They dropped the car wholesale sales tax from 20 per cent down to 15 per cent before the 1993 election to match the Fightback 15 per cent GST proposal. What happened after the election? They raised it back to 20 per cent. What about other wholesale sales taxes? Without warning, they increased the wholesale sales tax, firstly to 21 per cent and then to 22 per cent, and for those items taxed at 30 per cent they increased it to 31 per cent and then to 32 per cent. Did they go to an election and warn the voters? No. Did they give any compensation for those increases to the poor or to those on fixed incomes? No. Did they deliver their promised l-a-w tax cuts? No. So the Labor Party's record on tax is appalling—no warning, no compensation and no delivery of l-a-w tax cuts.I as a backbencher am proud to support this system. Throughout my electorate I get a lot of support for this system. The people know it is a better system and I am sure those opposite know it is a better system, but all they want to do is play party politics. That is a shame, because this country is a lot worse off because of it.12:15:0012642Cox, David, MPMr COX83UKingstonALP00—The necessity for the A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 again exposes the totally fraudulent claim by the Howard government that a GST means a simpler tax system. There have already been 756 amendments to the new indirect tax system legislation since it was passed less than six months ago, and this bill adds a further 151. That is a total of 907 amendments. I understand that, immediately following the divisions on this legislation, a further 119 amendments will be introduced, which will take the total to 1,026.DT4CREANMr Crean—I am glad it's a simple system!83UCox, David, MPMr COX—There is nothing simple about this system. That is part of the transitional cost of getting from one system to another. No matter how brilliant the Commonwealth Treasurer thinks he is, he could never have contemplated every possible implication of the GST for the way Australians do business. What seemed simple in concept has in reality turned out to be very complex. These amendments will by no means be the last. They are just the last GST amendments that will be made before the year 2000. I am prepared to predict that there will be another 2,000 amendments to the GST in the year 2000. Each time there is another crop of GST bills, regulations and explanatory memorandums, the member for Rankin weighs and measures them.Mr Emerson interjecting—83UCox, David, MPMr COX—He tells me it is 5.1 kilograms.83VEMERSONMr Emerson—And getting heavier.83UCox, David, MPMr COX—Heavier than Anna Burke's baby! Remember there will be about 1.4 million taxpayers doing the book work to comply with all these laws, which is a lot more than the 70,000 who had to comply with the wholesale sales tax. One of the problems of all these changes is that it is making it even harder for businesses to prepare for the GST. Accountants are finding it difficult to advise their clients, when so much of the detail of the new indirect tax system is up in the air.Deficiencies in the legislation will continue to be identified both before and after the date of its introduction. I am being constantly told that the ATO is not able to advise clients on much of the detail. Some of the stories about other jurisdictions where a GST has been introduced are instructive. The tax authorities may take several years to work out how to administer the legislation. Some of it will depend on interpretations of the law by the courts. Businesses may find that they are facing tax office audits several years down the track and being penalised for acting in a manner which the ATO had been unable to advise them was non-compliant at the time the actions were being taken.The Treasurer used to criticise the old indirect tax system because it had a number of different ways of treating various products. He said that this would all be replaced by a simple 10 per cent GST. The degree of complexity with the GST has reached a similar situation, and now there are: GST free, input taxed, five per cent GST on caravan park sites, 10 per cent GST, wine equalisation tax, luxury car tax, per stick tobacco excise, beer excise, spirits excise, fuel excise, taxed and untaxed food, high rollers casino concession and premium Olympics tickets tax as distinguished from the ordinary Olympics tickets, which are untaxed—same product, different tax rates. No wonder Treasurer Costello is adamant he does not want the amount of GST paid to appear on sales dockets and invoices. He persists with the fiction that the GST is simple and everyone will know what they are paying in tax in each transaction. The truth is, when it comes in, they do not want people to be reminded that it is even there, let alone reminded how much they will be paying. Question put: That the amendment (Mr Crean's ) be agreed to.12:23:00The House divided. (Mr Deputy Speaker—Mr F.W. Mossfield)59Mr AdamsMr AlbaneseMr AndrenMr BevisMr BreretonMs BurkeMr ByrneMr CoxMr CreanMrs CrosioMr DanbyMr EdwardsDr EmersonMr L. D. T. FergusonMr M. J. FergusonMr FitzgibbonMs GerickMr GibbonsMs GillardMr GriffinMs HallMr HattonMs HoareMr HollisMr HorneMrs IrwinMr JenkinsMr KerrMr LathamDr LawrenceMr LeeMs LivermoreMr McClellandMs J. S. McFarlaneMs MacklinMr McLeayMr McMullanMr MartinMr MelhamMr MorrisMr MurphyMs O'ByrneMr O'KeefeMs PlibersekMr PriceMr QuickMr RipollMs RoxonMr RuddMr Sawford*Mr SciaccaMr Sercombe*Mr SidebottomMr SmithMr SnowdonMr TannerMr WilkieMr WiltonMr Zahra75Mr AbbottMr AndersonMr K. J. AndrewsMr AnthonyFran BaileyMr BairdMr BarresiMr BartlettMr BillsonMrs B. K. BishopMs J. I. BishopMr BroughMr CadmanMr CameronMr CausleyMr CharlesMr DownerMrs DraperMrs ElsonMr EntschMr FaheyMr FischerMr Forrest*Mrs GallusMs GambaroMrs GashMr GeorgiouMr HaaseMr HardgraveMr HawkerMr 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 TrussMr TuckeyMr M. A. J. VaileMrs D. S. ValeMr WakelinDr WasherMr WilliamsDr WooldridgeMs WorthMr HowardMr BeazleyMr ProsserMs Kernot* denotes tellerQuestion so resolved in the negative.12:28:0012644Crean, Simon, MPMr CREANDT4HothamALP00—by leave—I move opposition amendments (2) and (3):(2) Schedule 1, Part 1, page 20 (after line 17), after item 45, insert:45A Subsection 126-10(1)Omit after the words from and including " total monetary prizes is the sum of:" to and including "(whether or not the supplies takes place during the tax period).", substitute: total monetary prizes is the sum of *monetary prizes you are liable to pay, during the tax period, on the outcome of *gambling events (whether or not any of those gambling events, or the *gambling supplies to which the monetary prizes relate, took place during the tax period).(3) Schedule 1, part 1, page 20 (after line 17), after item 45, insert:45B Section 126-32 Repeal the section.These are the high-roller amendments. The reason they are moved is that, under the A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 , the high rollers will have their tax paid by the casinos which, in turn, will get a full credit. What is fair about that?Contrast that with the Prime Minister's unction in relation to the Olympics tickets. We thank him for that unction because he managed to put the GST back on the front page of the papers, particularly in Sydney. He said he was doing it because wealthy people could afford to pay the tax. If that is the case, why did the government move a special provision to their GST bill to exempt high rollers in casinos? That is what they have done and that is what this amendment seeks to turn around.The circumstances pertaining to high rollers are that their limousines, accommodation, entertainment, meals and all other expenses are picked up by the casinos. There is no GST for the high roller; this is all picked up by the casinos. In addition, they get the special GST-free high rollers' rebate from the casino. The proposition that the government moved was to exempt them from that tax, whereas ordinary punters in this country have to pay the GST on almost everything they buy. If they are taking a holiday to one of the casinos around the country for the weekend or for a week, they have to pay the GST on their travel, the GST on their accommodation, the GST on their taxis, the GST on their entertainment and the GST on their meals. What is fair about that?This issue has come to the fore again because of the Olympics tickets exercise. This was John Howard thinking he was able to soak the rich. He will soak the rich when it suits him, but when he is confronted with the anomalies in his own tax base he will not lift a finger to change them. In addition to that, what is his notion of rich these days? It is very interesting, because in the last election he said that people on $50,000 were not rich, yet the new tax he has put on people to pay for our troops in Timor is going to slug people on $50,000. This Prime Minister is so hypocritical, so unctuous, that he does not understand why people refer to his inconsistency. The GST is fundamentally an unfair tax as well as being a nightmare to administer. There has been lots of pretence on the other side of the House about how simple it is but every time they get up to give an answer you realise how much more complex the GST will be. We are giving the government a chance to make the GST a little fairer. That is what they say some of their amendments do today. I have moved an amendment to bring the GST legislation back to where it started, without the special concessions for the high rollers but in the context of the Prime Minister's parading last week on the Olympic tickets, when he said that he was going to renege on a promise about GST exemption and have it now apply to the elite tickets group.If it is consistent to do it there, why not apply the same standards in relation to the high rollers? This has exposed the hypocrisy of this government. It will bend over backwards to make special exemptions, special provisions, for the high rollers and yet slug the punters. This amendment is about exposing that hypocrisy as much as it is about trying to get some fairness—to the extent to which that is possible—back into the government tax package. That package is riddled with inconsistency and it is riddled with unfairness, so let us get some consistency back and also try and engender a bit of fairness. Anyone on that side who votes against this amendment and sits glumly behind the Prime Minister's justifications on Olympics tickets is a hypocrite. (Time expired)12:33:0012645Slipper, Peter, MPMr SLIPPER0V5FisherLP10—The government rejects these amendments moved by the Deputy Leader of the Opposition to the A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 . Claims by Labor that high rollers are exempt from the GST are simply incorrect. The goods and services tax will be applied to the value added in gambling—that is, the margin between bets taken and prices and expenses paid out—just as it applies to the value added for other goods and services. So there is a consistency with respect to the government's approach to this.The goods and services tax will also apply to accommodation, meals, drinks and other matters that the so-called high roller pays for. Labor's policy is not to tax any service provided to high rollers. There is simply no connection between the liability for goods and services tax on premium Olympics tickets and the tax treatment of gambling. There is no GST exemption or special concessions to casinos or gambling high rollers. The so-called high-roller amendment to the GST bill merely ensured that if discounts were provided to gamblers then the GST applied to the discounted price, just as the GST applies to the discounted price where discounts apply to the price of other goods and services.The government's amendment provided no monetary benefit to casinos or high rollers and made no distinction among various kinds of gamblers. Casinos will be required to charge goods and services tax on goods and services sold to all gamblers. The honourable member for Hotham continues to chant that the GST is unfair. It is a very important reform for which the Australian people voted. We abolished the wholesale sales tax and many other taxes, with dramatic reductions in personal income tax and compensation for those on benefits and for retirees. It is fair and it is an appropriate tax as we approach the next millennium, and the government is very pleased to reject the amendments proposed by the Deputy Leader of the Opposition.12:36:0012645Emerson, Craig, MPMr EMERSON83VRankinALP00—I second the amendment put forward by the Deputy Leader of the Opposition to the A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 . It seems to me that the Prime Minister and the Treasurer have received a report from their pollster, Mr Mark Textor, and that report would have indicated that the government has all but lost the Howard battlers. They are deserting the government in droves because of the GST. His response to that was, `Oh well, I better come out and condemn extraordinary rises in executive salaries.' He did that, so there was a little bit of empty rhetoric there.Then he said, `Oh, and another thing I will do to show the Howard battlers I am really not in the pockets of the rich is apply a GST on Olympics tickets for the rich.' And then he said, `Another thing is that we will have this Timor tax and that will apply to people earning more than $50,000. That will be good for the Howard battlers; they may think I am pretty good on that.' So we are saying now, continue along the line of trying to be fair and actually repeal the high rollers' amendment.Now remember that the high rollers' amendment was a direct result of the grubby deal between the government and the Democrats. And just as we see no marginal members from the coalition here talking to this legislation, so it is true that members of the Senate are ducking and weaving and running away when it comes to the GST, and specifically to the high rollers' amendment.Coalition members of the Senate are ducking and weaving and running away, and so are the Democrats. I refer in particular to an exchange in the Senate that occurred on 23 September when Senator Conroy spoke about the high rollers' amendment:This is an individual who improved the bottom line of Crown Casino when she—and he is talking about Senator Allison—walked out of the chamber to allow passage of some of the worst amendments you will ever see.Senator Conroy said:They were called the GST high-roller amendments. When the five chicken Democrats walked out, they gave the government the numbers to pass the high-roller amendments—And so the amendments were passed.Senator Allison said in response to that:Mr Acting Deputy President, I rise on a point of order. Senator Conroy is misrepresenting my position. I did not walk out of the chamber; I did vote on that occasion.I have the record of voting and it does, in fact, have two Democrat senators voting against the high roller amendment—Senators Bartlett and Stott Despoja—but nowhere for the ayes or the noes is Senator Allison be cause she did do the chicken walk, she did leave the chamber so that she would not be pinned with the high roller amendment. She and her colleagues and this government are being pinned with the high roller amendment.Consider this for a moment, Mr Deputy Speaker: the wealthy, the high rollers, get this tax break from the GST, but imagine a punter going to an RSL club or to a service club to have a game of bingo and a couple of drinks and something to eat. The club will be subject to the GST on the margin—that is, for the bingo game, the difference between what is collected and what is paid out will be subject to GST. So the punters will bear the consequences of the GST if they have a game of bingo. Then there will be GST if they stay on for lunch at the bistro, if they have a bit of chook and peas and mashed potato and gravy. That will have GST on it. And then, of course, if they have a couple of drinks that will have GST on it as well. But do not worry about the high rollers because they are exempt from all that.Finally, if they arrive at or leave the RSL club by bus, by train or by taxi they will pay GST on that. So their whole day out will be a day when Peter Costello has his hands in their pockets. But the high rollers will run around the place, will jet into the place, will get all the services laid upon them, and they will get those GST free. There is nothing fair about this government.Mark Textor's report is right but the government's response is wrong. They can rectify that by agreeing with what we are saying today: get rid of that high-roller amendment that was put through the Senate by the chicken Democrats who walked out. Get some fairness back into this system in Australia so that ordinary Australians get a fair go. The Howard battlers are already coming our way in droves and they will be coming our way in droves at the next election. They are gone. The Howard government has lost all those people and it is worried about it because the marginal members are not here to defend the GST. (Time expired)12:41:0012646Rudd, Kevin, MPMr RUDD83TGriffithALP00—This amendment goes to the heart of the inequity of the goods and services tax proposal which is before the parliament. This is a proposal in which the government is seeking to defend and uphold the rights of high rollers—that is, those people who have the money to put $75,000 down on the table in an evening—while at the same time ignoring the rights, requirements and the needs of average, working Australian families. Let us never forget in this whole debate and all the rhetoric associated with it that this goods and services tax is the Robin Hood tax in reverse. This is the tax that robs from the poor in order to give to the rich. It is a wealth redistribution tax, a tax which takes from the poor in order to supplement the lifestyle, including the highrolling lifestyle, of the rich. It has failed every equity test which has been set for it—through the multiple Senate inquiries which have been held as well as the commentary which has been in the public media since this debate began earlier this year.The goods and services tax not only fails the equity test, it also fails the growth test. Not once have we been able to have convincing testimony—either from the Treasury, its officers or its advisers—which underpins a proposition that if you bring in this tax it is going to significantly augment the economic growth which would occur anyway in this economy in the absence of the tax. It fails the growth test. If it is worth inflicting all this equity pain on the Australian community, then surely you should be able to demonstrate to us that the economy is going to grow by a quantum way in excess of what it would normally grow by in order to cop this pain. But not once have we had effective testimony from Treasury officers, or from the Treasurer himself, to that effect.The other test which it fails beyond equity and beyond economic growth is simply this: it fails the compliance test. This tax is a compliance nightmare, as those opposite well and truly know. We already have countless stories coming out through our electorate officers and through the various briefings which the Australian Taxation Office is holding across the country at the moment about the compliance and implementation problems which this tax is creating right across the country. For example, in the train ing industry we do not yet have a determination from the minister as to which types of courses are going to be GST exempt as opposed to those which will have the GST levied on them. We are told that this is subject to a ministerial determination. Yet those who are engaged in this industry, when approaching the ATO for clarity in terms of what that determination might be, are simply told, `You will have to wait; it will be some time coming yet.' If you are engaged in that industry it is simply unsustainable to plan ahead in terms of your business development when six months down the track you do not know which courses you will be providing will be subject to the GST as opposed to those which will not.In health services, we have been told uniformly by those opposite that health services will be GST free. However, on one reading of the bill before the parliament, GST-free services apply to persons who provide health related services, but there is some ambiguity as to whether or not GST is charged when health or paramedical services are provided by companies, that is, companies which employ medicos, physios and various other staff engaged in, for example, injury management. It is very important, under these circumstances, that we have clarity. I am advised by people engaged in this particular industry that the act as it stands is unclear. Up until now, the Australian Taxation Office has not provided a clear determination as to what is in and what is out.Furthermore, if you look at tourism, which is of vital employment significance in the state of Queensland— the state from which the Parliamentary Secretary to the Minister for Finance and Administration, who is at the table, also comes—we still have a lack of clarity as to whether travel agents or airlines are ultimately responsible for the remitting of the GST to the Australian Taxation Office. There is a lack of clarity. We have advice from one set of tax experts that it is this way; from another set of tax experts we have advice that it is another way.The bottom line is that the tax fails these various tests of equity, of growth and of compliance. This has been described by the Deputy Leader of the Opposition as a dog's breakfast. In fact, it is a dog of a tax. It has fleas all over it. My prediction for those opposite is that they will take the bath of the century when this thing is put to the test at the next election. It is a tax which goes to the heart of increasing the level of inequity in this country, it goes to the heart of whether we are capable of growing the economy in the future in this country, and it goes to the heart of whether we are going to add to rather than detract from the level of compliance burdens which business already faces in dealing with the Taxation Office. (Time expired) Question put: That the amendments (Mr Crean's ) be agreed to.12:50:00The House divided. (Madam Deputy Speaker—Mrs D.M. Kelly)61Mr AdamsMr AlbaneseMr AndrenMr BevisMr BreretonMs BurkeMr ByrneMr CoxMr CreanMrs CrosioMr DanbyMr EdwardsDr EmersonMr M. J. EvansMr L. D. T. FergusonMr M. J. FergusonMr FitzgibbonMs GerickMr GibbonsMs GillardMr GriffinMs HallMr HattonMs HoareMr HollisMr HorneMrs IrwinMr JenkinsMr KerrMr LathamDr LawrenceMr LeeMs LivermoreMr McClellandMs J. S. McFarlaneMs MacklinMr McLeayMr McMullanMr MartinMr MelhamMr MorrisMr MurphyMs O'ByrneMr O'KeefeMs PlibersekMr PriceMr QuickMr RipollMs RoxonMr RuddMr Sawford*Mr SciaccaMr Sercombe*Mr SidebottomMr SmithMr SnowdonMr SwanMr TannerMr WilkieMr WiltonMr Zahra74Mr AbbottMr AndersonMr K. J. AndrewsMr AnthonyFran BaileyMr BairdMr BarresiMr BartlettMr BillsonMrs B. K. BishopMs J. I. BishopMr BroughMr CadmanMr CameronMr CausleyMr CharlesMr CostelloMr DownerMrs DraperMrs ElsonMr EntschMr FaheyMr FischerMr Forrest*Mrs GallusMs GambaroMrs GashMr GeorgiouMr HaaseMr HardgraveMr HawkerMr HockeyMrs HullMr JullMr KatterJackie KellyDr KempMr LawlerMr LiebermanMr LindsayMr LloydMr McArthur*Mr I. E. MacfarlaneMr McGauranMrs MayMr MooreMrs MoylanMr NairnMr NehlDr NelsonMr NevilleMr NugentMr PyneMr RonaldsonMr RuddockMr St ClairMr SchultzMr ScottMr SeckerMr SlipperMr SomlyayDr SouthcottDr StoneMrs SullivanMr C. P. ThompsonMr TrussMr TuckeyMr M. A. J. VaileMrs D. S. ValeMr WakelinDr WasherMr WilliamsDr WooldridgeMs WorthMr HowardMr BeazleyMr ProsserMs Kernot* denotes tellerQuestion so resolved in the negative.12:56:0012648Slipper, Peter, MPMr SLIPPER0V5FisherLP10—by leave—I move: (1) Clause 2, page 2 (after line 28), after subclause (7), insert:Schedule 4B—Diesel Fuel Rebate Scheme(7A) Schedule 4B commences immediately after the commencement of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 .(2) Clause 2, page 2, (lines 30 to 32), omit subclause (8), substitute:(8) Schedules 5 and 6 (other than items 1A to 2A of Schedule 6) commence immediately after the commencement of the A New Tax System (Goods and Services Tax) Act 1999 .(9) Items 1A to 2A of Schedule 6 commence immediately after the commencement of Schedule 3 to the A New Tax System (Indirect Tax and Consequential Amendments) Act 1999 .(3) Schedule 1, page 4 (after line 4), before item 1, insert:1A After subsection 9-15(2)Insert:(2A) It does not matter: (a) whether the payment, act or forbearance was in compliance with an order of a court, or of a tribunal or other body that has the power to make orders; or (b) whether the payment, act or forbearance was in compliance with a settlement relating to proceedings before a court, or before a tribunal or other body that has the power to make orders.(2B) For the avoidance of doubt, the fact that the supplier is a body of which the *recipient of the supply is a member, or that the supplier is a body that only makes supplies to its members, does not prevent the payment, act or forbearance from being consideration.1B Paragraph 9-15(3)(c)Omit "an *Australian government agency to another Australian government agency", substitute "a *government related entity to another government related entity".(4) Schedule 1, page 4, after proposed new item 1B, insert:1C At the end of section 9-20Add:(3) For the avoidance of doubt, the fact that activities of a body are limited to making supplies to members of the body does not prevent those activities being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b).(5) Schedule 1, item 1, page 4 (lines 5 and 6), omit the item, substitute:1 Subsections 9-30(1) and (2)Repeal the subsections, substitute:GST-free(1) A supply is GST-free if: (a) it is GST-free under Division 38 or under a provision of another Act; or (b) it is a supply of a right to receive a supply that would be GST-free under paragraph (a).Input taxed(2) A supply is input taxed if: (a) it is input taxed under Division 40 or under a provision of another Act; or (b) it is a supply of a right to receive a supply that would be input taxed under paragraph (a). Note: If a supply is input taxed, there is no entitlement to an input tax credit for the things that are acquired or imported to make the supply (see sections 11-15 and 15-10).(6) Schedule 1, item 3, page 4 (lines 10 to 12), omit the item, substitute:3 Section 9-39 (at the end of the table)Add:13 Telecommunication supplies Division 8514 Vouchers Division 100(7) Schedule 1, page 4 (after line 12), after item 3, insert:3A At the end of section 11-30Add:(5) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which a *creditable acquisition is for a *creditable purpose.(8) Schedule 1, page 4, after proposed new item 3A, insert:3B At the end of section 15-25Add:(4) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which an importation is for a *creditable purpose.(9) Schedule 1, page 4, after proposed new item 3B, insert:3C Section 17-99 (after table item 5)Insert:5A Goods applied solely to private or domestic use Division 1303D Section 17-99 (after table item 9)Insert:9A Non-profit sub-entities Division 633E Section 17-99 (after table item 12A)Insert:12B Stock on hand on becoming registered etc. Division 1373F Section 17-99 (at the end of the table)Add:16 Vouchers Division 100(10) Schedule 1, page 4, after proposed new item 3F, insert:3G Paragraph 19-40(c)Repeal the paragraph, substitute: (c) as a result of those adjustment events, the *previously attributed GST amount for the supply (if any) no longer correctly reflects the amount of GST (if any) on the supply (the corrected GST amount ), taking into account any change of circumstances that has given rise to an adjustment for the supply under this Subdivision or Division 21.(11) Schedule 1, page 4, after proposed new item 3G, insert:3H Paragraphs 19-45(b) and (c)After "this Subdivision", insert "or Division 21".(12) Schedule 1, page 4, after proposed new item 3H, insert:3I Paragraph 19-70(c)Omit "taking into account any adjustments for the acquisition", substitute "taking into account any change of circumstances that has given rise to an adjustment for the acquisition under this Subdivision or Division 21 or 129".(13) Schedule 1, page 4, after proposed new item 3I, insert:3J Paragraphs 19-75(b) and (c)After "this Subdivision", insert "or Division 21 or 129".(14) Schedule 1, page 4, after proposed new item 3J, insert:3K At the end of Division 19Add:19-99 Special rules relating to adjustment eventsChapter 4 contains special rules relating to *adjustment events in particular cases, as follows: Checklist of special rulesItem For this case . . . See1 Insurance Division 78(15) Schedule 1, page 4, after proposed new item 3K, insert:3L Paragraph 21-5(1)(c)Omit "due", substitute "*overdue".3M Subsection 21-5(1)Omit "due" (last occurring), substitute "overdue".(16) Schedule 1, page 4, after proposed new item 3M, insert:3N Paragraph 21-10(b)Omit "due", substitute "*overdue".(17) Schedule 1, page 4, after proposed new item 3N, insert:3O Paragraph 21-15(1)(b)Omit "due" (first occurring), substitute "*overdue".3P Paragraph 21-15(1)(b)Omit "due" (second occurring), substitute "overdue".3Q Paragraph 21-15(1)(c)Omit "due", substitute "overdue".3R Subsection 21-15(1)Omit "due" (last occurring), substitute "overdue".(18) Schedule 1, page 4, after proposed new item 3R, insert:3S Paragraph 21-20(b)Omit "due", substitute "*overdue".(19) Schedule 1, page 4, after proposed new item 3S, insert:3T Section 21-99 (before table item 1)Insert:1ABad debts relating to partly taxable or creditable transactionsDivision 136(20) Schedule 1, item 4, page 4 (lines 13 to 15), omit the item, substitute:4 Section 23-99 (before table item 1)Insert:1AGovernment entitiesDivision 1491BNon-profit sub-entitiesDivision 63(21) Schedule 1, page 4 (after line 18), after item 5, insert:5A Section 25-49 (after table item 1)Insert:2Non-profit sub-entitiesDivision 63(22) Schedule 1, page 4 (after line 21), after item 6, insert:6A Section 25-99 (after table item 1)Insert:1BNon-profit sub-entitiesDivision 63(23) Schedule 1, page 5 (after line 19), after item 13, insert:13A Section 37-1 (after table item 3)Insert:3ABad debts relating to partly taxable or creditable transactionsDivision 136(24) Schedule 1, item 14, page 5 (lines 20 to 22), omit the item, substitute:14 Section 37-1 (after table item 12)Insert:12AGoods applied solely to private or domestic useDivision 13012BGovernment entitiesDivision 14914A Section 37-1 (after table item 20)Insert:20ANon-profit sub-entitiesDivision 6314B Section 37-1 (after table item 29)Insert:29AStock on hand on becoming registered etc.Division 137(25) Schedule 1, page 5 (after line 25), after item 15, insert:15A Section 37-1 (at the end of the table)Add:38VouchersDivision 100(26) Schedule 1, page 5, after proposed new item 15A, insert:15B Paragraph 38-7(2)(a)Omit "and (f)", substitute ", (f) and (g)".(27) Schedule 1, page 5, after proposed new item 15B, insert:15C At the end of section 38-190Add:(3) Without limiting subsection (2), a supply covered by item 2 in that table is not GST-free if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with a *non-resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity in Australia.(28) Schedule 1, page 6 (after line 9), after item 16, insert:16A Subsection 38-475(1)Repeal the subsection, substitute:(1) The supply of a freehold interest in, or the *long term lease of, *potential residential land is GST-free if: (a) the land is subdivided from land on which a *farming business has been *carried on for at least 5 years; and (b) the supply is made to an *associate of the supplier of the land without *consideration or for consideration that is less than the *GST inclusive market value of the supply.(29) Schedule 1, page 6, after proposed new item 16A, insert:16B Section 38-480Repeal the section, substitute:38-480 Farm land supplied for farmingThe supply of a freehold interest in, or the *long term lease of, land is GST-free if: (a) the land is land on which a *farming business has been *carried on for at least the period of 5 years preceding the supply; and (b) the *recipient of the supply intends that a farming business be carried on, on the land.(30) Schedule 1, page 6, after proposed new item 16B, insert: 16C At the end of Division 38Add:Subdivision 38-Q—International mail38-540 International mailA supply is GST-free if it is a supply of services to a foreign postal administration for: (a) the delivery in Australia; or (b) the transit through Australia;of postal articles mailed outside Australia.(31) Schedule 1, page 6 (after line 14), after item 18, insert:18A Subsection 42-5(1)Omit "17,", substitute "4, 8, 15,"18B After subsection 42-5(1A)Insert:(1B) An importation of goods is a non-taxable importation if the goods are covered by item 17 in Schedule 4 to the Customs Tariff Act 1995 and: (a) the importer is the manufacturer of the goods; or (b) the importer has previously acquired the goods, and the supply by means of which the importer acquired the goods was a *taxable supply (or would have been a taxable supply but for section 66-45); or (c) the importer has previously imported the goods, and the previous importation was a *taxable importation.(1C) An importation of goods is a non-taxable importation if the goods are covered by: (a) item 1A, 1B, 1C, 1D, 1E, 5, 6, 9 or 16 in Schedule 4 to the Customs Tariff Act 1995 ; and (b) regulations made for the purposes of this subsection.(32) Schedule 1, page 6, after proposed new item 18B, insert:18C Section 42-15Repeal the section.(33) Schedule 1, item 20, page 6 (line 25), omit "or acquisition", substitute ", acquisition or importation".(34) Schedule 1, item 20, page 7 (lines 1 to 5), omit subsection (2), substitute:(2) In relation to the first GST group, this section has effect despite section 48-50 (which is about who has adjustments for a GST group).(35) Schedule 1, page 7 (after line 33), after item 20, insert:20A Section 51-1Omit "other".(36) Schedule 1, page 7, after proposed new item 20A, insert:20B Paragraph 51-5(1)(d)Omit "the companies", substitute "those companies".20C Paragraph 51-5(1)(e)Repeal the paragraph, substitute: (e) the application nominates one of those companies, or another company, to be the *joint venture operator of the joint venture; and (f) if the nominated joint venture operator is not a party to the joint venture agreement—the nominated joint venture operator satisfies the requirements of paragraphs 51-10(c) and (f).(37) Schedule 1, page 7, after proposed new item 20C, insert:20D Subsections 51-30(1) and (2)Omit "another", substitute "another *company that is a".20E Paragraphs 51-30(1)(b) and (2)(b)Omit "other".(38) Schedule 1, page 7, after proposed new item 20E, insert:20F Subsection 51-35(1)Omit "another", substitute "another *company that is a".20G Paragraph 51-35(1)(b)Omit "other".(39) Schedule 1, page 7, after proposed new item 20G, insert:20H Subsection 51-40(1)Omit "another", substitute "another *company that is a".20I Paragraph 51-40(1)(a)Omit "other".20J Paragraph 51-40(1)(b)Repeal the paragraph, substitute: (b) the *company that is the joint venture operator at the time the adjustment arises had the adjustment.(40) Schedule 1, page 7, after proposed new item 20J, insert:20K Paragraph 51-45(2)(a)Omit "another", substitute "another *company that is a".20L Paragraphs 51-45(2)(b) and (c)Omit "another", substitute "another company that is a".(41) Schedule 1, page 7, after proposed new item 20L, insert:20M Paragraph 51-70(1)(c)Repeal the paragraph, substitute: (c) approve another company that satisfies the requirements of paragraphs 51-10(c) and (f) as the joint venture operator of the joint venture.20N Subsection 51-70(2)Repeal the subsection, substitute:(2) The Commissioner must revoke the approval of: (a) one of the *participants of a *GST joint venture if satisfied that the participant does not *satisfy the participation requirements of the GST joint venture; or (b) the *joint venture operator of a GST joint venture if satisfied that the operator does not satisfy the requirements of paragraphs 51-10(c) and (f). Note: Revoking under this subsection an approval under this Division is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953 ).(42) Schedule 1, page 7, after proposed new item 20N, insert:20O At the end of Division 51Add:Subdivision 51-D—Ceasing to be a participant in, or an operator of, a GST joint venture51-110 Adjustments after you cease to be a participant in a GST joint venture(1) If you *cease to be a participant in a GST joint venture, any *adjustment that arises afterwards in relation to a supply, acquisition or importation that the *joint venture operator made on your behalf in the course of activities for which the joint venture was entered into (other than a supply covered by subsection 51-30(2)): (a) is an adjustment that you have; and (b) is not an adjustment of the *company that is or was the joint venture operator. (2) This section has effect despite section 51-40 (which is about who has adjustments for a GST joint venture).51-115 Changes in extent of creditable purpose after you cease to be a member of a GST joint venture(1) If: (a) while you were a *participant in a *GST joint venture, you acquired or imported a thing by the joint venture operator acquiring or importing it on your behalf; and (b) you *cease to be a participant in the GST joint venture;then, when applying section 129-40 for the first time after that cessation, the *intended or former application of the thing is the extent of *creditable purpose last used to work out: (c) under section 51-35, the amount of the input tax credit to which the *joint venture operator was entitled for the acquisition or importation; or (d) under section 51-40, the amount of any *adjustment the joint venture operator had under Division 129 in relation to the acquisition or importation.(2) If: (a) while you were a *participant in a *GST joint venture, you acquired or imported a thing by the joint venture operator acquiring or importing it on your behalf; and (b) you have *ceased to be a participant in the GST joint venture; and (c) you have an *adjustment under Division 129 in relation to the acquisition or importation;then, for the purposes of working out the full input tax credit in section 129-70 or 129-75, you are taken not to have been a participant of a GST joint venture when you acquired or imported the thing.(43) Schedule 1, page 7, after proposed new item 20O, insert:20P After Division 60Insert:Division 63—Non-profit sub-entities63-1 What this Division is aboutSome kinds of non-profit entities may choose to have some (or all) of their separately identifiable branches treated as separate entities for GST purposes.Note: The parent entities then cease to be responsible, for GST purposes, for these branches. (By way of contrast, parent entities would remain responsible for their branches if they registered them under Division 54.)63-5 Entities that may choose to apply this Division(1) An entity may choose to apply this Division.(2) However, the entity must be *registered and must be: (a) a charitable institution, a trustee of a charitable fund or a *gift-deductible entity; or (b) a non-profit body that is exempt from income tax under any of these provisions of the *ITAA 1997: (i) section 50-5 (charity, education, science and religion); (ii) section 50-10 (community service); (iii) section 50-15 (employees and employers); (iv) section 50-40 (primary and secondary resources, and tourism); (v) item 9.1 or 9.2 of section 50-45 (sports, culture and recreation).63-10 Period for which a choice has effect(1) The choice has effect from the time the entity makes the choice.(2) The choice ceases to have effect if: (a) the entity revokes the choice; or (b) the entity ceases to meet the requirements of subsection 63-5(2).(3) However, the entity: (a) cannot revoke the choice within 12 months after the day on which the entity made the choice; and (b) cannot make a further choice within 12 months after the day on which the entity revoked a previous choice.63-15 Consequences of choosing to apply this Division(1) While the choice has effect, any branch of the entity is treated, for the purposes of the *GST law (other than sections 63-5 and 63-10 and this section), as an entity if that branch: (a) maintains an independent system of accounting; and (b) can be separately identified by reference to: (i) the nature of the activities carried on through the branch; or (ii) the location of the branch; and (c) is referred to in the entity's records to the effect that it is to be treated as a separate entity for the purposes of the GST law.(2) The branch's treatment as an entity ceases if: (a) the choice ceases to have effect; or (b) the branch ceases to meet the requirements of paragraphs (1)(a), (b) and (c).However, if the branch is *registered, its treatment as an entity continues until its registration is cancelled.(3) At all times during its treatment as an entity, the branch is a non-profit sub-entity .63-20 Non-profit sub-entities may register(1) A *non-profit sub-entity may apply to be *registered under section 23-10 even if it is not *carrying on an *enterprise and is not intending to carry on an enterprise.(2) The Commissioner must *register the *non-profit sub-entity whether or not the Commissioner is satisfied that it is *carrying on an *enterprise or intending to carry on an enterprise.(3) This section has effect despite section 23-10 (which is about who may be registered) and section 25-5 (which is about when the Commissioner must register an entity).63-25 Registration turnover threshold for non-profit sub-entities(1) The registration turnover threshold for a *non-profit sub-entity is: (a) $50,000; or (b) such higher amount as the regulations specify.(2) This section has effect despite section 23-15 (which is about registration turnover thresholds).63-30 When non-profit sub-entities must apply for cancellation of registration(1) If a *non-profit sub-entity is *registered and it does not meet the requirements of paragraphs 63-15(1)(a), (b) and (c), it must apply to the Commissioner in the *approved form for cancellation of its *registration. It must lodge the application within 21 days after the day on which it ceased to meet those requirements.(2) Section 25-50 (which is about cancelling registration) does not apply to *non-profit sub-entities.63-35 When the Commissioner must cancel registration of non-profit sub-entities(1) The Commissioner must cancel *registration of a *non-profit sub-entity (even if it has not applied for cancellation of the registration) if the Commissioner is satisfied that the sub-entity does not meet the requirements of paragraphs 63-15(1)(a), (b) and (c). Note: Cancelling registration under this subsection is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953 ).(2) The Commissioner must notify the sub-entity if the Commissioner decides to cancel its registration. The notice must specify the date of effect of the cancellation.(3) Subsection 25-55(2) (which is about cancelling registration) does not apply to *non-profit sub-entities.63-40 Effect on adjustments of becoming a non-profit sub-entity(1) If a branch of an entity becomes a *non-profit sub-entity, any *adjustment arising afterwards in relation to a supply, acquisition or importation, made by the entity through the branch before it became a non-profit sub-entity: (a) is taken to be an adjustment that the non-profit sub-entity has, as if the non-profit sub-entity had made the supply, acquisition or importation; and (b) is not taken to be an adjustment that the entity has.(2) For the purpose of applying subsection (1) to an adjustment under Division 129 relating to a thing acquired or imported before the branch became a *non-profit sub-entity, that Division applies as if: (a) the extent to which the acquisition or importation of the thing was for a *creditable purpose were the extent to which the non-profit sub-entity acquired or imported it for a creditable purpose; and (b) the extent to which the thing has been *applied for a creditable purpose since its acquisition or importation were the extent to which the non-profit sub-entity applied it for a creditable purpose.63-45 Effect on adjustments of ceasing to be a non-profit sub-entity(1) If a branch of an entity ceases to be a *non-profit sub-entity, any *adjustment arising afterwards in relation to a supply, acquisition or importation, made by the branch while it was a non-profit sub-entity, is taken to be an adjustment that the entity has, as if the entity had made the supply, acquisition or importation.(2) For the purpose of applying subsection (1) to an adjustment under Division 129 relating to a thing acquired or imported before the branch ceased to be a *non-profit sub-entity, that Division applies as if: (a) the extent to which the acquisition or importation of the thing was for a *creditable purpose were the extent to which the entity acquired or imported it for a creditable purpose; and (b) the extent to which the thing has been *applied for a creditable purpose since its acquisition or importation were the extent to which the entity applied it for a creditable purpose.(44) Schedule 1, page 13 (after line 12), after item 30, insert:30A At the end of section 70-20Add:(3) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (2), the extent to which an acquisition is for a *creditable purpose.(45) Schedule 1, page 13, after proposed new item 30A, insert:30B At the end of section 72-5Add:(3) However, this section does not apply to any supply that is constituted by an insured entity settling a claim under an *insurance policy.(46) Schedule 1, page 13, after proposed new item 30B, insert:30C At the end of section 72-40Add:(3) However, this section does not apply to any acquisition that is constituted by an insurer settling a claim under an *insurance policy.(47) Schedule 1, page 13, after proposed new item 30C, insert:30D After subsection 75-10(3)Insert:(3A) If: (a) the circumstances specified in item 4 in the second column of the table in subsection (3) apply to the supply; and (b) there are improvements on the land or premises in question on the day on which the *taxable supply takes place;the valuation is to be made as if there are no improvements on the land or premises on that day.(48) Schedule 1, item 31, page 13 (lines 13 to 20), omit the item, substitute: 31 Section 78-1Repeal the section, substitute:78-1 What this Division is aboutStamp duty is not included in working out the GST on insurance premiums. Insurers have decreasing adjustments which enable the net GST on insurance to reflect correctly their margins after settlements of claims are taken into account.(49) Schedule 1, items 32 to 40, page 13 (line 21) to page 15 (line 14), omit the items, substitute:32 Subdivisions 78-A and 78-BRepeal the Subdivisions, substitute:Subdivision 78-A—Insurers78-5 GST on insurance premiums is exclusive of stamp duty(1) The *value of a *taxable supply of an *insurance policy is worked out as if the *price of the supply were reduced by the amount of any stamp duty payable under a *State law or *Territory law in respect of the supply.(2) This section has effect despite section 9-75 (which is about the value of taxable supplies).78-10 Decreasing adjustments for settlements of insurance claims(1) An insurer has a decreasing adjustment if, in settlement of a claim under an *insurance policy, the insurer: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply.(2) However, this section only applies if: (a) the supply of the *insurance policy by the insurer was solely or partly a *taxable supply; and (b) either: (i) there was no entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened; or (ii) there was an entitlement to such an input tax credit, but the amount of the input tax credit was less than the GST payable by the insurer for the taxable supply; and (c) the insurer settles the claim for a *creditable purpose; and (d) the insurer is *registered, or *required to be registered; and (e) the settlement does not relate solely to one or more *non-creditable insurance events.(3) An event is a non-creditable insurance event if the supply of an *insurance policy would not be a *taxable supply if it were only an insurance policy against loss, damage, injury or risk that relates to that event happening.78-15 How to work out the decreasing adjustmentsNo input tax credit for the premium(1) If there was no entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened, the amount of the decreasing adjustment is 1/11 of the *settlement amount.Partial input tax credit for the premium(2) If there was an entitlement to such an input tax credit, the amount of the decreasing adjustment is as follows:where: extent of input tax credit is the amount of the input tax credit expressed as a fraction of the GST payable for the supply of the *insurance policy for the period to which the premium relates. Note: There is no decreasing adjustment if there is a full input tax credit for the premium paid: see paragraph 78-10(2)(b).Non-creditable insurance events(3) The amount of the decreasing adjustment under subsection (1) or (2) is reduced to the extent (if any) that the settlement relates to one or more *non-creditable insurance events.Settlement amounts(4) The settlement amount is worked out using this method statement.Method statement Step 1. The sum of the payments of *money (if any) made in settlement of the claim is multiplied by the following: where: extent of input tax credit has the meaning given by subsection (2). Step 2. The *GST inclusive market value of the supplies (if any) made by the insurer in settlement of the claim (other than supplies that would have been *taxable supplies but for section 78-25) is added to the step 1 amount.Step 3. The sum of any payments of excess made to the insurer under the *insurance policy in question is subtracted from the step 2 amount.78-20 Settlements of insurance claims do not give rise to creditable acquisitions(1) If, in settlement of a claim under an *insurance policy, an insurer: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply;the payment or supply is not treated as *consideration for an acquisition made by the insurer.(2) This section has effect despite section 11-5 (which is about what is a creditable acquisition).78-25 Supplies in settlement of claims are not taxable supplies(1) A supply that an insurer makes in settlement of a claim under an *insurance policy is not a *taxable supply.(2) This section has effect despite section 9-5 (which is about what are taxable supplies).78-30 Acquisitions of goods by insurers in the course of settling claims(1) An acquisition of *goods is not a *creditable acquisition if: (a) it is solely an acquisition made by an insurer for the purpose of supplying the goods in the course of settling a claim under an *insurance policy; and (b) the supply of the insurance policy by the insurer was not a *taxable supply.(2) This section has effect despite section 11-5 (which is about what is a creditable acquisition).78-35 Taxable supplies relating to rights of subrogation(1) If, in settlement of a claim made by an insurer in the insurer's exercising of rights of subrogation in respect of an *insurance policy, an entity that is not insured under the policy: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply;the payment or supply is not treated as *consideration for a supply made by the insurer (whether or not the payment or supply is made to the insurer) or by the entity insured.(2) This section has effect despite section 9-15 (which is about consideration).78-40 Adjustment events relating to decreasing adjustments under this DivisionDivision 19 applies in relation to a *decreasing adjustment that an insurer has under this Division as if: (a) the adjustment were an input tax credit; and (b) the settlement of the claim to which the adjustment relates were a *creditable acquisition that the insurer made; and (c) any payment or supply made by another entity, in settlement of a claim made by an insurer in the insurer's exercising of rights of subrogation in respect of the *insurance policy in question, were a reduction in the *consideration for the acquisition. Subdivision 78-B—Insured entities etc.78-45 Settlements of insurance claims do not give rise to taxable supplies(1) If, in settlement of a claim under an *insurance policy, an insurer: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply;the payment or supply is not treated as *consideration for a supply made by the entity insured, or by any entity (other than the entity insured) that was entitled to an input tax credit for the premium paid for the insurance policy.(2) This section has effect despite section 9-15 (which is about consideration).78-50 Settlements of insurance claims give rise to taxable supplies if entitlement to input tax credits is not disclosed(1) However, the payment or supply is treated as *consideration for a supply made by an entity if: (a) the entity paid all or a part of the premium, for the *insurance policy, relating to the period during which the event giving rise to the claim happened; and (b) the entity was entitled to an input tax credit for the premium it paid; and (c) the entity: (i) did not, at or before the time the insurance policy was supplied, inform the insurer that the entity was entitled to an input tax credit for the premium it paid; or (ii) in informing the insurer of the entitlement at or before that time, understated its extent.It does not matter whether that entity is the entity insured, or whether the payment or supply is made to that entity or any other entity.(2) The extent to which the payment or supply is treated as *consideration is the extent of the entitlement, or the extent to which the entitlement was understated, as the case requires.(3) The supply made by the entity is a taxable supply whether or not the entity is *registered, or *required to be registered, at the time of the settlement or at the time of the payment or supply by the insurer. Note: Subdivision 78-D deals with how GST applies to the taxable supply if the insured entity is not registered, or required to be registered.(4) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-15 (which is about consideration).78-55 Payments of excess under insurance policies are not consideration for supplies(1) The making of any payment by an entity is not treated as *consideration for a supply, to the entity or any other entity, to the extent that the payment is the payment of an excess to the insurer under an *insurance policy.(2) This section has effect despite section 9-15 (which is about consideration).78-60 Supplies of goods to insurers in the course of settling claims(1) A supply of goods is not a *taxable supply if it is solely a supply made under an *insurance policy to an insurer in the course of settling a claim under the policy.(2) In working out the value of a *taxable supply that is partly a supply of goods made under an *insurance policy to an insurer in the course of settling a claim under the policy, disregard the *consideration to the extent that it relates to the supply of those goods.(3) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-75 (which is about the value of taxable supplies).(50) Schedule 1, item 41, page 15 (line 24), after "supply is", insert "not ".(51) Schedule 1, item 41, page 15 (lines 26 to 31), omit subsections (2) and (3).(52) Schedule 1, item 42, page 16 (line 3) to page 19 (line 9), omit the item, substitute:42 Subsection 78-80(1)Omit "section 78-30", substitute "section 78-50".(53) Schedule 1, page 19 (after line 9), after item 42, insert: 42A Paragraph 78-85(1)(a)Omit "section 78-30", substitute "section 78-50".(54) Schedule 1, page 19, after proposed new item 42A, insert:42B Paragraphs 78-90(1)(a) and (b)Omit "section 78-30", substitute "section 78-50".(55) Schedule 1, page 19, after proposed new item 42B, insert:42C At the end of Division 78Add:Subdivision 78-E—Statutory compensation schemes78-95 GST on premiums etc. under statutory compensation schemes is exclusive of stamp duty(1) The *value of a *taxable supply of membership of, or participation in, a *statutory compensation scheme is worked out as if the *price of the supply were reduced by the amount of any stamp duty payable under a *State law or *Territory law in respect of the supply.(2) This section has effect despite section 9-75 (which is about the value of taxable supplies).78-100 Settlements of claims for compensation under statutory compensation schemes(1) This Division applies in relation to a payment or supply made in settlement of a claim for compensation under a *statutory compensation scheme in the same way that it applies to a payment or supply made in settlement of a claim under an *insurance policy.(2) For the purposes of the application of this Division in relation to such a payment or supply: (a) the claim for compensation under the scheme is treated as a claim under an *insurance policy; and (b) the entity operating the scheme is treated as the insurer; and (c) an entity is treated as the entity insured if: (i) the entity's payment of premiums, contributions or similar payments under the scheme, or payment of levy in connection with the scheme; or (ii) the entity's liability to pay premiums, contributions or similar payments under the scheme, or liability to pay levy in connection with the scheme;enabled the claim for compensation to arise; and (d) the supply of membership of, or participation in, the scheme is treated as the supply of an *insurance policy.78-105 Meaning of statutory compensation schemeA statutory compensation scheme is a scheme or arrangement: (a) that is established by an *Australian law; and (b) under which compensation is payable for particular kinds of injury, loss or damage; and (c) that is specified in the regulations, or that is of a kind specified in the regulations.Subdivision 78-F—Miscellaneous78-110 Effect of judgments and court ordersIf: (a) in compliance with a judgment or order of a court relating to: (i) a claim under an *insurance policy; or (ii) a claim by an insurer in exercising rights of subrogation in respect of an insurance policy; or (iii) a claim for compensation under a *statutory compensation scheme;an entity makes a payment of *money, makes a supply, or makes both a payment of money and a supply; and (b) had the payment or supply been made in the absence of such a judgment or order, it would have been a payment or supply made in settlement of the claim;the payment or supply is treated as having been made in settlement of the claim.78-115 Exclusion of certain Commonwealth, State or Territory insurance schemesThis Division (other than sections 78-5 and 78-95) does not apply to an *insurance policy, or to a payment or supply made in settlement of a claim made under an insurance policy, if: (a) the policy was supplied under a scheme for insurance, or a *statutory compensation scheme, established by an *Australian law; and (b) that scheme is of a kind specified in the regulations.(56) Schedule 1, page 20 (after line 13), after item 44, insert:44A After Division 99Insert:Division 100—Vouchers100-1 What this Division is aboutA supply of a voucher for supplies up to a stated monetary value is not subject to GST. GST may still be payable on the supply for which the voucher is redeemed, and there is an increasing adjustment for unredeemed vouchers.Note: Vouchers that do not state a monetary value can be subject to GST when supplied, but the price of the voucher is excluded when working out the GST on the supply for which the voucher is redeemed (see paragraph 9-15(3)(a).100-5 Supplies of vouchers stating monetary value(1) A supply of a *voucher is not a *taxable supply if: (a) on redemption of the voucher, the holder of the voucher is entitled to supplies up to a monetary value stated on the voucher; and (b) the *consideration for supply of the voucher does not exceed that monetary value.(2) If the *consideration for supply of the voucher exceeds that monetary value, the consideration is treated (except for the purposes of this section) as if it were reduced by that monetary value.(3) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-15 (which is about consideration).100-10 Redemption of vouchers(1) The act of redeeming a *voucher is not a supply. Note: A supply for which the voucher is redeemed is still a supply.(2) Subsection (1) has effect despite section 9-10 (which is about what is a supply).(3) Paragraph 9-15(3)(a) (which is about the consideration for exercising rights or options) does not apply to a right or option that is granted by way of a *voucher if, on redemption of the voucher, the holder of the voucher is entitled to supplies up to a monetary value stated on the voucher.100-15 Increasing adjustments for unredeemed vouchers(1) You have an increasing adjustment if: (a) you supplied a *voucher for *consideration; and (b) on redemption of the voucher, the holder of the voucher was entitled to supplies up to a monetary value stated on the voucher; and (c) the voucher has not been redeemed; and (d) you have, for accounting purposes, written back to current income any reserves for the redemption of the voucher.(2) The amount of the increasing adjustment is 1/11 of the amount written back to current income.100-20 Vouchers supplied to non-residents and redeemed by others in AustraliaThis Division does not apply to a *voucher supplied to a *non-resident if, because of the application of subsection 38-190(3), the supply is not *GST-free.100-25 Meaning of voucherA voucher is any voucher, token, stamp, coupon or similar article the redemption of which in accordance with its terms entitles the holder to receive supplies in accordance with its terms. However, a postage stamp is not a voucher.(57) Schedule 1, page 20 (after line 17), after item 45, insert:45A At the end of Subdivision 129-AAdd:129-15 Adjustments do not arise under this Division where there are adjustments under Division 130Despite section 129-5, you cannot have an adjustment under this Division for an acquisition if you have already had an *adjustment under Division 130 (goods applied solely to private or domestic use) for the acquisition.(58) Schedule 1, page 20, after proposed new item 45A, insert:45B Subparagraph 129-20(1)(b)(ii)Omit "ends" (second occurring).(59) Schedule 1, page 20 (after line 27), after item 46, insert:46A At the end of section 129-40Add:(3) If the thing is acquired through a *reduced credit acquisition and, at the time of the acquisition, it was wholly for a *creditable purpose because of Division 70, the extent to which it was acquired for a creditable purpose is the reduced input tax credit percentage prescribed for the purposes of subsection 70-5(2) for an acquisition of that kind.(60) Schedule 1, page 20, after proposed new item 46A, insert:46B Section 129-80 (heading)Repeal the heading, substitute:129-80 Effect of adjustment under Division 19 or 21(61) Schedule 1, page 20, after proposed new item 46B, insert:46C After Division 129Insert:Division 130—Goods applied solely to private or domestic use130-1 What this Division is aboutYou may have an increasing adjustment if you apply solely to private or domestic use goods for which you had a full input tax credit.130-5 Goods applied solely to private or domestic use(1) You have an increasing adjustment if: (a) you made a *creditable acquisition or *creditable importation of goods; and (b) the acquisition or importation was solely for a *creditable purpose; and (c) you *apply the goods solely to private or domestic use.(2) The amount of the increasing adjustment is an amount equal to the amount of the input tax credit to which you were entitled for the acquisition or importation, taking account of any *adjustments for the acquisition or importation.(3) However, this section does not apply if you have previously had an adjustment under Division 129 for the acquisition or importation.(62) Schedule 1, page 20, after proposed new item 46C, insert:46D After Division 135Insert:Division 136—Bad debts relating to partly taxable or creditable transactions136-1 What this Division is aboutIf you have an adjustment under Division 21 for a bad debt relating to a supply that was partly taxable or an acquisition that was partly creditable, the amount of that adjustment is reduced under this Division.136-5 Adjustments relating to partly taxable suppliesIf you have an *adjustment under section 21-5 or 21-10 in relation to a supply that was partly a *taxable supply, the amount of that adjustment is reduced to the following amount:where: full adjustment is what would be the amount of the adjustment worked out under section 21-5 or 21-10 if this section did not apply. taxable proportion is the proportion of the *value of the supply (worked out as if it were solely a taxable supply) that the taxable supply represents. Example: If the amount of an adjustment under section 21-5 would be $100 but the supply was only 80% taxable, the amount of the adjustment is $80.136-10 Adjustments in relation to partly creditable acquisitions(1) If you have an *adjustment under section 21-15 or 21-20 in relation to a *creditable acquisition that was *partly creditable, the amount of that adjustment is reduced to the following amount:where: extent of consideration is the extent to which you provide, or are liable to provide, the *consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition. extent of creditable purpose is the extent of *creditable purpose last used to work out: (a) the amount of the input tax credit for the acquisition; or (b) the amount of any *adjustment under Division 129 in relation to the acquisition;expressed as a percentage of the total purpose of the acquisition. full adjustment is what would be the amount of the adjustment worked out under section 21-15 or 21-20 if this section did not apply.(2) If you have an *adjustment under section 21-15 or 21-20 in relation to a *creditable acquisition that was a *reduced credit acquisition and that was not *partly creditable (that is, it is wholly for a *creditable purpose because of Division 70), the amount of that adjustment is reduced to the following amount:where: extent of consideration is the extent to which you provide, or are liable to provide, the *consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition. percentage credit reduction is the reduced input tax credit percentage prescribed for the purposes of subsection 70-5(2) for an acquisition of that kind. full adjustment is what would be the amount of the adjustment worked out under section 21-15 or 21-20 if this section did not apply.(63) Schedule 1, page 20, after proposed new item 46D, insert:46E Before Division 138Insert:Division 137—Stock on hand on becoming registered etc.137-1 What this Division is aboutIf you become registered or required to be registered, you may have a decreasing adjustment for stock you have already acquired.137-5 Adjustments for stock on hand on becoming registered etc.(1) You have a decreasing adjustment if: (a) you become *registered or *required to be registered; and (b) at that time, you hold stock for the purpose of sale or exchange, or for use as raw materials, in *carrying on your *enterprise; and (c) you had acquired the stock solely or partly for a *creditable purpose.(2) However, this section does not apply if: (a) you were entitled to an input tax credit for the acquisition; and (b) you have not had a *increasing adjustment under Division 138 (cessation of registration) relating solely or partly to the stock.(3) The amount of the decreasing adjustment is an amount equal to what would have been the *previously attributed input tax credit amount for the acquisition if you had been *registered at the time of the acquisition.(64) Schedule 1, page 23 (after line 8), after item 50, insert: 50A Subsection 156-5(1)Omit "to one or more tax periods", substitute ", in accordance with section 29-5,".50B Subsection 156-5(2)Repeal the subsection, substitute:(2) If the progressive or periodic components of such a supply are not readily identifiable, the components correspond to the proportion of the total *consideration for the supply that the separate amounts of consideration represent.(65) Schedule 1, page 23, after proposed new item 50B, insert:50C Subsection 156-10(1)Omit "to one or more tax periods", substitute ", in accordance with section 29-10,".50D Subsection 156-10(2)Repeal the subsection, substitute:(2) If the progressive or periodic components of such an acquisition are not readily identifiable, the components correspond to the proportion of the total *consideration for the acquisition that the separate amounts of consideration represent.(66) Schedule 1, page 23, after proposed new item 50D, insert:50E After section 177-10Insert:177-12 GST implications of references to price, value etc. in other Acts(1) In any Act, unless the contrary intention appears, a reference to a *price relating to a supply, or proposed supply, is taken to include the *net GST (if any) that is, or would be, payable by an entity making the supply.(2) Subsection (1) applies in relation to: (a) any fee or charge made, or required to be made; or (b) any *consideration provided, or required to be provided;for or in connection with the supply in the same way that it applies to a *price relating to a supply.(3) In any Act, unless the contrary intention appears, a reference to the value relating to a thing is taken not to include the GST (if any) that would be payable if an entity were to make a supply of the thing.(4) This section does not apply to: (a) this Act; or (b) the Income Tax Assessment Act 1997 ; or (c) the A New Tax System (Wine Equalisation Tax) Act 1999 ; or (d) the A New Tax System (Luxury Car Tax) Act 1999 ; or (e) Schedule 1 to the Taxation Administration Act 1953 ; or (f) the Income Tax Assessment Act 1936 ; or (g) the Fringe Benefits Tax Assessment Act 1986 ; or (h) the Petroleum Resource Rent Tax Assessment Act 1987 .(67) Schedule 1, page 23, after proposed new item 50E, insert:50F At the end of section 184-1Add:Note: For GST purposes, non-profit sub-entities are treated as entities (see Division 63), and government entities can be treated as entities (see Division 149).(68) Schedule 1, page 23, after proposed new item 50F, insert:50G At the end of Division 184Add:184-5 Supplies etc. by partnerships and other unincorporated bodies(1) For the avoidance of doubt, a supply, acquisition or importation made by or on behalf of a partner of a *partnership in his or her capacity as a partner: (a) is taken to be a supply, acquisition or importation made by the partnership; and (b) is not taken to be a supply, acquisition or importation made by that partner or any other partner of the partnership. Note: Section 50 of the Taxation Administration Act 1953 deals with the liability of partners for the obligations imposed on a partnership under the GST law.(2) For the avoidance of doubt, a supply, acquisition or importation made by or on behalf of one or more members of the committee of management of an unincorporated association or body of persons (other than a *partnership), in their capacity as members of that committee: (a) is taken to be a supply, acquisition or importation made by the body; and (b) is not taken to be a supply, acquisition or importation made by any members of the association or body. Note: Section 52 of the Taxation Administration Act 1953 deals with the liability of members of committees of management for the obligations imposed on an unincorporated association or body of persons under the GST law.(69) Schedule 1, page 23 (after line 14), after item 51, insert:51A Section 195-1Insert: cease to be a participant of a GST joint venture means: (a) your approval as a *participant of a *GST joint venture is revoked; or (b) the approval of a GST joint venture of which you are a participant is revoked.(70) Schedule 1, item 52, page 23 (lines 15 to 18), omit the item.(71) Schedule 1, page 23 (after line 20), after item 53, insert:53A Section 195-1 (note at the end of the definition of consideration )Omit "78-30, 78-35", substitute "78-20, 78-35, 78-45, 78-50".53B Section 195-1 (note at the end of the definition of consideration )After "99-5", insert ", 100-5".53C Section 195-1 (definition of creditable acquisition )Omit "and subsection 78-5(2)".53D Section 195-1 (note at the end of the definition of creditable acquisition )Omit "78-15", substitute "78-30".(72) Schedule 1, item 55, page 23 (table item 4A), omit the table item, substitute:4ASection 78-10Payments or supplies made in settlement of insurance claims(73) Schedule 1, page 23 (after line 26), after item 55, insert:55A Section 195-1 (at the end of the table in the definition of decreasing adjustment )Add:7Section 137-5Stock on hand on becoming registered etc.(74) Schedule 1, item 58, page 24 (line 11), omit "and", substitute "or".(75) Schedule 1, item 58, page 24 (after line 15), at the end of the definition of government related entity , add:; or (c) a local governing body established by or under a *State law or *Territory law.(76) Schedule 1, page 25 (after line 3), after item 61, insert:61A Section 195-1 (after table item 4 of the definition of increasing adjustment )Insert:4ASection 100-15Unredeemed vouchers61B Section 195-1 (after table item 5 of the definition of increasing adjustment )Insert:5ASection 130-5Goods applied solely to private or domestic use61C Section 195-1 (definition of insurance policy )Repeal the definition, substitute: insurance policy means a policy of insurance (or of reinsurance) against loss, damage, injury or risk of any kind, whether under a contract or a law. However, it does not include such a policy to the extent that it does not relate to insurance (or reinsurance) against loss, damage, injury or risk of any kind.(77) Schedule 1, page 25 (after line 7), after item 62, insert:62A Section 195-1 (definition of joint venture operator )Omit "*participant of the joint venture nominated as mentioned in paragraph 51-5(e)", substitute "*company nominated to be the joint venture operator under paragraph 51-5(e)".(78) Schedule 1, page 25 (after line 14), after item 64, insert:64A Section 195-1Insert: net GST : the net GST that is or would be payable by an entity for a supply is: (a) the GST that is or would be payable by the entity on the supply; plus (b) the sum of any *increasing adjustments that the entity has or would have relating to the supply; minus (c) the sum of any *decreasing adjustments that the entity has or would have relating to the supply.64B Section 195-1Insert: overdue : a debt is overdue if there has been a failure to discharge the debt, and that failure is a breach of the debtor's obligations in relation to the debt.64C Section 195-1Insert: non-profit sub-entity has the meaning given by subsection 63-15(3).(79) Schedule 1, page 25 (after line 20), after item 66, insert:66A Section 195-1 (paragraph (a) of the definition of pre-school course )Repeal the paragraph, substitute: (a) in accordance with a pre-school curriculum recognised by: (i) the education authority of the State or Territory in which the course is delivered; or (ii) a State or Territory body that has the responsibility for recognising pre-school curricula for courses delivered in that State or Territory; and66B Section 195-1 (definition of registration turnover threshold )Omit "section 23-15", substitute "sections 23-15 and 63-25".(80) Schedule 1, page 25 (after line 27), after item 68, insert:68A Section 195-1Insert: settlement amount has the meaning given by subsection 78-15(4).(81) Schedule 1, item 69, page 26 (line 2), omit "78-135", substitute "78-105".(82) Schedule 1, page 26 (after line 2), after item 69, insert:69A Section 195-1 (definition of taxable supply )Omit "78-30", substitute "78-50".(83) Schedule 1, item 70, page 26 (lines 3 to 5), omit the item, substitute:70 Section 195-1 (note at the end of the definition of taxable supply ) Omit "72-5, 78-45, 78-50", substitute "66-45, 72-5, 78-25, 78-60".(84) Schedule 1, page 26 (after line 5), after item 70, insert:70A Section 195-1 (note at the end of the definition of taxable supply )Omit "and 90-5", substitute ", 90-5 and 100-5".(85) Schedule 1, item 74, page 26 (line 19), omit "78-3, 78-40, 78-45, 78-125", substitute "78-5, 78-60, 78-95".(86) Schedule 1, item 77, page 26 (lines 24 to 27), omit the item, substitute:77 Section 195-1Insert: voucher has the meaning given by section 100-25.(87) Schedule 1, page 27 (after line 3), before item 78, insert:77A Paragraph 7-10(3)(c)After "item", insert "4, 8, 15,".(88) Schedule 1, page 27, after proposed new item 77A, insert:77B Paragraph 15-40(1)(c)Omit "due", substitute "*overdue".77C Subparagraph 15-40(2)(b)(ii)Omit "due", substitute "*overdue".(89) Schedule 1, page 27, after proposed new item 77C, insert:77D Paragraph 15-45(1)(b)Omit "due", substitute "*overdue".77E Subparagraph 15-45(2)(a)(ii)Omit "due", substitute "*overdue".(90) Schedule 1, page 27 (after line 11), at the end of the Part, add:78A Section 27-1Insert: overdue : a debt is overdue if there has been a failure to discharge the debt, and that failure is a breach of the debtor's obligations in relation to the debt.(91) Schedule 1, page 28 (after line 3), before item 79, insert:78B Subsection 7-15(1)After "item", insert "4, 8,".(92) Schedule 1, page 28, after proposed new item 78C, insert:78D At the end of Part 5Add:Division 25—Tourist refund scheme25-1 What this Division is aboutIf you take wine overseas as accompanied baggage, you may be entitled to a refund of the wine tax borne by you on the wine.25-5 Tourist refund scheme(1) If: (a) you have *borne wine tax on wine that you purchased; and (b) the purchase is of a kind specified in the regulations; and (c) you leave Australia, and export the wine from Australia as accompanied baggage, in the circumstances specified in the regulations;the Commissioner must, on behalf of the Commonwealth, pay to you an amount equal to: (d) the amount of the wine tax that you have borne on the wine; or (e) such proportion of that amount of wine tax as is specified in the regulations. (2) The regulations may specify how amounts of *wine tax borne are to be worked out.(3) The amount is payable within the period and in the manner specified in the regulations.(93) Schedule 2, page 29 (after line 5), before item 1, insert:1AA Paragraph 11(1A)(a)Repeal the paragraph.(94) Schedule 2, item 1, page 29 (lines 6 to 9), omit the item, substitute:1 Before subsection 11(2)Insert:(1B) This section does not apply to: (a) a supply of a long-term lease made before 1 July 2000; or (b) a supply of a voucher made before 1 July 2000 if, on redemption of the voucher, the holder of the voucher is entitled to supplies up to a monetary value stated on the voucher.(95) Schedule 2, page 29 (after line 9), after item 1, insert:1A Subsection 11(4)Repeal the subsection, substitute:(4) If this section has an effect in relation to a supply, it has a corresponding effect in relation to the acquisition to which the supply relates.(96) Schedule 2, page 29, after proposed new item 1A, insert:1B After subsection 12(1)Insert:(1A) However, this section does not apply to a supply of a warranty (whether express, implied or required by law) that relates to goods or a service, if the value of the warranty was included in the price of the goods or service.(97) Schedule 2, item 2, page 29 (after line 13), after subsection (4), insert:(5) In this section: warranty , in relation to goods or a service, means an undertaking or obligation in relation to: (a) the quality, performance or characteristics of the goods or service; or (b) the provision of services that are or may at any time be required in respect of the goods or service; or (c) the supply of parts that are or may at any time be required for the goods;given or made in connection with the supply of the goods or service.(6) If this section has an effect in relation to a supply, it has a corresponding effect in relation to the acquisition to which the supply relates.(98) Schedule 2, page 29 (after line 19), after item 3, insert:3A At the end of section 14Add:(6) If this section has an effect in relation to a supply, it has a corresponding effect in relation to the acquisition to which the supply relates.(99) Schedule 2, page 30 (after line 3), after item 7, insert:7A After subsection 16(3)Insert:(3A) However, if the amount of sales tax you have borne in respect of the goods changes after 1 July 2000, the amount of the special credit changes accordingly.7B Subsection 16(4)Omit "before 22 January 2001", substitute "for a tax period that ends before 7 January 2001".7C Subsection 16(4A)Repeal the subsection, substitute: (4A) If the amount of the special credit changes under subsection (3A) after you lodged that return, you must lodge with the Commissioner an amended GST return for that tax period. You must lodge it on or before the 21st day of the month following the end of the tax period in which the change happens.(100) Schedule 2, page 33 (after line 5), after item 9, insert:9A At the end of section 20Add:(5) If you are not entitled to an input tax credit on an acquisition because of this section, sections 21-15 and 21-20 of the GST Act do not apply to you in relation to that acquisition.(6) If an input tax credit to which you are entitled is reduced by 50% because of this section, then, for the purposes of applying section 21-15 or 21-20 of the GST Act (where relevant), the amount of any adjustment under that section is reduced by 50% (before any application of Division 136 of that Act).(101) Schedule 2, item 10, page 33 (lines 6 to 13), omit the item, substitute:10 Subsections 22(1) and (2)Omit "is not a taxable supply", substitute "does not give rise to any adjustment, and is not a taxable supply, under Division 78 of the GST Act".11 Subsections 22(3) and (4)Repeal the subsections.(102) Schedule 2, page 33, at the end of the Schedule, add (after proposed new item 11):12 Section 23Repeal the section, substitute:23 Input tax credits relating to compulsory third party schemes(1) You are not entitled to an input tax credit for: (a) a premium, contribution or similar payment made under, or a levy paid in connection with, a compulsory third party scheme before 1 July 2003; or (b) a premium paid, before 1 July 2003, on an insurance policy issued under a compulsory third party scheme.(2) A compulsory third party scheme is: (a) a statutory compensation scheme; or (b) a scheme or arrangement, established by an Australian law, under which insurance policies are issued;that is specified in the regulations, or that is of a kind specified in the regulations.(103) Schedule 2, page 33, at the end of the Schedule, add (after proposed new item 12):13 After section 23Insert:23A Disclosure before 1 July 2000 of entitlement to input tax credits for insurance premiumsSection 78-50 of the GST Act does not apply to an entity in relation to an insurance policy supplied before 1 July 2000 if, before that day, the entity informed the insurer of the extent to which the entity was entitled to an input tax credit for the premium it paid.(104) Schedule 2, page 33, at the end of the Schedule, add (after proposed new item 13):14 At the end of Part 5Add:24A Unredeemed vouchersSection 100-15 of the GST Act applies to vouchers supplied before 1 July 2000, and not redeemed before that day, in the same way that it applies to vouchers supplied after that day.(105) Schedule 4, page 36 (after line 4), before item 1, insert:1A Section 5 (heading)Repeal the heading, substitute: 5 Application to government entities and non-profit sub-entities1B Section 5After "*government entity", insert ", or a *non-profit sub-entity,".(106) Schedule 4, page 36 (after line 20), after item 4, insert:4A At the end of section 38Add:(3) For the avoidance of doubt, the fact that activities of a body are limited to making supplies to members of the body does not prevent those activities being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b).(107) Schedule 4, page 36, after proposed new item 4A, insert:4B Section 41Insert: non-profit sub-entity : a branch of an entity is a non-profit sub-entity if: (a) the entity has chosen to apply Division 63 of the A New Tax System (Goods and Services Tax ) Act 1999 , and that choice still has effect; and (b) the branch maintains an independent system of accounting; and (c) the branch can be separately identified by reference to: (i) the nature of the activities carried on through the branch; or (ii) the location of the branch; and (d) the branch is referred to in the entity's records to the effect that it is to be treated as a separate entity for the purposes of the GST law.(108) Page 36 (after line 24), after Schedule 4, insert:Schedule 4A—Income tax deductions for GST-related expenditureIncome Tax Assessment Act 19971 Section 12-5 (after table item headed "grape vines")Insert: GST—acquiring or upgrading plant to meet GST obligations etc.depreciation for cost of plant 42-168software 42-168, 46-25upgrading plant 25-802 Section 12-5 (table item headed "software")After:abandoned software 46-70insert:GST—acquiring or upgrading plant to meet GST obligations etc. 42-168, 46-253 Section 20-30 (after table item 1.7)Insert:1.7AA25-80upgrading plant to meet GST obligations etc.4 After section 25-75Insert:25-80 Upgrading plant to meet GST obligations etc.(1) You can deduct expenditure you incur in upgrading *plant if: (a) you incur the expenditure between 1 July 1999 and 30 June 2000; and (b) you do so for the purpose of, or for purposes that include the purpose of, meeting your existing or future obligations, or exercising your existing or future rights, under the *GST law; and (c) you are the owner or *quasi-owner of the plant when you incur the expenditure; and (d) you use the upgraded plant before 1 July 2000, or have it *installed ready for use immediately before 1 July 2000; and (e) your *pre-GST annual turnover for the income year in which you incur the expenditure does not exceed $10,000,000; and (f) immediately before 1 July 2000, you are registered under Part 2-5 of the *GST Act.Substituted accounting periods(2) If the income year in which you incur the expenditure ends before 30 June 2000, you are taken to have complied with paragraph (1)(f) if: (a) when you lodge your *income tax return for the income year, you are registered under Part 2-5 of the *GST Act; or (b) before you lodge your income tax return for the income year, you applied for registration under Part 2-5 of the GST Act and, when you lodge the return, the application has not been refused.(3) However, if subsection (2) has applied to you but, immediately before 1 July 2000, you are not registered under Part 2-5 of the *GST Act, you cannot deduct the expenditure. If you have already deducted it, your assessment may be amended to disallow the deduction.5 Before section 42-170Insert:42-168 Acquiring plant to meet GST obligations etc.(1) Despite sections 42-160 and 42-165, your deduction is the *plant's *cost for the income year in which you become its owner or *quasi-owner if: (a) you become the owner or quasi-owner of the plant between 1 July 1999 and 30 June 2000; and (b) you do so for the purpose of, or for purposes that include the purpose of, meeting your existing or future obligations, or exercising your existing or future rights, under the *GST law; and (c) your *pre-GST annual turnover for the income year does not exceed $10,000,000; and (d) immediately before 1 July 2000, you are registered under Part 2-5 of the *GST Act.Substituted accounting periods(2) If the income year in which you become the owner or *quasi-owner of the *plant ends before 30 June 2000, you are taken to have complied with paragraph (1)(d) if: (a) when you lodge your *income tax return for the income year, you are registered under Part 2-5 of the *GST Act; or (b) before you lodge your income tax return for the income year, you applied for registration under Part 2-5 of the GST Act and, when you lodge the return, the application has not been refused.(3) However, if subsection (2) has applied to you but, immediately before 1 July 2000, you are not registered under Part 2-5 of the *GST Act, you cannot deduct the *plant's *cost. If you have already deducted it, your assessment may be amended to disallow the deduction.6 At the end of Subdivision 46-BAdd:46-62 Software expenditure to meet GST obligations etc.The modifications set out in sections 46-35, 46-40, 46-45 and 46-50 are to be disregarded in the application of section 42-168 (meeting GST obligations etc.) to units of *software.7 At the end of paragraph 46-85(d)Add ", or deductible by virtue of section 42-168 (meeting GST obligations etc.) as applied by section 46-62".8 At the end of Division 960Add:Subdivision 960-R—Pre-GST annual turnover960-370 Meaning of pre-GST annual turnoverGeneral rule(1) Your pre-GST annual turnover for an income year is your *group turnover for the income year. Note: Your pre-GST annual turnover will not be relevant to an income year starting after 30 June 2000, because it is only relevant to deductions for costs related to preparing for the GST (see sections 25-80, 42-168 and 46-62).New businesses(2) However, if you, or one or more of the entities *connected with you, did not start to carry on *business until after the start of the income year: (a) you must make a reasonable estimate of the amount that would have been your *group turnover for the income year if you, and all of the entities connected with you, had carried on business throughout the income year; and (b) that estimate is your pre-GST annual turnover for the income year.9 Subsection 995-1(1)Insert: group turnover : the group turnover of an entity (the primary entity ) for an income year is the sum of: (a) the *value of the business supplies the primary entity made in the income year; and (b) the value of the business supplies entities *connected with the primary entity made in the income year;reduced by: (c) that part of the value of the business supplies the primary entity made in the income year that is attributable to *supplies it made during the year to entities connected with it when they were connected with it; and (d) that part of the value of the business supplies entities connected with the primary entity made in the income year that is attributable to supplies the connected entities made during the year to the primary entity when they were connected with it; and (e) that part of the value of the business supplies another entity made in the income year that is attributable to supplies the other entity made to a third entity at a time when both the other entity and third entity were connected with the primary entity.10 Subsection 995-1(1)Insert: GST law has the meaning given by section 195-1 of the *GST Act.11 Subsection 995-1(1)Insert: pre-GST annual turnover has the meaning given by Subdivision 960-R.12 Subsection 995-1(1)Insert: value of the business supplies : the value of the business supplies an entity makes in an income year is the sum of: (a) for *taxable supplies (if any) the entity made during the year in the ordinary course of carrying on a *business—the value (as defined by section 9-75 of the *GST Act) of the supplies; and (b) for other supplies the entity made during the year in the ordinary course of carrying on a business—the prices (as defined by section 9-75 of the GST Act) of the supplies.(109) Page 36, (after line 24), before Schedule 5, insert:Schedule 4B—Diesel Fuel Rebate SchemeCustoms Act 19011 Paragraph 164(1)(ac)Omit "use", substitute "transport".2 After subsection 164(4B)Insert:(4C) The rebate payable under subsection (1) to a person in respect of diesel fuel purchased by the person for use in a manner referred to in paragraph (1)(ab) or (ac) (rail or marine transport) is payable at the rate that the rebate would be payable if the use of the diesel fuel had been in primary production (other than forestry).3 Paragraphs 164(5AC)(a) and (b)Omit "under subsection (5) or (5A)".4 Subsection 164(7) (definition of marine use )Repeal the definition.5 Subsection 164(7) (definition of marine transport )Insert: marine transport includes transport by vessels in or on fresh water, but does not include any transport relating to forestry.Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 19996 Item 5 of Schedule 1Repeal the item.7 Item 5 of Schedule 2Repeal the item.Excise Act 19018 Paragraph 78A(1)(ac)Omit "use", substitute "transport".9 After subsection 78A(4B)Insert:(4C) The rebate payable under subsection (1) to a person in respect of diesel fuel purchased by the person for use in a manner referred to in paragraph (1)(ab) or (ac) (rail or marine transport) is payable at the rate that the rebate would be payable if the use of the diesel fuel had been in primary production (other than forestry).10 Paragraphs 78A(5AC)(a) and (b)Omit "under subsection (5) or (5A)".11 Subsection 78A(7)Omit " marine use ", substitute " marine transport ".(110) Schedule 5, page 47 (after line 8), at the end of the Schedule, add:Taxation Administration Act 195338 After Division 7A of Part VIInsert:Division 7B—Indirect tax refund schemes62B Refund scheme—defence related international obligations(1) If: (a) an acquisition covered by a determination of the Defence Minister is made: (i) by or on behalf of a visiting force that is; or (ii) by a member of the visiting force who is; or (iii) any other person who is;covered by a determination of the Defence Minister; and (b) at the time of the acquisition, it was intended for: (i) the official use of the visiting force; or (ii) the use of a member of the visiting force; or (iii) any other use;and that use is covered by a determination of the Defence Minister;the Commissioner must, on behalf of the Commonwealth and subject to subsection (4), pay to a person in a class of persons determined by the Defence Minister an amount equal to the amount of indirect tax (if any) borne by the entity in respect of that acquisition. (2) A determination of a person under subparagraph (1)(a)(iii) and of a use under subparagraph (1)(b)(iii) may be made if, and only if, the Commonwealth is under an international obligation to grant indirect tax concessions in relation to the kind of person and the kind of use.(3) A claim for an amount covered by subsection (1) must be in the approved form.(4) The amount is payable: (a) in accordance with the conditions and limitations; and (b) within the period and manner;determined by the Defence Minister.(5) A determination under this section is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .(6) In this section: Defence Minister means the Minister administering the Defence Act 1903 . member of a visiting force and visiting force have the meaning given by section 5 of the Defence (Visiting Forces) Act 1963 .62C Refund scheme—international obligations(1) If an entity of a kind specified in the regulations makes an acquisition of a kind specified in the regulations, the Commissioner must, on behalf of the Commonwealth and subject to subsection (4), pay to the entity (or a person in a class of persons determined by the Commissioner) an amount equal to the amount of indirect tax (if any) borne by the entity in respect of that acquisition.(2) The regulations may specify a kind of entity and a kind of acquisition if, and only if, the Commonwealth is under an international obligation to grant indirect tax concessions in relation to the kind of entity and the kind of acquisition.(3) A claim for an amount covered by subsection (1) must be in the approved form.(4) The amount is payable: (a) in accordance with the conditions and limitations; and (b) within the period and manner;set out in the regulations.(111) Schedule 6, page 48 (after line 5), before item 1, insert:1A At the end of Division 17Add:17-25 GST attributable because of the GST Transition ActIf: (a) section 10 of the A New Tax System (Goods and Services Tax Transition) Act 1999 applies in an income year that ends after 30 November 1999 and before 1 July 2000 in relation to a *taxable supply that you will make on or after 1 July 2000; and (b) because of the application of that section, an amount of *GST is attributable to your first *tax period after 1 July 2000;an amount equal to the amount of GST is not assessable income.(112) Schedule 6, page 48, after proposed new item 1A, insert:1B At the end of Division 17 (after section 17-25)Add:17-30 Special credits because of the GST Transition ActA special credit under section 16, 16A, 16B, 16C or 19A of the A New Tax System (Goods and Services Tax Transition) Act 1999 is assessable income : (a) at the time it is attributed to a tax period (for a credit under section 16, 16A, 16B or 19A); or (b) at the time it is paid (for a credit under section 16C).(113) Schedule 6, page 48, after proposed new item 1B, insert:1C At the end of Division 27Add:27-30 Input tax credits attributable because of the GST Transition ActIf: (a) section 10 of the A New Tax System (Goods and Services Tax Transition) Act 1999 applies in an income year that ends after 30 November 1999 and before 1 July 2000 in relation to a *creditable acquisition that you will make on or after 1 July 2000; and (b) because of the application of that section, an *input tax credit is attributable to your first *tax period after 1 July 2000;you cannot deduct under this Act an amount equal to the input tax credit.(114) Schedule 6, items 1 and 2, page 48 (lines 6 to 16), omit the items, substitute:1 Subsection 995-1(1) (definition of assessable income )Omit "and 17-10", substitute ", 17-10 and 17-30".2 Subsection 995-1(1)Insert: creditable acquisition has the meaning given by section 195-1 of the *GST Act.2A Subsection 995-1(1)Insert: tax period has the meaning given by section 195-1 of the *GST Act.(115) Schedule 6, page 50 (after line 26), at the end of the Schedule, add:Taxation Administration Act 195315 After subparagraph 37(1)(b)(iii)Insert:; or (iv) creditable acquisitions or creditable importations;(116) Schedule 6, page 50, at the end of the Schedule, add (after proposed new item 15):16 After section 52Insert:52A Liability related to non-profit sub-entities(1) Obligations that would be imposed under the GST law on a non-profit sub-entity are imposed on each person who is responsible, to persons or bodies outside the sub-entity, for the management of the sub-entity, but may be discharged by any person who is so responsible.(2) Any offence against the GST law that is committed by the sub-entity is taken to have been committed by each person who is responsible, to persons or bodies outside the sub-entity, for the management of the sub-entity.(3) In a prosecution of a person for an offence that the person is taken to have committed because of subsection (2), it is a defence if the person proves that the person: (a) did not aid, abet, counsel or procure the relevant act or omission; and (b) was not in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the entity).(117) Schedule 6, page 50, at the end of the Schedule, add (after proposed new item 16):17 Subsection 62(2) (after table item 37)Insert:37Acancelling the registration of a non-profit sub-entitysubsection 63-35(1)(118) Schedule 6, page 50, at the end of the Schedule, add (after proposed new item 17):18 After subsection 70(1)Insert:(1A) If you choose to apply Division 63 (non-profit sub-entities) of the GST Act, you must: (a) keep records that record: (i) your choice to apply that Division; and (ii) each branch that is treated as a separate entity for the purposes of the GST law; and (iii) each branch that has ceased to be treated as a separate entity for the purposes of the GST law; and (b) retain those records for at least 5 years after you revoke the choice.(119) Schedule 6, page 50, at the end of the Schedule, add (after proposed new item 18):Wool Tax (Administration) Act 196419 At the end of section 10Add:(5) Despite section 177-12 of the A New Tax System (Goods and Services Tax) Act 1999 , a reference in subsection (1) to the price of the supply of wool is taken not to include the net GST that is, or would be, payable by an entity making the supply.(6) Expressions used in subsection (5) have the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999 .Many of these amendments have come about as a result of continuing consultation with industry, state governments and the not-for-profit sector. The government has listened to their concerns and responded to them through these amendments. The majority of these amendments will be welcomed by business and the community in general. Most amendments involve slight changes to the law to provide more certainty. There is one revenue protection measure.In my comments I intend to address only the main issues covered by the amendments. The first issue is the immediate deductibility of expenditure for small and medium sized businesses on GST related plant and software. This amendment will implement a major initiative of the government to assist small and medium sized businesses as they prepare for the introduction of the GST. As the government announced on 19 August, there will be an immediate income tax deduction for small and medium sized businesses for expenditure incurred in acquiring or upgrading plant or software to prepare for the GST. This immediate deduction will have an estimated revenue cost of $175 million in the 2000-01 financial year. It is in addition to the $500 million that the government is providing to help small and medium sized businesses, charities and education bodies prepare for the start of the GST. The deduction will be available to a business with an annual turnover not exceeding $10 million. The turnover test will include the turnover of any entities connected to the business. The deduction will apply to expenditure on acquiring or upgrading plant to meet obligations or exercise rights under the GST law. It is to be available for expenditure incurred during the current financial year.Change to the treatment of insuranceThe amendment simplifies the treatment of general insurance without altering the fundamental basis of the policy. This will mean that businesses will not be liable for GST on any payouts they receive. This amendment was made in response to issues raised by the insurance industry.Supply of farmlandThe government is also seeking to amend the GST act to ensure that the sale of farmland is GST free, even if the entity supplying the land is different from the entity carrying on the farming business on the land. That is, the supply is GST free provided that the farming business has been carried on on the land for five years. A further amendment clarifies that the supply of the farmland is only GST free if it is the sale of farmland or a supply by way of long-term lease.Sale of unimproved crown landThe government is also clarifying that when a government holds unimproved land at 1 July 2000 that is subsequently improved before supply, it is the unimproved land that is to be valued at the date of sale for the purpose of applying the margin scheme when calculating the amount of GST payable.Structural flexibility for certain non-profit bodiesThe amendments provide flexibility for charitable institutions, trustees of charitable funds, gift deductible entities and certain non-profit bodies that are income tax exempt to treat separately identifiable units of their organisations as though they are separate entities for GST purposes.Ensure that non-incorporated bodies are carrying on the enterprise and not the membersThis amendment will make it clear that a non-incorporated body is carrying on an enterprise and not the individual members.Determining the extent of creditable purpose for entities making financial suppliesThe amendment allows the commissioner to determine appropriate apportionment methodology for working out the amount of input tax credits claimable by the financial supply provider. This will assist entities in making financial supplies to determine the amount of input tax credits that they are entitled to.Goods taken from stock for private or domestic useThis amendment ensures that GST is payable where an individual carrying on an enterprise takes taxable goods from their stock for private or domestic use. This amendment will ensure that in these circumstances an appropriate adjustment is made to the input tax credit previously claimed.Adjustments for stock on hand for a new registrantThis amendment will allow an unregistered entity when it becomes registered to claim input tax credits for the GST included in the cost price of stock held at that date for sale or manufacture.Treatment of vouchersThis amendment will ensure that certain vouchers—for example, gift vouchers—are subject to GST at the time of redemption. It will apply to vouchers that have a specified monetary value. Bus tickets, postage stamps and vouchers for specified goods or services will continue to be taxed at the time the ticket or voucher is supplied. This amendment was requested by the Australian Retailers Association and will be welcomed by the industry. I have just about 30 seconds more, Madam Deputy Speaker, so you might give me the call again. (Extension of time granted)Amendments to the diesel fuel rebate schemeThe first amendment restores the original policy intent to extend the diesel fuel rebate scheme to marine `transport' use. Under the second amendment, the diesel fuel rebate scheme for the new marine and rail transport categories will be the same rate as that applying to the primary production category. The rebate rate for primary production is considered to be a full rebate. This amendment will fulfil the intention of the government to pay a full rebate for marine and rail transport categories.There are also a number of other technical amendments to the GST and related ANTS legislation and the majority of the technical amendments are to correct errors in drafting and these include typographical errors and incorrect cross-references. I commend the amendments to the chamber.13:03:0012678Emerson, Craig, MPMr EMERSON83VRankinALP00—This legislation takes us past the 1,000th amendment to the GST legislation, yet it is more than seven months before the GST even comes in. The first set of amendments resulting from the grubby deal between the government and the Democrats totalled 302, and that included the infamous high roller amendment. At the last sitting a further 454 amendments were passed through the House of Representatives, taking the total to 756. Until yesterday, another 151 had come in. But now today, with this legislation, we have a further 119, taking the grand total to 1,026 amendments.The purpose of many of the amendments today is to clarify the situation in relation to insurance. Consider the situation where a shop owner insures for compulsory third party, insures for workers compensation or personal liability insurance for accidents. Up until this amendment, if that person claimed as an input tax credit the GST component of the insurance premium, then the person, the shop owner, the proprietor, would be personally liable for GST on any payout. If somebody trips over a mop or slips on the floor and there is a million dollar payout—surprise, surprise!—the owner, the proprietor, would be up for $100,000. They did not know about this and they were about to get a very rude shock.This legislation changes that so that from now on the person who takes out the insurance policy will not be able to claim a credit for the GST paid on the insurance policy. So remember the value added tax was going to operate so that you claim credits for all the GST paid on the way through. No, that is not going to happen from now on. I am sure that small business around Australia yet again will be surprised that they are being denied the credits or the refunds of GST on their inputs. But, of course, that is quite widespread. It is true for the entire financial services sector, where they cannot claim GST input tax credits. This is a dog's breakfast of a tax. We have now passed the millennial amendment and what do we get for it? The Treasurer says we are going to get a streamlined new tax for a new century.Madam Deputy Speaker, do you remember the Treasurer in the parliament standing up and saying, `Oh, look at this; I have got this wonderful business activity statement. That is all that the taxpayers, the small business community of Australia, will have to do—just fill out this two-page business tax activity statement for the streamlined new tax for a new century.' What he did not reveal was that this is The Hitchhiker's Guide to the Galaxy—as the member for Lowe said—the hitchhiker's guide to the two-page business activity statement. It is still in draft form. It has got `draft' written all over it. We downloaded it from the web site just the other day. But they are the draft business activity statement instructions. So much for the streamlined new tax for a new century, which was supposed to replace 10 taxes.As a result of the grubby deal between the government and the Democrats, only four taxes are being replaced. Six taxes that the government said before the election were going to be abolished are going to remain. So the taxes that will remain payable after the introduction of this GST will be income tax, payroll tax, alcohol excise, cigarette excise, petrol excise, diesel excise, stamp duty on buying a house, stamp duty on hire purchase, stamp duty on insurance, stamp duty on cheques, stamp duty on mortgages, bank accounts debit tax, customs duty, gambling taxes, other state fees and charges, local council rates, fees and charges.This is not a streamlined new tax for a new century. In fact, the four taxes to be abolished include a bed tax on some hotels in New South Wales and the Northern Territory. The abolition of that does not affect anyone in Victoria or in Queensland, in my home state, so this tax is going and being replaced by a $28 billion tax. Will the GST be a tax on a tax, Madam Deputy Speaker? Yes, of course it will. The Treasurer has confirmed that the GST will apply to taxes, fees, charges and levies unless he determines otherwise and he has not determined otherwise in any case at all. So the GST will apply on top of the following: fire levies contained in insurance policies, environmental levies, bushland acquisition levies, camping fees, national park entry fees, swimming pool entry fees, sporting field hire from local councils, community hall hire from local councils and library fees. A tax on a tax; it is a disgrace. (Time expired)13:10:0012679Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I would like to respond to the erroneous comments made by the honourable member for Rankin but a Whips' agreement restricts me merely to presenting the supplementary explanatory memorandum.Amendments agreed to.Bill, as amended, agreed to.12679Bill (on motion by Mr Slipper)—by leave—read a third time.Bills12679r64612679Message received from the Senate returning the bill and acquainting the House that the Senate insists on amendments Nos 1 to 15 disagreed to by the House and has agreed to the additional amendment made by the House with an amendment.Ordered that the message be made an order of the day for the next sitting.Bills12680r92912680Debate resumed from 30 September, on motion by Dr Stone:That the bill be now read a second time.13:12:0012680Kerr, Duncan, MPMr KERRRH4DenisonALP00—With one glaring exception the opposition will support this legislation. The glaring exception relates to those provisions of the bill which relate to cooperation between Australia and Indonesia in the enforcement of criminal law in the Timor Gap Zone of Cooperation provisions of part 4.Before I address the generality of the bill, I might say that it is a matter of astounding insensitivity and bad timing, and a political issue of some embarrassment, that the government has brought on for debate today on the eve of the Prime Minister's visit to East Timor a bill which includes provisions which, in a sense, require us as a parliament to acknowledge and reaffirm Indonesia's sovereignty in the Timor Gap. This is an extraordinary situation given that Indonesia itself has formally renounced control of East Timor.The fact that the government introduced this bill after the plebiscite in East Timor and after the East Timorese voted to form an independent nation is extraordinary enough in itself. It now defies belief that Minister Vanstone has had almost two months to realise the possible ramifications of this bill but it is here before us today without amendment. The opposition will not in any sense allow that to occur and at the appropriate time the opposition will move amendments which will delete in part 4, clauses 7 to 9, schedule 2, those references which operate with respect to this matter, and ensure that if the government does not have the wit or wisdom to avoid the sloppy and politically insensitive and plain dopey aspects of proceeding in this manner, at least we in opposition will do what we can to ensure that this parliament does not join with them.It is unfortunate that I had to make those opening remarks with respect to legislation which, in its general terms, ought to be welcomed by this House. In the absence of those provisions to which I will return in detail in a minute, the bill would repeal the Crimes at Sea Act 1979 and replace it with legislation which will give legal force to a new crimes at sea scheme developed through a special select committee of solicitors-general and approved by the Standing Committee of Attorneys-General. The scheme has the support of the Australian Police Ministers Council. The Commonwealth and states have agreed to this cooperative scheme.Under the new scheme the states and the Northern Territory will enact uniform crimes at sea acts. The scheme is designed to overcome overlapping of the application of state laws and confusion as to which various state laws apply. Under the arrangement, the criminal law of each state is to apply to the offshore area adjacent to the state or territory, firstly, for a distance of 12 nautical miles from the baseline for that state by force of the law of the state and, secondly, beyond 12 nautical miles, up to a distance of 200 nautical miles or the outer limit of the Continental Shelf, whichever is the greater distance, by force of law of the Commonwealth.This cooperative arrangement and the intergovernmental agreement will much simplify the process of determining investigative procedures and jurisdictions to deal with offences and will allow that to occur much more effectively. In addition, the Commonwealth bill would apply the Jervis Bay Territory's criminal law to certain criminal acts committed outside the new scheme's coverage area. Responsibility for administering criminal justice in the area covered by the scheme will be divided between the Commonwealth and states under the scheme and subject to the intergovernmental agreement.This has been a long time in the making. I believe the genesis for this emerged before the current government came into office and it has continued to work through what are inherently difficult issues which have in volved much give and take on behalf of the Commonwealth and the states and the Territory that is affected, the ACT being the only territory that does not have a maritime jurisdiction. I make no criticism at all of the long process of gestation. This is a complex issue which has eluded satisfactory solution for a very long time. It has required enormous amounts of technical expertise being applied to it by the various state and Commonwealth solicitors-general.The fact that we have reached an occasion, as we have today, where we can bring before this parliament an agreed package of measures that will be reflected by common legislation in each of those states and territories, is a matter about which we should be very pleased. It is a measure which has been long in the making but should not be diminished by that fact, but unfortunately attached to a measure with which the opposition can only extend its genuine congratulations to all ministers and officials who have played a part in that constructive outcome. Apart from that, there are these provisions in relation to the Timor Gap.The provisions in part 4 of the bill reflect Australia's obligations under the Timor Gap Zone of Cooperation Treaty which provides for cooperation between Australia and Indonesia in the enforcement of criminal law in area A of the zone of cooperation. If you go back to the explanatory memorandum, it says that the provisions here in all material respects replicate provisions that are currently in the Crimes at Sea Act 1979 and have been in operation since 1991.So that statement in the explanatory memorandum makes plain that these provisions which we are bringing forward today for debate are as good as identical to the provisions currently in place. Whilst the legislation has been a long time in the making, it begs the question why, given the political state of play of Indonesia, East Timor and the Timor Gap treaty, the Australian Government is bringing on this legislation at the most inappropriate time. The Timor Gap treaty includes, as an express element of its terms, an Australian acknowledgment of the sovereignty of Indonesia with respect to East Timor and then reflects that in a series of measures which go to the maritime jurisdictions between the two countries.Australia does have a strong interest in working to ensure a business-as-usual approach to activity in the Timor Gap and a smooth process of transition which will allow East Timor to benefit from the petroleum resources of the zone of cooperation. But we cannot understand why, after Indonesia's renunciation of control over East Timor, it is appropriate to proceed with legislation which is based on recognition of Indonesia's sovereignty over East Timor and a continuing Indonesian role in the Timor Gap. If passed by this parliament, after the Indonesian People's Consultative Assembly formally ends Indonesia's control over East Timor, these provisions will be cited as Australian acknowledgment, indeed acceptance, of a continuing Indonesian claim to parts of the Timor Gap.The Labor Party has called for the Howard Government to formally end Australia's de jure recognition of Indonesia's sovereignty over East Timor. With that background, Labor will oppose the provisions of part 4 and will urge the government not to proceed with respect to part 4 on these matters until the United Nations transitional authority—and ideally an independent East Timor—has replaced Indonesia in the operation of the Timor Gap treaty.I might say—and more than rhetorically—whilst I have criticised in a media release yesterday the Minister for Justice and Customs, Senator Vanstone, for batting on with this legislation after the opposition drew these consequences to her office's attention, what I find extraordinary is: where is Minister Downer? Where is the Department of Foreign Affairs and Trade? What does it say about the position the Australian government is advocating with respect to the future of East Timor that these measures do come before this parliament at this time?There is no explanation I can see for the complete failure—and that is all I can say it is—the complete failure of the government to address an issue of immense political sensitivity by publicly stating that these amendments, whilst they may have been drafted in different situations and may have inadvertently still been allowed to be part of the legislation put before this parliament a month after the ballot in East Timor, are still before us in this House in that form now. There is no plausible explanation. It is disgraceful and the opposition will rigorously oppose those measures.Might I say, by way of background, this cannot be mere inadvertence. My office asked the minister to reconsider the timing of debate on this bill. In good faith and in Australia's best interests we pointed out to the minister that it is not appropriate to be passing legislation which could be cited as an Australian acknowledgment of continuing Indonesian claims to parts of the Timor Gap. I can say that this can only be described as a first rate stuff-up. It is bound to embarrass the Prime Minister on the eve of his departure. And if the Prime Minister is not embarrassed, he has some serious questions to answer, because he is operating in an environment where, on the one hand, we have Australian troops in East Timor securing the peace in that territory after a plebiscite and after the United Nations has taken steps with respect to its eventual transition to independence; yet, on the other hand, we have before this parliament legislation which entrenches and reinforces and gives our parliament's assent to an assertion of Indonesian sovereignty in respect of the territorial waters of what would be in the future an independent East Timor.I cannot understand that. It may have just been sloppy and politically insensitive that this matter was included as it was as part of a longstanding process of working through these measures, the commencement of which began well before the current plebiscite and before international conditions changed. That may have just been sloppy and politically insensitive. But it is a diplomatic catastrophe now, and it is a disgrace to this parliament if we are pressed to accept these measures, and if this House rejects the opposition amendments that will see them deleted from the face of this legislation.I intend to be brief. I think I have spoken enough to indicate the measure of our anger over these matters and the inconsistency that the government has shown in relation to the management of this issue. It is not an issue that we feel happy to be raising in this House at this time. There are other mechanisms that could have been used to address it and to take it off the table. The bill could have been reintroduced in a form which gave none of the offence that I am mentioning now. Yet the government has seen fit to press on. How the Prime Minister can come into this House and how the Minister for Foreign Affairs can say that Australia is acting in a way that is otherwise than grossly inconsistent with every public utterance that they have made in relation to the Australian engagement whilst they are proceeding with this legislation is completely beyond my imagination. So I am not certain about the process here, whether I move the amendment that the opposition is foreshadowing at this stage, or whether we do so in consideration stage. I think it may be in consideration stage.10000Kerr, Duncan, MPMADAM DEPUTY SPEAKER (Mrs DeAnne Kelly)—Yes.RH4Kerr, Duncan, MPMr KERR—Before we hear that they do not intend to proceed with these measures—as a result of what I am saying now, and after the reflection that they should have had before—I want an indication that they are chastened. I am certain now that messages must be going back and forth, because we are not going to drop off this. Before we hear that, let us make it plain that the reason this will not be proceeding through this parliament—if it does not proceed through this parliament—is that the opposition has acted with integrity and is moving amendments which will delete these provisions in part 4.The timing of this legislation meant that the shadow ministry had no choice but to oppose that significant aspect of this bill, which, based on Australia's obligations under the Timor Gap Zone of Cooperation Treaty, provided for those arrangements between Indonesia and Australia in a like manner as would occur between the Commonwealth and the various states. We communicated that to the government. We indicated that we thought it was inappropriate for all the reasons that I have set out for this matter to proceed.As I said, I have been very critical of Minister Vanstone for neither accepting that advice in the spirit in which it was given, nor being able to understand the political and diplomatic sensitivities involved. However, what may be at least marginally comprehensible from the point of view of a Minister for Justice and Customs who wants to bat on with her agenda, is incomprehensible in relation to Minister Downer and the Department of Foreign Affairs and Trade. This I find absolutely beyond all plausible explanation.I conclude by saying it is a shame that in speaking to this legislation I have been compelled to perhaps diminish what should have been a speech which really did reflect the credit that should go to the work of ministers and government advisers in working through a quite difficult and complex scheme between state and territory governments. It is a shame that we are unable to simply say we acknowledge and honour the work that you have done as part of an ongoing process that began before—I think it has been about a decade—certainly this government came to office, but which we were not able to complete. This government has been able to do that, and they should have been given proper credit for it. We would have done so, and nothing that I say should take away one jot from what I would hope to stand on the record as remarks of approval for the work that was done by the solicitors-general, attorneys-general and other ministers who have had carriage of this matter and their advisers. But neither should anything I say in that regard diminish in any way what I am saying about the absolute foolishness of incorporating within this legislation provisions which mean that, after the events that have occurred over the past three months in East Timor, the Australian parliament continues to insist on Indonesian sovereignty with respect to the Timor Gap.Why that is being proceeded with eludes me comprehensively. When our amendments are debated, I expect the government to acknowledge the force of the arguments that have been put and to say that they will not proceed with part 4. To do otherwise would simply show gross hypocrisy. Of course, if the government insists, that is a matter for the Prime Minister and the Minister for Foreign Affairs more than Minister Vanstone. They will have to answer questions from the Australian people on what they mean by having engagements of the kind that the Australian public is so strongly supportive of in East Timor, and yet be passing through this parliament at this time legislation which treats as nothing the changes that have occurred and still preserves an Australian assertion of Indonesia sovereignty with respect to the Timor Gap—the waters adjacent to and immediately part of the territorial waters of what is now a territory under interim UN administration and which, with the goodwill of everybody in this House and the goodwill of the Indonesians and the people of East Timor, will become an independent country, hopefully on friendly terms with both Australia and Indonesia.I know there are others who wish to speak in relation to this matter. I cannot believe that this matter will pass this parliament in this form, even if the government overrides the objections that I have placed on the record now in this House. I cannot believe the Senate would connive such an outcome. I urge the government to accept that this would be a most unwise component of this legislation and to join with the opposition and not oppose the amendments that will be moved when debate in committee occurs.13:34:0012683Vale, Danna, MPMrs VALEVK6HughesLP10—I rise to support this welcome legislation. The purpose of my contribution to this debate is to ensure that crimes at sea should not go unpunished because of legal technicalities. I am able to foreshadow to the House that the amendments to part 4 in terms of the Indonesian and Australian treaty are currently being circulated. The provisions of part 4 of the bill, which are being removed, were drafted before recent developments in East Timor. The government decided to remove part 4 well before the unhelpful intervention of the member for Denison. This was the first opportunity since the introduction of the bill for the amendments to be introduced. The minister's office approached the member for Denison's office concerning these proposals before he issued his press release statement.I also understand that it was the bipartisan position of the government and opposition that it is in the interest of Australians and the people of East Timor that the treaty's proven system of exploration and exploitation should continue providing a stable, legal basis for ongoing petroleum activities. I trust that the fact that the shadow minister for justice and customs has issued a misleading press release in the knowledge that the bill was to be amended at the first available opportunity following the separation of East Timor is not a reflection of a change of view on the part of the opposition.New provision will be introduced before debate in the Senate to govern offences in the Timor Gap to take account of arrangements for the continuance of the treaty with a different treaty partner. Negotiations for the new arrangements are taking place and are proceeding well. It is intended that the new provisions will be introduced as government amendments before passage of this bill.This legislation will provide legal power to enforce Australian criminal laws on the high seas. It does not matter how good government policies are or how well coordinated is the work of government agencies, if the legal framework underpinning them is antiquated and the law cannot be properly enforced, the policies and coordination will be undermined and made ineffective. A measure of the importance of this bill is that it is an integral component of a web of state and territory legislation that was developed by the Special Committee of Solicitors-General from the Commonwealth, states and territories. It has the endorsement of both the Standing Committee of Attorneys-General and the Australian Police Ministers Council. It implements a new national uniform and cooperative scheme to apply to Australian criminal law offshore.The bill extends the criminal jurisdiction of the Australian states beyond Australian coastal waters to the limits of the Continental Shelf and beyond in limited circumstances, so as to provide a legal basis for more effective control over crimes at sea. It gives effect to three things: a cooperative scheme developed by the Commonwealth and state and territory governments over crimes at sea within the adjacent area; a complementary regime developed by the Commonwealth government over crimes at sea beyond the adjacent area; and prevention of the existing situation where too often the body of law to be applied to a crime at sea is unrelated to the crime itself. The bill will also prevent the existing situation where the applicable law depends on facts that may be particularly difficult to establish, like the vessel's intended destination before the crime was committed.This bill will help to simplify a very complex set of laws, making it easier to understand and for law enforcement authorities to apply. The existing Crimes at Sea Act 1979 focused on acts by Australian citizens aboard Australian ships and acts aboard foreign ships outside the territorial sea when the offender entered Australia. Under the current legislation the law that applies to a crime at sea depends upon the state with which the vessel is connected. This is usually the state in which the vessel is registered. For example, a vessel may be connected with New South Wales; therefore New South Wales law applies. But if an offence is committed off the coast of another state, the police of that state would have to apply an unfamiliar law, putting law enforcement at a distinct disadvantage. Where another country has jurisdiction over a ship, a prosecution could not proceed unless that country gave its consent. As well as that, there is no intergovernmental arrangement to determine who is responsible for the enforcement action. With regard to foreign vessels, the law to be applied depends on the ship's first port of call in Australia. This confusion caused to law enforcement agencies works to the advantage of the offender.Under this bill, the applicable law will be determined on the basis of geography; that is, a single body of law will apply in the sea area of each state and the Northern Territory out to 200 nautical miles or the Continental Shelf limit, whichever is the greater. This body of law will apply directly as state law to 12 nautical miles and will be applied as Commonwealth law beyond that point. It will apply the criminal laws of the Jervis Bay Territory to criminal conduct beyond the area covered by the new scheme on Australian ships and, in some cases, foreign ships where there is an appropriate connection with Australia.This bill updates the current law to meet new challenges from modern organised criminals. Such criminals are taking advantage of old laws and confusion over jurisdiction that are a legacy of our colonial past. This bill replaces legislation passed in 1979. Even at that time, the term `boat people' had not been coined, as the phenomenon of organised boatloads of people arriving on our shores, covertly or illegally, was unknown. This changed in the early eighties when occasional boatloads of political refugees fled from Vietnam and arrived on our northern shores. Since then, a new phenomenon of economic refugees illegally, and not so covertly, is being landed on our shores, even our southern shores, by sophisticated, people-smuggling, well-organised criminals.As the minister for immigration pointed out in the House recently, over the last 12 months the number of illegal arrivals rose from 200 to 1,500. According to news reports from 1989 to 1990 only three boats were intercepted by Australian authorities. This year 242 boats have been intercepted. Just in one week, groups of 31, 35 and 29 have arrived at Ashmore Reef off the north coast of Western Australia. Another group of 24 have sailed near Ashmore Reef and a group of 62 have arrived at Christmas Island. Their countries of origin are Afghanistan, China, Iraq and Iran; the origins of 29 are unknown at this stage. It has now become quite clear that the source of the illegal immigrants has spread from East Asia across to the Middle East. The small wooden fishing boats of the early 80s are being replaced with large steel vessels with sophisticated navigation equipment, well capable of transporting large numbers of people on extensive voyages from almost anywhere in the world.The beaching of a large vessel on the northern New South Wales coast, its passengers and crew fleeing into the bush and their subsequent round-up was a stark reminder that we have entered a new era of well-organised sea-borne people smuggling and law breaking activity. Of added concern was the fact that the vessel's location in the vicinity of Australian waters had been known, but its apprehension was made difficult, amongst other things, by the complexities of law. Not only do we need to simplify and modernise the law for immigration reasons; we also need to have effective and enforceable laws to counter new threats and to meet the unique challenges of modern technology.Australia's maritime boundary across the north-west of Australia is directly adjacent to waters that are internationally infamous for modern-day piracy. The waters of South East Asia have a long history of piracy, but today there is a new generation of space age pirates, who, aided by high technology, have effectively streamlined their modus operandi. Proceeds of modern-day piracy have been calculated in billions of dollars. Last year there were 86 incidents of international piracy. Forty-three crewmen were killed; 80 were injured; and 10 were taken hostage. Already a ship stolen in this part of the world has turned up on the other side of the world with a different name and flag and a missing crew.Not only is the globe, in effect, shrinking in terms of electronic communications; it is also shrinking in the maritime sense. Looking into the future, it is conceivable that if the ill-gotten gains are attractive enough the endemic piracy of nearby waters will spill or edge into Australian waters just as it has spread in recent years from the Straits of Malacca, in the south-east, to the north-east of Asia.Madam Deputy Speaker, the words of our national anthem remind us that, our land, Australia, is a land girt by sea. We have to face the fact that today there are desperate people in other parts of the world who have the ability to sail and who are in practice sailing towards our shores, into that huge expanse of sea that extends out 200 nautical miles from the Australian coastline, a coastline which is measured in tens of thousands of kilometres. This vast area is subject to Australian law enforcement of one type or another, and this bill, with its updated laws, is urgently needed to meet our enforcement responsibilities without having our hands tied behind our backs.As I said before, this bill will enact the Commonwealth parts of a new cooperative scheme agreed with the states and the Northern Territory. The states of New South Wales, South Australia and Tasmania have already taken action to implement the scheme, and Western Australia presently has proposals before its parliament. The Northern Territory is expected to introduce legislation, and legislation is awaiting government approval in Queensland and Victoria.Law enforcement at sea always involves difficult operational and judistic problems. These amendments will make the job a lot easier and be a big step forward to the rule of law at sea. This legislation will be warmly welcomed by those who share the responsibility of the enforcement of the laws of our nation. I commend this legislation to the House.Debate (on motion by Mr Hollis) adjourned.Committees12686126861268613:46:0012686Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: CSIRO Riverside Corporate Park, North Ryde, NSW—Joint Research Complex for CSIRO Molecular Science and Food Science Australia.Mr Deputy Speaker, CSIRO proposes to construct a new joint complex for its Division of Molecular Science and Food Science Australia at Riverside Corporate Park, North Ryde, New South Wales. The proposed works are a further stage in the major redevelopment of the CSIRO site at North Ryde into a high technology business park, Riverside Corporate Park. It will incorporate both CSIRO research and development facilities and compatible private industry technology developments. The new complex will replace predominantly old and substandard existing facilities at North Ryde that are now inadequate for conducting modern scientific research.This project will establish and consolidate new replacement research facilities for Food Science Australia, a joint venture between CSIRO and Australian Food Industry Science Centre, and the Division of Molecular Science within a central CSIRO precinct at Riverside Corporate Park.The new facilities will provide accommodation for some 220 Food Science Australia/Division of Molecular Science staff, plus long-term visitors and students. It will also provide amenities, support services and infrastructure which will be shared among all CSIRO divisions within the central precinct of Riverside Corporate Park.The new research facilities will consist of modern laboratories, laboratory special suites, support areas and laboratory offices, industrial scale process bays, as well as accommodation for the management and administration staff.The joint facilities to be shared among all CSIRO divisions on the site include a library, canteen, a 140-seat auditorium and a central reception area, as well as common stores for both hazardous and non-hazardous goods and general consumables. Associated infrastructure, including fully networked computing capabilities, a comprehensive access control security system and building maintenance system, will be included in the project.Associated site works will include roads, car parking, site engineering services and landscaping. Substandard temporary and redundant existing buildings located on the site of the new complex will be demolished.The project has a budget of $49 million. Subject to parliamentary approval, tenders are expected to be called early in the year 2000, with completion of construction in late 2001.The Public Works Committee in its report has recommended that this project proceed. CSIRO agrees with the recommendations of the committee. On behalf of the government I would like to thank the committee for its support and I commend the motion to the House.Question resolved in the affirmative.126871268713:50:0012687Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: CSIRO Division of Building Construction and Engineering Development Works at Riverside Corporate Park, North Ryde, NSW.CSIRO proposes to construct new facilities for its Division of Building Construction and Engineering at Riverside Corporate Park, North Ryde, New South Wales. The proposed works will replace predominantly old and substandard facilities with new, state of the art accommodation for the division's construction materials laboratory and fire technology complex. These new facilities will be consolidated with other recently constructed facilities within a discrete divisional precinct at Riverside Corporate Park. These works are a further stage in the major redevelopment of Riverside Corporate Park as a high technology business park. It will include both CSIRO research and development facilities and compatible private industry occupants.The proposed facilities will accommodate the construction materials laboratory, which will house groups undertaking research and testing of concrete masonry materials, and the fire technology complex, which will conduct fire-related research activities, including the behaviour of structures and materials subjected to fire, and advanced fire protection technologies. The new facilities will replace accommodation on one site scheduled for sale and fire research structures erected on another site in the early 1950s. The existing facilities are inadequate for current activities and substandard in terms of structure and materials. The existing structures are constructed from materials containing asbestos and will be demolished. The land will be decontaminated in preparation for future use by CSIRO.The project has a budget of $10 million. Subject to parliamentary approval, tenders are to be called in early 2000 with completion scheduled for mid-2001. The Public Works Committee in its report recommends that this project proceed. CSIRO agrees with the recommendations of the committee. I would like again to thank the committee for its support and I commend the motion to the House.Question resolved in the affirmative.126871268713:53:0012687Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: CSIRO Clayton (Eastern Precinct) Development Works, Victoria.CSIRO proposes to consolidate the Victorian activities of its divisions of Manufacturing Science and Technology, Mathematical and Information Sciences, Information Technology Services and Petroleum Resources at its Clayton site in Victoria. The project will enable CSIRO to vacate sites at Preston and Syndal, freeing up these sites for sale. It will also relocate staff and resources from leased premises at Carlton and Clayton into accommodation at the Clayton site, which is owned by CSIRO and is located adjacent to the campus of Monash University. The Clayton site is one of the largest sites of CSIRO and is occupied by more than 700 staff. It is the major Victorian site of the organisation and the centre for CSIRO research into minerals, forest products, molecular and polymer science, manufacturing science and technology, and mathematical and information sciences.The development will provide approximately 7,000 square metres gross floor area of new building accommodation. This is in addition to another 7,000 square metres of refurbishment in the 35-year-old outdated and substandard David Rivett laboratories. This will provide accommodation for over 370 staff. The work will provide laboratories, offices, process and technical bays, research support facilities and staff amenities. The project has a budget of $28 million. Subject to parliamentary approval, construction is expected to commence in mid-2000 with completion scheduled for early 2002. The Public Works Committee in its report recommends that this project proceed. CSIRO agrees with the recommendations of the committee. I would like to thank the committee for its support and I commend the motion to the House.Question resolved in the affirmative.Bills12688r92912688Debate resumed.13:55:0012688Hollis, Colin, MPMr HOLLISDH4ThrosbyALP00—I am pleased to speak on this important legislation, the Crimes at Sea Bill 1999. We on this side, as pointed out by the shadow minister, support the legislation except for part 4, which is an embarrassment to the parliament and to the people of Australia. I note that when the honourable member for Hughes spoke, she foreshadowed government amendments, which she said were being circulated. A copy has just been placed in front of me and I have not had time to go through them.0V5SLIPPERMr Slipper—They should make you happy.DH4Hollis, Colin, MPMr HOLLIS—I am pleased the parliamentary secretary thinks they will make me happy. But if they pick up the points we were making, I think that we on this side will still proceed with our amendment. Nevertheless, we hope the government has taken note of what the opposition has said. We contacted the Attorney-General yesterday, pointing out the inconsistency of recognising Indonesian sovereignty over that area when Indonesia itself has indicated that it has given up sovereignty. Nevertheless, we will look at that and I suspect we will still proceed with our amendments, but I suppose the government will use its numbers to pass its amendments.The bill will implement a new national uniform cooperative scheme to apply Australian criminal law offshore. The scheme was developed by the Special Committee of Solicitors-General and has been endorsed by the Standing Committee of Attorneys-General. The existing legislation is a mishmash of laws. It has complicated and confused the task of identifying the law that applies in connection with suspected offenders. The difficulty is the confusion that exists has often meant an offender could escape conviction on a technicality.There is an extensive list of speakers to this bill and they will cover many technical aspects of this legislation and especially its relevance to maritime and international law. In my speech, I want to highlight the criminal activities that go unpunished against seafarers on ships in international and national waters. Crimes such as assault, and even murder, occur on ships with too-frequent regularity, and people do not care. I hope this legislation will cover this. Of course, with regard to the maritime matters, if this government ratified ILO convention 147, some of the problems I have highlighted many times in this parliament would be overcome. The treatment of many foreign crews and their pay and working conditions are an international scandal that can be solved only by a concerted international response. Australia can begin by immediately ratifying ILO 147.ILO 147 is a broad convention covering wages, working conditions, certification, training and health, which are vital to the welfare and rights of international seafarers. It is a scandal that Australia, having taken the lead in exposing substandard shipping, has not ratified this international convention because of a mere technicality. I wish to highlight one example that has been mentioned in this parliament before by me and my former colleague Peter Morris when he was a member. By highlighting the inaction of this case, hopefully this legislation will prevent similar occurrences and maybe justice can at last be achieved.The Glory Cape is a vessel that loaded iron ore and departed Port Hedland on 31 October 1995. On the night of the departure, five of the crew members, who were Indonesian, were attacked by officers and other crew of that vessel. There had been a dispute over non-payment of wages. The five Indonesians had sought the assistance of the International Transport Federation and the Australian Maritime Union in Port Hedland in obtaining their underpayment and unpaid wages.10000SPEAKERMr SPEAKER—Order! It being 2 p.m., the debate is interrupted in accordance with standing order 101A. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.Questions Without Notice126891268912689Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Minister for Education, Training and Youth Affairs.WI4REITHMr Reith—There is no minister for education. Where is he?PE4Mr BEAZLEY—There is no minister for education, I am inclined to agree, but we will make the effort nevertheless. Is the minister aware of the cuts to the science faculty at Monash University, among others, of $3.6 million and 73 staff, and the recent decision of the dean of the faculty to resign in protest at an impending second round of cuts? Is the minister aware also of the recent announcement by the University of Adelaide to close its science faculty, a faculty with which our greatest scientist Howard Florey was associated and from which Douglas Mawson graduated? Minister, if relatively wealthy universities like Monash and Adelaide cannot support full-scale science faculties, what does this say about our national capacity to build excellence in science, teaching and research? Haven't your deep cuts to university operating grants undermined Australia's capacity to become a knowledge nation and, on your own admission, placed universities at risk and undermined quality? What are you going to do about it?Government members interjecting—Mr Beazley interjecting—10000SPEAKERMr SPEAKER—The Leader of the Opposition might recognise that he was granted a good deal of leniency from the chair and he should extend some courtesy as a result.12689Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—Once again we have seen how the Leader of the Opposition is simply not on top of education issues. His question included several misstatements of fact, which I will now correct for him. He referred to the decline in the operating grants from the federal government to universities. There has been no real decline in operating grants because, following the efficiency dividend decisions of 1996, the government has provided additional money to the universities in operating grants for overenrolled students. The fact is that this year the operating grant for universities, at $4.959 billion, is some $30 million higher than 1996 in constant dollar terms. So the fundamental assumption of your question about operating grants is wrong.Further to that, the government has provided the universities with the opportunity to raise additional resources. The total revenue of Australian universities is now some $700 million higher than it was in 1995 when you take public and private sources into account. In addition to that, the Commonwealth has actually increased the funding for targeted programs for scientific research through my portfolio.Funding for scientific research in Australian universities is now significantly higher than it was in 1996. It was you in your flawed, failed, stuffed-up—as I think the member for Werriwa called it—election policy who proposed cuts to scientific research funding. You could not even get the figuring right to maintain the forward estimates—and you have the nerve and hypocrisy to come into this House and ask what this government has done about university funding. Universities under this government are autonomous institutions. They are entitled to make their own decisions about their funding priorities within the university budgets, and that is what those universities have done.1268912689Hardgrave, Gary, MPMr HARDGRAVECK6MoretonLP10—My question is addressed to the Treasurer. Treasurer, on this historic day when the latest job creating improvements for our tax system have been introduced into this place, would you advise the House of the updated economic and fiscal estimates contained in the Mid-Year Economic and Fiscal Outlook released this morning?12690Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for Moreton for his question. I was surprised to hear some members of the opposition apparently disagreeing with his statement that our historic tax reform will create growth and jobs. I point out that that historic tax reform is supported by the Labor Party. So I do not think you should be interjecting against the benefits that it will bring Australia, because you actually support it. We welcome the support of the Labor Party on historic tax reform. It will do a great deal to build Australia's economic development in jobs.Today the government released its Mid-Year Economic and Fiscal Outlook. In the course of releasing that outlook, the government has revised up its growth forecasts for the 1999-2000 year from three to 3½ per cent. In addition, the government has revised up its forecast for next financial year to 3¾ per cent largely as a result of the fact that the international outlook, which was working so much against Australia in 1997 and 1998 with the Asian financial crisis, appears to be turning. Asia is now coming out of recession and we would expect a recovery in Asia in the period ahead.The mid-year outlook shows that, notwithstanding unanticipated and large expenses, the budget remains in healthy surplus. As a result of the measures which the government announced this week, it will remain in surplus across into the next financial year. Those unanticipated expenses were caused by the Senate's position in relation to the government's tax reform and the costs associated with East Timor.The government, also in its mid-year economic outlook today, has revised up employment growth for the current year. We have revised up employment growth because the Australian economy is showing additional employment and creating new jobs. For the first time, enclosed in the government's forecast is a forecast that unemployment in Australia next year will fall below seven per cent. The government forecast that by the middle of next year, June 2000, unemployment will be around 6¾ per cent—the lowest unemployment in Australia for over a decade. That is the consequence of good economic policy, which has kept strong growth on low inflation. Since the government was elected, nearly 570,000 net jobs have been developed in the Australian economy, and the government is forecasting additional job growth in the next year. This is a story of strong growth on low inflation, good jobs growth and falling unemployment, and with the big structural changes to the Australian economy and the development of tax reform—the historic business tax reform which will now pass this parliament—that will lead to stronger growth, more jobs and better opportunities for all of Australia's citizens, particularly its young people.1269012690Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—My question is to the Minister for Health and Aged Care. Does the minister accept the verdict of the independent arbiter appointed to determine the appropriate method of indexation of hospital funding grants to the states under the Australian health care agreements? Does the minister accept the arbiter's finding that the increases in absolute dollars that he constantly parades as his commitment to public health are in fact less than the growth in population, the increase in utilisation and the rise in medical costs in excess of inflation? Will the government increase its miserly offer of 0.5 per cent indexation in next year's grants to the recommended level of 2.25 per cent indexation, which would mean up to $125 million extra for our cash-strapped public hospitals around Australia?12690Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I thank the honourable member for her question. We have received the arbiter's report. It is being examined by government, and I will give an announcement when government makes a decision. But what I would say on hospital funding is that the honourable member is quite incorrect. If the hospitals are cash-strapped, it is because of how the states have chosen to fund them. The federal government has increased hospital funding by six per cent. The states in their budgets, with the exception of South Australia because we cannot get that data, have increased their hospital budgets on average by 0.3 per cent. If the states had put the same amount of extra money in that the Commonwealth had put in, there would be $478 million extra in the hospitals.It is particularly bad in New South Wales, where the Commonwealth gave an extra $93 million this year, and state expenditure in the New South Wales budget on hospital services—not on health services but specifically on hospital services—went up in the order of only $45 million. So the New South Wales government did not even put in the extra money the Commonwealth gave it—half of it they squirreled off into the Olympics, I imagine—let alone put a cent of new money in themselves. So they have to take responsibility for their own actions.1269112691Lieberman, Lou, MPMr LIEBERMANXU5IndiLP10—My question is addressed to the Treasurer. Treasurer, how will Australian businesses and individual investors benefit from the introduction of the new business tax system?12691Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—Yesterday's announcement that the opposition would vote for the government's policy in relation to the new business taxation system clears the way through the Senate for the introduction of historic reform, which will be the greatest reform to Australia's business tax system ever. As part of that, the broadened base will apply to companies and reduce company tax rates from 36 per cent to 30 per cent, making Australia one of the most competitive business taxation regimes in this region, attracting new businesses to Australia and creating new jobs. As part of that, capital gains tax will be simplified, because the old indexation system will be changed and the averaging system will be abolished. Capital gains will apply to nominal increases at half rates, meaning that the top rate applying to a nominal capital gain—a much more simplified method of assessment—will become 24.25 per cent as people who save and invest get benefits in relation to the taxation regime.But in addition to that there are benefits for small businesses, which will have 50 per cent of their assets kept out of the capital gains tax regime, and particular benefits for the farmers of Australia, because one of the new measures which the government is introducing is that, if a small business has held an asset for 15 years and the person is 55 years of age and intending to retire or is otherwise incapacitated, they can sell that active asset capital gains tax free. So, if a farmer has decided after a lifetime of farming that they want to sell the farm, move into the regional country town and buy a property, they can do something now which they could never do before under the capital gains tax system which was penalising them. If they have held that asset for 15 years, they can sell it and it will be capital gains tax free. They can buy premises in the town, and they can realise the reward of a lifetime of hard work. That is great news for the farmers of Australia. This is, of course, the first government in Australia's history that has cut capital gains tax. It took a coalition government to cut capital gains taxes in this country, to help small businesses. It took a coalition government to help the self-funded retirees and investors—8K6FITZGIBBONMr Fitzgibbon—You slap a GST on it as well.CT4Mr COSTELLO—I do not see why the opposition frontbench interjects. You support this policy. You are voting for it. You should be out there now extolling its virtues—all of the virtues of the policy which you are voting for and actually support. All we can say is that it is a policy that the opposition have recognised as being of value to the nation, and I appreciate the fact that they have done that. They are giving it their wholehearted support, as you can hear from their noisy rounds of `Hear, hear!' as they cheer on this policy in such a noisy way from the opposition benches, having come on board and having supported the government in its business tax, obviously being so happy at doing so and being able to join the government. It is great for farmers, great for small business and great for the self-funded retirees. It will be good for economic growth, and that will help Australia's jobs.1269212692Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—My question is to the Minister for Health and Aged Care. Is the minister aware of the wave of adverse events sweeping Australia's public hospitals due to underfunding, most recently catalogued in last week's Sunday Age ? Why has the minister taken no action to appoint members to the Australian Quality Council, as he promised in May? Why did he allocate only $4 million over four years when the experts he had commissioned recommended that at least $17 million was required?12692Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I guess I cannot expect the shadow minister to know the answer to this, because she does not attend health ministers' meetings, but the answer is in what happened at the health ministers' meeting. It was matched funds by Commonwealth and state governments. The states wished to put in a certain amount of money, but there was a strong view around the table that, if advice came back to us that we needed more money, we would attempt to find that to put in. The real difficulty with quality is that problems tend to be systemic problems; they are not problems in which it is easy to intervene. Solving them needs the cooperation of the medical profession, and the quite extraordinary and outrageous manner in which this report was released by the member for Fremantle when she was minister for health has made it extraordinarily difficult to get the medical profession onside to help us.1269212692Neville, Paul, MPMr NEVILLEKV5HinklerNP10—My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Would the minister outline for the House the benefits that will flow to the farm sector and to small business in general in regional areas from the government's business reform package? Could he also outline how these reforms will build on other taxation measures due to commence on 1 July next year?12692Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for his question and acknowledge his real interest in the economic progress of rural and regional areas. In addition to those ben efits that he mentioned that will come into play on 1 July next year arising from indirect taxation reform, for example, an estimated savings of some $900 million a year to the nation's farmers and well over $4 billion in relief on exports because of the removal of the embedded taxes that currently exist on our exports, we will have with the business tax changes quite simply a better and simpler small business tax system and one which, as the Treasurer has just alluded to, clearly offers real relief from capital gains tax, which is one of the great bugbears of small business and the farm sector. On top of the major benefits of the new GST system, we see in particular the slashing of transport costs, which are so crippling in a country as vast as ours.So, firstly, it is simpler. A single quarterly or monthly business activity statement—I even have a draft exposure form here, and it is very straightforward; I am delighted to see what it will potentially look like—will replace up to 32—can you believe it?—reporting and repayment requirements that currently pertain to business people.ZD4HOWARDMr Howard—That's under the present system.4K4Mr ANDERSON—That's under the system that those opposite advocate that we ought to retain, that they want to keep in place. One system, Pay As You Go, replaces 11 existing systems involving up to 32 forms for reporting and paying tax. For a farmer running a cash book without a computer—I know a few of those—I think it will take an hour or two at most. It is a very small time input indeed for the very real cost relief that will emerge out of this tax reform.Coming to capital gains tax reform, repeatedly over the last decade or so that I have moved around the country, I have heard people saying that capital gains tax is a major inhibitor. As the Treasurer said, we are delighted to be the first government ever to actually reduce very significantly the burden of capital gains taxation. All small businesses will benefit. We have slashed the rates for small business asset exemptions, and we have made it easier to roll over assets into replacement assets.Finally, there is the exemption for those who have held assets for 15 years or more. That is very important for those many small businesses and farmers who see their businesses as their superannuation. What is more—I heard someone interject on this—we have done it without threatening the capital base or the operation of legitimate family trusts set up to pass on a farm or a business from one generation to the next. This is on top of the very real boost I have touched on from the reform of our indirect taxation system next year. I again remind people on this broadcasting day that people will see in rural Australia a cut of 23c a litre in the price of diesel—very worth while for regional transport costs—and the total abolition of all fuel excise on rail in this country.1269312693Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—My question is to the Minister for Health and Aged Care. Is the minister aware of the widespread alarm amongst doctors following the revelation that medical indemnity insurance premiums will rise by 10 per cent to meet the cost of the GST imposed on payouts to people affected by medical negligence? What steps has the minister taken to compensate the medical defence funds for the impact of the GST and ensure that there is no flow on from the increased premiums to larger gap charges by doctors? How can you claim that health will not be affected by the GST when such large increases will flow through directly as a result of the government's design and implementation of this unfair tax?12693Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I thank the honourable member for her question. She obviously does not understand the GST, but that is not surprising. It is an input tax credit and doctors will get it back.1269312693Billson, Bruce, MPMr BILLSON1K6DunkleyLP10—My question is addressed to the Minister for Employment, Workplace Relations and Small Business. How will the government's new business tax system benefit micro and small business owners and their employees, such as those making a significant contribution in the Dunkley electorate?12693Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I thank the member for Dunkley for his question. His electorate has Frankston as its central part. In these suburban electorates—he is representing a suburban electorate—he has a lot of small businesses, a lot of microbusinesses, and there is no doubt that the reforms which have now been agreed will produce significant benefits for those people. Mr Speaker, I have taken out a couple of examples just to give you a feel for the dimensions of this.Mr Crean interjecting—WI4Mr REITH—Why interject? These are great advantages. I will send you the numbers and next time you are speaking to a trade union group you can get up and say, `Capital gains tax reform under us is great, and here is an example.' This is my example: someone in a $20,000 to $30,000 range buys a hairdressing shop for $10,000 in June 1994 and sells it this year for $18,000. Under the old system that you are happily with us getting rid of, capital gains tax is $2,450. Under us, there is a 70 per cent reduction, a $710 tax bill. This is a massive benefit, meaning that if you are running a hairdressing salon you keep more of what you earn in building up your asset.DT4CREANMr Crean—What about the GST?WI4Mr REITH—I get the interjection about the GST. I see what Steve Bracks says about the GST this morning. He says that it is just such a great tax, and given the revenue likely to come from it, he is going to spend that on cutting payroll tax to create jobs in Victoria—a fantastic benefit from the GST. You would be opposed to giving people the chance of a job.Take another bloke who is an operator of a small butcher's shop. This is a butcher's shop where the person has bought it for $100,000 and sells it for $200,000. There are various assumptions you can make about tax rates, but under the old system you were looking at a tax liability of $35,000 or thereabouts for that person. Under us, depending on the age and for a person going into retirement, there is no capital gains tax at all. It is a fantastic incentive for small business, and of course that means jobs.This is an extraordinary achievement in the area of tax reform, and I want today to publicly pay tribute to the Treasurer for securing such a fantastic win for the small business community.8K6FITZGIBBONMr Fitzgibbon—Are you running for deputy leader now?10000SPEAKERMr SPEAKER—Order! The member for Hunter.WI4Mr REITH—This does display extraordinary powers of persuasion. This does display an insight and understanding—PE4BEAZLEYMr Beazley—I raise a point of order, Mr Speaker. What possible relevance can this hypocritical paean have to the question that was asked?10000SPEAKERMr SPEAKER—The Leader of the Opposition knows that he is going beyond any point of relevance. The minister has the call.WI4Mr REITH—These reforms, supported by the opposition, are putting incentive back into small business. That is great for people who have got their own small business, but it is also great for people they will employ in the future who today are unemployed. It is a singular feat to achieve a halving of the capital gains tax. For somebody who has been in business for a few years, 15 years, and qualifies under the proposal, there is no capital gains tax at all. Again, that emphasises the significance of the benefit for the small business community. I suppose the Treasurer would have to acknowledge that timing is terribly important in politics. If he had gone to the Labor Party back in June, that was when the Leader of the Opposition said, `You can only take one week's holiday because you have got to get out and brand-name our policies.' When it came to July, he did not have any policies. He was holding a seminar to see what his policies might be. By the time we got to September, he had been liberated so that they could be freewheeling and they could die in a ditch on their principles.10000SPEAKERMr SPEAKER—The minister will come to the question.WI4Mr REITH—Finishing on this point, Mr Speaker, the latest strategy we have from the opposition is that if you have got a problem with developing a policy you hospitalise the front bench and put it off until next year.10000SPEAKERMr SPEAKER—No, the minister will come to the question.WI4Mr REITH—This is a great win for small business.Opposition members interjecting—10000SPEAKERMr SPEAKER—But for the uproar in the chamber, members may have heard me draw the minister's attention to the fact that that was an inappropriate way to conclude his answer.QI4PRICEMr Price—I raise a point of order, Mr Speaker. A number of members have had the misfortune of suffering illness and none have been so reflected on. I would have thought that that remark should have been withdrawn.10000SPEAKERMr SPEAKER—The member for Chifley will resume his seat.1269412694Emerson, Craig, MPMr EMERSON83VRankinALP00—My question without notice is to the Treasurer. Is it a fact that the legislation and explanatory memoranda for your streamlined `new tax system for a new century' are now thicker than three telephone books, contain more than 1,000 amendments and weigh in at 5.1 kilograms? Wasn't the Prime Minister right when he recently described the GST as `a complicated bit of legislation'?12694Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I have not seen those comments allegedly attributed to the Prime Minister and long experience has told me to take what is said from that side of the House with a pinch of salt, even more than two telephone books worth of salt.Opposition members interjecting—CT4Mr COSTELLO—I should take from that side of the House more than three telephone books worth of salt—is that the point that you are making? Can I say in relation to tax reform though that I think a goods and services tax—or value added tax—is now applied in 150 countries of the world. It is supported by the British Labour Party. It is supported by the French Social Democrats. It is supported by the French socialists.YU5TANNERMr Tanner—The French Social Democrats! Who are they?10000SPEAKERMr SPEAKER—The member for Melbourne!CT4Mr COSTELLO—It is supported by the German Social Democrats. It is supported by the New Zealand Labour Party. It is supported by all of the parties of the Socialist International, as the Deputy Leader of the Opposition would have found out in Paris at the Socialist International recently.And if he had stood up at the Socialist International and told them how they should get rid of value added tax and introduce wholesale sales tax, he would have had nobody in that room supporting him unless there was a representative of a socialist party from Swaziland or Botswana present because it is the Australian Labor Party, Swaziland and Botswana that, according to Labor, are the only political parties in the world that have figured out that value added tax is not a broad indirect tax worthy of tax reform, that Scullin had it right in 1932—that the most up-to-date modern thinking that the Labor Party can still cope with was Scullin in 1932—that the rest of the world—France, Germany, Japan, all of Asia, Britain, New Zealand and Australia—have all got it wrong, and that the only people who have really got it right are Australian Labor, Botswana and Swaziland.1269512695Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—My question is to the Minister for Community Services. Could the minister outline to the House the benefits to self-funded retirees flowing from reforms to capital gains tax being introduced by this government's new, innovative business tax system?12695Anthony, Larry, MPMr ANTHONYXJ6RichmondNPCommunity Services10—I would like to thank the member for Parramatta because I know that not only is he a fine member but he is very concerned about his self-funded retirees and the elderly people in his electorate. He knows, like all Australians know, that this business tax reform package, which has been put through, is great news for self-funded retirees and is great news for elderly Australians.One of the major benefits that the Treasurer has negotiated in the business tax package is that there will be increasing levels of savings and contributions towards superannuation funds and also towards private savings. I think all of us would agree that, if we can encourage private savings, then we can start to encourage greater self-reliance in people for their own retirement. If we can have greater self-reliance and a greater incentive for people to plan for their own retirement, then it means a lesser burden on the social security system.The other measure which the Treasurer clearly articulated is the enormous benefits, particularly for older Australians, with the capital gains tax changes. If you have been holding a business asset for longer than 15 years, you sell it and you are over the age of 55, then all that now will be subject to capital gains tax relief. I think that is a tremendous benefit to people in regional Australia and also in urban Australian areas such as the seat of Parramatta.One of the great benefits with the new business package is the effective rate on capital gains towards superannuation funds which will now only be 10 per cent, as opposed to 15 per cent, which of course was introduced by the Australian Labor Party. This will mean superannuation contributions will have a greater return to members. Likewise, self-funded retirees will have a further benefit because of the self-refundable imputation credits. This is very good news and it is also good news for the 1.5 million pensioners, in light of the many investments that they have in mutual funds, because their returns will be higher and they will get greater remuneration. So without question the coalition's business tax reform package is a huge leap forward for all Australians.1269512695Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Minister for Employment, Workplace Relations and Small Business. Are you aware that the Antipodean Gallery in Subiaco, sellers of second-hand books, maps and prints, is closing early next year and shifting its stock to New York because the GST will, in the words of the shop owner, David Lilburne, `create an impossible administrative burden'? How can you claim that a tax system which requires regular reporting monthly or quarterly according to a 100-page instruction manual—this is what the small businesses have to go through—will simplify business red tape? Won't your new tax tangle be an impediment to the operators of small businesses, like the owner of the Antipodean Gallery already anticipates?12696Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—The implementation of the goods and services tax provides us with an opportunity to change the way in which the tax system is administered. For many years, we have seen the small business community loaded up with a string of tax administration systems—all different, none coordinated and all of which have led to a significant impost of red tape on small business. That is why a lot of small business people have been saying for many years that we need a better system.Opposition members interjecting—WI4Mr REITH—Well, just you wait! When we were elected, we set up the Bell committee. The Bell committee went around to small business to talk to them about how we could better administer the tax system.Mr Tanner interjecting—10000SPEAKERMr SPEAKER—The member for Melbourne is warned!WI4Mr REITH—The Bell committee recommended a consolidation of five existing tax systems into one pay as you go system. That system will see the end of the reportable payments system, and it will see, for example, the end of provisional tax.Mr Fitzgibbon interjecting—WI4Mr REITH—For many years a lot of small businesses have gone broke because of the provisional tax which you kept in place. We will abolish the provisional tax system.4G4DOWNERMr Downer—There is sales tax on books in New York.WI4Mr REITH—There is sales tax on books in New York. Thank you to the Minister for Foreign Affairs. He does travel more than I do. For small business this will mean a consolidation of the system. Instead of up to 32 different iterations with the tax office in an annual period, it will be reduced to four quarterly payments. If it were the case that your small business put the invoices, the receipts and the cheque butts into a shoe box until the end of the year and then passed them to the accountant, there is no doubt that you would have a greater transition cost. But you would also have a better set of accounts and a better understanding of what was happening in your business.This package represents the most significant attack on red tape in recent Australian tax history. It is very good for small business not just from a red-tape point of view but because customers will have more money in their pockets and because we are reducing tax on business. This is a very good package. When it is topped off with the fantastic reforms on capital gains tax, small business is going to be a lot better off.1269612696Brough, Mal, MPMr BROUGH2K6LongmanLP10—My question is addressed to the Minister for Financial Services and Regulation. Minister, will you inform the House how Australia's small shareholders will benefit from the government's new business taxation system?DT4CREANMr Crean—Tell them about the Sunday lunch in London, Joe!12696Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—You were shopping in Marks and Spencers.Mr Crean interjecting—DK6Mr HOCKEY—How was Harrods?10000SPEAKERMr SPEAKER—I warn the Deputy Leader of the Opposition and I warn the Minister for Financial Services and Regulation. I am tired of this across-the-table exchange.DK6Mr HOCKEY—I thank the member for Longman for his question. The member for Longman, and importantly the people of Caboolture, would be aware of how significant share ownership is for improving the general wealth of Australia. As I understand it, the Bank of Queensland was recently very heavily oversubscribed. The people of Queensland are very keen to invest in shares.After the passage of the Ralph taxation initiatives yesterday, 80 per cent of Australians will pay no more than 15 per cent in capital gains tax as a result of those initiatives. In fact, super funds, which are accessible to 91 per cent of working Australians, have had their taxation reduced from 15 per cent to 10 per cent as well. That brings Australia into line with a whole range of other countries, but most importantly it reduces the complexity and compliance costs for small business and particularly for small investors in Australian shares.It is an opportune moment to remind the House that share ownership in Australia is continuing to grow. Since 1995, 2.8 million Australians have become direct Australian share owners for the first time. That has come about for two particular reasons: firstly, the privatisation programs undertaken by various governments around Australia and, secondly, demutualisation of insurance companies. They have provided the shares. So now nearly 44 per cent of all Australians directly own shares, which is more than six million people.Some people in this House do not think that is enough. I noted the comments of the member for Werriwa during the course of the debate on business taxation yesterday. He, having for the last 3½ years been trying to drag the Labor Party kicking and screaming to the right, has now decided to try to pull them to the left on taxation.PE4BEAZLEYMr Beazley—Mr Speaker, I rise on a point of order. This has absolutely nothing to do with the question that was asked of him, which was to explain the government's legislative proposals.10000SPEAKERMr SPEAKER—I was clearly waiting for the quote to see whether it had relevance to the question that had been asked. It is difficult to rule prior to knowing what the member for Werriwa had said.DK6Mr HOCKEY—This was in the debate on business taxation yesterday in the House. I quote the member for Werriwa:This parliament should be enacting a first share owners scheme to bring all Australians into the virtues of a share owner democracy . . . We all agree, but we are intrigued that, when this parliament had legislation before it with the most accessible and affordable first-time share owners scheme in it—and that was the sale of the second tranche of Telstra—the Labor Party and the member for Werriwa voted against it. On the one hand, the member for Werriwa comes in here and says there should be in operation a share owners scheme for all consumers, and on the other hand he votes against the sale of Telstra.5I4McMULLANMr McMullan—Mr Speaker, I rise on a point of order. With regard to standing order 145, now that we have heard the quote and the examples that have been drawn from it, it is clearly not relevant to the question that was asked.10000SPEAKERMr SPEAKER—I reassure the Manager of Opposition Business that if the minister is not relevant to the question asked, at the instruction of the chair he will resume his seat. But it is not hard to imagine how he may be drawing a parallel between share ownership and investors and business tax reform. That is why I have allowed him to continue.DK6Mr HOCKEY—I am helping them in this situation, Mr Speaker. From now on, share ownership in Australia will be more affordable and more accessible than ever before because of the initiatives of abolishing stamp duty on the transfer of shares, starting 1 July 2001, lower transaction costs as a result of the Wallis initiatives, greater competition in the provision of share ownership services, halving capital gains tax and scrip for scrip takeover relief. Share ownership in Australia has never been more accessible for everyday Australians.1269712697Roxon, Nicola, MPMs ROXON83KGellibrandALP00—My question is to the Minister for Employment, Workplace Relations and Small Business. Are you aware that, contrary to the Department of Immigration and Multicultural Affairs report, Charter of Public Service in a culturally diverse society , the Australian Taxation Office is not intending to translate the GST registration and information kits for use by small business? Minister, how will a measly $200 adequately cover the GST implementation costs to thou sands of ethnic small businesses—many in my electorate—when these businesses will be forced to seek additional advice at considerable extra cost?12698Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I am not sure about the assertion that the member made at the start of her question. I thought we were providing quite a lot of material in a range of languages.Mr Fitzgibbon interjecting—10000SPEAKERMr SPEAKER—The member for Hunter was not asked the question.WI4Mr REITH—I will be happy to have that checked and will advise the honourable member in due course. In terms of the voucher, the whole idea of it is to provide assistance but it is particularly directed to ensuring that small business avails itself of the wide range of information, training and other measures necessary to assist in the transition. The GST Assistance Office is seeking registrations of interests from suppliers so that we have an idea of the extent of discounts that will be available to small businesses as they exercise the voucher that is being made available to them. So what you are going to get is a leveraging up effect of the voucher, thereby enhancing the value of it for small business operators. When we took advice from the Small Business Consultative Committee on this issue, contrary to the misleading statements made by your shadow minister, the committee actually said that a voucher idea—8K6FITZGIBBONMr Fitzgibbon—Why don't you release the report.10000SPEAKERMr SPEAKER—The member for Hunter is deliberately defying the chair and I warn him.WI4Mr REITH—The Small Business Consultative Committee said that the money has its role, but the really important thing for small business is to have a range of information, education and training programs made available. That is what we have done. As I say, we have leveraged that up in a sense using the voucher, and I was very pleased to see in the Yellow Pages index, I think it was, that came out this week that we are seeing a lot of small business people now turning their minds to implementation. Obviously, you would expect that, but it was a very high figure. I do urge small businesses to focus on this issue. I know they have Y2K and Christmas and everything else coming up, but it is wise to get in early and get on top of the issue. We are very keen as a government, through all the organisations that we are assisting, to ensure that they do have quality information available to them.8K6FITZGIBBONMr Fitzgibbon—Mr Speaker, I rise on a point of order. The Minister for small business should be required to authenticate his claims with respect to the Small Business Consultative Committee's report and should do so by releasing it.10000SPEAKERMr SPEAKER—The member for Hunter will resume his seat.1269812698Macfarlane, Ian, MPMr IAN MACFARLANEWN6GroomLP10—My question is addressed to the Minister for Immigration and Multicultural Affairs. I refer to your answer yesterday concerning the strong action being taken by this government against unauthorised arrivals. Do the large numbers of people who overstay their visas in Australia also pose a major threat to the integrity of our borders?12698Ruddock, Philip, MPMr RUDDOCK0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—I thank the honourable member for Groom for the question. It certainly is a matter of concern to the government when people are here unlawfully, and there is a variety of means by which people become unlawful. First, of course, if people come by boat or by air and are not authorised to enter Australia, there are good and appropriate reasons why that is a matter for concern. We need to be able to satisfy ourselves that we know who the people are, whether they pose a risk to the health of the Australian community, whether they are of character concern—in other words, whether they are criminals in another place—or whether they pose a risk to our security. They are appropriate questions to be able to ask.In relation to people who come to Australia lawfully—in other words, they enter on a visa and we have had an opportunity to clearly identify them and to satisfy ourselves from information made available to us that they are not criminals and that they are not of security concern; we maintain alert arrangements to identify people of particular concern to us—they do not pose the same immediate problem on arrival. The fact is that, in relation to the people who come to Australia by air, we make quite determined efforts to intercept them before they even get on an aircraft. In the past 12 months, something in the order of 438 people were intercepted at overseas airports and prevented from boarding flights to Australia. We also locate people at our airports who arrive and are refused entry. That can be because they have fraudulent documentation or it can be because we have other doubts in relation to their bona fides. We have seen a very significant increase in unauthorised border entries at our airports, and in the last year we refused entry to 2,019 people. Something in the order of 70 per cent of those unauthorised air arrivals were removed within 72 hours of arriving in Australia.However, we are putting considerable resources into dealing with the other problem. When we know who they are and they happen to overstay a visa I do not regard it as being of the same urgency as the other matters, but it is of concern. Last year we located something of the order of 13,000 people who had overstayed visas or breached visa conditions. That is a very substantial number. When you estimate that 50,000 people are here unlawfully at any time, a 20 per cent location rate is very significant indeed. So that members may know of our ongoing concern in relation to this matter, I have had a review of illegal workers here in Australia. The government will be considering recommendations from the report. It will be interesting to see the level of support for the wide ranging recommendations that will no doubt flow from that review.1269912699Swan, Wayne, MPMr SWAN2V5LilleyALP00—My question without notice is directed to the Minister for Community Services. Minister, is it a fact that, in your electorate of Richmond, the Tweed Shire Council makes grants to community organisations such as the Tweed Heads Family Centre? Is it also a fact that the GST will apply to all local government grants, including those in your electorate? Minister, irrespective of what the Commonwealth does with its grants, what arrangements has the Commonwealth made in conjunction with the Tweed Shire Council and all other councils to ensure that their grants will not be cut by 10 per cent when your GST is introduced?12699Anthony, Larry, MPMr ANTHONYXJ6RichmondNPCommunity Services10—I thank the member for Lilley. Of course, he spends a lot of his time scaremongering and spreading fear amongst the most vulnerable people of the community, whether it is local councils, younger people or older people. As I have mentioned quite a few times in the parliament, grants that are made to charities that are registered and have an income over $100,000 will be subject to a GST. Of course, the actual grant itself will be increased to take that into account.2V5SWANMr Swan—Who by?10000SPEAKERMr SPEAKER—The member for Lilley has asked his question.XJ6Mr ANTHONY—Clearly, charitable organisations just claim it back and it just washes through the system. That is exactly how it operates.1269912699Andrews, Kevin, MPMr ANDREWSHK5MenziesLP10—My question is addressed to the Minister for Employment Services. Is the minister aware of recent criticism of government programs for the unemployed, particularly the long-term unemployed? Could the minister inform the House what the government is doing and what progress has been made?12699Mr ABBOTTMr ABBOTTUNKNOWNUNKNOWNUNKNOWNUNKNOWN00—I thank the member for Menzies for his question. Even though unemployment has come down from 11 per cent under Labor to about seven per cent now, some people are not prepared to give credit where it is really due. The latest example of this was the member for Lalor who attacked the government in the House this week because unemployment in her electorate is still well above the national average. I should point out that, in the statistical region of outer western Melbourne, which contains the electorate of Lalor, unemployment was 13.3 per cent when this government took office. It is now down to 9.4 per cent, which is obvi ously still too high but it is a lot better than it was. Unemployment was in fact at 10.5 per cent in that region. When the now Leader of the Opposition was minister for employment it was 16.2 per cent and, when the now Leader of the Opposition lost that office, unemployment in that region peaked at 17.5 per cent when none other than the now Deputy Leader of the Opposition was minister for employment. This is not untypical of what has happened to unemployment in regional Australia.Last week the acting shadow minister for employment claimed that government programs were failing and they were particularly failing the long-term unemployed. I should point out that long-term unemployment and very long-term unemployment peaked in 1993 when the Deputy Leader of the Opposition was minister and are now one-third below those peaks. I should also point out that 70 per cent of the participants in intensive assistance under the Job Network are long-term unemployed and that 30 per cent of long-term unemployed intensive assistance clients are in paid employment three months after leaving the program. The only Working Nation program with higher percentages of long-term unemployed in it was new work opportunities, which had just a 20 per cent outcome rate at a cost of $55,000 per successful outcome compared to just $7,000 under intensive assistance. Intensive assistance is working because it involves local Job Network members tailoring a package of assistance personally to each job seeker.On that point, it is worth noting what the acting shadow minister said in his interesting book Open Australia. He said:The introduction of the concepts of case management and mutual obligation has helped to customise the relationship between state and beneficiary. This process needs to be accelerated so that government assistance assumes a much more facilitating role.That is precisely what this government is doing in all of our employment services. We are building a social coalition between the great charitable organisations and the small community organisations of this country to help the people who need it most. I should point out that, in an electorate such as Lalor, we have funded no fewer than 16 Work for the Dole projects, and each one of them involves a local organisation working with local people to enhance local infrastructure and the fabric of local life.I would say to members opposite that they should support these great programs that are working with the communities of Australia and they should get away from this old-fashioned mind-set that Canberra and only Canberra knows best.1270012700Crean, Simon, MPMr CREANDT4HothamALP00—My question is directed to the Minister for Transport and Regional Services. I refer to the coalition's election promises to cut petrol excise by an amount that ensures the GST does not push up any petrol prices. Deputy Prime Minister, is this still coalition policy? With the cost of petrol running at over 80c per litre at many city and country stations, by how much do you need to cut the levy to keep your promise?12700Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for his question. I notice that one other member of his frontbench has been declaring that the 7c is something set in concrete, which it never was. It was always only an indicative figure. We have made it plain that when the new fuel tax arrangements come into place we will reduce the cost of excise on fuel by an amount equivalent to the GST. For private motoring then, the GST is imposed and the private motorist pays the same price for petrol that they would otherwise have paid. For business use, of course, the GST is rebatable at a rate of 10 per cent. That is over and above the other reductions to fuel prices.Opposition members interjecting—4K4Mr ANDERSON—I make the point that it is a broadcasting day. The ALP has been out there fearmongering on our approach to fuel taxation. This is the crowd that oversaw an increase in the price of fuel excise in Australia from 7c a litre to 34c. They are the people who in government in 1993, when they told the Australian people that they could introduce l-a-w law tax cuts without imposing a GST and without raising new taxes, proposed to raise the price of petrol by 10c a litre for leaded and 5c for unleaded, with commensurate rises in the price of diesel. Let that be remembered. That was their approach to fuel policy. They are the people who believe in high taxation on fuel and high taxation on the costs of transport. We are the side that has significantly reduced the cost of fuel, to the great benefit of rural and regional Australia.I conclude by saying that we know what their policies are. Their policies are to retain the wholesale sales tax and to keep pushing it up like they did in 1993. Their policies are to retain fuel excise and to keep increasing it because the tax system, as they know, is actually fundamentally broken. I think the message out of all of this is that, given that the new spokesman for rural Australia over there has not yet repudiated the member for Dickson's claims that our reductions in fuel costs are just a $7.8 billion boost to pollution, I think it is time the Leader of the Opposition showed a bit of leadership here and actually showed his hand. Does he—and the Labor Party—or does he not support our reductions in the cost of transport in this country?1270112701Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—My question is to the Minister for Forestry and Conservation. Can the minister advise the House of the reaction from timber communities, business and workers to the decision by Labor and the Democrats to persist with the unworkable amendments to the Regional Forest Agreements Bill 1998 ? Would the minister further advise if the failure of the legislation to pass will ruin opportunities for major investment and employment, especially in forest industries in my electorate and in many other electorates around Australia?12701Tuckey, Wilson, MPMr TUCKEYSJ4O'ConnorLPForestry and Conservation; Minister Assisting the Prime Minister10—I thank the member for Eden-Monaro for that question. Like many other members, he constantly puts the case for the timber workers in his electorate, who he sees as deserving of employment. Irrespective of the more esoteric arguments advanced in this place on the regional forest agreement legislation, the judgment of those representing capital and labour is that the Labor Party's amendments, as reiterated in the Senate, are in fact an attack on the security needed to guarantee investment, jobs and growth in the forest industries.Consequently, amongst others, the CFMEU has put out a press release that is headed `Forest union lashes Labor'. Included in that press release by Mr Trevor Smith, the National Secretary of the CFMEU Forestry Division, which condemns the ALP, the union has said, `The union has accused the ALP of breaking commitments made to the union during the last federal election.'Mr Zahra interjecting—SJ4Mr TUCKEY—In other words, as is very clear, at the last federal election the member for McMillan and other members went to their people and said, `Trust us, we stand by our own invention—Mr Zahra interjecting—SJ4Mr TUCKEY—which is the national forest policy statement of 1992, and the union is now saying to the public and to the workers, `You told us an untruth.' That is what they—the union, the CFMEU—are saying. What is more, they say, `Let no-one in the parliament think that this issue will go away. Every regional community reliant on the forest and forest products industry is going to be informed of this betrayal and the union will urge the government to reintroduce the bill as soon as possible.'I can assure you, Mr Speaker, that the government will in due course reintroduce this legislation and all the Labor members in Tasmania with forest interests—and that is the lot of them—all the Labor members in Victoria with forest interests and all the Labor members in New South Wales with forest interests will have the opportunity, leading into the next election, to explain to the people who have loyally backed them over the decades why, according to the assessment of the union—Mr Zahra interjecting—10000SPEAKERMr SPEAKER—I warn the member for McMillan.SJ4Mr TUCKEY—according to the assessment of the investors, according to the assessment of the workers, they have let them down and done so deliberately. The issue here is that, as Senator Brown is so keen to tell everyone, the Labor Party's amendments were designed to wreck the regional forest agreements legislation which is designed to encourage people, by giving them legislative backing to a state-federal agreement, to invest in the industry.We have a $2 billion trade deficit in forest products in Australia. That is money we are borrowing as a nation from the rest of the world. That deficit can be removed if we go into value adding, particularly in the manufacture of paper. You do not get into the manufacture of paper without a $1 billion or $2 billion investment. But imagine the opportunities I have as minister under the action agenda to go to people who are interested in doing that and to say, `Spend your money, but Kim Beazley has made it clear that he will take your resource away from you because he wants to cancel out through the Senate regional forest agreements made in good faith.'It is an outrage that people run around at the factory gate telling people, `We are looking after you,' when of course the Hansard record in this House and in the Senate says that they voted against the interests of their own workers. I can assure those workers we will persist in giving them the protection and the investment they are entitled to.1270212702Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Treasurer. In light of the Deputy Prime Minister's last answer, has your mid-year review factored in a reduction in fuel excise of greater than 7c per litre?12702Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The answer that the minister gave, which is entirely correct, is that the excise arrangements will be struck on the price of petrol at the time that we strike them. The amount will come off the excise—8I4MARTINMr Martin—How else can you do it?Opposition members interjecting—CT4Mr COSTELLO—I suppose we should strike at a price other than when we strike it, should we? These economic geniuses, Mr Speaker! I suppose we should strike it on last year's price, should we? Or maybe we should strike it on next year's price. The economic genii of the Labor Party think it is very funny to strike it on the price on the date on which you strike it. And, of course, on the date on which you strike it, you will strike it a price so that the excise reduces and the 10 per cent means that prices need not rise. I make that point.Of course, another factor to be thought of by the economic genii of the Labor Party is that the higher the price, the more the reduction in the excise would have to be and the higher the 10 per cent GST would be. In fact, when you equalise out the tax arrangements, you get the same amount of revenue anyway. The excise comes down and the 10 per cent goes back up. It is the same amount of tax. It just depends on whether you are taking it in a form of excise or whether you are taking it in the form of GST.We have these questions here every day. We had them from the member for Lilley about grants. What is going to happen with these grants? The fact of the matter is that a council that has registered for GST, which pays 10 per cent, will get it all back—the full input tax credits.DT4CREANMr Crean—On a point of order, Mr Speaker, the question was: has he factored in a reduction of fuel excise of greater than 7c per litre in his mid-year review? He says he agrees with the Deputy Prime Minister. Has he factored it in?10000SPEAKERMr SPEAKER—The Deputy Leader of the Opposition will resume his seat. He has made his point of order.CT4Mr COSTELLO—We factored it in on both sides. We factored in the excise reduction and the GST take. As I said before, if you reduce the excise and apply a 10 per cent GST to equalise the price, the revenue is actually the same.Let me make a point: excise is a tax; GST is a tax. Whether it is called excise or whether it is called GST, it remains the same. The frightening possibility—it may just be a frightening possibility—is that, possibly since 1985 when the Labor Party last supported value added tax, they have been campaigning against something they have not understood. It is quite possible that since 1985 they have been campaigning against something they have not understood. Mr Speaker, 150 countries in the world can do tax reform. They can do it in Germany, France, Britain, New Zealand, Japan and Singapore, but Australian Labor cannot make the cut.PE4BEAZLEYMr Beazley—Great answer, Pete.Mr Costello interjecting—Mr Snowdon interjecting—10000SPEAKERMr SPEAKER—I warn the member for the Northern Territory!Opposition members interjecting—Mr Downer interjecting—10000SPEAKERMr SPEAKER—I warn the Minister for Foreign Affairs. I indicate to the parliament that by any measure I have been an occupier of the chair reluctant to remove people from the parliament. Why? Because 148 of us—Mr O'Keefe interjecting—10000SPEAKERMr SPEAKER—I warn the member for Burke! Why? Because 148 of us have been elected here by people to represent them, and to be obliged to leave the parliament has to be the ultimate indignity. I will, however, exercise the authority vested in me if I must, and if I do so it will be because people have asked that they be able to leave the parliament by reason of their behaviour.1270312703Wakelin, Barry, MPMr WAKELINHV5GreyLP10—My question is directed to the Deputy Prime Minister and Minister for Transport and Regional Services. Can the Deputy Prime Minister inform the House about the federal government's support for the construction of the Alice Springs to Darwin railway line and the significant benefits that new rail line will bring to the nation and particularly to regional communities in South Australia and the Northern Territory?12703Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for his question and acknowledge his very real interest in and very strong support for the Alice Springs to Darwin railway line announced by the Prime Minister at the Regional Australia Summit here recently. I noticed in something, which probably as closely as anything else approximates a policy on that side, that the Leader of the Opposition supports it strongly as well. We have increased our financial commitment to the project by a further $65 million, in addition to the $100 million already allocated from the Federation Fund and the long-term peppercorn lease of the existing Tarcoola to Alice Springs line, which has a written down value of some $400 million.Completing the link between Adelaide and Darwin—which was first promised in 1911—will significantly benefit not just the South Australian and Northern Territory economy, and in particular their exporters, but the nation. Construction will take three years. It will create employment for 7,000 people in regional Australia. I know—and this will be of enormous relief to the member who asked the question—that it will particularly benefit the steel producing city of Whyalla. A United States Asia-Pacific transport consortium, which includes the South Australian based Macmahon Holdings and Kinhill Engineering and Construction, was selected in June as a preferred builder for the railway. With the abolition from June next year of all excise on diesel train operation, we have provided the consortium and, it should be said, all railway operators with a boost to the competitiveness of rail services.This is the sort of nationally significant project which helped to make Australia great. It certainly leads to Australians being very proud of the work that can be done. It is a great credit to the South Australian and Northern Territory governments that they refused to say no. I think the Alice Springs to Darwin link will enhance our attempts to revitalise rail in this country. We are putting real capital into rail. We are getting traffic and freight back onto rail. Our reform projects are indeed directly opposite to those pursued by the Labor Party when they were in government; for example, that infamous stretch of rail where they set out to restore it under their One Nation program and the trains went slower after they had reconstructed the rail than they had before.ZD4HOWARDMr Howard—Mr Speaker, I ask that further questions be placed on the Notice Paper . In the process, can I record, on behalf of the government, our gratitude to the Treas urer for the tremendous job he has done in negotiating business taxation.Questions Without Notice127041270415:17:0012704Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—Mr Speaker, I seek the indulgence of the chair to add to an answer.10000SPEAKERMr SPEAKER—The minister may proceed.WI4Reith, Peter, MPMr REITH—I was asked about translation services in the new tax system. I have made some inquiries about that. Quite a lot of the material is in fact being translated—advertisements, fact sheets and the like. It is true that some technical documents are not translated. That is entirely consistent with the practice of the Taxation Office for many years, including when the opposition was in office. However, we now have the widest spread of communities ever targeted in a single campaign. Furthermore, we have very useful assistance available to people through the Translating and Interpreting Service. That phone number is 131450.I was asked about New York. They do have a retail sales tax in New York of eight per cent, and it is on books. Furthermore, you do not get a rebate for any tax paid.Questions to the Speaker127041270412704Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—Mr Speaker, under standing order 150, I wonder whether you would write to the Minister for Finance and Administration, hurrying up an answer to my question No. 875 lodged on 25 August.12704Mr SPEAKERMr SPEAKER10000PON/A10—I respond to the member for Melbourne by indicating that of course I will take that action.1270412704Fitzgibbon, Joel, MPMr FITZGIBBON8K6HunterALP00—Today's parliamentary sitting represented the government's last chance to respond to the report by the Joint Select Committee on the Retailing Sector within the requisite 90 days. Pursuant to standing order 150, would you write to the Minister for Employment, Workplace Relations and Small Business, encouraging him to do something for small firms in this country by responding to that report?12704Mr SPEAKERMr SPEAKER10000PON/A10—There is no obligation on the chair to write to the committee as, of course, there is an obligation under the standing orders to respond to unanswered questions to ministers.Personal Explanations1270415:20:0012704Albanese, Anthony, MPMr ALBANESER36GrayndlerALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the honourable member claim to have been misrepresented?R36Albanese, Anthony, MPMr ALBANESE—I do.10000SPEAKERMr SPEAKER—Please proceed.R36Albanese, Anthony, MPMr ALBANESE—Yesterday, in an outrageous article on page 1 of the Sydney Morning Herald , Margo Kingston said:As the Left's Anthony Albanese reintroduced his private member's bill to grant gay partners rights to super—in line with Labor policy—Labor copped out on a costless symbolic recognition of gay couples.The fact is that the changes to Senate standing orders on pecuniary interests to allow for gay and lesbian partners by using non-discriminatory, inclusive legal language has been a significant victory for same sex relationships and all those who believe in equality. It should be noted that all members of the Senate Procedure Committee, including the Democrats, supported this change and it received the unanimous support of the Senate.10000SPEAKERMr SPEAKER—The member for Grayndler must indicate where he has been personally misrepresented.R36Albanese, Anthony, MPMr ALBANESE—It is true that on Monday I reintroduced my private member's bill on same sex superannuation for the third time. This was necessary because the government has refused to allow a vote on this legislation in spite of the fact that it is supported by the industry—10000SPEAKERMr SPEAKER—The member for Grayndler must come to where he has been misrepresented in the article or resume his seat. R36Albanese, Anthony, MPMr ALBANESE—the CPAs, trade unions, HREOC, gay and lesbian rights groups and thousands of petitions tabled in this parliament.10000SPEAKERMr SPEAKER—The member for Grayndler will resume his seat.15:21:0012705Zahra, Christian, MPMr ZAHRA84HMcMillanALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKERMr SPEAKER—Does the honourable member claim to have been misrepresented?84HZahra, Christian, MPMr ZAHRA—I do.10000SPEAKERMr SPEAKER—Please proceed.84HZahra, Christian, MPMr ZAHRA—In response to a question today, the Minister for Forestry and Conservation accused me of breaking commitments to forest industry workers in my electorate. That is clearly a filthy, grubby lie.10000SPEAKERMr SPEAKER—The member for McMillan will withdraw that statement.84HZahra, Christian, MPMr ZAHRA—I withdraw the comment and suggest the word `lie' instead of `untruth'.Questions to the Speaker127051270512705Wilton, Greg, MPMr WILTONYK6IsaacsALP00—Pursuant to standing order 150, would you write to the Minister for Transport and Regional Services in respect of question No. 925 appearing in the Notice Paper under my name?12705Mr SPEAKERMr SPEAKER10000PON/A10—I will undertake that action.Documents1270512705Reith, 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 paper:Australian Institute of Health and Welfare—Australia's Welfare 1999Debate (on motion by Mr McMullan) adjourned.Adjournment12705Motion (by Mr Reith) agreed to:That the House at its rising adjourn until Monday, 6 December 1999, at 12.30 p.m., unless the Speaker, or, in the event of the Speaker being unavailable, the Deputy Speaker, fixes an alternative day or hour for the meeting.Matters of Public Importance127051270510000SPEAKERMr SPEAKER—I have received a letter from the honourable member for Jagajaga proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the Government to adequately resource hospitals to meet the administrative costs of the GST which will result in a further reduction in the capacity of hospitals to deliver quality health servicesI 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—15:23:0012705Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—As my colleagues point out, the Minister for Health and Aged Care does not even have the decency to come in and debate this matter, so all those hospitals and pharmacies out there which are going to have to implement this iniquitous tax should know that this minister will not even come into this chamber and debate this matter of public importance. As all of the hospitals—public, private and non-profit—know and as all of the pharmacies know, this GST is a time bomb ticking away. It is set to go off in all of those institutions and pharmacies around the country on 1 July next year. Its impact will be felt across the community and it will certainly be unpalatable in all of those health institutions. It will reverberate loudly in our hospital system.You might recall that the government went to the last election promising that health services would be GST free, meaning, you would think, that there was not going to be any GST on any health services: another promise made to be broken—a non-core promise. The reality is that the GST will turn up in thousands of ways and impose a huge administrative burden on our hospital system. The total implementation cost across all types of hospitals will be several hundreds of millions of dollars. No-one yet knows the exact figure, because it keeps growing the more the issues are examined.Over the last year we have seen the detailed design of the GST on health emerge through various processes. We have seen frequent changes determining what is going to have a GST and what is not. The government have now had three goes at trying to define what types of medicines will be taxed and which ones will not be taxed. They have left us with the latest version where, for things like Strepsils, for example, some types of Strepsils will have a GST and others will not have a GST. We have many other similar absurdities. The government have managed to design a tax system that taxes the frames of glasses but not the lenses. Can you figure out the sense of that?We are still waiting, months after the so-called final announcement of the GST and what it is going to apply to, for these special items that the Minister for Health and Aged Care says he is going to exempt on public health grounds. We still do not know which ones they are going to be and neither do the pharmacists who are going to sell them. Over the next 12 months every Australian business will suffer as they grapple with the very complex task of working out how to implement this tax. The anomalies built into the original scheme have been magnified by the deal and compromises that the government and the Democrats arrived at. Nowhere will that be more complex, as it turns out, than in our public, non-profit and private hospitals. All of them already face a huge array of problems generated by the government's failure to properly fund our public hospitals in particular.The press has increasingly been reporting the number of adverse events where patients are suffering avoidable illnesses and even death as a result of their treatment but in that area as well the government continues to delay effective action. Amidst this air of crisis in funding, what do we have from this government? What is their response when it comes to the massive administrative burden on hospitals that is going to come about as a result of the need to implement the GST and establish the new accounting procedures in hospitals that have never been subject to sales tax before? That is the critical thing. Public hospitals have never had to deal with this issue before. It is not as if they are replacing any previous taxes. These hospitals have never been subject to sales taxes in the past and now they face the huge task of re-examining every aspect of their operation and establishing systems to monitor all purchases and payment of GST.In the future, hospitals will have to pay the GST on various support services provided by private operators and then claim the rebates back for those parts of the hospital's activities which are free of GST. Out in the community, we all know what the nightmare on food is going to be like. Some food will be taxable and some will not, as a result of the deal done by the government and the Democrats. Hospitals feed people three times a day. They are going to have to track the food from the kitchen to the dinner plate and figure out what food they can claim a rebate on, for all the food that is eaten by patients. There are different tax arrangements for the food that is eaten by the staff. The poor people having to work out that mess in the hospitals will certainly confront a massive task. In future, the hospitals will have to add a GST component to the total bill that every patient gets who buys something from the hospital—uses a phone, hires a television, arranges for a haircut and all the sorts of things that people in hospital have to do.In Treasury jargon what this means is that input tax credits are not available for non-deductible expenses. It is going to be necessary for hospitals to figure out what is non-deductible. There are no simple boundaries and the government has totally underestimated how diverse the activities of our hospitals are. This will impose a significant cash flow delay on hospitals as they pay for the GST up-front and recoup it on a monthly or quarterly basis.The emergence of hospital co-locations, where you have a public hospital and a private hospital on the same site, and outsourcing of service provisions through shared service centres are going to make the task for all of our hospitals extremely difficult indeed. The invoices are going to have to be apportioned, with the allocation of tax credits between the different hospitals being worked out in partnerships. It is going to be an out and out mess. Of course, all the hard-pressed staff are going to be taken from their normal tasks—which are supposed to involve looking after patients—to undertake training to figure out how to do this job and to work on the implementation of these complex new procedures. Remember that the staff in our hospitals have never had to do this before because they did not have to pay sales tax.To achieve this, they will be given virtually no compensation. Not-for-profit hospitals and for-profit hospitals will be eligible for $200. They will be able to get the voucher. Of course, if small businesses around Australia understandably feel offended by the offer of that $200 gift voucher from our so generous Treasurer to meet the GST implementation costs, imagine how these hospitals, with turnovers of many millions of dollars, feel about this ridiculous sum of $200. Public hospitals will get nothing from the Commonwealth.You will be pleased to know that the government has allocated $170,000—for all of Australia—to provide for training of staff in the not-for-profit sector. Just in the not-for-profit sector they will get $170,000, which is a relatively tiny amount when you consider the hundreds of hospitals and the tens of thousands of staff involved in this task. This is going to provide only for the setting up of the training sessions. Nothing is going to be provided for the huge cost to the hospitals of lost staff time for taking part in training, arranging the implementation of new accounting systems and so on. What we know is that these costs will run into many millions of dollars. The reality is that, inevitably, other important projects will be dropped or delayed to allow staff to devote their energies to coping with the GST. The capacities of our hospitals will be reduced and the quality of services will be compromised.One of the most detailed analyses of the costs involved has been carried out by the accounting firm Arthur Andersen for Catholic Health Australia. Their report concluded that the additional costs caused by the GST within Catholic hospitals alone would add between $36 million and $56 million in the first year and about $5 million a year extra from then on. That is an increase of about four per cent in the total costs of running those hospitals in the first year.MG4LEEMr Lee—How will they pay for that?PG6Macklin, Jenny, MPMs MACKLIN—There are only two ways they will be able to pay for that. They will be forced to either increase their charges or reduce the quality of care that is provided. They are the only options that will be available to these hospitals: to increase the charges, which patients will have to pay, or to reduce the quality of care, which the hospitals will not want to do. It is an ongoing cost of about 2½ per cent.The Catholic hospitals represent about 15 per cent of the total hospital sector. Therefore, the total cost for the whole hospital sector will be several hundred million dollars initially. Of course, the ongoing costs will be tens of millions of dollars. As we know, this government has no intention whatsoever of compensating hospitals for these huge additional costs. The only consequences will be, as I have just said, that services will be reduced or, in the private or non-profit sector, that the price to the patient will have to rise.The story gets even worse when you combine it with the lack of willingness by this government to properly pay for our public hospitals. Not only does the government not intend to compensate our public hospitals, private hospitals and non-profit hospitals but it is also short-changing the public hospitals on future funding. We now know this because there has been a very detailed study into the indexation of hospital grants under the Australian health care agreements. The Commonwealth only signed these agreements one year ago, and they are already trying to welsh on the deal.The health care agreements bind the Commonwealth to indexing their annual payments to hospitals in line with population, growing utilisation of hospitals, the growth in medical costs due to inflation and the application of new technology. What do you think the Commonwealth offered this year? It offered 0.5 per cent to account for the indexation of hospital costs, which is well below the inflation rate of 1.25 per cent. There is no recognition of the fact that medical costs are rising much higher than the CPI. The Australian Bureau of Statistics produces a special index, and they say that health costs have risen by 4.1 per cent—way higher than the 0.5 per cent the government is offering the states.Fortunately for the states, there is a clause in the agreements which provides for the appointment of an arbiter where a dispute arises over these indexation provisions. Fortunately, that arbiter has provided some independent advice. He has concluded that the states are entitled to an increase of one per cent above the CPI, which would go some way to reducing the pressure on hospitals due to the Howard government's cutbacks.A very important thing that the arbiter has also disclosed is that he has given the lie to the minister's frequent claims, which we have all heard in here time after time, that the government has been generous—can you believe it?—in that it is giving $17 billion more over the next five years than was given over the past five years. We now discover that this apparent increase, this seemingly large amount, is nothing more than growth of population and inflation, that in fact there is nothing extra at all for our public hospitals, even when it comes to dealing with the GST. So not only are the public hospitals facing a government that is offering a miserly increase in indexation that does nothing to keep up with costs and the use of our public hospitals but, on top of that, the public hospitals, the private hospitals and the non-profit hospitals are all expected to meet the massive increase in costs coming from the administration of the GST.Of course, the Minister for Health and Aged Care does not have the courage to come in and defend himself against these facts that have been worked out by the public hospitals, the Catholic hospitals and the private hospitals, all demonstrating the massive increases in costs that are going to be imposed on our hospital system by this minister. He does not even have the courage or the courtesy, as far as the hospitals are concerned, to answer the questions. He will not answer the facts that have been exposed by the Catholic hospitals. He will not even come into this House and defend the GST, because he knows what the real impact is going to be on the patients of Australia. (Time expired)15:38:0012708Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—The matter of public importance does raise—perhaps uncharacteristically—a matter of considerable importance, and I want to address the substantive questions it raises. In particular, I want to respond to the demonstrably false account that the member for Jagajaga has just given of, for example, the Australian Catholic Health Care Association's contribution to the national debate.Beginning with the member for Jagajaga, we ought to understand the critique which she brings to this debate and the alternatives she would be providing. For example, the member for Jagajaga gave a speech on Sunday, 8 July 1984 titled `Looking to the future'. It gives something of a flavour of the sort of Australia she would like to create. In particular, she invited attendees to a further meeting `to formally establish a new organisation committed to helping develop effective strategies for socialists in Australia'. At least the member for Werriwa is providing a genuine alternative. He is looking to the future. He is asking the Australian Labor Party to embrace the next millennium.The member for Jagajaga's idea of looking to the future is establishing a new organisation to develop effective strategies for Australian socialists. The member for Jagajaga goes on to ask questions such as: `What does the dismantling of capitalism and the building of socialism involve? It is all too clear that spontaneous uprisings are not around the corner.' I am very sorry to hear, Honourable Member for Jagajaga, that we do not have any spontaneous uprisings. She goes on to say that `planned insurrection is also only a dream in some people's minds'. This is the idea of the member for Jagajaga of looking to the future. I hate to imagine what her idea of looking to the past would be.I want to take a little bit of the emotion out of this debate and look at 10 incontrovertible facts that relate to the impact of the government's reforms to taxation and the introduction of a GST on the administration of public hospitals and the quality and cost of health services to Australian citizens. Point No. 1 is that all revenue from the GST goes to the states. The debate about public hospitals is about the level of funding available from the states. All revenue from the GST goes to the states. Point No. 2 is that the states have received a guarantee of no reduction in funding for the next four years under the GST regime. That is a contractual, black-letter guarantee from this government. In fact, the Treasury estimates upon which the flow of revenue to the states has been based are recognised as being very conservative. If levels of economic growth are higher than anticipated—as they have been in virtually every budget estimate that this government has brought down since being elected in 1996—we will find the states enjoying an enormous windfall gain. The point to remember is that every cent of the GST will go to the states to be available for precisely the types of services which we see delivered in the public health system.GST provides not only increased funding to the states but also increased certainty of funding. As a former member of the staff of the current member for Cook when he was an illustrious minister in the New South Wales government, I remember the frustration which state government departments felt about the inability to plan for the future because they simply did not know what revenues would be available from the Commonwealth. If there was a change of government, would there be some sort of capricious change in policy? Would you get a new minister with a different temperament, a different set of policy priorities? Large state government instrumentalities simply could not plan their capital works or their human resource strategies. They simply did not know how much funding would be available to them, whereas all of that political uncertainty is taken out of the equation by simply giving the states a guaranteed, rising, certain, fixed share of revenues which flow from every cent of the GST.As for the growth of the GST, it is fascinating to see the Victorian Premier, Steve Bracks, coming out today and saying that, on the basis of his anticipated increase in state revenue as a result of the introduction of the GST, he is contemplating the abolition of payroll taxes to make Victoria more competitive. A state Labor minister is not going to be down there contemplating cutting taxes on the basis of GST revenues unless he confidently expects that the GST is going to deliver higher revenues to the states, and ultimately that is what this matter of public importance is about. It is about whether the Commonwealth is discharging its obligations to my constituents in the electorate of Parramatta and whether they are receiving health care services from Westmead Hospital. As we go on in this story, these incontrovertible, unemotional facts demonstrate that the Commonwealth is providing genuine leadership and is more than pulling its weight in this field.Other empirical evidence for the impact on the states of this tax is the fact that Labor premiers and Labor treasurers around Australia were crawling over each other to sign up to the GST package. I note, for example, David Crean, the Deputy Leader and Treasurer in the Tasmanian government, was among the first with his pen out saying, `Where do I sign?' because he recognised the tremendous benefits the GST would involve in recasting Commonwealth-state financial relations.XU5LIEBERMANMr Lieberman—Simon's son.3K6Cameron, Ross, MPMr ROSS CAMERON—Simon's brother, I believe. So here we have a certain share of revenue, a growing share of revenue. We also have the fact that the Commonwealth, in the area of health, has been providing absolutely stellar support to the states and the state public health systems. All we have to do is look at the states' own budget papers and contrast them with the forward plan for five years of Commonwealth funding for the states under the Australian health care agreements. If you look at the states' own source funding for health in the state budget papers, you find that the average increase in the past 12 months for the states has been less than two per cent across Australia. If you take out the ACT and the Northern Territory, it falls to close to one per cent. By contrast, the Commonwealth has executed a five-year agreement with the states, increasing funding from $23.4 billion in the last funding round to $31.34 billion. I will read from the Prime Minister's press release:Accordingly the Commonwealth has been prepared to increase the five-year funding by an additional $915 million taking the full five-year allocation to $31.34 billion compared to $23.4 billion provided under the 1993-98 Labor Medicare Agreements.This amounts to an increase in real funding for the States and Territories of 10.2% in 1998-99 and 17.6% over the five years compared to 1997-98.If you look at all Commonwealth health care funding, we are looking at close to a 20 per cent increase in funding by the Commonwealth to the states for health over the next five years. When we look at the states' own source contribution, we are looking at a miserly contribution of close to two per cent.That is when you look at the averages; if you look at some of the more negligent or recalcitrant states, or the more mismanaged states, in particular my own state of New South Wales, the story is even worse. Here in New South Wales you have this complete mismanagement of the Olympic Games, this high profile event. Bob Carr knows that at the end of this exercise he is going to have to turn around and present a dollar figure bill for the games to the taxpayers of New South Wales. Because of the mismanagement of Michael Knight and of the board, that figure is growing all the time. Sponsors are getting more and more gun shy; they are scared off, they are not participating. The tickets have been an absolute fiasco.I guarantee that what is happening behind the walls in Macquarie Street are crisis meetings where Bob Carr and Michael Knight are saying to the rest of their ministerial colleagues, `Somehow you guys have to dig us out of this hole.' And they are doing it by ripping money out of health care budgets in area health services around metropolitan Sydney—and in rural and regional services. For example, in my own area of Western Sydney we find this document coming to light indicating that the New South Wales health department is looking at ripping $40 million of funding from the Western Sydney Area Health Service. In the very same week we have a report in the Sydney Morning Herald which is enough to send a chill down the spine of anyone who believes in the proper purpose of a public health system. It appears that Westmead Hospital is developing a scheme `whereby uninsured people would be admitted for surgery as private patients'.We have the member for Jagajaga standing up here week after week, day after day, proclaiming the benefits of Medicare and the public health system, yet her state Labor ministerial colleagues are systematically dismantling—as she would systematically dismantle capitalism—Medicare and the public health system. We are going to have the wealthy heiress in Neutral Bay marching to the front of the queue when my poor retired pensioner in Toongabbie is standing way back somewhere, looking over the heads, wondering if she will ever make it to the front of the queue, because Craig Knowles down there has been told by Michael Knight and Bob Carr that somehow we have to fill the massive Olympic hole in the budget. That is Labor's idea of health administration.XU5LIEBERMANMr Lieberman—The Double Bay gall bladder syndrome.3K6Cameron, Ross, MPMr ROSS CAMERON—That's correct. Not only do we have the increase in revenue which will come from the GST generally, not only do we have this outstandingly generous contribution of the Commonwealth to the health funds of the states, separate from the general increase which will flow from the GST, but also we have the fact that $800 million was given to the states as part of the intergovernmental agreement specifically to address the transitional issues associated with the GST. This was $800 million from the Commonwealth to the states to help them manage the one-off costs of transition associated with the GST.There is more: if we go to point No. 10, we find that the cost of health care generally under a GST environment will fall. Treasury estimates indicate that somewhere close to two per cent of costs are taken out of the delivery of health care services as a consequence of the abolition of all of the hidden, embedded taxes of the wholesale sales tax environment which we pay every time we make a transaction but of which we are not aware under the dishonest, hidden regime of the wholesale sales tax system.XU5LIEBERMANMr Lieberman—She didn't mention any of that.3K6Cameron, Ross, MPMr ROSS CAMERON—None of that was mentioned by the member for Jagajaga. Not only do you have these other benefits flowing from this government's administration or from the GST but you have a fall in the delivery costs of the system.If you look at the genuine transitional issues, it is true that the public hospitals will for the first time be entering into the tax system. What is that going to involve for them? It is going to mean that they will not charge GST on any of the services they provide, but they will have to pay GST on their inputs. At the end of the month they will simply add up all of those items on which they have paid GST, get out the calculator, divide that amount by one-eleventh, remit a claim to the Australian Taxation Office and they will be paid. It is as simple as that. It is adding one line into the accounting software program of a major public hospital. It can be done automatically; it can be done at the hit of a button. It is going to become so completely routine that hospital accountants and administrators will hardly even notice it.There will be a small number of non-therapeutic services provided in hospitals which will attract the GST. For example, if you get a television in your ward, that is a commercial service and you pay for the watching of that service, or when you turn up to the parking lot and it is run by Wilson Parking or somebody else you will pay GST on that cost. In reality, most of the services are contracted out by the hospital. They are run by subcontractors and the administrative cost and effort will be worn by the subcontractor rather than by the hospital itself.In summary, first, all GST revenues go to the states; secondly, the actual level of revenue will increase as the economy increases; thirdly, the increased certainty which state government departments will enjoy will allow for more efficient allocation of resources; and, fourthly, specific health funding by the Commonwealth to the states for health has increased by 20 per cent over the next five years and 28 per cent in my own state of New South Wales. A specific payment of $800 million has been made by the Commonwealth to the states to assist in transitional costs. The costs of the health sector generally will fall by nearly two per cent as a consequence of reducing embedded taxes. Health services generally will be GST free. (Time expired)15:53:0012711Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—It is very instructive when the Minister for Health and Aged Care, as a cabinet minister who was involved in the decisions that put in place the goods and services tax, does not have the decency to enter into the debate about how it is going to affect matters that are under his portfolio.In this debate, it is very important to outline what is in fact the state of public hospitals at the moment. If we look at recent headlines, to say that public hospitals are in crisis is an understatement. We had yesterday in the Australian Financial Review an article headlined `Australia's health system is in a critical condition'. We have had a headline in the Australian of 11 November `Push mounts for hospital fix'. We have headlines in other states on the condition of the health system. For instance, a Canberra Times headline read `Health system on life-support'. In the Sydney Morning Herald of 10 November, a headline read `Pressure mounts for more hospital funding'. There are even emotive headlines like the one we saw in the West Australian of Tuesday, 9 November: `Fund cuts "kill patients"'. The purpose of raising this matter of public importance is to indicate that, in an environment where public hospitals are doing it tough, struggling and having to cut back to bare bones, where they almost are extracting the marrow, the effect that the consequences of the new tax system surrounding a GST are going to have on the administration of public hospitals should be looked at seriously. And for the minister to run away from such a discussion is a disgrace.In his contribution, the honourable member for Parramatta entered into the distortion that surrounds the actual funding of public hospitals. But, if we look through those articles that have been out over the last couple of weeks and look at statements that have been made by state ministers, we find the truth of the matter. The truth of the matter is that, if the Commonwealth's effort was the same as the effort in 1994, in New South Wales there would be an additional $300 million this financial year. To criticise what is happening in New South Wales does not accord with the facts. If one analyses the facts in public hospital funding, it is clear that New South Wales is in fact doing what it undertook to do under the Commonwealth-state agreement. Dr Wooldridge really needs to acknowledge that fact and not use the excuse that the state governments are not doing the right thing as a blind.In the article yesterday in the Australian Financial Review, Dr Wooldridge suggests that the New South Wales government should consider going down the Victorian road. As that article indicates, the Victorian public has made a judgment on the way that Jeffrey `Glib' Kennett destroyed the Victorian public health system. I have used many debates in this place to give examples of what happens just in the northern suburbs of Melbourne: the time that is spent by patients on trolleys awaiting admission, and the number of times patients are sent away because the pressure in public hospital casualty departments is such that they cannot get proper attention. When I say that, I have the greatest sympathy for the people that work in those situations. It is not a value judgment on their professionalism; it is an observation about the type of pressure under which they work, where they are told that they have to clear beds as fast as possible. I am sure that in the state of Victoria Minister Thwaites will be able to rectify a lot of the damage that has been done by the Kennett government, but it will take a long time. When next year public hospitals have to deal with the administrative effort that is required under the goods and services tax, as this matter of public importance indicates, it will be even harder.A lot is said about health services being GST free in the main. If you say that quickly enough, people might be convinced. People might think, `By the magic wand the government has been greatly benevolent in the way it has treated the health industry.' It is not simple; it is fairly complex, like everything to do with this new tax package. If one refers to the Internet site and extracts `The Health Industry and the New Health System', one gets a 40-page document. It makes interesting reading. Perhaps there is a need to go through some of the terminology that surrounds this new tax system and the goods and services tax.It is very instructive when one goes to the example that is actually given in this booklet about a GST-free supply. What is used is the supply of antibiotics through a pharmacy. I use it as an example because the same thing applies to whichever part of the health industry where you see `GST free'. As to what happens, we use something that is about $10, the pharmaceutical manufacturer sells it to the wholesaler, and it includes a GST of approximately a dollar, which the wholesaler has to pay to the manufacturer. The manufacturer has to send the dollar off to the Australian Taxation Office.Of course, the wholesaler then on-sells it to the pharmacist. By then, as this example indicates, it is about $22 per unit including the $2 GST. The manufacturer sends that additional dollar in GST to the Australian Taxation Office. Then the pharmacist sells the antibiotic on to the customer for approximately $30 GST free. In that transaction there is no GST payable by the customer but, of course, the pharmacy has to put in the appropriate paperwork to get the $2 back from the ATO. So here we have a diagram that has six arrows and they are trying to say that this is very simple. For one transaction this is the type of thing that the pharmacy will have to be looking at.I was interested to go to the Pharmacy Guild of Australia's Internet site to see the type of information that they are giving to pharmacies. They have a question and answer sheet and on it question 3 asks:Is the sale of goods and drugs to a hospital taxable or GST free?The answer, according to the guild—and this is the guild, a third party, and not the opposition, saying it—is:Our interpretation is that the supply to a hospital would not be GST free because it would not meet the following tests:the drugs can only be supplied on prescription;the drugs can only be supplied by a doctor, dentist or pharmacist;in the absence of pharmaceutical services, the drugs can be supplied by an assistant; orthe drug is an analgesic with a single active ingredient when they are the same as those supplied in larger packs by pharmacies.So, as this answer concludes, the pharmacy would charge the hospital the GST. What is very interesting about this—given my six-arrow example from the Australian Taxation Office's document—is that we get a few more arrows in this one and what would have to happen would be that the hospital would require a tax invoice to claim the credit which is different from the invoices supplied to the public.Just before question time, the opposition tried to get an amendment to the legislation that would ensure that ordinary customers would have on their invoice how much GST that they had paid, but an end-user customer who cannot claim back the GST input will not be told that. But in this case the pharmacy, if they are supplying the hospital, will have to treat it differently because, of course, the hospital requires the tax invoice to be able to get the input relief.So the honourable member for Parramatta is deluding himself by suggesting that, simply by a flick of a switch in some sort of software, this can be easily solved. It is about time that the backbench members of this government started to get out of outer Mongolia, go to the Manchu court and ask questions, because they are being sold a pup. This is nightmare on main street and on main street you can find public hospitals, on main street you can find pharmacies, on main street you find doctors and on main street you get health services. (Time expired)16:03:0012713Southcott, Andrew, MPDr SOUTHCOTTTK6BoothbyLP10—In responding to this matter of public importance motion, I say there are really two assertions that have been made. The first is that the hospitals are not being adequately resourced by the Commonwealth government and the second is that the administrative costs of the GST will be significant to hospitals. I want to repudiate both of those claims made by the shadow minister for health, the member for Jagajaga. She referred to a report that was commissioned by the Australian Catholic Health Care Association, and what we can say about that report is that the first draft of it was wrong in several respects, they had a revised report which included several faulty assumptions and you can come to the conclusion that this was a report designed to come up with an outcome.This report underestimated the savings from going to a new tax system and overestimated the costs. We have a letter to the government from the association in which Frances Sullivan admits that, compared with the previous report, significant changes have been made to estimated cost savings from abolition of the wholesale sales tax and other indirect taxes. It says:The changes also have some flow-on effects to other areas, notably motor vehicles, as set out below. In general, the abolition of indirect taxes will result in cost reductions for the Catholic health and aged care sector.It goes on to say:The ongoing sector compliance costs have been significantly revised downwards for the sector as a whole. It is clearly difficult to present a highly accurate estimate of the likely costs to the sector in this particular area due to the great diversity in the scale and nature of operations of the individual organisations.This is a poor report, and at one part they include savings as costs. The shadow minister seemed to be coming up with calculations—almost of figures on the back of an envelope—to assert that this will involve hundreds of millions of dollars in compliance costs to hospitals. That is not true. That is actually a lie. There are bizarre assertions that there will be GST credit leakage. Why would you not claim all GST credits? They make unrealistic assumptions based on the cost savings and we reject that—and it is notable that this report was savaged by a Senate committee.I do not think the shadow minister understands how hospitals work—I use to work in a public hospital. Hospitals will provide food but, if people visiting patients and staff want to get food, they will actually buy that themselves. That would be subject to GST and I do not think there is any confusion about that. I do not think she understands how the current tax system works. To assert that currently hospitals do not pay wholesale sales tax is true but there are still very significant savings from removing the embedded costs of indirect taxes.The experience in New Zealand was that, after a transition period, this was very smoothly administered. I would really like to know what is the Labor Party's solution. Do they seriously want to repeal the GST and reintroduce a wholesale sales tax? Because that is not the position of the Socialist International and that is not the position of the Socialist parties in France, Germany or Britain. It does seem strange to be using the language and the rhetoric of the Cold War in 1999; after all, it is a long time since that was over. But I think we really do need to know where the Labor Party spokesperson is coming from. She made some comments in April 1983 at the Marx Centenary conference. Some of these were:The vanguard, economism, the inevitable decline of capitalism, have all been knocked on the head.Another was:We have obviously been wedded too long to the idea that the industrial proletariat constitute the subject for social change.And my personal favourite:What does the dismantling of capitalism and the building of socialism involve? It is all too clear that spontaneous uprising is not around the corner. Planned insurrection is also only a dream in some people's heads.CK6HARDGRAVEMr Hardgrave—Who said that?TK6Southcott, Andrew, MPDr SOUTHCOTT—The member for Jagajaga, the shadow spokesperson for health for the Labor Party, said that. In July 1984 at Unity Hall there was a meeting and, later, a committee of 10 was formed. They sent out a letter signed `Yours fraternally', and the 10 members are listed and they include four members of the Communist Party of Australia, including Max Ogden. You might say, `That was a long time ago, we could put that down to youthful exuberance.' But there is an important implication here—that is, that health is either the number one or the number two issue in people's minds when they vote. We do know one thing: the Australian voters do not like an idealogue in charge of their health system. I have sometimes raised this with members of the Labor Party and I have asked them whether they have thought that it might be an idea to have someone who is, perhaps, a bit more pragmatic in health, not someone with a background of being heavily involved in socialist movements. What we really have in the member of Jagajaga is one of the last vestiges of the Victorian socialist left. I do not know whether she is a Maoist, a Leninist, a Marxist or a Trotskyite; I do not know whether she sees the member for Werriwa as a counter-revolutionary. Back in 1983 and 1984 people like the member for Jagajaga were telling us how wonderful China, Vietnam and the Soviet Union were while they were killing their own people. This is someone who, if the Labor Party win the next election, will be in charge of the hospitals and the health system. The member for Dobell has just arrived; he is a much more pragmatic opposition health spokesperson. But, sadly, he is relegated to education, which he was not very happy about. But I reject the allegations regarding the funding of public hospitals. There is a real increase of 20 per cent over the life of the Australian health care agreements, and we are also avoiding the previous problems which gave state governments an incentive to pull money out in the early years. Who does the member for Jagajaga think gets the GST revenue? It goes to the states, with guarantees for the first four years that no state will be worse off. They all signed up, including the shadow Treasurer's brother. He could not be quick enough to sign up to getting a share of the GST revenue. We have heard only obfuscation from the Labor Party on the GST situation. This is the situation: a hospital will be able to claim input tax credits for GST paid, and health care provided in hospitals will be GST free. Treasury estimates that the costs in health care are expected to decline by about two per cent due to the removal of embedded indirect taxes. It has been guaranteed that no state or territory budget will be worse off as a result of tax reform, and we have also agreed to provide an extra $800 million to offset costs to the state and territory budgets associated with the introduction of the government's tax reform. This was a lame, lightweight MPI which was not based on fact at all.In relation to health treatment under the GST, the following types of health related goods and services will be GST free: medical services; other health services; hospital treatment; residential care; extra services; community care; flexible care; specialist disability services; medical aids and appliances; drug and medicinal preparations; and private health insurance. Things that are GST free will include: Aboriginal and Torres Strait Islander health; acupuncture; audiology; chiropody; dental; dietary; nursing; OT; optical; pharmacy; physiotherapy; speech pathology; speech therapy; and social work. As I said, I used to work at the Royal Adelaide Hospital, at the Flinders Medical Centre and at the Daw Park Repatriation Hospital in my own electorate. I am very proud of that. We have the curriculum vitae of the Labor spokeswoman for health, and what we do know is that before she was in parliament she was the ministerial adviser to David White, the minister for health in Victoria at that time. What she put down as one of her key achievements in this position was the smooth closure of Prince Henry Hospital. So I used to work in hospitals; she used to close them. And this is the person the Labor Party want to have administering the health system. Turning to the compliance costs, because that is the substantive issue, as I have said, the report we heard was wrong. You should not stand by that; it was a faulty report. There will be cost savings from removing the embedded costs. The systems compliance costs will be much lower than estimated and the recurrent compliance costs will be negligible within a hospital budget. I repudiate completely the assertions made by the Labor Party's spokeswoman for health, and I think members of the Labor Party should too.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! The discussion is now concluded. I regret to inform the member for Perth that even though he is in the adviser's boxes, he is not exempt from the practises of the House. I would be obliged if he would leave the chamber.Bills12715r94112715Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.12715Bill (on motion by Mr Slipper)—by leave—read a third time.Bills12715r93812715Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.12715Bill (on motion by Mr Slipper)—by leave—read a third time.Bills12715r94012715Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.12715Bill (on motion by Mr Slipper)—by leave—read a third time.Bills12715r93712715Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.12716Bill (on motion by Mr Slipper)—by leave—read a third time.Bills12716r84912716Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.12716Bill (on motion by Mr Slipper)—by leave—read a third time.Bills12716r96512716Bill presented by Mr Fahey, and read a first time.1271616:20:0012716Fahey, John, MPMr FAHEYHQ5MacarthurLPFinance and Administration10—I move:That the bill be now read a second time.It is with pleasure that I introduce the Appropriation (East Timor) Bill 1999-2000 . This bill makes provision for supplementary appropriations to the Department of Defence and the Australian Agency for International Development (AusAID) in relation to operations in the East Timor region.In the bill, the parliament is asked to appropriate moneys from the consolidated revenue fund to meet these necessary additional expenditures. The moneys are additional to the appropriations made in Appropriation Acts (Nos 1 and 2) 1999-2000 last Budget, and the additional appropriations proposed in the appropriation bills (Nos 3 and 4) 1999-2000 to be tabled in this session.In order that the Department of Defence and AusAID can operate, financially uninhib ited, in fulfilling the government's commitment to the East Timor region, it is necessary that they have timely access to the supplementary funding. For this reason, the appropriations are sought outside the additional estimates process, and introduction and passage of the East Timor bill in this session is being sought.The appropriations in the East Timor bill total $920 million.A sum of $860.0 million is provided for the Department of Defence for the deployment and peace enforcement in East Timor, new investments that may be needed to augment the capability of the forces in East Timor and an increase in overall ADF numbers so that the deployment can be sustained and acceptable levels of overall readiness maintained.Of this total amount some $845 million relates to operational expenses and net capital investment of the department, and $15 million to fund the capital user charge. The latter amount is an internal transaction to government and so does not impact on the overall budget bottom line.A sum of $60 million is provided for AusAID to fund Australia's contribution to the humanitarian and reconstruction needs of East Timor and to support the establishment and operations of the United Nations Transitional Administration in East Timor (UNTAET).I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Mr Crean) adjourned.Bills12716r964Billsr963Bills12716Debate resumed.16:23:0012716Crean, Simon, MPMr CREANDT4HothamALP00—The New Business Tax System (Capital Gains Tax) Bill 1999 was introduced only this morning. We have agreed with the government to facilitate its passage today because of agreement reached between the government and the opposition on the business tax package to enable consideration of the total part of stage 1 when the matter goes before the Senate next week.When the government introduced its legislation on stage 1, that legislation did not reflect all of the announcements pertaining to stage 1. I do not want this to be confused with stage 2—which is really what the negotiations with the government essentially have been about for the last couple of weeks—because stage 2 constituted mere dispositions that the government had which, if implemented, would have squared the revenue neutrality test. Put that aside because we dealt with that earlier today, but I do want to make the point, to put these bills in context, that these bills now constitute the unfinished legislation of stage 1—or the unfinished presented legislation in relation to stage 1.There is a variety of areas covered in the New Business Tax System (Capital Gains Tax) Bill 1999 and the New Business Tax System (Income Tax Rates) Bill (No. 2) 1999. First of all there are small business reforms in respect of active assets held for long periods. Given the length of time allocated to this debate, comments in relation to that aspect will be dealt with by my colleague the shadow minister for small business. The bills also deal with scrip for scrip rollover relief under certain circumstances and they deal with new incentives for venture capital both for domestic and international investors. In addition it ends, for disposals of assets after 21 December 1999, the averaging system which previously applied to individuals. The averaging system together with the indexation have disappeared from the capital gains tax regime, and those two measures contribute almost three-quarters of the cost of the announced halving of the capital gains tax rate. Previously, the legislation had touched upon the abolition of only the indexation. With the new regime coming in, these bills also deal with, amongst other things, the averaging system.I want to make only a couple of comments: one in relation to venture capital and the other in relation to scrip for scrip. We welcome the venture capital incentives in this legislation. Indeed, this was an area in which we were able to get bipartisan support from the day the government announced its business tax package. The reason for that, of course, is that Labor took to the last election a proposal in relation to venture capital whereby we recognised the need to attract overseas pension funds to this country. Those overseas pension funds operated in their own countries in circumstances in which the capital gains tax was much lower than applied here. Of course, if it were lower there than here, why would they invest here?Our argument, because evidence had been put to us that we were missing out on investment opportunities in the development of this country—and, of course, the name of the game has to be about jobs and building our industry and our new industries in particular—was that this was a vital area that needed to be attracted. So we proposed the changes to attract the US pension funds. But the notion was not just to attract their capital; there was also the notion that, if you got their capital, you would also attract their expertise: the people who actually managed the investments—managed the venture capital—and who had experience in taking the idea and working it through the start-up phase to commercialisation.This is an area in which countries like the US have had a long period of experience—probably some 30 years of experience. It is not an experience that can be obtained overnight, although it is very interesting that a country the size of Israel has made huge inroads into this area, as has Ireland. Both of those countries have understood the importance of attracting not only the capital but also the expertise—the means by which the capital is managed wisely. So it is against that background that we welcome the initiatives in terms of the overseas pension funds, because there was a barrier to venture capital coming to Australia.It is also interesting to note that, when we took it to the last election, the government rubbished us on this measure that they are now agreeing with us on. They said it would not work. They obviously had not considered the detail properly. So it is pleasing that they have come to the party on it. Over the last 24 hours we have been able to achieve bipartisanship in the areas on which we can find common ground in advancing the interests of the nation. I hope that, in the future, the government are not too quick to condemn an idea simply because it happens to come from the opposition.The government have picked our suggestions up. We welcome it and we welcome this about-face, in effect, by the government. It is an important move for venture and risk capital in this country. It will be good for innovation and jobs. Although there is a lot of unravelling to be done here, it may offset some of the damage that the government's abolition of the 150 per cent research and development deduction has done. But the government is deluding itself if it thinks its changes to research and development tax concessions have not damaged business investment in R&D in this country. There has been a dramatic decline in business R&D in this country since the 150 per cent deduction was abolished.It is interesting to note that, when you do these things to attract venture capital, you have to do them at times by way of tax concessions; it is a similar case with R&D. Australia will now get access to enormous pools of funds from Canada, France, Germany, Japan, the UK and the US. Many of these investment bodies, particularly pension funds, have not invested in Australia before due to the taxation arrangements here. These reforms will address that issue by removing the tax hurdles which have previously stymied investment. Australian superannuation funds will be able to access similar tax preferences through the pooled development fund arrangements.I want to make one other point in relation to this venture capital area. I urge the government to take on board consideration of this issue because, again, it was a policy which we took to the last election—that is, building on the notion of the need to attract, develop and nurture the culture of entrepreneurship and the culture of venture capital management in this country. Labor proposed at the last election that we should encourage investment vehicles—whether they are pension funds, IIF programs or pooled development funds, they are all vehicles through which venture capital can be undertaken at favourable taxation rates—to develop partnerships with Australian business schools.Essentially, this would be to encourage regional development and to link into the business management—the MBA—students in the various courses around the country to have the students help evaluate local proposals from regional businesses and channel the best proposals to venture capital groups. They would be marked and graded on the quality of the recommendations that they sent and they would learn in a practical way of the need to make sensible decisions and learn the business—learn while they are learning; the practical dimension not just the theoretical dimension.We also encouraged annual venture capital centres in regions to help firms become investment ready. It is one thing to deal with the attractiveness, the incentive to the capital, but it is another thing entirely to ensure that you get the right people and the right culture. Australia should be thinking strategically in this direction. It is beginning to get the base right in terms of attracting the money, but we now have to attract, nurture and develop our own expertise in the area. If we do it properly, we will position ourselves well into the new millennium in this area in which there is rapid growth, huge job opportunities and in which, in terms of the information age and the knowledge nation, there is effectively exponential potential.The second area that I want to touch on is the scrip for scrip measures. These are also supported by Labor for two reasons. First, they build on the realisations principle supported by Labor. That is the notion that if you are going to have a capital gains tax it should be a tax on the gain when it is realised. If an investor does not actually realise an investment they should not have to face tax on that investment. The second reason is that this change is expected to increase merger and acquisition activity in the Australian economy and to encourage more diversity and dynamism in our industry base. Whether it actually happens at the level estimated by the government is a moot point that will only be revealed over time, but the measure will increase the flexibility of Australian capital markets and will provide more options to Australian investors.It is significant to note that, with the emergence of the new industries, many of them are starting up on the basis of not being able to offer those who work for them or those who become part of the operation very large salaries. What they do is offer fairly low salaries but give share option equity if the business grows. If there happens to be a subsequent merger and those shares are offered as part of the merger, in the past they could have been treated as a capital gain—they were effectively deemed to have been realised. These measures seek to overcome that, to encourage recognition of the high risk associated with some of these ventures, and to encourage more dynamism in the development and expansion of the operations.Labor also supports the small business initiatives. As I said, my colleague the shadow minister for small business will be addressing these points in more detail, but they build on the 50 per cent goodwill exemption introduced by Labor which has been so important in helping small business grow over time. These are important initiatives. They are issues that, in their own right in the main—particularly venture capital, scrip for scrip and many of the small business reforms—we would have supported in any event.Progress had not been made on them because, until yesterday, the government was not prepared to give the commitments necessary to meet the revenue neutrality test to demonstrate how these changes will be paid for. That has now been secured in terms of the arrangements we have with the Treasurer. The opposition will support these bills before the House today. We will expedite their passage and we look forward to the business certainty that will be created. But, importantly, we look forward to integrity being intro duced into the revenue base to underpin budgets into the future.16:38:0012719Hardgrave, Gary, MPMr HARDGRAVECK6MoretonLP10—It is a historic day. It is a good day for Australian small business; it is a good day for wealth creators, for people who are prepared to invest—the mums, the dads and the individuals who put their houses on the line to try to have a go at creating something for themselves and those around them, for their community. These changes to the way that business tax is administered in this country are all about jobs. It is not about a tax break for the business person; it is all about rewarding investment, rewarding initiative. It is about creating wealth for the nation, wealth that all Australians can share through the creation of more jobs and a much stronger economy.It is a historic day for another reason. It is tremendous to have the Deputy Leader of the Opposition, the shadow Treasurer and member for Hotham, however you wish to describe him, also supporting the government's measures. There was no way that the Australian Labor Party opposition could avoid supporting this new business tax legislation because they know that what I just said about creation of jobs is really what is at the heart of these proposals today.It is tremendous to think about how far Labor have come in just 14 months, given that at the October 1998 election one of their two key tax policies was to capital gains tax old assets—pre-1985 assets—the retrospective treatment of old assets. It is great to see Labor supporting these measures because it will ensure that there is a smooth and timely passage of this legislation. It will pass this place today and it will pass the other place next week. So before Christmas we will see a new business taxation system in place.This is something that has eluded this nation for some 50 years. Governments have not acted on matters relating to capital gains tax. In fact, this is the first government ever to reduce capital gains tax. What does this really mean? In recent years, as the member for Hotham said, venture capital, capital from overseas pension funds—or companies, for that matter—which wanted to put money into a nation like Australia has to some extent eluded us. People I have spoken to throughout a lot of industries, particularly the emerging industries like the information technology industry, have said to me that there are plenty of overseas venture capitalists surfing around looking for a place to land. They look at Australia and they say, `Well, it's got the English language; it has the proximity to Asia and the western Pacific markets, the big emerging market; it has an educated population; it has a stable form of government; it has all the natural resources you could ever want to back up any investment you put in. But let us have a look at the capital gains tax system. Well, you are going to pay too much if you invest in Australia.'Now that we have got rid of that impediment as a result of the passage of this legislation, there will be big licks of money coming into this country. I am pleased to report that, on the back of simply the government's proposals based on the Ralph report, a major pharmaceutical company, Astra Zeneka, put $37 million down on the table just the other week at Griffith University in my electorate. That $37 million is topping up the $25 million they put in a couple of years ago following the election of this government. That $37 million will go into real research into pharmaceutical development right through to the year 2002. At the announcement of that, the company said that, because of the positive action of the Howard government in the area of capital gains tax, they are prepared to slide that much money into just one institution so that research can take place.When those opposite say that research and development is not taking place in key areas, they are missing out on some of the real things that are happening, and that particular proposal by Astra Zeneka, one of the biggest pharmaceutical companies in the world, is living proof of action that is occurring. So it is a good day. It is a red letter day, as David Buckingham from the Business Council said this morning. Mark Patterson from the ACCI, the Australian Chamber of Commerce and Industry, said, `We'll have an internationally competitive regime that will hopefully encourage further investment in job creation.' They are obvious and true statements of fact. We welcome those opposite because they really had no choice other than to back the government's proposals. What they are going to mean for individual Australians is worth stating in the House once more.When Australians now buy assets and hold them for at least a year, they will be taxed on only half of the nominal gain that they make. That will be a big step forward for those Australians. The system will also become simpler with the removal of the averaging and indexation provisions which were so necessary during the era of high inflation—provisions that are now no longer necessary in the low inflation environment that we operate in. Individuals will further benefit from the reduction in capital gains tax paid by superannuation funds. From now on those funds will effectively pay tax on only two-thirds of the nominal capital gains. That means a concessional rate of 10 per cent.The government is also legislating rollover relief for scrip for scrip takeovers. This will be available for takeovers between companies and between trusts. Shareholders in takeover targets will be able to assess the offer and respond on commercial grounds without tax being a show stopper. This tax is positive in a number of other ways, other than those I have already outlined.This will mean a simplified tax system. This will mean a system that small business will be able to adhere to and they will be able to understand what they are contributing to. The one thing that has been constant in my observations of this whole taxation reform debate that we have been having over the last few years, initiated by the Howard government because we knew it could create jobs through incentive, is the fact that people wanted a simple system. If the taxation system is too complex people feel detached from it. They have no understanding of what they are contributing to and cannot follow the reasoning for the amount of money that they are paying across in tax.Around 95 per cent of small business will be eligible for this simplified treatment as a result of these changes. I see the Treasurer is in the chamber. He has done a fine job in negotiating these changes and is going to bring a real and lasting dividend to all Australians. The changes will dramatically reduce paperwork and compliance burdens for small businesses and ensure that existing benefits to small businesses are effectively maintained. Over 75 per cent of small businesses will no longer have to do annual stocktakes. Depreciation provisions will be simplified so that assets costing $1,000 or less will be able to be written off immediately.Assets with effective lives of less than 25 years can be depreciated in one pool at a 30 per cent per annum rate on diminishing values and sales proceeds of pooled assets are dealt with simply by reducing the written down value of the pool. There is no need to calculate balancing charges or CGT consequences. Income and expenditure will also be able to be determined on a cash basis rather than on accruals, which will substantially reduce compliance costs. Also contained within these business tax reforms, the company tax rate will fall from 36 per cent to 34 per cent for the 2000-01 income year and to 30 per cent thereafter.As I said, this is all about providing incentive for people to invest in themselves and in their nation, and to create jobs. It is disturbing to think, while we have even the Australian Labor Party wanting to back the government's positive, proactive and job creating approach in this area, that there are still those who want to profit from being a prophet of doom.A number of people in my electorate have written to me concerned about something described as the `profits first rule'. They have been told by one particular tax adviser—his name is Ray Regan—that the world will come to an end as a result of the government's plans and that there are all sorts of dire consequences in the detail. One only has to look at the government's track record with regard to encouraging and assisting the growth of small business operators. Any attempt to crack down on the few who do the wrong thing will certainly never come at the expense of the majority who do the right thing. That is the way this government works. You reward those who do the right thing and penalise those who do the wrong thing. I look forward to the consultations that are going to continue over the coming months in the area of business tax and I look forward to seeing those results.Concerning the `profits first rule' that is being talked about in such a dire way by Mr Regan and a few others who have been hoodwinked by his approach, nothing like it will come about in legislation until at least next year, and that will come about only after a full and thorough assessment is made as to how this particular proposal will work and who will be affected. We want to make sure that those who do the right thing never are affected in a detrimental way.There are a very small number of Australian trust holders who use their trusts to avoid paying the proper amount of tax. As the member for Hotham has said, the Australian Labor Party, the Liberal and National parties, I am sure the independent member for Calare, and the vast majority of members in this place, of course, support any efforts to try to ensure that those who do the wrong thing are brought into line. When people pay tax to contribute to the good running of this nation, we want to make sure that they have an attachment to the process, that they have a satisfaction that the money they are paying is fair and reasonable, that the processes which govern the payments they make are easily understood and easy to comply with, and that they do not cost them an arm and a leg in the process of being a law abiding tax paying citizen.We also want to make sure that those who do not do the right thing by the law-abiding taxpayers are penalised. I would say to any farmer or small businessman who may be listening on this broadcast day that they should understand very clearly—Mr Fitzgibbon interjecting—CK6Hardgrave, Gary, MPMr HARDGRAVE—There are plenty of people listening today—that this is a government that takes seriously its responsibility to run this nation to the benefit of all Australians, to ensure that, even in the finite area of business taxation reform, as a result of that reform there are real benefits that trickle down to each and every Australian. Job prospects will be enhanced. The growth of business produces new jobs, new industries and new opportunities. Investors who are currently avoiding investing money in this nation because of the ancient, creaking capital gains tax regime are now going to invest here.The people listening to this broadcast should understand that they have a government which, for the first time ever, is actually decreasing the amount of capital gains tax. The benefits are there for all Australians. We are going to make this work and we are going to make it work well. We welcome the support of the Australian Labor Party. I think they understand the benefits that will flow from these changes. It is great to see that support today.16:50:0012722Fitzgibbon, Joel, MPMr FITZGIBBON8K6HunterALP00—Indeed, the Australian Labor Party is quite sceptical. I note the member for Moreton has been playing to the radio audience. I am sure all those people out there who are listening in their cars or in their homes would be thinking, based on the way the member for Moreton was speaking, that this is an absolutely perfect package, that this is the panacea for all the nation's ills. I do not see it that way.I said in this place yesterday that there are a number of equity concerns here. The member for Moreton highlighted some of them when he talked about the ability of Australians to now make more from their capital gains; in other words, the advantage that this package gives those who make their money by buying low and selling high over those who make their money simply by the sweat of their brow. There are also some concerns about the apparent inability of the government to meet its own revenue neutrality constraints. That will remain a concern to us. We will be watching the detail of this package very closely.The member for Moreton is right: we have agreed to support this package in principle. Certainly, I will be supporting the legislation before the House at the moment. Indeed, the opposition welcomes the New Business Tax System (Capital Gains Tax) Bill 1999. The 50 per cent capital gains tax concession and the additional concessions for over 55s with active assets held for more than 15 years will undoubtedly bring benefits to the country's small business community. Indeed, it builds on Labor's own initiative to apply a 50 per cent discount on gains on goodwill. The Labor Party will on every occasion support tax reform measures that make our tax system more internationally competitive, more equitable and continually more relevant.We need to have a look at the benefits that may flow to small business from the bill before the House today in the context of other things the government is doing in the area of small business. I refer in particular to the goods and services tax. Once introduced after 1 July next year, it will make around 1.3 million small firms unpaid tax collectors for the government. Mr John Cohen from Deloitte Touche Tohmatsu told us this week what the regular experience for small business will be after 1 July next year. He said:They will be dealing with GST compliance. In a way it will be like doing their annual returns monthly or quarterly, depending of course on their turnover.He went on to say that for very organised businesses that will mean about three or four hours. But for somewhat less organised businesses—and I respectfully say that is probably the majority of them; operators of small firms do all the work and all the book work too—it is more likely to be a day or two. I know the government is very conscious of the backlash it is receiving in the small business community. That is why it has come up with this outrageous idea of sending a $200 gift voucher to every firm to compensate them for the compliance costs for small business. Thanks to the latest Yellow Pages Small Business Index , we already know that, on average, firms are already investing heavily in the software and hardware they will require to deal with GST compliance. The $200 will come too late and will go nowhere near covering the real costs of compliance and start-up. Estimates of that real cost and start-up range from about $3,500 to $9,000, depending on who you listen to. They are certainly significant and they are certainly much greater than the $200 being offered by the government.We have to ask where this $200 voucher idea came from. The Minister for Employ ment, Workplace Relations and Small Business today indicated to us that the Small Business Consultative Committee, chaired by Mr Curt Rendall, actually recommended such a scheme. That would surprise me a little, because we know that in June this year, Dr Shergold, the head of Mr Reith's own department, told senators that he would be very surprised if the Small Business Consultative Committee came back with such a recommendation. Indeed, he said he could confidently predict that that would not be one of the options recommended.But we do not know what is contained within the Small Business Consultative Committee's report because the Minister for Employment, Workplace Relations and Small Business has chosen not to release it. This is a report that cost the Australian taxpayer $5 million. It was a process that took the committee and the Minister for Employment, Workplace Relations and Small Business to New Zealand. It was a process that had within it remuneration of members sitting on that committee of up to $500 a day. Why is it that the Minister for Employment, Workplace Relations and Small Business refuses to release that report? Could it be that there are messages contained within the report that are not too flattering with respect to the likely impact of the GST on small firms? I suspect that is the case.These measures being introduced today are good for small firms, although I should say that the capital gains assistance does not assist ongoing firms. It does not assist with cash flow problems. It will assist firms at the point at which they decide to exit that business. That is not going to help too much in the day to day operation of that firm. But we welcome it. It must be seen in the context of the GST and all the other things that are creating uncertainty for the small firm sector at the moment.During question time today I raised another issue very relevant to the small firm sector—the report of a committee you sat on, Mr Deputy Speaker Jenkins, the Joint Select Committee on the Retailing Sector. I am sure you will agree that was a very effective committee. It produced a number of recom mendations that I believe will assist small firms in their ongoing struggle to compete with larger organisations—recommendations for an industry ombudsman and the establishment of an industry code, recommendations for amendments to the Trade Practices Act, recommendations for representative action so that the ACCC can go to court on behalf of small firms and recover damages for small firms that have been injured by the unfair practices of larger firms. These are things that are not going to cost the government big money.On Monday, it will be 90 days since the tabling of that report, and the government should be moving to implement those recommendations. But you and I both know, Mr Deputy Speaker, that the government was dragged screaming to establish that committee. Labor committed to it prior to the last election and the conservatives felt they had no choice but to likewise commit themselves to it. First they delayed the committee. Then the committee sat. Then the government tried to stifle the public hearings of that committee and tried to keep it out of regional Australia where the issues were running strongest. And now it is simply failing to respond or, at the very least, delaying its response.We welcome the measures for small firms contained within this bill today, but they have to be seen in the context of that dreadful GST which, as we have learned today, is already causing some small firms to close their doors. They also have to be seen in the context of the government's failure to act on those 10 recommendations of the Joint Select Committee on the Retailing Sector. They are the real issues for small firms. They are going to continue to be the issues for small firms into the new year and beyond. The government knows that. That is why it is now fighting so desperately hard to lift its stocks within the small business community.17:00:0012723Cadman, Alan, MPMr CADMANSD4MitchellLP10—We have heard a speech that is not a speech. When you are battling to find anything worth while to say, you change the topic and bag the government. That is what the member for Hunter has just done. He is not prepared to talk about the issue before the House today, which is the advantages to small business of the change in the capital gains tax regime that the Australian Labor Party have agreed to. Those advantages are very significant.My friend, it is not on the finish of the business that this incentive applies. This is encouragement to change businesses, grow your businesses and move on to new businesses. Then, at the end of the day, when you retire, you keep the benefits of that hard work. That is something that small businesses in Australia have been looking forward to for years and years.Not only have they been given the rollover advantage, there is also the advantage to a small business proprietor or owner in building up the business. It can be a corner store, a takeaway shop, a fish and chip shop or any other sort of business. They invest their time, their family's energy, their commitment and long hours into that business to build up its value, and now they can sell that business, take on the proceeds to another business—that is a rollover process—and go on without the penalty of capital gains tax. They can keep doing that. If they own a single business for as long as 15 years, there is no capital gains tax at all, no matter what the increase might be, provided the total value of the business is not over $500,000.This is incentive. This is a government that understands that Australians need to have the shackles that have been put on them taken off. It is a complete picture. It starts with the relief from personal taxation that is given by installing a capital gains tax. The average family with a couple of kids will have its personal tax cut by $40 or $50 a week in this process. It is a process that encourages the small, the medium and the large companies of Australia to employ and to expand by giving them relief from company tax. It is a process that encourages small businesses in particular to continue their investment back into Australia.I am pleased that the Australian Labor Party have agreed to this new business tax system legislation before the House today. I am pleased that they think these measures are worth while. I am pleased that they have the interests of Australians at heart enough to be able to say that they will endorse the decision of the government. The decision of the government is to help small businesses in relieving them from capital gains tax. People who are not small business investors but who, using their savings, buy stocks and shares or invest in a company will also have the advantages that small businesses have if their purchases appreciate in value.The third provision in this legislation today is something that is really significant—allowing exemption from capital gains tax for venture capital investment. The relief from capital gains tax for venture capital investment is something that every clever and committed small business innovator has wanted to see. It is not a chance to rip off the community with smart ideas, because there must be an investment factor there that the investor will see returned to them as increased value or increased sales.The release from capital gains tax for venture capital investors will encourage people to take something of a risk. They will say, `I will back those ideas. I will put some money in that company. I will become a part owner. I will invest in the equity of the company and not just loan to a proprietor in order to get a return on my investment—a regular cheque for the interest on the money that the small business proprietor has borrowed. I will become a true partner, a shareholder working alongside the person with the bright idea, the person with the drive and the person with the ability to expand.'I have watched the growth of a company called Dynamic Lifter over a period of 10 or 12 years because that company started in my electorate. It was started by an engineer who had an idea that he could take offensive animal waste and turn it into a product that is useful and advantageous to the agricultural and horticultural industries of Australia. Norm Jennings has done that. He had an R&D grant, but what he needed at the beginning was venture capital investment. He needed some money to be able to expand and to build his factory. Having built his factory, I am pleased to say that 10 or 12 years later there are Dynamic Lifter factories in the United States, in the Middle East and in Asia. Mr Jennings has done really well, but it was his perseverance rather than the availability of capital that made him succeed.There are many individuals who have failed in that process. But today the government has seen fit to say that, for those people who want to invest and to take a share in a company that has a bright idea, drive and energy but that may not have the financial resources, their venture capital will be released from the responsibility of paying a capital gains tax.I would like to return to some of these provisions and underscore them once more. There are four available small business concessions being made in this legislation. There is a complete exemption from capital gains tax for any small business that is owned for more than 15 years. So you can buy low and sell high. You can buy low, work hard and make a gain, and if you hold the business for 15 years then you are completely exempt from capital gains tax. There is a 50 per cent reduction in capital gains taxes across the board. That is a wonderful advantage to small business.There is a retirement concession so that, if somebody takes their funds and invests them in a suitable superannuation fund, they are excused from capital gains tax. That is a wonderful concession. It encourages people to regard their businesses and hard work as their investment for retirement. Then there is the rollover provision that I spoke about earlier which allows you to build up a business, sell it, buy another one and roll your funds over into another active business, and do the same again and keep doing the same. Many of our migrant families have become very successful doing exactly that, and good luck to them. So there is exemption from capital gains tax if that is done. This legislation is historic. It covers all of those provisions.Other provisions that I mentioned earlier include the release of capital gains tax on retirement or rollover. I have real difficulty with the Australian Labor Party being negative on these issues because I do not think that there is a circumstance that anybody can think of where this process is anything but an incentive. It is not an invitation to abuse; it is an invitation to be able to be recognised for hard work and a lifetime commitment to the business.The final provision I regard as most significant because it is the continuing request of Australians who want to expand or do something different, who have the ideas but not the capital resources, to have access to venture capital. This decision today by all parties in this House to release venture capital from capital gains tax will have a huge effect on the inventiveness and creativity of Australians and their ability to make good with what is around them. Australians are very ingenious, and this will give them the opportunity to take advantage of their ingenuity, turn it into dollars and provide opportunities for export that we have not dreamt of. I commend the government, I commend the Australian Labor Party, and I trust that they will not continue to be churlish about what is a generous and sensible decision.17:10:0012725McMullan, Bob, MPMr McMULLAN5I4CanberraALP00—These new business tax system bills come before us at a very interesting time in the public debate about tax in Australia and about business tax in Australia in particular. For most Australians who only get their views of politics from television and newspapers, something which they would see as very unusual occurred yesterday, and that is that the major parties agreed on a matter of tax. Of course, those of us who are in the parliament know that that is what usually happens, that most measures that go through this parliament, particularly tax measures, go through with bipartisan agreement. But I do not want to minimise it: this was a bigger change than most things that go through the parliament, and its agreement was therefore more significant than the norm. I am sure all of us have been disconcerted in the past by circumstances in which people say, `Why don't you ever put anything through the parliament with agreement?' when we all know that 90 per cent of what happens is dealt with in that way.I was pleased to be part of the process that led to the agreement, not because I think this is the best business tax package we could ever have had. It is not what the Labor Party would have done. If we had been in govern ment, we would have introduced measures differently—some of them very similar, particularly where they relate to venture capital and overseas pension funds. That has been a policy that we, and I, have been advocating for a long time, and we are pleased to see it being implemented. Some of the other changes with regard to scrip for scrip, et cetera are issues that we have been advocating and that we support. Others are ones about which we have more reservations; they are not our preferred position. But, on balance, it is a package that can give some certainty to the business community that the changes to business tax will last more than two years. That should therefore enhance the investment climate. One of the prices you pay when you lose elections is that, if you want to give a bit of certainty in a circumstance, you have to be prepared to support an initiative that is not your preferred initiative but that has sufficient elements of a positive nature for you to be prepared to support it.The package as a whole—not particularly these two bills but I hope, Mr Deputy Speaker, you will allow me to put them in the context of the whole package of which they form a part—has a very significant anti-avoidance element, which has always been very important to the Labor Party. We believe that it will work substantially to enhance the rigour of the tax system and the integrity of the tax base. That is a very important thing not only for the flow of revenue to the government but for the confidence of the PAYE taxpayers of Australia who pay their tax that other Australians are more likely to be paying their tax. There is no doubt that there is great frustration, and it reached a peak with the stories about very wealthy Australians paying no tax and stories about what is happening on the building sites and other places in Australia where people are arranging their affairs to take advantage of tax loopholes.There are parts of these measures which we support enthusiastically because they reflect the principles which we have been advocating, and I refer again particularly to the venture capital measures. As I said in an earlier speech, I hope the Treasurer will ac knowledge some of the reservations that AVCAL have raised with regard to that measure in the detail, not the principle, and I hope that there might be the capacity for some discussion with them. But that does not affect our preparedness to support the measures. They do not go to the heart of it or to the core principles which we support.With regard to the other measures in this package, particularly as they relate to small business, I am interested in the increased emphasis on the active assets. It is not the first time this has been in there. Some of these measures are really rephrasing of existing measures to reflect the balance of the package of measures. That is sensible and we support it, but it is important that we make that distinction. It might be an issue we have to address more often in the future.The other aspect that I wish to refer to briefly—in conclusion, as we did agree that I would speak for five minutes only on this matter—is the significance of the changes with regard to averaging. In so far as it relates to the business tax system, there is no problem with these changes and it is part of what goes to the revenue neutrality of the measure. But beyond the direct business community, the impact of the changes to averaging on independent retirees, for example, is an issue that gives me a bit of concern. It is not going to lead me to not support these measures—I was aware of it before the proposition came forward and I said we would still support it—but it is an issue that we as a community will need to consider and contemplate a broader response to.I was a little disconcerted that those who reviewed these measures recommended removing one of the benefits in the system by which they are not affected but by which other people are affected. They very enthusiastically recommended that averaging be taken out of the system when none of the review team could ever be affected by the averaging measures. I was disappointed by that, but I understand in the broad context of the whole package why it is there. I refer to it only because it is part of what we are putting through in this package and I want to put those reservations on the record. It is a package which we support; therefore, these are bills which I am pleased to support.17:16:0012727Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I did not hear all the honourable member's speech, but he raised the point at the outset that a lot of good work in the parliament is done on a bipartisan basis and that there should be credit given for that, and I do give credit for that. It is important that there is bipartisan support. I said in my speech in relation to the previous bills in the parliament earlier on that if they can be passed with bipartisan support so much the better and we welcome that. We are glad that the opposition is supporting the government's legislation; it is good for the design of the tax system. I want to say that without qualification.People often ask in media commentary of one kind or another whether we would prefer our legislation to be passed on the votes of this group of people or that group of people. It is my view and the government's view that it does not matter who votes for the legislation; the important thing is that the legislation is enacted. We are here to implement policy. We welcome any support for legislation, and the more support there is the better. I never have and I never will say that I would prefer my bills to be voted against by somebody or another. I would prefer my bills to be supported by all honourable members, especially all honourable senators. I make that absolutely clear.The comments that the honourable member made apply not just to business taxation. If ever I have seen a case for bipartisan support for necessary tax reform it is on indirect taxation, because whoever is going to be in government in the future in Australia is going to need an indirect tax base which grows with the size of the economy; that is, an indirect tax base which covers goods and services. I would have thought that the introduction of a goods and services tax from which all governments in Australia in future will benefit was one of those issues which was crying out for bipartisan support.We know that if Labor were ever to form a government again they will be relying on a goods and services tax and they will be glad that this was the government that had the vision and the strength to implement those changes. That is why we know that the campaign they are engaging in at the moment is shameless and populist. It is designed to try to get them cheap votes on necessary reform, which they fully intend to take the benefit of at the first available opportunity. I completely agree with the comments of the previous speaker, the member for Fraser, on the need for bipartisanship and I say yes and more. My great regret is that it was not done in relation to the necessary changes to indirect tax.The previous speaker also raised, I believe, some questions in relation to the drafting. He raised some comments made by a group; I am not quite sure what those comments were. I indicate to the House that, if it appears that the drafting is unduly restrictive, the government will undertake to remove unnecessary restrictions. I have already had some representations from one of my colleagues indicating that the measures may not be fully effective in the information type industries and I have undertaken to have a look at that and, if there is a legitimate problem, try to do something about it in the Senate. We will not be changing the substantive measures, but in the spirit in which the member for Fraser raised those matters we will look at the drafting to ensure that the full intention in relation to these measures is observed without opening undesirable opportunities for avoiding proper revenue responsibilities.I have been asked some questions from the shadow Treasurer's office in relation to scrip for scrip. I indicate my response to them because they were raised with my office. One of the things that was raised was whether the government's legislation makes pre-1985 assets exchange in a scrip for scrip post-1985 assets. I am informed that the answer is yes. We were also asked whether the government's legislation contains anti-avoidance rules similar to those of the UK. Again the answer is yes, they require that like assets be exchanged for like assets where both the original entity and the acquiring entity are not widely held. They will also be backed up by the government's part 4A requirements. So I can give those answers to the questions that have been raised with me.Coming back to the bills themselves, the capital gains tax bill, which will now pass through this parliament—I hope it will pass through the Senate next week—will streamline existing CGT concessions. The bills will introduce new rollover for small business taxpayers who have held an active asset for 15 years and are 55, or retiring or incapacitated. They will give rollover relief for shareholders in a company which exchanges shares and units during a takeover. They will give an exemption to non-resident tax exempt pension funds to come in and make venture capital equity investments in this country. They will accomplish the rounding-out of this government's historic reductions in capital gains tax, which will see, in return for the abolition of indexation and averaging, a reduction in the gain which is taxable to 50 per cent; that is, only half a capital gain will be taxable. That has the effect of at least halving rates. That puts Australia in a competitive position, along with countries like the United States and the United Kingdom. It gives us the opportunity to encourage people to save. It gives business the opportunity to build. It gives us the opportunity to attract into this country, capital gains tax free, US pension funds that can invest in venture capital. All that adds up to more mobility of capital, more savings and more investment incentives, greater economic growth and more jobs—benefits for average Australians.This is historic tax reform. This is the biggest business tax reform that has ever been done in Australia. I know there is a lot more work to be done before we bring it to finality and conclusion, but these are historic changes. I am glad they will have the support of the House of Representatives. I am glad they will have the support of the Senate. I hope they will be law by Christmas, and we will have accomplished the first leg of the great historic reform of Australia's business taxation system.Question resolved in the affirmative.Bill read a second time.12728Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Costello) read a third time.Bills12728r96312728Consideration resumed, on motion by Mr Costello:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.12728Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Costello) read a third time.Adjournment1272810000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! It being nearly 5.30 p.m., I propose the question:That the House do now adjourn.EM6STONEDr Stone—Mr Deputy Speaker, I require that the question be put forthwith without debate.Question resolved in the negative.Bills12728r92512728Bill returned from the Senate with an amendment.Ordered that the amendment be taken into consideration forthwith.Senate's amendment—(1) Schedule 1, page 45 (after line 4), at the end of the Schedule, add:Part 6—Amendments to prevent forum shopping65 At the end of section 36Add:Protection obligations(3) Australia is taken not to have protection obligations to a non-citizen who has not taken all possible steps to avail himself or herself of a right to enter and reside in, whether temporarily or permanently and however that right arose or is expressed, any country apart from Australia, including countries of which the non-citizen is a national.(4) However, if the non-citizen has a well-founded fear of being persecuted in a country for reasons of race, religion, nationality, membership of a particular social group or political opinion, subsection (3) does not apply in relation to that country.(5) Also, if the non-citizen has a well-founded fear that: (a) a country will return the non-citizen to another country; and (b) the non-citizen will be persecuted in that other country for reasons of race, religion, nationality, membership of a particular social group or political opinion;subsection (3) does not apply in relation to the first-mentioned country.Determining nationality(6) For the purposes of subsection (3), the question of whether a non-citizen is a national of a particular country must be determined solely by reference to the law of that country.(7) Subsection (6) does not, by implication, affect the interpretation of any other provision of this Act.66 Paragraph 46(1)(d)After "91K (temporary safe haven visa),", insert "91P (non-citizens with access to protection from third countries),".67 After Subdivision AJ of Division 3 of Part 2Insert:Subdivision AK—Non-citizens with access to protection from third countries91M Reason for this SubdivisionThis Subdivision is enacted because the Parliament considers that a non-citizen who can avail himself or herself of protection from a third country, because of nationality or some other right to re-enter and reside in the third country, should seek protection from the third country instead of applying in Australia for a protection visa, or, in some cases, any other visa. Any such non-citizen who is an unlawful non-citizen will be subject to removal under Division 8.Note: For protection visas, see section 36. 91N Non-citizens to whom this Subdivision applies(1) This Subdivision applies to a non-citizen at a particular time if, at that time, the non-citizen is a national of 2 or more countries.(2) This Subdivision also applies to a non-citizen at a particular time if, at that time: (a) the non-citizen has a right to re-enter and reside in, whether temporarily or permanently and however that right arose or is expressed, any country (the available country ) apart from: (i) Australia; or (ii) a country of which the non-citizen is a national; or (iii) if the non-citizen has no country of nationality—the country of which the non-citizen is an habitual resident; and (b) the non-citizen has ever resided in the available country for a continuous period of at least 7 days or, if the regulations prescribe a longer continuous period, for at least that longer period; and (c) a declaration by the Minister is in effect under subsection (3) in relation to the available country.(3) The Minister may, after considering any advice received from the Office of the United Nations High Commissioner for Refugees: (a) declare in writing that a specified country: (i) provides access, for persons seeking asylum, to effective procedures for assessing their need for protection; and (ii) provides protection to persons to whom that country has protection obligations; and (iii) meets relevant human rights standards for persons to whom that country has protection obligations; or (b) in writing, revoke a declaration made under paragraph (a).(4) A declaration made under paragraph (3)(a): (a) takes effect when it is made by the Minister; and (b) ceases to be in effect if and when it is revoked by the Minister under paragraph (3)(b).(5) The Minister must cause a copy of a declaration, or of a revocation of a declaration, to be laid before each House of the Parliament within 2 sitting days of that House after the Minister makes the declaration or revokes the declaration. Determining nationality(6) For the purposes of this section, the question of whether a non-citizen is a national of a particular country must be determined solely by reference to the law of that country.(7) Subsection (6) does not, by implication, affect the interpretation of any other provision of this Act.91P Non-citizens to whom this Subdivision applies are unable to make valid applications for certain visas(1) Despite any other provision of this Act but subject to section 91Q, if: (a) this Subdivision applies to a non-citizen at a particular time; and (b) at that time, the non-citizen applies, or purports to apply, for a visa; and (c) the non-citizen is in the migration zone and has not been immigration cleared at that time;neither that application, nor any other application the non-citizen makes for a visa while he or she remains in the migration zone, is a valid application.(2) Despite any other provision of this Act but subject to section 91Q, if: (a) this Subdivision applies to a non-citizen at a particular time; and (b) at that time, the non-citizen applies, or purports to apply, for a protection visa; and (c) the non-citizen is in the migration zone and has been immigration cleared at that time;neither that application, nor any other application made by the non-citizen for a protection visa while he or she remains in the migration zone, is a valid application.91Q Minister may determine that section 91P does not apply to a non-citizen(1) If the Minister thinks that it is in the public interest to do so, the Minister may, by written notice given to a particular non-citizen, determine that section 91P does not apply to an application for a visa made by the non-citizen in the period starting when the notice is given and ending at the end of the seventh working day after the day that the notice is given.(2) For the purposes of subsection (1), the matters that the Minister may consider include information that raises the possibility that, although the non-citizen satisfies the description set out in subsection 91N(1) or (2), the non-citizen might not be able to avail himself or herself of protection from the country, or any of the countries, by reference to which the non-citizen satisfies that description.(3) The power under subsection (1) may only be exercised by the Minister personally.(4) If the Minister makes a determination under subsection (1), he or she is to cause to be laid before each House of the Parliament a statement that: (a) sets out the determination; and (b) sets out the reasons for the determination, referring in particular to the Minister's reasons for thinking that his or her actions are in the public interest.(5) A statement under subsection (4) is not to include: (a) the name of the non-citizen; or (b) any information that may identify the non-citizen; or (c) if the Minister thinks that it would not be in the public interest to publish the name of another person connected in any way with the matter concerned—the name of that other person or any information that may identify that other person.(6) A statement under subsection (4) is to be laid before each House of the Parliament within 15 sitting days of that House after: (a) if the determination is made between 1 January and 30 June (inclusive) in a year—1 July in that year; or (b) if the determination is made between 1 July and 31 December (inclusive) in a year—1 January in the following year.(7) The Minister does not have a duty to consider whether to exercise the power under subsection (1) in respect of any non-citizen, whether he or she is requested to do so by the non-citizen or by any other person, or in any other circumstances.68 At the end of section 198Add:(9) An officer must remove as soon as reasonably practicable an unlawful non-citizen if: (a) the non-citizen is a detainee; and (b) Subdivision AK of Division 3 of this Part applies to the non-citizen; and (c) either: (i) the non-citizen has not been immigration cleared; or (ii) the non-citizen has not made a valid application for a substantive visa that can be granted when the applicant is in the migration zone; and (d) either: (i) the Minister has not given a notice under subsection 91Q(1) to the non-citizen; or (ii) the Minister has given such a notice but the period mentioned in that subsection has ended and the non-citizen has not, during that period, made a valid application for a substantive visa that can be granted when the applicant is in the migration zone.69 Paragraph 475(2)(e)After "91L,", insert "91Q,".70 Application of amendmentsThe amendments made by this Part apply to applications, or purported applications, for a visa made after the commencement of this item.17:28:0012731Ruddock, Philip, MPMr RUDDOCK0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—I move:That the amendment be agreed to.The amendment we have before us is the amendment that was foreshadowed when we were debating the Border Protection Legislation Amendment Bill 1999 in the House of Representatives. In order to facilitate discussion of the amendment both in the government party rooms and also within the opposition party rooms, it was necessary, to assist in ensuring speedy passage, that the terms of the amendment be considered in another place. They have been. This is the amendment that is intended to prevent forum shopping. I did elaborate, when the matter was before the House, in relation to the government's intention to move this amendment, why it was necessary and the urgency associated with it. I thank the opposition for their cooperation in ensuring that these matters were considered.The only additional information I want to put before the House is in relation to the proclamation of this legislation. I will be anxious to get the border protection legislation amendments that were amendments to the Migration Act and other legislation proclaimed as quickly as possible so that it can be operative and the benefits to be obtained from it will be available.In relation to the forum shopping matters, it was not the government's intention that they should operate retrospectively to impact upon people who may have matters presently before the courts and where there is an opportunity now—because of certain steps that have been taken by me—for them to be able to present a refugee application for consideration. This applies particularly to 28 East Timorese. We have given them notice that the application should be lodged as quickly as possible; we have been in discussion with their legal advisers on that matter. I do not intend to proclaim the sections dealing with forum shopping in such a way as to in any way prejudice their capacity to make their claims, as would occur with these amendments operational and impacting adversely on consideration of their claims. For that reason there may be a small delay in the proclamation of the legislation, but it is for that purpose and I wanted the House to be aware of it.17:31:0012731Kerr, Duncan, MPMr KERRRH4DenisonALP00—Firstly I would like to thank the Minister for Immigration and Multicultural Affairs for the kind remarks that he had made in the Senate, through his representative there, in relation to the work that we undertook together on this matter. Whilst never objecting to the objective that the minister proposed by way of amendments to prevent forum shopping, the opposition identified three matters which it regarded with great seriousness in the original draft that the minister supplied on a confidential basis to us. The first was retrospectivity. The second concerned the possibility that the obligation to remove a person from Australia under these provisions might facilitate or permit the return of a person, who had sought to engage our protection obligations, to a country about which that person might have well-founded fears of persecution for reasons of race, religion, nationality, membership of a particular social group or political opinion. The third concerned the question of East Timorese asylum seekers. Without suggesting that the discussions with the minister were anything other than cordial at all times, I might say they were tough and extensive.0J4RUDDOCKMr Ruddock—Really?RH4Kerr, Duncan, MPMr KERR—Perhaps not tough.0J4RUDDOCKMr Ruddock—I just think that you're a hard bargainer.RH4Kerr, Duncan, MPMr KERR—Yes. Might I say that they certainly took place over a very extended period of time. That they occurred between the minister and me really flows only from the fact that, by agreement between the shadow minister for immigration and me, this border protection legislation had my general carriage and, secondly, the shadow minister was engaged in a very serious political discussion regarding the three-year visa issue and in that circumstance I had the occasion to undertake those negotiations.Whatever the arrangements, I am certain that the outcome is legislation which does achieve the government's objectives while each of the three points that concerned the opposition have been addressed now. They were addressed by the amendments which were incorporated in the government amendments moved in the Senate, by way of the undertakings given by the minister in his second reading speech and by the administrative arrangements which the minister has undertaken to adopt, one of which he indicated in the House now—the deferral for some time of the commencement of this legislation to allow the final resolution of the cases of the East Timorese who have yet to lodge applications.In short, there is a common agreement about the objective. Might I thank the minister and his officers who put in an enormous amount of time. Each of us was asserting common agreement but each of us was finding difficulties, for various reasons, with the solutions pressed by the other. However, through the goodwill of those processes, we were able to come to an outcome which did add up to a conclusion that this legislation achieves the objectives. At the same time this legislation, as I believe now, does not in any way cause this parliament to need to reflect that it has perhaps trod a path which it might regret later, which might have been the case, notwithstanding the good intentions of the minister, had the legislation stood as originally drafted.We have spoken extensively on the principal provisions of the bill. Given the time and the need to deal with other legislation, I do not intend to protract this debate. I merely indicate that the outcome will mean that Australia does have a greater capacity to seek a person's removal. It would obviously require cooperation with other countries because the return of people without papers in the circumstances that often arise is difficult at best. But at least there is a system now that the minister can pursue to avail himself of where there is a person who may be able to seek the protection of a third country, who has not sought that protection or who has sought that protection and had previously availed himself or herself of it but then came to Australia. Those are outcomes that are sound but the protections that are now built in to the legislation prevent the possibility of us abusing the provisions of this legislation and keep us within the terms of the convention regarding the protection of refugees.17:36:0012732Sciacca, Con, MPMr SCIACCA6J4BowmanALP00—First of all I want to thank my colleague the member for Denison for all the work he has done on this legislation. The opposition always made very clear to the government that we would be supporting these enhanced measures to try to protect our national borders and I fully agree with the legislation. I want to take a couple of minutes of the House's time to make a few comments with respect to this whole problem that we presently are suffering, if you like, with these illegal immigrants. Firstly, I think we need to take into account the fact that it is not only Australia that has these problems. Indeed, not long ago one of the European ambassadors said to me, `You think you've got a problem; we have up to a thousand of them per night coming into our country.' So I think we do need to keep it in perspective. I also want to say that I was less than impressed with the minister—and I am glad the minister is in here because, generally, I have a high opinion of him. But I do feel that on this occasion he has gone over the boundaries. I think the way in which he pulled that figure out of the air—and I repeat: pulled that figure out of the air—when he said that something like 10,000 people were going to arrive was disgraceful. He tried to tell the Australian public that all of a sudden we were going to be invaded by all these illegal immigrants, that whole Middle Eastern villages were packing up to come here. I think what he did was quite reprehensible. I think it was playing wedge politics at its possible worst. I think he unnecessarily alarmed the Australian public by saying that this is a much bigger problem than it is. I would have thought, Minister, that you were a little above that, but obviously you are not. I think you may have given yourself a bit of a short-term advantage as a result, but I can tell you now that because you have been asked the question of where you got that figure from and have not been able to answer it—you have hidden behind `that was the intelligence that I received'—no-one in Australia, certainly no-one who knows anything about these issues, will believe you. Certainly, you have been questioned about it and you have got yourself a bit of a win, if you like, but at a cost to you that you may not yet realise. In any event, having said that, I want to say this: I accept that this is a difficult problem. I accept that it is something that needs to be fixed up. As you are well aware, Minister, you have the bipartisan support of the Labor Party on all of this. Never mind that you tried to, if you like, shift the blame away from your handling, or the government's handling, of what is a difficult problem, and I acknowledge that. But, nevertheless, you tried to blame the opposition, and you know that was wrong. You did so and you got away with it, but you have done so at a great expense to your own reputation as a decent, caring and compassionate person. I think you will find that amongst all the organisations that are your constituency, you may have lost a lot of that. I am certainly not going to deter them from that way of thinking, because I agree with them. In the end all these measures give the minister and the government the armoury they want. Again, I say that it is a difficult problem but it is one that, obviously, the minister is having extraordinary difficulty in handling. There is no question in my mind that the three-year temporary visa, which we have supported him on and which of course has been there for about a month now so it was not awaiting anybody's approval—all the ones that have been coming in over the last month have in fact been processed under that regulation, which is not of course what the minister was trying to tell the Australian public. He was trying to hoodwink them. But the point is that you have that armoury now and every time a boat comes in, Minister, it is your problem. Every time a boat comes in it depends on how you are going to handle it. You have the armoury that you wanted, and now it is up to you. I want to finish by saying that the minister himself has said what we have been saying, that is, that we have to redouble the diplomatic efforts. Given the comments of President Wahid of Indonesia this morning when he said that as far as he was concerned this was our problem, I believe that nothing less will do than for the Prime Minister himself to arrange an appointment with President Wahid to ask his assistance in trying to help us with this problem. We all know that Indonesia is the staging point. There is no point sending Stockings Downer over there; I do not think he is going to be able to do too much about it. This is a very serious problem—a 10 on the Richter scale according to the minister. I call on the Prime Minister to get over there to try to fix this problem in Indonesia.17:41:0012733Ruddock, Philip, MPMr RUDDOCK0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—I thank the honourable member for his comments. I think they do indicate that he needs to take a little more note of the matters that he is raising. He needs to be a little more consistent, I think, in his own comments and observations. It was some weeks ago that the honourable member said when some boats arrived and I was not available to comment that this was a national emergency. They were his comments. I have been very careful about the sorts of comments I make because I do not wish to alarm people, and never have. I admit that I did say that if it were a national emergency, as the honour able member had said, when we had the large number of arrivals, something like 700 people within a fortnight—and with the intelligence information, which I will address in a moment—that it had gone up 10 points on the Richter scale. That was not me saying that it was a national emergency; they were the member's own comments.But, certainly, the situation had become very much worse in a short period of time. I do not pull figures out of the air. If you ever get leaked documents from around the government, you will find that when I have said there was intelligence information there, it was there. The same sources who had said to us that there were 2,000 people on the way, which has been substantiated by the number of arrivals that we now have—the people that I am holding in detention—were those who told us that there was a pipeline and that many more people were on the way. It is not hard to see it.There are estimates of as many as 2,000 people in Indonesia and of people who are travelling already from the Middle East and West Asia through places like Malaysia and Singapore; these are people who come with travel documents. I have heard some people say. `Refugees don't travel with documentation. They flee over borders.' Let me assure you that there are no borders over which people can flee without documentation. People do not get by boat from, say, Pakistan to Indonesia and on to Australia without documentation. People come by aeroplanes, with visas, with documentation that tells you where they have been and on what basis they have been there. When you know that people have thrown those documents overboard in sight of Australian officials, there is no doubt that there is a desire on the part of many people to ensure that we do not know where they have come from and that we do not know where they have been. It is one of the reasons that the implementation of the measures that we have undertaken has to be seen as part of a continuing program of action on our part to deal with this matter.I have never said that any one of the steps that we have advanced will be a cure in itself. These measures and the further measures that will be necessary have to be seen as incremental, and I have identified some of them at question time in the House over the last few days. I know the honourable member is concerned that his view was not endorsed by his colleagues, that he wanted to convince them that there was no argument for a temporary entry visa and that he feels some concern that this reflects upon his handling of the matter. I cannot accept responsibility for that, but I can say that, if you look at all of the measures that we have implemented, the temporary entry measure is the one that will have an impact. But it has not yet impacted. There have been no decisions taken in relation to it. It takes time to process the people who are already here and who have priority. No temporary entry permits have been granted and, if this measure were disallowed, the impact would have been immediate. It is important that honourable members understand that. (Time expired)17:46:0012734Sullivan, Kathryn, MPMrs SULLIVAN3E4MoncrieffLP10—I rise to speak on the Border Protection Legislation Amendment Bill 1999 . I have a longstanding interest in immigration and refugees, and I feel moved to enter this debate very briefly in light of some of the things that have been said about the Minister for Immigration and Multicultural Affairs. The minister of course has mounted a very capable defence of himself, but somebody from the government needs to say a few words on his behalf. I have had years now of dealing with this minister on the subject of immigration, both in opposition and in government.The member for Bowman made the statement that the minister is a decent, caring and compassionate person. I agree with that statement, and I am going to extend it by saying that I believe he is recognised more and more throughout Australia as we all know him to be—a man of integrity who has worked very hard to return integrity to our immigration and refugee policy. The Border Protection Legislation Amendment Bill 1999 is of a piece with the actions in this area of the minister and of the Howard government.I have been in parliament for a few years and was very active in the immigration and refugee area more than 20 years ago when we were getting boat people from Indochina. I remember the alarm bells that that set off in the community, and some of the fairly wild things that were said around the place by people nobody in this chamber would associate themselves with. The feeling in the community was: what is the security of this country when people just start to arrive on our shores? There is that same feeling now. There is a very deep concern about what the arrival of all these boatloads of people means for the future of the country.Australians are a compassionate and altruistic people. Most of them are very happy to help people who are in need, and they recognise that this is a nation that has international obligations to genuine refugees who, for the most part, are accepted with sympathy and understanding. I have a very deep concern about the people trafficking—I cannot speak for the minister, but I am sure it is his view, too. Some people see it as a threat to the integrity of our borders. It is something that carries with it the potential to damage our interest to genuinely helping refugees and others whom we would want to help.Generous people do not like to feel they are being used, and there is a growing feeling that these people are using Australia. The measure that the minister has put forward in this bill is a very reasonable one—people who have other acceptable options should take them, and we should see that they do so that the integrity of our refugee policy is not undermined no matter what the force of numbers that are being brought to bear. We will remain steadfast in that. We will not allow our well-intentioned refugee procedures to be used by people who are just queuejumping in an immigration process.I applaud everything that the minister is attempting to do. Personally, when I see him on television in the context of `yet another boatload', I listen very closely to what he says because I know it will be very sound and it will be very important for our immigration and refugee policies. I believe that the minister has been very temperate indeed in what he has been saying. He has nevertheless recognised the need and the right of the Australian people to know something of the magnitude of the problem. I am sure that, when he makes statements about what his intelligence is on the magnitude of the problem, he would never do it in an alarmist way and that he would give very close consideration to the need for the Australian people to know that intelligence. (Time expired)17:51:0012735Kerr, Duncan, MPMr KERRRH4DenisonALP00—I will just conclude very briefly. This has been a constructive debate. Clearly the points of some seriousness and passion have been correctly identified. These are matters which touch us deeply as a country, and we have to address ourselves with great seriousness to them. Just for the record, there was a cooperative endeavour between the minister's office and mine. Having been chided by my parliamentary colleague the shadow minister for immigration, I put on record the assistance that was provided by my staffer, George Haddad. I will also mention the issues that were inserted as a result of the agreement with the minister on the original draft. They were 91N(2)(c), 91N(3), (4) and (5), 91Q(2) and the amendment in terms of section 70—the `application of amendments'—which made it plain that these matters would not operate retrospectively. I believe that the outcome reflects credit on the willingness of the minister to work through these matters cooperatively.There are going to be continuing and very important public debates about the management of the issue of immigration and the management of the question of those seeking to come to Australia illegally. The opposition does have a number of substantive proposals or initiatives that we have asked the government to examine—for example, the possibility of establishing a national coastguard service and the like—but this is not the forum for it, nor is there time to continue that debate at this stage. This is unfinished business, and we will return to it in due course.Question resolved in the affirmative.Bills12736r85412736Consideration resumed from 24 November.Senate's amendments—(1) Clause 20, page 12 (line 13), after "brought", insert "directly".(2) Clause 20, page 12 (after line 25), at the end of the clause, add: (3) If, apart from this subsection, subsection (1) is to any extent inconsistent with section 73 of the Constitution, this Act has effect as if the words ", except by special leave of the High Court" were added at the end of subsection (1).(3) Clause 39, page 23 (lines 6 to 8), omit subclause (6).(4) Clause 41, page 24 (line 12) to page 25 (line 16), omit the clause.(5) Page 25 (after line 16), after Part 5, insert:Part 5A—Removal of proceedings(6) Page 25 (after line 16), after the heading to Part 5A, insert:41A Removal by order of Federal Court or Family Court (1) Where: (a) a proceeding is at any time pending in the Federal Magistrates Court; and (b) the Federal Court, apart from section 32AA of the Federal Court of Australia Act 1976 , has jurisdiction in the matter; the Federal Court may, upon application by a party or upon application by or on behalf of the Attorney-General of the Commonwealth, at any stage of the proceedings before final determination, order that the proceeding or a part of the proceeding be removed into the Federal Court, on such terms as the Federal Court thinks fit. (2) Where: (a) a proceeding is at any time pending in the Federal Magistrates Court; and (b) the Family Court, apart from section 33A of the Family Law Act 1975 , has jurisdiction in the matter; the Family Court may, upon application by a party or upon application by or on behalf of the Attorney-General of the Commonwealth, at any stage of the proceedings before final determination, order that the proceeding or a part of the proceeding be removed into the Family Court, on such terms as the Family Court thinks fit. (3) The Federal Court or the Family Court may not make an order under subsection (1) or (2), as the case requires, unless: (a) all parties consent to the making of the order; or (b) the Federal Court or the Family Court, as the case requires, is satisfied that it is appropriate to make the order, having regard to all the circumstances, including the interests of the parties and the public interest.(7) Page 25 (after line 16), after clause 41A, insert:41B Orders may be made If an order is made under section 41A, the Federal Court or the Family Court, as the case requires, may make such orders as it considers necessary pending the disposal of the proceeding by the Federal Court or the Family Court, as the case requires.(8) Page 25 (after line 16), after clause 41B, insert:41C No appeal lies An appeal does not lie from a decision of the Federal Court or the Family Court under section 41A in relation to the removal of a matter under this Part.(9) Page 25 (after line 16), after clause 41C, insert:41D Removal valid even if subsection 19(1) contravened A reference in section 41A to a proceeding pending in the Federal Magistrates Court includes a reference to a proceeding that was instituted in contravention of subsection 19(1).(10) Page 25 (after line 16), after clause 41D, insert:41E Part has effect subject to Constitution This Part has effect subject to the Constitution.(11) Clause 45, page 27 (line 20) to page 28 (line 2), omit the clause.(12) Clause 46, page 28 (lines 3 to 20), omit the clause.(13) Clause 60, page 35 (after line 15), after paragraph (c), insert: (ca) an employee of the Commonwealth who is: (i) authorised under paragraph 3(c) of the Consular Fees Act 1955 ; and (ii) exercising his or her function in that place; or (cb) an employee of the Australian Trade Commission who is: (i) authorised under paragraph 3(d) of the Consular Fees Act 1955 ; and (ii) exercising his or her function in that place; or(14) Clause 60, page 35 (line 22), after "(c)", insert ", (ca), (cb)".(15) Clause 76, page 46 (line 9) to page 47 (line 4), omit the clause.17:55:0012737Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:That Senate amendments (1), (2), (13) and (14) be agreed to.I will be very brief about the reasoning. The government was concerned as to the unintended effects of some of the amendments that were made in the Senate. The outcome is that we are prepared to accept an amendment that relates to the additional jurisdiction of the Federal Magistrates Service in relation to residence matters. I will deal with that in more detail when we come to government amendments that I propose to move.17:56:0012737McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—I indicate that the opposition will accept that motion.Question resolved in the affirmative.17:56:0012737Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:That Senate amendments (3) to (12) and (15) be disagreed to.The government is not prepared to accept the amendments made by the Senate to the Federal Magistrates Bill 1999 and to the Federal Magistrates (Consequential Amendments) Bill 1999 which were moved by the opposition. The opposition's amendments would only obstruct access to cheaper justice in the Federal Magistrates Service, make the service more complex and reduce its potential to cut the backlog of cases in the family law arena.The bills have been carefully crafted to facilitate a more streamlined, less technical approach being taken to the conduct of litigation in the Federal Magistrates Service. The government sees it as vital that the integrity of the provisions of the bill be maintained to encourage the fulfilment of these goals. It is for these reasons that the government rejects the amendments to both bills moved by the opposition.17:57:0012737McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—We strongly oppose this motion by the government. The government, despite having the rhetoric that the amendments will increase the cost of litigation, has not substantiated that argument at all. For instance, our amendments, which were accepted by the Democrats, will require federal magistrates to give appropriate reasons for judgment—properly referring to the reasons and the evidence presented before them. That would, of course, enable applicants or plaintiffs in the proceedings to see why the magistrates have made their decisions, particularly in the context where these magistrates will be dealing in very controversial areas relating to family law, access to children and the like. It is in those areas where, quite frequently, we see the most vehement opposition to the courts by those who have been before them. It risks the personal safety of not only the magistrates but also other parties to the relationship not to require these magistrates to give appropriate reasons. That cannot possibly add to the cost of the litigation, because it is at the end of the litigation. It would require the magistrate sitting down for perhaps another half an hour or so to properly refer back in their decision to the evidence.The other issue related to the power of the Federal Court and the Family Court to assume conduct of matters before the magistracy if they thought it was appropriate to do so. This is part of the government's agenda. Quite clearly, when we see their amendments to the consequential provisions bill, which we will speak on shortly, we will see what the government are about here. They are about setting up this magistracy as a sop to the people who have voiced their opposition to the Family Court. They want to cocoon the Federal Magistracy from the overview of the Family Court. That is one area.In the other area—which we will speak on shortly in respect of the industrial area and the consequential provisions bill—the government is proposing to enable the magistracy to deal with very complex industrial matters, including section 127 of the Workplace Relations Act on the no strike orders and part XA of the freedom of association provisions, which I will talk about shortly. This government wants to give to the magistracy—a court for dispensing brief, succinct and less complex judgments—highly politically charged, very complex, very controversial matters.They want to bestow this very complex and sensitive jurisdiction on the magistracy and then cocoon it so that the Federal Court cannot assume conduct of these complex and controversial matters. None of these issues can sensibly be said to increase the cost of litigation for applicants. It is about a hidden government strategy. We are looking at a situation where the government says that this is as good as it gets for its access to justice strategy. If it is opposing our amendments, I am afraid that the government is not interested in justice at all.Question resolved in the affirmative.18:02:0012738Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I present the reasons for the House of Representatives disagreeing to the amendments of the Senate. I move:That the reasons be adopted.Question resolved in the affirmative.Bills12738r85312738Consideration resumed from 24 November.Senate's amendments—(1) Schedule 4, page 19 (after line 22), after item 69, insert:69A Paragraph 18A(3)(f)Omit "Rules of Court", substitute "Federal Court Rules".(2) Schedule 8, item 11, page 25 (after line 33), after subsection (5), insert: (5A) If, in dismissing an appeal under subsection (1), the Family Court is of the opinion that the appeal does not raise any question of general principle, it may, in accordance with the standard Rules of Court, give reasons for its decision in short form.(3) Schedule 8, item 11, page 26 (line 18), omit "(1);", substitute "(1); or". (4) Schedule 8, item 11, page 26 (after line 18), after paragraph (8)(c), insert: (d) to reinstate an appeal under subsection (1) that, because of the standard Rules of Court, was taken to have been abandoned; or (e) to stay an order of the Family Court made in connection with an appeal under subsection (1);(5) Schedule 9, item 11, page 30 (after line 3), after subsection (5), insert: (5A) If, in dismissing an appeal under subsection (1), the Family Court is of the opinion that the appeal does not raise any question of general principle, it may, in accordance with the standard Rules of Court, give reasons for its decision in short form.(6) Schedule 9, item 11, page 30 (line 21), omit "(1);", substitute "(1); or".(7) Schedule 9, item 11, page 30 (after line 21), after paragraph (8)(c), insert: (d) to reinstate an appeal under subsection (1) that, because of the standard Rules of Court, was taken to have been abandoned; or (e) to stay an order of the Family Court made in connection with an appeal under subsection (1);(8) Schedule 11, item 25, page 40 (line 24) to page 41 (line 18), omit section 33C.(9) Schedule 11, item 42, page 44 (lines 4 to 8), omit paragraph (a), substitute: (a) proceedings are instituted in the Federal Magistrates Court in relation to property of a total value exceeding, at the time the proceedings are commenced: (i) $300,000; or (ii) if another amount is specified in the regulations—that other amount; and(10) Schedule 11, item 42, page 44 (after line 16), after subsection (1), insert: (1A) If: (a) after proceedings have been instituted in the Federal Magistrates Court in relation to property, the total value of the property exceeds: (i) $300,000; or (ii) if another amount is specified in the regulations—that other amount; and (b) the respondent in answer to the application by which the proceedings are instituted, is seeking an order different from that sought in the application; the Federal Magistrates Court must, before proceeding further with proceedings, inform the parties that, unless each of them consents to the Federal Magistrates Court continuing to hear and determine the proceedings, the Federal Magistrates Court is required to transfer the proceedings to the Family Court.(11) Schedule 11, item 42, page 44 (line 18), after "hearing", insert ", or continuing to hear,".(12) Schedule 11, item 42, page 44 (line 20), after "hearing", insert ", or continuing to hear,".(13) Schedule 11, item 42, page 44 (line 24), after "(1)", insert "or (1A)".(14) Schedule 11, item 42, page 44 (line 28), after "(1)", insert "or (1A)".(15) Schedule 11, item 63, page 48 (line 9) to page 49 (line 20), omit the item.(16) Schedule 11, item 76, page 51 (after line 16), after subsection (6), insert: (6A) If, in dismissing an appeal under subsection (1), the Family Court is of the opinion that the appeal does not raise any question of general principle, it may, in accordance with the standard Rules of Court, give reasons for its decision in short form.(17) Schedule 11, item 76, page 51 (line 33), omit "(1);", substitute "(1); or".(18) Schedule 11, item 76, page 51 (after line 33), after paragraph (9)(b), insert: (c) to reinstate an appeal under subsection (1) that, because of the standard Rules of Court, was taken to have been abandoned; or (d) to stay an order of the Family Court made in connection with an appeal under subsection (1);(19) Schedule 12, item 4, page 57 (line 30) to page 58 (line 2), omit the item.(20) Schedule 12, item 6, page 59 (line 26) to page 60 (line 21), omit section 32AC.(21) Schedule 16, item 20, page 68 (line 26), omit "46V(1)(c) ", substitute "46PV(1)(c) ".(22) Page 71 (after line 7), after Schedule 18, insert:Schedule 18A—Amendment of the Maternity Leave (Commonwealth Employees) Act 19731 After paragraph 5(3)(b) Insert: (ba) a person who is a Federal Magistrate;(23) Schedule 25, page 80 (line 2) to page 82 (line 18), omit the Schedule.Motion (by Mr Williams) agreed to:That Senate amendments (1) to (7), (16) to (18), (21) and (22) be agreed to.18:03:0012739Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:That Senate amendment (15) be disagreed to and the following 2 Government amendments be made in place of it:(1) Schedule 11, item 63, page 48 (lines 19 and 20), omit "during the interim period".(2) Schedule 11, item 63, page 49 (lines 10 to 20), omit subsection (6).By way of explanation, the government is concerned about the amendments made by the Senate and moved by the opposition regarding the jurisdiction of the Federal Magistrates Service to deal with the residence of children in family law matters. As the amendment stands, the clause which limited the ability of the Federal Magistrates Service to deal with residence matters has been omitted. This means that the Federal Magistrates Service would have unlimited jurisdiction to deal with such issues, whereas the government intends that this jurisdiction would at least initially be more limited.Concern had been raised before the Senate Legal and Constitutional Legislation Committee that this clause in its original form had allowed the government to make a proclamation within four years which could give the court unlimited residence jurisdiction. The government assumes that the opposition's amendment was intended to deal with this issue, but instead it has given the Federal Magistrates Service unlimited residence jurisdiction from the commencement of its operations, which was never the intention of the government. It has been raised as a concern by the Law Council of Australia. To deal with this, the government is prepared to omit the ability to extend the court's residence by proclamation and simply allow the Federal Magistrates Service to deal with residence matters only where either of the parties seeks orders by consent or where the parties consent to the court hearing the matter. This will give the service the same residence jurisdiction as state magistrates courts.The amendment removes the ability to extend the residence jurisdiction of the Federal Magistrates Court under the Family Law Act 1975 by proclamation. The jurisdiction of the Federal Magistrates Service concerning the residence of children will then be limited to the court hearing such proceedings where the parties seek orders by consent or where the parties agree to the court hearing the proceedings.18:05:0012740McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—I indicate that the opposition will agree to that motion.Question resolved in the affirmative.18:06:0012740Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:That Senate amendments (8) to (14), (19), (20) and (23) be disagreed to.I have already addressed the reasons for the disagreement in dealing with the previous bill.18:06:0012740McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—The reason why people are being delayed in catching their planes this evening is courtesy of `Reith the Wrecker'. He rides again.DK6HOCKEYMr Hockey—Not delayed—we have already missed them.JK6McClelland, Robert, MPMr McCLELLAND—The reason people have missed planes is `Reith the Wrecker'. He has already done some damage to this country and he is continuing to do it. The government could easily have its magistracy up if it were not for the minister. He has leadership aspirations. They are widely published. We read of him having `tea and pee' clubs with members of the backbench to woo them, but they will not back a bloke without courage.He could have said, `Look, I understand that there's controversy about these matters. Let me take that argument up. It involves industrial matters and the powers of the Workplace Relations Act. I will carry the ball forward,' and he would gain some respect among his backbenchers. But he wants to give these very highly charged political and industrially sensitive issues to these magistrates, who no doubt will be hand-picked by the government. He wants to do that because the Federal Court, in dealing with these matters, has shown some degree of fairness and objectivity in standing as a bulwark against the government's very harsh industrial agenda, particularly in respect of imposing injunctions and penalties for breaching section 127 strike orders.The court has determined to accept that the employer, if they are seeking an application, bears the onus of proof, but the government does not like that decision. The Federal Court has said, in determining these matters, that the orders of the Australian Industrial Relations Commission had to be appropriately expressed so that those receiving the orders knew that they were targeted by the order and they knew what the order meant. Again, the government does not like that. So it is imposing these very harsh measures on the workers of this country, but it is now trying to give them to 16 hand-picked magistrates. That is all this is about.When we look at this second wave legislation that the magistrates will be required to deal with if this legislation goes through, the Australian Industrial Relations Commission will be required to make these orders after 48 hours, even if there is no dispute. Effectively that will reverse the onus of proof placed on workers. Effectively it will abolish the traditional balance of convenience test that has been applied in respect of these sorts of interim orders. Indeed, it will enable the commission to make anticipatory orders if there has been any industrial action in the past couple of months. They can make orders in advance, if you like, to prevent industrial action occurring. These very complex and sensitive issues will be given to the federal magistracy if these amendments are defeated.Again, I stress that the government clearly wants to hand-pick these 16 magistrates. It wants to cocoon them from any oversight of the Federal Court, which I have to say has to be regarded as one of the best courts in the world. I say that quite proudly. We have in this country a court with a reputation for fairness, for intellect and, indeed, for dispensing justice without fear or favour. But that is not what this government is about. It is certainly not what `Reith the Wrecker' is about. He is about pursuing his own personal agenda.10000SPEAKERMr SPEAKER—The member for Barton knows better than that.JK6McClelland, Robert, MPMr McCLELLAND—I take that point, Mr Speaker. He is about pursuing his own personal agenda at the expense of his colleagues' legitimate measures which his colleagues genuinely want to pursue. He is about impeding them. We see a situation when a colleague says, `I can get my agenda through if you'll just carry the ball on your issue,' and he says, `No. Damn you. You're on your own, Brother. It's my agenda. I'm telling you what to do.' It is about time the frontbench of this government stood up to this man. He is not a statesman. He is a political rogue. He is going to bring your government down. (Time expired)18:11:0012741Bevis, Arch, MPMr BEVISET4BrisbaneALP00—The timing of this debate after 6 o'clock on a Thursday evening is either an unfortunate accident or a piece of shrewd planning. There is no reason why this debate could not be held when the House resumes in a week. This is a vitally important piece of legislation. The government has chosen the timing quite deliberately. We do not intend to let it slide through, but I intend to restrict my remarks to only a few minutes. There are important considerations here.The government is in the process of establishing the worst form of forum shopping on industrial relations matters in the judicial systems that this country has. The government has proposed in its industrial relations second wave laws to provide the opportunity for matters dealing with section 127 orders—sensitive and complex areas associated with industrial disputes—to be dealt with not by the Federal Court, as has been the case, but to have those matters dealt with by the Supreme Court. In the Federal Magistrates (Consequential Amendments) Bill 1999 , the government is proposing to provide a third shop where people can go forum shopping; that is, the newly created Magistrates Court.The issues of these section 127 orders and freedom of association matters—the very heart of the way in which workers are organised—were the subject of quite a deal of comment by the legal community when they came up as part of the second wave. I spoke about this when the second wave legislation was before the parliament. In view of the time, I will not refer to the whole document. I will read two sentences from an open letter headed `A Critical Analysis of the Reith Proposals' by over 80 of Australia's leading industrial barristers and solicitors, including three QCs. They said this about the very thing that this government is now putting into a third forum shopping venue:There is, however, nothing to suggest that the Federal Court has acted in anything other than a prompt and efficient manner in dealing with such enforcement proceedings—that is, in relation to section 127 orders, precisely the thing the government says needs to be shunted off into its new Magistrates Court. They also said:There is simply no need for extending the powers of enforcing of section 127 orders to state supreme courts.I have no doubt that these same 80 eminent lawyers, who have said that there is no reason to shunt this off into a supreme court, would say there is definitely no need to shunt it off into the Magistrates Court. So why do it? The simple answer to that is that the government has lost a number of high profile cases before the Federal Court. The simple fact of this is that the government does not like its chances in industrial relations matters before the Federal Court. Its mates do not either.So, under pressure from some at the top end of town, the government said, `Let us go to our state Supreme Court.' They threw that in there because they thought they might have a better run at it in Western Australia or possibly in Victoria if they went there. Now they want to put a third option in: `If you do not think you are going to win it in the Supreme Court in your state and you do not think you are going to win it in the Federal Court, what we will do is set up a new Magistrates Court for you and we will appoint the magistrates.' So you have a really good safety net here!Let us not have any misunderstandings about where that takes us. This government, in fact the former Deputy Prime Minister, is on the record as saying, when a High Court appointment came up, that the country needed a capital `C' conservative judge. That is sure what they got. They got a capital `C' conservative judge appointed to the High Court. Now they want to fill up a magistrates court with a whole run of small `c' conservative magistrates. So we will have a whole lot of small `c' conservative magistrates who want to grow up to be big `C' conservative judges. This is nothing more than a stack. It is a stack for the basic political industrial agenda that this minister and this government are known for.Anyone who doubts that should have been in the Senate a couple of nights ago. When this matter was being dealt with in the Senate, the Minister for Employment, Workplace Relations and Small Business was over in the lobby. He was physically in the lobby haranguing Democrat senators as they walked in to vote on it. How often do you see the Minister for Employment, Workplace Relations and Small Business over in the Senate? He was there because he knows this is the heart of his policy. He was there because, at the end of the day, it does not matter what happens out there in the workplace. If a union wants to take a matter to court, he knows he wants it to go to this new magistrates court.This is a rort. That is what it is. It is a rort. If the government are fair dinkum about wanting to set up a magistrates court to deal with the proper business that is here, they have got the support of the opposition. If they want to persist with their ideological industrial relations rort and override good judicial practice, we will oppose it and we will defeat it again in the Senate.18:16:0012742Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—In view of the hour, I will not reply to the two speeches that have just been made. We have heard these issues run previously. They seem to be reflecting paranoia rather than reality. I commend the motion to the House. Question put: That Senate amendments (8) to (14), (19), (20) and (23) be disagreed to.18:20:00The House divided. (Mr Speaker—Mr Neil Andrew)75Mr AbbottMr AndersonMr K. J. AndrewsMr AnthonyFran BaileyMr BairdMr BarresiMr BartlettMr BillsonMrs B. K. BishopMs J. I. BishopMr BroughMr CadmanMr CameronMr CausleyMr CharlesMr CostelloMrs DraperMrs ElsonMr EntschMr FaheyMr FischerMr Forrest*Mrs GallusMs GambaroMrs GashMr GeorgiouMr HaaseMr HardgraveMr HawkerMr 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 M. A. J. VaileMrs D. S. ValeMr WakelinDr WasherMr WilliamsDr WooldridgeMs Worth58Mr AdamsMr AlbaneseMr AndrenMr BevisMr BreretonMs BurkeMr ByrneMr CoxMr CreanMrs CrosioMr DanbyMr EdwardsDr EmersonMr L. D. T. FergusonMr M. J. FergusonMr FitzgibbonMs GerickMr GibbonsMs GillardMr GriffinMs HallMr HattonMs HoareMr HollisMr HorneMrs IrwinMr JenkinsMr KerrDr LawrenceMr LeeMs LivermoreMr McClellandMs J. S. McFarlaneMs MacklinMr McLeayMr McMullanMr MartinMr MelhamMr MorrisMr MossfieldMr MurphyMs O'ByrneMr O'KeefeMs PlibersekMr PriceMr QuickMr RipollMs RoxonMr RuddMr Sawford*Mr SciaccaMr Sercombe*Mr SidebottomMr SnowdonMr TannerMr WilkieMr WiltonMr ZahraMr HowardMr BeazleyMr ProsserMs Kernot* denotes tellerQuestion so resolved in the affirmative.18:24:0012743Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I present the reasons for the House disagreeing to certain Senate amendments and I move:That the reasons be adopted.Question resolved in the affirmative.Bills12743The following bills were returned from the Senate without amendment or request: Social Security (International Agreements) Bill 1999 Electronic Transactions Bill 1999 National Residue Survey Levies Regulations (Validation and Commencement of Amendments) Bill 1999 Bills12743s22712743Bill received from the Senate, and read a first time.Ordered that the second reading be made an order of the day for the next sitting.Bills12743r82912743Bill returned from the Senate with amendments.Ordered that the amendments be taken into consideration at the next sitting.Bills12743r83012743Bill returned from the Senate with amendments.Ordered that the amendments be taken into consideration at the next sitting.House adjourned at 6.28 p.m. until Monday, 6 December 1999, in accordance with the resolution agreed to this sitting.Miscellaneous1274312743Mr Bevis asked the Speaker, upon notice, on 14 October 1999:(1) What were the staffing levels for the Parliamentary Library in (a) 1995, (b) 1996, (c) 1997, (d) 1998 and (e) 1999.(2) What changes have been made to standard working hours in each year referred to in part (1).(3) What changes or restrictions have been placed on overtime claims by Parliamentary Library staff since 1995.(4) What internal policy arrangements are in place to ensure adequate staffing levels are being maintained to assist Members and Senators, especially after normal hours during sitting weeks.10000SPEAKERMr Speaker—The answer to the honourable member's question is as follows:(1) Average staffing levels (ASLs) for the Department of the Parliamentary Library (DPL) were:Financial YearDPL Budgeted ASLDPL Actual ASLCorporate Management Program ASLClient Service Programs1995-96219213.943.779.6%1996-97207195.233.283.0%1997-98195194.130.684.2%1998-99192188.831.183.5%1999-00186 178.2* 27.1* 84.8%** Year to date (at 30/9/99).As the above table shows, the proportion of resources committed to client services has increased over the period.(2) From 9 June 1998, under the DPL Certified Agreement 1999-2000, the Parliamentary Library's standard working hours are from 9:00am to 12:30pm and from 1:30pm to 5:30pm (ie. 7 hours 30 minutes per day)Before the Certified Agreement, DPL's standard working hours were from 8:30am to 12:30pm and from 1:30pm to 4:51pm (ie 7 hours 21 minutes per day).(3) Only those staff who are below the Senior Officer level receive overtime. This has been the situation throughout the Australian Public Service for more than 30 years.Overtime required to be performed in each financial year varies, as it is influenced by matters such as sittings and election periods, changes in request levels from Senators and Members, priority administrative tasks (such as the one-off introduction of new systems for accrual budgeting), staff leave patterns and the actual staffing structure of an area.Under DPL's Certified Agreement, junior staff receive overtime for all directed duty performed: (i) after 5:30pm and 8 hours paid duty on that day; (ii) before 7:30am; and (iii) on a weekend or public holiday.Staff may elect to receive a salary payment for overtime or time off in lieu, both being at the relevant penalty rate.Before the Certified Agreement, overtime was paid for all directed work performed by junior staff outside normal working hours. However, as DPL had flextime, this meant in practice that evening overtime on a business day was payable after 4:51pm and after 7 hours 21 minutes duty on that day for rostered junior staff.(4) On sitting nights from 5:00pm to 8:00pm, in addition to those staff working up to 8pm under the Parliamentary Library's superflex arrangements, a number of specialist information and research staff are rostered. This roster usually comprises 19 staff and qualified and experienced officers are always available on the Central Enquiry Point to assist Members and Senators.The joint Library Committee has recently reviewed an independent evaluation of the Parliamentary Library's services and the evaluation report is included in the Parliamentary Library's 1998-99 annual report, tabled on 21 October 1999. The consultants found that, when compared with the 1996 client services evaluation, a greater number of Members and Senators are relying more on 24 hour electronic access to services such as the Internet and DPL's databases to meet their immediate information needs. DPL had already noted this trend and is developing several strategies to assist clients in this area, such as a dedicated intraNet portal and the provision of additional information through PARLINFO.DPL's Output 2 is; `Provision of self-help information services for Senators, Members, parliamentary committees and parliamentary departments' to distinguish those services from requests commissioned by Senators and Members. Selection of this output has assisted DPL focus attention more on providing self-help services to Senators, Members and their staff 24 hours per day.Twenty-four hour access is already provided to the Library's fulltext databases through PARLINFO, from both electorate and Parliament House offices, and to an extensive and increasing range of guides to resources and useful sites through DPL's Internet pages.As set out above, the proportion of Library resources dedicated to the direct provision of client services has been increased, notwithstanding reductions in overall funding available to the Parliamentary Library.Notices12744The following notices were given:Mr Snowdon to move:That this House, noting the desire of the Australian community to satisfactorily resolve outstanding issues concerning the stolen generations referred to in the recommendations of the report by the Human Rights and Equal Opportunity Commission, Bringing Them Home :(1) calls on the Government:(a) to settle the stolen generation case currently before the Federal Court in the Northern Territory; and(b) after consultation and agreement with appropriate representatives of the stolen generations, to: (i) establish an alternative dispute resolution tribunal to assist members of the stolen generations by resolving claims for compensation through consultation, conciliation and negotiation, rather than adversarial litigation and, where appropriate and agreed to, deliver alternative forms of restitution; and (ii) set up processes and mechanisms, which are adequately funded, to: (A) provide counselling; (B) record the testimonies of members of the stolen generations; (C) educate Australians about their history and current plight; (D) help them to establish their ancestry and to access family reunion services; and (E) help them to re-establish or rebuild their links to their culture, language and history; and(2) calls on the Government to refer the following matters to a Joint Committee of the Parliament for inquiry and report by the last sitting day of the first sitting week in October 2000:(a) the adequacy and effectiveness of the Government's response to the recommendations of the Bringing Them Home report;(b) appropriate ways for Governments to implement paragraph (1)(b) of this resolution;(c) effective ways of implementing recommendations of the Bringing Them Home report including an examination of existing funding arrangements;(d) the impact of the Government's response to recommendations of the Bringing Them Home report with particular reference to the consistency of this response with the aims of the Council for Aboriginal Reconciliation; and(e) the consistency of the Government's response to recommendations of the Bringing Them Home report with the hopes, aspirations and needs of members of the stolen generation and their descendants.Mr Adams to move:That this House:(1) notes that dumping of cement from Indonesia, China, Malaysia and Thailand is significantly undercutting Australian cement prices;(2) notes substantial industry investment and cost cutting has made the Australian cement industry cost competitive, but the companies cannot compete against imports being sold below their cost of manufacture;(3) notes dumping is threatening the viability of Australia's cement industry operations, with a real threat of plant closures unless urgent action is taken; and(4) calls on the Government to(a) recognise the threats to the cement industry by dumping;(b) recognise the efforts of the Australian industry to comply with environmental safeguards that the dumping countries are not being made to follow;(c) ensure that immediate action is taken under our current anti-dumping legislation to protect the Australian industry; and(d) take steps to protect all industries that are susceptible to dumping.1999-11-25Mr DEPUTY SPEAKER(Mr Nehl) took the chair at 9.40 a.m.Statements by Members127461274612746Price, Roger, MPMr PRICEQI4ChifleyALP00—I want to talk today about what was, I suppose, a very pleasant duty that I had in my electorate. On 10 November I opened a Rapid Opiate Detoxification Unit which, I have to say, is not a very large facility of some four beds. Using the drug Naltrexone, it allows drug addicts to be completely clean of drugs within 24 hours. When you open these facilities, you really get excited about the marvellous good it will do for your electorate. I regret to say that I did not open it on that basis, because the patients come from the North Shore, eastern suburbs and basically everywhere other than my electorate. There are two simple reasons for that. Firstly, once you have been detoxed, you have got to take this drug constantly. It costs between $300 and $400 per month. People in my electorate cannot afford to go through a program like that, nor can they afford the upfront fee to go onto this program.I do not believe that anyone has simple answers as far as drug addiction is concerned, and I am confident that we need to provide drug dependent people and families with choices. I think this program is going to play a most important part; it will make a significant contribution. It will not be the total answer, but it will get a lot of people off drugs and all that that brings with it. But the issue for the government is whether this should be on the PBS. This is hardly a radical drug. I have put a question on the Notice Paper to have listed the number of countries that have approved this—and I might say that in the States it has been approved for many years. It really should be on the PBS.Last but not least, we ought to give drug dependent people the choice of going onto the program without forcing them to commit further crime to pay upfront to get on. That is really a bad situation. I urge the government to embrace this program so that working-class people and young people can have this choice and not just those coming from wealthy families. I do not grudge them; I am pleased that they are coming there. I welcome them, and I am delighted for them and their families that they are drug free. But I do say that my constituents should have an equal go and a fair go.1274612746Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—The Beattie state government has ridden roughshod over the autonomy and independence of the James Cook University student union, blocking an attempt by the student body to change the name to the James Cook University Student Association. I would describe as petty and arrogant the state government's attempt to override the JCU student union's decision to change their name to one that more accurately reflects an inclusive approach to student representation.The state Minister for Education, Dean Wells, has effectively said that loyalty to his union mates comes before the wishes of James Cook University students. For that, both he and the Beattie government should be condemned. The JCU student union had earlier this year agreed to change the name to the `student association' on the basis that the word `union' alienated many students. The James Cook University council also unanimously endorsed the name change at its meeting of 1 July 1999. The peak body of the university unanimously endorsed the name change, recommending to the state government that the change be facilitated along with other reforms through an amendment to the James Cook University Act 1997. This was to be done through the Education and other Amendments Bill which is shortly due to go through the state parliament.However, the education minister through the department has informed the student union and the university council that that bill will now proceed minus the recommended change to the name of the student union. Dean Wells has ignored the longstanding convention which says that the state government does not interfere with internal decisions of universities. Instead, he has chosen, from the comfort of his George Street office, to ride roughshod over the wishes of the James Cook University student union, the James Cook University council and JCU students in general.The James Cook University student union ought to be praised rather than railroaded for seeking to become more inclusive and responsive to the needs of North Queensland university students. The decision by the state government to impose their will on JCU and prevent the student body from becoming a representative organisation should be condemned. It clearly shows where the Beattie government's priorities lie. Unions and unionism come first. The needs and wishes of North Queensland students come second. That is their mantra.1274712747Swan, Wayne, MPMr SWAN2V5LilleyALP00—An Optus telecommunications tower proposed for a location at Brighton in the electorate of Lilley has been an issue of concern for many residents of my local community over the past month. Many local residents are concerned to learn there is no federal legislation governing the location of high-impact telecommunications towers in regard to residential areas, particularly schools and hospitals. In fact, in 1997 the federal government amended the Telecommunications Act to ensure that there is no federal regulation of high-impact telecommunication towers. They deliberately took this matter out of the hands of the federal government and placed it in the hands of local councils, who are simply not qualified to deal with the health and safety aspects of high-impact telecommunications towers. The zoning of high-impact towers is now entirely in the hands of local councils.Local residents are justifiably concerned when local councils approve these towers. But these towers are only judged on local town planning guidelines; they are not judged on the health and safety issues associated with them. It is completely inappropriate for local councils to be taking decisions about a national telecommunications network. Hundreds of local councils are involved in what should be a national regulation of a national problem.Residents in the area are extremely concerned that this tower has been approved, because they can have no faith that the occupational health and safety standards of these towers have been taken into account in relation to local residents. Surprisingly, the Telecommunications Act is relatively clear when it comes to low-impact towers. There are guidelines in federal legislation set down for low-impact towers but not for high-impact towers. This is simply not good enough. This is an area where the Telecommunications Act federally will need to be amended substantially so that we can have a national approach to a national problem and so that residents in places like Brighton can have some faith that their concerns about the impact of high-impact telecommunications towers are taken into account in a national planning process.Many residents in Lilley are also extremely concerned about something that is very basic, and that is the rapid increase in the price of milk. The price of milk has risen 12 per cent since the beginning of this year while the national rate of inflation for cream products is only three per cent—the rise in price is 12 per cent in Brisbane alone. Many people have expressed their concerns to me along these lines, including these comments from Taigum:I am thoroughly disgusted at the increases in milk prices. We have two children to encourage to drink plenty of milk so they grow up healthy and have strong bones and teeth, but the more it costs to buy each week the less I encourage them to drink.A person from Boondall said:My husband and I receive a carers pension and are caring for three intellectually disabled people also on pensions in our own home. We have no other source of revenue, savings or super. If these types of price rises continue—(Time expired)1274812748St Clair, Stuart, MPMr St CLAIR84BNew EnglandNP10—I rise to ask a question today. Why is it that in some cases people are financially better off when receiving welfare payments rather than working for an income? Australia has for many years financially punished those who work hard. Last week I was speaking with a constituent in my electorate who showed me an article he had written for the Australian Hereford Quarterly 10 years ago. The article was entitled `Social security suiting spongers splendidly'.The article was looking at why there were so many unemployed people in Australia. The article took two hypothetical cases of a man, his wife and six kids. The only difference was that one was receiving unemployment benefits while the other was working as a mechanic. He then went about collecting figures from the department of social security, and he was able to find out that with various benefits and top-ups the unemployed man was able to receive $1,122.60 per fortnight, while the hardworking mechanic was lucky to bring home $800 a fortnight after tax.After reading the article it got me and some others wondering whether it is still the same today 10 years later. Can a person on unemployment benefits still earn more than someone who is working? After doing some research in the last few days, I believe the answer is still yes. It staggered me to see that, when I took the same hypothetical situation of two men, their wives and six children, with one of the men being on unemployment benefits while the other worked, you could still earn more income being on unemployment benefits than working.The average weekly ordinary times earnings, which is the average wage in Australia before you include overtime, equates to $753.70 per week before tax. I then asked the Department of Family and Community Services to work out the figures on the same hypothetical situation. The figures showed that being on unemployment benefits with a wife and six children you could receive an income of $831.62 per week after tax. That is $1,663.24 a fortnight. Compare that with a man who works hard to earn only $1,507.40 a fortnight before tax. After tax it would work out that the family on unemployment benefits is some $400 a fortnight better off.To conclude, is this sending the right message? There are people who need the support of these sorts of welfare funds, and I understand that. But, on the other hand, if I could earn another $400 a fortnight for doing nothing, it would be tempting. Why is it that in some cases you are financially better off to receive welfare benefits than to work for an income? We might not be able to fix this problem, but we can introduce legislation that will reward those who work hard, as we are doing with the reduction of personal income tax. However, once again, it is the opposition who are trying to prevent the types of reform that I and others believe are necessary to return to a society that rewards effort, rather than continuing to support one that penalises effort.1274912749Rudd, Kevin, MPMr RUDD83TGriffithALP00—The Senate at present is conducting an inquiry into the Brisbane Airport Corporation master plan. This inquiry has been under way for some time. It was initiated by the Labor Party in the Senate, supported by the Democrats and opposed by the government. One of the key issues to emerge in the inquiry so far is the precise operation of section 94(5) of the Airports Act 1996. This sounds like a complex provision of the act, but it goes to the heart of the concerns of people in the southern and northern suburbs of Brisbane. In broad, what the provision of the act says is that a minister cannot endorse a major development plan for an airport unless that major development plan is consistent with the endorsed or approved master plan. There is a two-stage process in the approval of new runways at all airports in Australia. First, there must be under the Airports Act an approved master plan and, secondly, subsequent to that, an approved final major development plan.The government's interpretation of section 94(5) of the act is along these lines: if there is an approved master plan and it recommends a particular runway option—in the case of the Brisbane Airport Corporation, the proposed western parallel runway—then at the next and final stage of the approval process, that is, the major development plan stage, the government can proceed to endorse a runway alternative which is inconsistent with that which is contained within the approved master plan.I find that a curious interpretation indeed, because the black-letter law of the act simply says that one document must be consistent with the other, and you cannot have a document which is consistent with its parent document if they recommend alternative or different runway options. My interpretation of the act, therefore, is that if a master plan has been approved by the minister, as it was in February of this year, and it recommends a particular runway option—in this case the western parallel runway—then it is incompatible with the act for the minister subsequently to approve a major development plan which represents a different runway option.The overall import of this is as follows: the minister in February of this year approved a major development plan which recommended a particular runway option. Both the minister and the Brisbane Airport Corporation now say to the community at large, `Don't worry, there is a second bite of the cherry. It will all be fixed up in the morning. Trust us, we are the government'. There is an opportunity to revisit this decision at the major development plan stage. This runs entirely counter to the provisions of 94(5) of the Airports Act.This Senate inquiry is my community's last chance to see some justice and transparency on this issue. It is to be hoped the senators will make a finding in relation to this matter which says that the Brisbane Airport Corporation has not properly exercised its functions under the act. If the Senate so finds, then the decision becomes one for the minister to overturn his decision of February. If he fails to do so the Brisbane community will see this runway built. (Time expired)1275012750Elson, Kay, MPMrs ELSON6K6FordeLP10—As we stand on the brink of a new millennium, I believe the most important thing we can do as a government and nation is to commit ourselves to building stronger ties within our local communities. I am a very firm believer that the biggest advances of the 21st century will not be in technology but will be a re-assessment of how we live together and how we build better communities.The Howard government's commitment to mutual obligation is a very positive step in that direction. It has already built an enormous amount of goodwill in the community. Slowly but surely, the anger and resentment towards some welfare recipients that was allowed to grow and fester under Labor is disappearing. That anger has been replaced with a very genuine respect and support for job seekers, who are making a wonderful contribution to the nation through our Work for the Dole program. Mutual obligation is based on the premise that people who are relying on government for support ought to be expected to be giving something back in return.There is another very important aspect to mutual obligation—that is, extending the principle to the corporate world. Corporations and companies that make increasingly huge profits from the Australian community ought to be expected to contribute something back to the wellbeing of this community. That is the basis of the Prime Minister's social coalition. It is practical, it is decent and it makes commonsense.I want to restate my strong support for an effective social coalition. I have had an extremely positive response from local residents in my area on this issue. I think that if the mainstream media in Australia were to concentrate on our bread and butter issues and put aside their very obvious personal vendetta against the Prime Minister Australia would be better served. If they were to join the Prime Minister's push for a social coalition to help us engage the business community to work closely with social welfare groups, enormous good would be achieved. It could then leave a very important tangible and positive change for future generations. We could build a nation where there is support for those who need it most and it is not just someone else's problem or simply a matter of a monetary hand-out from the government but something we all have an interest in. When all Australians feel they have a stake in each other's wellbeing, then we will truly build stronger communities and we can begin to break the cycle of isolation and disenchantment that I know many Australians feel. They ought to be our prime goal for the new century. The business world, particularly the large corporations and banks which each year are achieving record profits, have a very major role to play.Today I join with many of my constituents in asking corporate Australia to make a more significant social contribution to the new century. Whether the journos are prepared to admit it or not, a strong social coalition is what the Australian community wants. I am very proud to be part of a government that is working towards that very honourable and important role.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! In accordance with standing order 275A, the time for members' statements has concluded.Bills12751r941Billsr938Billsr940Billsr937Billsr849BillsBillsBillsBills12751Debate resumed from 14 October, on motion by Mr Entsch:That the bill be now read a second time.09:58:0012751Kerr, Duncan, MPMr KERRRH4DenisonALP00—This package of five bills, which includes the Tradex Scheme Bill 1999 [No. 2] , Tradex Duty Imposition (Customs) Bill 1999 , Tradex Duty Imposition (Excise) Bill 1999 , Tradex Duty Imposition (General) Bill 1999 and Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] , replaces three bills that the government introduced on 24 June and later discharged from the Notice Paper . There is no explanation in the explanatory memorandum or the second reading speech relating to this new package and nothing to explain why the previous bills were discharged.It is, however, suggested in a Parliamentary Library Research Service Bills Digest that the probable reason that this occurred was to satisfy section 55 of the Constitution. That provision in the Constitution provides:Laws imposing taxation shall only deal with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.Subsidiary to that, it states:Laws imposing taxation, except laws imposing duties of customs or excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only.The Library suggested that the package introduced on 24 August probably failed to satisfy section 55 of the Constitution. As somebody who prides himself on being a constitutional lawyer, I must admit that I failed to detect that error when the bills were first brought into this place, and I plead guilty to that oversight. But it does surprise me that the drafters of these measures, who must have carriage of these matters routinely, also failed to address their minds to something which is within their particular sphere of routine administration. I am wondering whether the changes that have occurred in terms of the privatisation arrangements with respect to the office of the Crown Solicitor, and the increasing tendency to outsource work, may have contributed towards the loss of institutional memory in relation to the way in which these matters should be dealt with for parliamentary processes.I am raising this only by way of an introduction. But I do think it is a serious matter that, over time, the storehouses of institutional memory that have reposed in government in the various departments have become much less deep—the well is much shallower now as, increasingly, outsourcing has taken out of the system people with great experience of the processes of administrative law and constitutional law, and parliamentary experience—and there is the tendency for departments to seek advice other than through the AGS and, in turn, for AGS to reduce its resources and capacity.Of course, it is not just in the area of legal services where this may be a matter of concern—although, if instances like this became more frequent, one would imagine how red-faced the government would be to pass a package of bills, have them proceed through the parliament, begin collecting a revenue based on those measures and then be subjected to a constitutional challenge on the basis of a technicality. One can imagine how awkward that would be. So I do not diminish that. But, of course, the same issue of a diminishing store of public experience is reflected in a whole range of different areas of administration.I might just instance a meeting I had recently with the Australian Institute of Engineers. They pointed out—I cannot remember the time frame but I think it was during the last decade, although it may have been a shorter time frame—that, of over 70 per cent of their membership being employed in the public sector, less than 30 per cent is now employed in the public sector. They were saying that that means that, essentially, there is nobody in large areas of public administration who knows what is going on in outsourced contracts or who can judge the effectiveness of tenders. Further, there is no central capacity to, in a sense, oversight and look at issues of broader public policy such as whether the infrastructure that is in the public domain is being maintained or whether it is in a situation where we may be storing up a number of potential public crises which will emerge when the infrastructure becomes unable to be maintained properly. At that point, whether it be public water supplies, power supplies or whatever that have been outsourced, whilst you might say it is a matter that the private sector utiliser of that resource has made some judgments on in relation to their private interests—the return on capital and the rate of maintenance that is appropriate to sustain that infrastructure over the period of what they see as its economic life—the long-term consequences for the community—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Order! The chair is loath, as always, to interrupt the flow of the member for Denison, but so far we have not heard any reference to Tradex. I acknowledge your concern about infrastructure and those things, but I would be grateful if you could perhaps occasionally refer to the subject of the bill.RH4Kerr, Duncan, MPMr KERR—I will conclude this small point. I was really drawing attention to the package: how it is structured and what would have been a consequence were the apprehension of the Parliamentary Library's Research Service accurate that the reason for the bill being withdrawn and represented in this way was a failure to apprehend the constitutional problem. In public life these kinds of deficiencies can have much more serious consequences than mere constitutional invalidity. But, Mr Deputy Speaker, you are quite right to chastise me.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—Not chastise, remind.RH4Kerr, Duncan, MPMr KERR—You must understand, Mr Deputy Speaker, that I am also under immense pressure from my colleague—whipping me for the opposition and reminding me that a number of other speakers are not yet in a position to attend to the chamber and that I am expected to do my duty for a reasonable period of time rather than to simply address this bill in short form and sit down. I have taken the liberty that emerged because of this issue of constitutionality to perhaps expand more broadly than would otherwise be proper.I will now come to the background of the package of bills. The opposition does support this initiative. In fact the government's industry statement `Investing for Growth' mentions two schemes claimed to improve Australia's attraction as a site for regional manufacturing and warehousing: the Tradex scheme and the Manufacturing in Bond scheme.The Tradex scheme will replace the Tariff Export Concession scheme, known as the Texco scheme. It will also allow most drawback users to gain up-front exemption from duty and other taxes on goods imported for re-export. The explanatory memorandum states that, according to an initial analysis of unpublished ABS data, the utilisation of the existing Texco and drawback schemes is running at 50 per cent. That claim cannot be verified, because the government has not released the ABS report for public scrutiny. But, on its face, I take that as valid.From this conclusion, the government suggests that the exporting community is forgoing approximately $100 million of eligible claims. However, in its financial impact statement it allows for an additional $30 million as revenue forgone due to an expected increase in the utilisation rate.These bills establish the Tradex scheme. The object is to allow for the importation of goods without the payment of customs duty or other taxes, provided the goods are subsequently exported in their original or modified form. Intending participants in the scheme are required to apply and obtain a Tradex order. Criteria are set for the applications for Tradex orders. If a Tradex order holder fails to export the goods in accordance with undertakings under the provisions of the scheme, the duty or tax that would have applied becomes payable. This bill, along with the other four bills, provides the legislative basis for the Tradex scheme.The anticipated benefits of Tradex are a reduction in compliance costs for users, a more self-assessment oriented operation with a lighter approach to access and compliance, and the relaxation of some regulatory arrangements in relation to eligibility, registration and ongoing compliance requirements.That broad framework is contained in the Tradex Scheme Bill 1999 [No. 2] . Tradex Duty Imposition (General) Bill 1999 gives the authority to recover Tradex duties where a participant fails to export the goods in accordance with the Tradex scheme and imposes a liability as a tax within the meaning of section 55 of the Constitution.The next bill in the package is the Tradex Duty Imposition (Customs) Bill 1999 . This bill imposes a liability as a duty of customs within the meaning of section 55 of the Constitution and provides the authority to recover Tradex duty, as in the bill above.We then have the Tradex Duty Imposition (Excise) Bill 1999 , which imposes a liability as a duty of excise within the meaning of section 55 of the Constitution and provides the authority to recover the duty as a tax, as in the bills above.The next bill is the Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] , which inserts an item into the Customs Tariff Act 1995 to enable goods under the Tradex scheme to be allowed to be imported without payment of customs duty.On their face, these measures will improve the arrangements that currently exist—and they are arrangements that have the support of the opposition. There is, of course, the parallel scheme, the Manufacturing in Bond scheme, which has passed this parliament, I believe. I think it has passed now through all the parliamentary processes. In that area it is the opposition's contention that there could be some significant improvements in part of the complementary package between Manufacturing in Bond and the Tradex arrangements.We have made a number of representations to the government on behalf of manufacturers and freight forwarders, who would use that Manufacturing in Bond system, with the object of securing greater efficiencies in that part of the broad scheme that is being designed, in a sense, to facilitate Australia being able to compete as a manufacturing place against countries which offer trade-free arrangements or other arrangements which are designed to mean that no unnecessary transactional frictions, costs, get built into the production of goods onshore in Australia—which are good for employing labour and generating revenue—which are then used for export. That is a very valuable thing.I see my relief hoving into view. I am rescued from the obligation to expand further on the Tradex legislation, which is just as well, as I have really exhausted all I wish to say. Mr Deputy Speaker, I thank you for your indulgence earlier.I commend the package of legislation, all five bills, which now comply with the Constitution, to the tender mercies of this Main Committee.10:12:0012754Secker, Patrick, MPMr SECKER848BarkerLP10—I agree with the concerns about the drafting of this Tradex legislation, and I thank the member for Denison for pointing that out. I think it is very important. I certainly do not have the constitutional expertise that the member for Denison would have. I think the best that I could boast is that I am a bit of a bush lawyer, which probably is not very useful in this day and age. However, it does give you some help in trying to seek out the truths of any legislation before us.I also thank the member for Denison for informing the chamber of the opposition's support for these bills the Tradex Scheme Bill 1999 [No. 2] , the Tradex Duty Imposition (General) Bill 1999 , the Tradex Duty Imposition (Customs) Bill 1999 , the Tradex Duty Imposition (Excise) Bill 1999 , and the Customs Tariff Amendment (Tradex) Bill 1999 [No. 2].I would like to give a general outline of these bills. The Tradex scheme is a key initiative arising from the government's `Investing for Growth' industry statement. The objective of the Tradex scheme is to allow for the importation of goods without payment of customs duty or other taxes, provided the goods are subsequently exported or incorporated in other goods that are exported. I will give a few examples of that later.The Tradex Scheme Bill 1999 [No. 2] , Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] , Tradex Duty Imposition (General) Bill 1999 , Tradex Duty Imposition (Customs) Bill 1999 and all the other relevant bills, together with the Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] , provide the legislative basis for this new scheme.The Tradex Scheme Bill 1999 establishes a Tradex scheme and provides for the administration of the program. The three Tradex duty imposition bills provide for circumstances where goods entered under the provisions of the Tradex scheme are not exported or are consumed in the Australian domestic market. In particular, these bills provide for the imposition of the Tradex duty—an amount equal to the customs duty that would have been payable if the goods had not been imported under the provisions of the Tradex scheme.The Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] inserts a new item into schedule 4 of the Customs Tariff Act 1995. This will allow for the importation, without payment of customs duty, of goods included in a Tradex order under the Tradex scheme where those goods are imported by the holder of the order. The Tradex scheme will replace the existing tariff export concession otherwise known as Texco. This scheme, which has been in existence for some time, as a result of these changes will allow most duty drawback users to gain up-front exemption from customs duty and other taxes on goods imported for re-export, either in their original or modified form. This gives greater cashflow benefits for the entity involved.The financial impact of the introduction of Tradex is difficult to estimate accurately. The cost of revenue forgone will be highly dependent on the level of utilisation of the Tradex scheme. Analysis of unpublished Australian Bureau of Statistics data indicates that the utilisation rate of the existing Texco and duty drawback schemes is currently running at approximately 50 per cent. This suggests that approximately $100 million of eligible claims are currently being forgone by the export community. This figure provides an estimate of the amount of additional revenue forgone as a result of 100 per cent utilisation of the existing schemes.With the introduction of Tradex, it is expected that the utilisation rate will increase because of the more streamlined processes associated with this scheme. However, the take-up rate is difficult to predict in an environment of low and declining tariffs where small claims may not be cost effective for business. Forward estimates make provision for an additional $30 million a year—that is, revenue forgone—as a result of the introduction of the Tradex scheme.A review of Texco, duty drawback and temporary importation provisions was undertaken by a task force of officials during the latter half of 1997 as part of the Commonwealth legislation review schedule. The deliberations of the review task force and the recommendations included in the draft report form the basis of the government's Tradex initiative announced in the Prime Minister's `Investing for Growth' industry statement on 8 December 1997.The key features of the Tradex scheme as announced in `Investing for Growth' were as follows: Tradex will provide relief from customs duty and sales tax on imported goods intended for re-export or use as inputs to exports. The existing duty drawback and Texco arrangements will be integrated into the single, simplified and more accessible scheme. Tradex will improve the effectiveness of existing arrangements by, firstly, moving to an exemption based system, thereby reducing compliance costs for users. A drawback facility will still be available for instances where, at the time of import, it was not known that the goods would be re-exported or used as inputs to exports. Secondly, it will adopt a more light-handed approach to access and compliance requirements and a stronger reliance on self-assessment in its day-to-day operation. Thirdly, it will relax some regulatory arrangements in relation to eligibility, registration and ongoing compliance requirements.The key objective of the Tradex scheme is to provide exporters with up-front exemption from customs duties and sales tax on imported inputs and thus largely remove the need to draw back these charges after export—which in many cases could be several months down the track. This approach will result in substantially lower compliance costs for industry and lower processing costs for government as a result of a greater use of self-assessment and risk management strategies. These lower compliance costs, along with a targeted publicity and education program, should make the Tradex scheme more attractive to business and result in higher utilisation rates. This, in turn, will improve the international competitiveness of Australian exporters—something which I am sure we would all support.The movement to an exemption based program would result in substantial gains to current and potential duty drawback users, as well as reducing administrative costs by removing the implicit `double handling' involved in a drawback type system. Evidence provided to the task force review suggested that business compliance costs in relation to duty drawback are of the order of 10 to 15 per cent of the amount refunded. If 1997-98, when approximately $80 million of drawback payments were made, is used as a base year, business compliance costs could equate to approximately $8 million to $12 million. In addition, evidence presented to the task force suggested that an exemption based program—in this case the current Texco scheme—was significantly cheaper to administer than the existing drawback process. For example, the average drawback claim costs around $49 to process, while the cost of a Texco exemption per import entry line is only around $9. Wider use of an exemption based system would drop the average cost towards the Texco level.There were two distinct phases of consultation, the first being the review of the existing Texco, duty drawback and temporary importation provisions undertaken by a task force of officials during the latter half of 1997. The task force was chaired by the then Department of Industry, Science and Tourism. Other agencies represented were the Treasury, the Department of Foreign Affairs and Trade, the Australian Customs Service and the Australian Taxation Office. The task force received 35 written submissions from interested parties, including importers, exporters and customs brokers.A significant outcome from the public consultation process was a general agreement on the need to retain the key elements of the current programs, with modifications and streamlining. In addition, many stakeholders advocated a greater availability of the up-front exemption based system available in Texco, rather than the more cumbersome drawback arrangements. The task force draft report formed the basis for the government's announcement of the Tradex scheme as part of the `Investing for Growth' industry statement.The second phase of consultations involved discussions between the Department of Industry, Science and Resources and the Australian Customs Service on the best mechanism for the implementation of the Tradex initiative. During this time various stakeholders, including importers, exporters and customs brokers, were consulted prior to finalisation of this initiative.The recommended option for the introduction of the Tradex initiative is via legislation. This option provides both industry and government with significant benefits in the delivery of an up-front exemption scheme. In particular, legislation for the implementation of Tradex will clearly spell out eligibility criteria so that the potential applicants have a degree of certainty as to the conditions they must meet in order to participate in the scheme. Secondly, it will enable unsuccessful applicants to have a right of review of the relevant adverse decision by the Administrative Appeals Tribunal. Thirdly, it will provide the administrators of the scheme with the appropriate audit and recovery powers and penalty provisions to help ensure compliance, given the self-assessment nature of the scheme.I can see many areas of benefit from these proposed changes. For example, in the car industry, which is a very important part of industry in South Australia—and other states—some components are imported for production of vehicles to be subsequently exported. We should give some credit to the previous Labor senator John Button, who certainly got the ball rolling in this area. But previously there was a claim-back provision, and paying back had implications for cashflows. Now there will be no up-front component and the car industry will benefit from better cashflows.Another example is the production of certain animal food preparations that need the importation of various vitamin supplements, with an up-front payment of tariffs and duty. One medium-sized business in my electorate of Barker immediately comes to mind as one that will benefit from this provision, as they have a thriving export business to New Zealand. If they have to pay the up-front taxes and customs duty, it does cause some cash flow problems. With these changes, they will no longer have those payments, because a large part of their export business is the New Zealand business. Unfortunately, they have no choice in where they buy their vitamin supplements to the feed mixture, because they are only produced overseas.Certain chemicals are needed for the production of wine, some of which are imported from overseas. Again, this is an important industry in Barker and Australia. Indeed, last year, it produced over $1 billion worth of exports. The export part of their businesses will benefit from the ability not to have to pay these up-front duties and tariffs. That is another commitment and goal, and it is a provision that we have given to the wine industry to ensure that they continue to be the success that they are. I commend this bill and thank the opposition for their very generous support.10:26:0012757Hatton, Michael, MPMr HATTONLN6BlaxlandALP00—As indicated by the shadow minister, we will be supporting the Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] today. We indicated that we supported the bill after its introduction in October 1999. We also indicated that we would support the bill after its introduction in June 1999. The Parliamentary Secretary to the Minister for Industry, Science and Resources, in his second reading speech in October 1999 was efficient, because there is only one change in his second reading speech from October back to June. Instead of this bill and two associated bills, in October we found that it was this bill and three associated bills. It may have been more efficient if he had just said that he was giving the second reading speech as it was—understand all the rest of it—and change the two associated bills to three associated bills.We understand, based on the assessment of the shadow minister and the Parliamentary Library, that the reason we have gone from two to three associated bills is that there was a problem with the drafting of the first lot in regard to section 55 of the Constitution and that what we have before us now is actually in conformity, because we have a separate imposition of tax bill, a separate customs duty bill, a separate excise bill, and they are involved in this cognate debate.We have three bills, not two, and we are dealing with them all cognately. Hopefully, this will not be up for challenge by anyone in that regard. But it is up for challenge on a number of other grounds. This goes back to the Prime Minister's `Investing for Growth' speech. In that speech, he indicated that, after review, it was passingly conceded that the Labor government programs were to ensure that the Manufacturing in Bond and the old Texco systems gave an advantage to Australian manufacturers in terms of customs duty forgone and an ability to bring in product for re-export from Australia. A critical part of that was that there should be a manufacturing process in Australia, and that manufacturing process was to add value to those products for re-export. A subsidiary thing associated was that you could import some materials, not go through a manufacturing process and re-export them.The Prime Minister has tied these changes—in `Investing for Growth', and somewhere in what I have read they have been tied, either by the Parliamentary Secretary to the Minister for Industry, Science and Resources or someone else—to the GST process. The argument for their being tied is that these are a set of changes to make Australia more competitive, so when they looked at `Investing for Growth' they looked at a series of different areas which needed changing. They argued that in our treatment of customs and the approaches of customs to both Texco and to the Manufacturing in Bond area—and the changes in relation to that have been dealt with previously—things needed changing. The Prime Minister argued that there would be greater competitiveness for Australian business because of the introduction of a goods and services tax.I would point out that there is a bit of a problem here in the government arguing that we will increase our competitiveness by having these changes—with their approach to how business should operate with regard to customs duties, and the imposition that has been put in place with regard to the GST. In fact, it is anomalous, because the approaches go in two entirely different directions. Here, in these bills, we are told that the old Texco bills had a bit of a problem, that they had to be reversed; that we had a shortfall of $100 million in investment that was not being taken up; and that, after review, it is expected that these changes will mean that it will be a lot easier for business to access these programs and we will get more manufacturing or remanufactured output and export for Australia.The approach devised by the department and announced by the parliamentary secretary is that the regulatory scheme that we had in the past should be turned on its head. And how should it be turned on its head? It is the same, by the way, in the explanation in October as it was in June: we should adopt an exemption based system, reducing compliance costs for users. That should involve a more light-handed approach to access and compliance requirements, and stronger reliance on self-assessment and periodic settlement.As far as I know, with the value added tax that this government is introducing, there is actually a reversal of that. There is not much self-assessment for business in the GST; there is not much of a change to a more light-handed approach to access and compliance requirements—in fact, the reverse is the case. So on the one hand, in these bills, what we are being offered is a change to self-assessment and, if you break the law, in the end we will come and audit you and get you, maybe, and that is supposed to improve our situation. On the other hand, with the value added tax—the most complex form of a goods and services tax that one can imagine—the work that business will have to do because of the massive amount of regulation that is produced by this government will be immense. So their task will be much harder in that regard and it will be more difficult for them to pursue their business practices, although this is supposed to make it easy for them on the other end.They have also relaxed some regulatory arrangements relating to eligibility, registration and ongoing compliance costs. The parliamentary secretary has argued that in doing so, because the criteria will be well spelt out and so on, $100 million more will be able to be accessed by business. It is very interesting if that is the case. We were not told the reason for those changes—and I hope that in his summing up we might finally get the reason, if it was the constitutional drafting problem that was the cause for these changes and for the bills being whipped out and then brought back to us now. But we also have not been given an explanation as to whether or not there really would be $100 million worth of extra manufacturing involved here in extra access, because we have only been told that there was only a 50 per cent take-up of the $200 million program.What does the government actually say in its financial impact statement? It says that it has planned for an additional $30 million as revenue forgone due to an expected increase in the utilisation rate. So the parliamentary secretary is saying, `Well, it is 50 per cent; there was $100 million of a $200 million program that had not been taken up.' But in its actual financial statement it says, `Well, even with these changes, we only expect to get another $30 million.' One would hope that, for the scheme to work well and effectively, it would be pushed in such a way that the other $70 million would be taken into account and that that would in fact be the target. But the expectation here is only that $30 million.It is important that we reach those targets because it is important that Australian manufacturing—and the core idea here is that Australia could be a better manufacturing hub for the region—should be allowed to develop, and develop fully and strongly. I note particularly in regard to this that this has been tied in with the Manufacturing in Bond approach. The member for Newcastle has argued for a very long time—in committee and also in the House—for a much broader approach to Manufacturing in Bond. He has argued that it should not just be in designated places, but that countrywide we could have a flexible, innovative approach to Manufacturing in Bond that would give us a greater advantage in terms of our exports.This set of proposals, taken off the board and put back without explanation so that we have had to figure out what the explanation was, is aimed at turning the regulatory scheme on its head. One wonders whether in the future a coalition government will come back to try to turn the regulatory scheme of the goods and services tax on its head. Where the regulatory imposition has been taken off in this circumstance, in the goods and services area it has been heavily imposed on small and medium businesses in Australia with no prospect whatsoever that that heavy-handed regime, that aggressive regime, that regime that creates such an impost for Australian businesses, would be modified.As I said, yesterday there was another path opened to the government. If they were determined upon a goods and services tax they could have chosen a less heavily regulated model. They could have chosen not to run with the VAT—the most complex, the most difficult, the most time consuming approach to a goods and services tax; instead they could have done it with the retail sales tax and a very strong audit mechanism. They have not chosen to do that, they have chosen to impose the most paper intensive, and these days the most electronic intensive, process of regulation on Australian businesses.So one would hope that if there is a benefit—and not the $30 million extra but $100 million extra benefit to Australian business from these changes—it will not be cut across by the complexity of the changes that have been brought in by the GST bills, which are in the mind of the Prime Minister and in the mind of the government, corollaries to this because they are supposed to be about increasing business competitiveness.In that regard I will mention one other thing. At the time that he released `Investing for Growth,' the Prime Minister realised that he had to actually change a position that he had adopted previously. When they came to government, this coalition government knocked off the export market development grants. They did not see any purpose in going ahead with that. They also knocked off the DIFF scheme. They wanted to save money wherever they could. But in doing that they prejudiced the ability of Australian manufacturers to build towards Australia really becoming a hub of business in the Asia-Pacific region.At least in `Investing for Growth,' the Prime Minister took a step back and conceded that the former Labor government had been right. He conceded that the Export Market Development Grants scheme should be extended to 2001-2002, and that an extra $300 million should be expended in doing that. What he did not do was reintroduce the DIFF scheme. As a result, our business competitiveness, our ability to deal within the region, has been hampered.Here I would note that the coalition government, in putting forward these proposals in June, and again in October—and we have finally got to debate them now—has the support of the Labor opposition, and that support is not conditional. We hope that this will work. We hope that the changes in regulation will work and have an effect.But there is a great danger in a move to industry regulating itself, in that the audit mechanisms adopted by the government may not be fully pursued. Those people who see the regulations being put back in their hands rather than in government hands as a chance to import goods into Australia and then re-export them, skirting the controls that were there previously, must be pursued and prosecuted so that this scheme can work in the way it should.The Prime Minister was asked, in relation to the `Investing for Growth' statement, about support for government programs. He indicated that while we were in government we had had support from the Democrats. He said:. . . in government the Labor Party always has a de facto Coalition arrangement with the Australian Democrats.How times change. One could easily say that that is the case and has been the case since the GST was supported by the Australian Democrats so heavily and so readily.I will finish on this point. He said:. . . the reality is that they are a centre/left group within the Australian political firmament—so it is interesting to see that the conjunction is so close—. . . they are further to the left of the Labor Party on most economic issues and they support the Labor Party on social issues . . . He then said:When we were in opposition we were very responsible and supported most of the Labor Party's economic reform so that they were able to do a lot better with their program.That is stretching the truth, and it is stretching the truth very strongly. A great deal of Labor's economic program was fought against, tooth and nail, by this government when it was in opposition. When it is in government, it likes to say that it supported most of that program. It battled against most of the major changes that we made. Its tooth and claw battling to pull those pieces of legislation apart, to stifle them and to stymie them has seen its final resolution since 1996, when one after another the major initiatives taken by the ALP have been clawed back, none more so than in the superannuation area. The government has stifled that change, refusing to go on with the major changes by Labor to increase the input into super from nine per cent to 15 per cent. This government fought against it the whole way, as it fought against a whole range of Labor changes.In propaganda terms, the government says that it is at one with us and supported us so greatly. The memory of a lot of people may be short but my memory is not. From 2 January 1985 I have watched this whole process very closely, in my previous work and now here. It is not true that this government was totally supportive or almost entirely supportive. It supported us, when it chose to do so, only for what it saw as its political advantage.We support these bills. In doing so, now that they are in conformity with section 55 of the Constitution, we hope that the move to self-regulation and self-assessment does not open up a hole for this set of changes to be exploited. We hope that the government audit process will not be just put on a shelf but will be pursued energetically to ensure that we get another hundred million dollars worth of credit to Australian manufacturers, that we really do become a stronger hub within the Asia-Pacific region and that Australian businesses can become stronger as a result of the proposed legislation.10:43:0012761Morris, Allan, MPMr ALLAN MORRISFI4NewcastleALP00—Like the member for Blaxland I am bemused by the shift of these instruments from the ones that were brought in in June to the ones we now have before us. I can actually give an explanation for one change. I read in clause 21(6) of the major bill, the Tradex Scheme Bill 1999 (No. 2):. . . consumed or used means consumed or used otherwise than as permitted by regulations made for the purposes of this section.That is actually a variation from the original legislation. In the original bill that was put forward there was an ambiguity about what was meant by `consumed' or `used', which could have been to do with components and consumables.In a manufacturing process some things are totally used up such as grinding media, lubricants and materials like solder. Yet in another context, some components become part of a new product. Transistors become part of a computer, for example. The legislation that came to the House in June left quite ambiguous what was meant by that terminology. It could have meant that every single thing that went into a zone was treated identically because of the lack of clarification. This amendment does address that question and allows the regulations to better define what is meant by `used' and `consumed'. That may need to be varied for individual products. There is at least one change between the original legislation and that which is with us now. This is as a result of discussions that took place between some of us and the departmental representatives.It is hard to know where to start with this stuff because there was a massive gestation and huge heralding and trumpeting of change in `Investing in Growth' in December 1997. This was all announced two years ago. What we have now is a bit of a runt in development. In my view, this is not the thing that was trumpeted and gave some expectation to the community at large. That is not to say it is not an improvement.The drawback schemes and Texcos certainly are cumbersome and poorly used, partly because they are so bureaucratic. They are of an age when tariffs were very high and, therefore, you could afford to spend a fair bit of money on all the paperwork and red tape that went with that. With tariffs getting lower and lower, the actual processing costs and the on-costs are now quite prohibitive. While the concepts were developed at a time of higher tariffs, the applications are coming in during a lower tariff regime. I will explain that a bit more.This system would work well if companies had separate corporations for exports and domestic. Take, for example, a computer company that was making computers in Australia, of which three-quarters were exported and one-quarter was used here. Try and work out for that company how they would handle that within this Tradex scheme or the current system or Manufacturing in Bond. The fact is that it would be incredibly complicated because they import thousands of components. They do not streamline those to separate productions and sales. They then make computers, some of which go offshore and some of which come onshore. Amongst all that are questions about warranties, re-issue and repairs for things that go defunct. There are also things about marketing, demonstration models and samples. A whole range of issues like that come into it.Trade is effectively about exports because, if you put them back into the domestic market and sell them into Australia, then all the dues are applicable. You have to be able to account for them all. The stock control systems, the accounting systems and the paperwork for a company that has that natural spread of its business interests are going to be really quite complicated. It will be difficult for small companies to use this scheme unless they are exporting only. That will force an artificial line for companies to create a subsidiary which is only doing one kind of business. That is not natural. It is not good legislation. Government procedures create artificial corporate structures which this would logically do. What is not in here is the other big no-no, the processing charges.The fact is that the Australian government requires importers to advise us of what is brought into the country. Those entries are charged on a per entry basis and, after nine lines, so much per line. There is a charge for people bringing in large amounts of components and materials to be used in manufacturing to tell the government what they are doing with them. There will also be a charge when they export them because that processing charge is still applicable to Tradex. This is where a lot of the confusion comes in.So we have got two splits. We have got the product split going in domestic and export, where they are treated differently. We have got the processing charges where, if they are split, they are charged differently. Whether that processing charge is then charged on the original line entries or on the new line entries is confusing and uncertain as is whether they can recompile their entries. The other point is that the duty when applied to the domestic economy will still be on the components. This legislation suffers from the same kinds of problems that Manufacturing in Bond legislation suffers from. There are currently amendments before the Senate. Quite frankly, this government is pathetic—it really is pathetic. We are now being punished. We now have legislation being taken off the business paper because the government wants to insist that a product is not a product but a bundle of components.What is happening right now in this building is that there is legislation in the Senate and the Senate is trying to move an amendment to it, a very simple amendment which does not in any way disadvantage the government and is to do with the imposing of duties on manufactured goods. The MiB proposals and the scheme announced two years ago are still not functioning properly in any shape or form. In terms of government embarrassment, this is a monumental embarrassment. This was going to be one of their great initiatives that was going to help attract manufacturing. It has done nothing at all two years later.The current proposals in the parliament, which are the second or third lot of amendments since the stuff was first brought in, say that if people import, for example, components to make a computer, those components are dutiable; if they export the goods, there is no duty charged. Fine. However, for those computers that come into Australia, the duty is then payable—but not the duty on the computer, the duty on components. In other words, the computer is not a computer, it is a bundle of components, a bucket of components. On the other hand, if you are an Australian importer importing a computer into this country there is no duty. So the manufacturer is paying duty on his components; the importer of a manufactured good is paying no duty. We are actually giving an advantage to importers to import fully made-up products. And it is not just computers—this covers a range of products.The amendments in the Senate at the moment are proposing that, rather than legislation deciding that is how the duty is paid, we do it by regulation, in a way which is flexible, which allows the government, the department and the manufacturers to make judgments then and there about particular products. We are talking about, two years after these announcements, the stuff not even being finalised for the parliament yet. So the amendments are saying, simply: determine how the duty is paid, whether it is on finished product or on components, by regulation. That gives the government all the flexibility it needs and all the control it needs. The government is saying, `No, we will not do that. We want it in legislation. We want to make it rock solid. We do not want there to be any question, any doubt, any flexibility, any attempt to actually think about it. It is going to be in the law.' It has never been in the law before, as far as I can find. I have asked the government to provide me with the details of where it was previously in legislation, and that is still not forthcoming.What was in the law before, just a few years ago, was that it would apply to components or finished product, whichever was cheaper. That is being wiped out. The government wants to legislate that duty will be paid on components even when they are transformed into a finished product. For a manufacturer to keep track of all that stuff, all those components, and then pay the duty and, of course, the processing charge as well, which I presume would be on the original lines, imposes a cost which is prohibitive. If you wonder why it is not working, it is because why would you bother—why would you bother investing in manufacturing computers when your opposition gets a tax break? That is what they get. Right now, it is cheaper. There is no tax payable on imported computers, there is tax on computers made in Australia—not on the computer but on the components.We are offering the government a logical, sensible solution. It is saying no. And what it is doing right now is saying, `It is off the paper.' It is now killed for another four or five months, out of spite. This is petulant, it is stupid. It is cutting off its nose to spite businesses' face. This is a government talking about investing in growth; it is investing in petulance and pettiness. I just cannot believe the rhetoric from those in government who are supposed to be trying to develop manufacturing industries and who are acting in a way which is clearly against that. That particular amendment went to a Senate committee. The committee actually agreed that the legislation was unwise—that was not the word they used but it was to that effect if it imposed the duty. This Tradex legislation will do the same thing. It is the same mind-set.The fact is the government is stuck back in about 1983 or 1984. It has not actually moved on from there. The world has changed quite dramatically, particularly in the last five years. It has changed in two ways: firstly, modern manufacturing is about assembly, not about a factory producing every component right through to a finished product. That stopped back in the early 1980s. Modern manufacturing is about assembling components from all over the world, all over a country, into finished product. It involves a lot of transport, complex logistics and sophisticated stock control and computer controlled systems where people do not have large stockholdings. They use just-in-time manufacturing techniques, where stuff arrives in the morning and is out in the product the next day. You do not keep large piles of things. You choose countries to locate your assembly facilities which are economically strategic. The locations are not necessarily low wage countries because you are looking for high skill and high quality products and a high quality output.Modern manufacturing also looks at transport costs. The government may not be aware of this, but the cost of shipping stock from Sydney to Hong Kong is probably half the price of shipping from Bangkok to Hong Kong. Singapore-Hong Kong is probably twice the price of Sydney to Hong Kong. Why? We are a major importer from those countries. We send aeroplanes back to Asia empty. So Australia's freight charges to Asia are much cheaper than Asia to Asia. Therefore it is to people's advantage to locate their final assembly in Australia because the cost of exporting back to the marketplace is, in fact, lower.Secondly, we are the second biggest domestic economy in Asia after Japan—it is Japan, then us. What the government is doing is making it difficult for an Australian manufacturer to import into Australia. One of the reasons for locating here is that we are a big economy. There is a big market there to sell into, much bigger than Indonesia, Malaysia, Singapore, China or any of those other markets. A logical reason to locate in Australia is that there is a big market. The government then says, `If you want to export only, that is terrific, we will make it easy. There will be no duty and we will waive processing charges. But mind you, if you sell to Australia, then we will penalise you even more. We will make it even nastier.'When I talk about the government being back in 1985 or 1986 that is because in those days there were businesses that were for export only. There may still be those businesses in the future, but most businesses now are international. They actually make for the world, not only for export.For a business in Australia that wants to use Tradex or MiB there is a massive disadvantage if you sell into Australia. Why would you locate here, in your second biggest marketplace, and pay a penalty? It is much easier to locate in Singapore or Batan Island, Malaysia or Thailand where there is no penalty for importing into Australia, where you are on a level playing field with other importers. This legislation gives a lie to all the rhetoric and it also shows the stark contrast. This is the tragedy of it. Intending investors will look at our systems now because they are being promulgated now. The big announcements in investment in growth—all those big, new things about how we were going to get with it; we were going to attract world investment—were all trumpeted and heralded from the rooftops of new government.People looking at it say, `What does it actually mean?' Do you know what it means? It means you are penalised if you invest here unless you export only. If you invest here for the Australian marketplace, you are punished. We are not getting the benefit. Two years later it is not working.MiB was brought in last year—it is not happening. Why? The government is insistent that it knows how it all works, that it is the expert, that tariffs are just an issue under review. What they are saying to me is, `We have the Productivity Commission doing a review, it is going to rethink all tariffs and all this stuff will come up there. We will deal with it all in that review. If you can wait, three, four or five years, fine.'But you do not need to. This is not rocket science. This is not something very complex. This is actually very simple. The government then says, `Listen, we cannot review. We cannot change tariff policy or duty policy as part of customs legislation. You have got to do it properly. You have got to do it through proper policy process.'That's funny, because the Prime Minister announced in `Investing for Growth' a great change in policy. They then say, `Yes, but that was only a small scheme. That was just for a small part of the area.' The Prime Minister did not say that. He did not say this was Mickey Mouse. He did not say this was trivial. He heralded it as a major initiative by government, as a package of issues that was going to change our investment profile and attract new investment in modern manufacturing. That was the impression he gave. Why bother making such a speech if that was not the intent, if it was going to be limited to a very small part?I have pursued this issue up hill and down dale for two years. I cannot believe that I am still getting the same message now that I was getting two years ago. No-one can fault the logic, no-one can deny the accuracy of what I am saying, but they are all saying, `We know you are right but we will not do it anyhow because it does not fit government policy. What's more, we will pull it off the business paper.' It has now been cancelled in the Senate. The companies that are trying to say to the government that there is a better way are effectively being told, `It is off the agenda. You are being punished because you are being too difficult. And you talk to the opposition and to the Democrats. Go jump, you will get nothing at all. Now there will be nothing at all.'This is the height of petulance. I actually thought a couple of years ago the government was serious about this rhetoric. I thought it was serious about new initiatives. Over the years, many of us have followed industry policy in detail. We have adapted to the world. As the world has changed we have tried to move with it. We are always a few years behind. We are always some time behind because the world is moving quickly and in different ways in different parts of the world.It is difficult for governments at national levels to adapt quickly and accurately. But, in good faith, a lot of people have invested a lot of effort into those issues over a long time, not just in parliament but outside as well. What we are seeing in this stuff is a petty, petulant exercise with the government saying, `We did not think of it. Therefore, we will not do it.'Tradex is an improvement on Texcos and duty drawbacks. There is no question of that. The failure of those systems is shown by the lack of take-up. The government admits half of it is not used. In other words, people are paying $100 million duty more than they should at the moment. That is what the government is saying. This legislation is not about new industry, it is about the people who are already in there actually getting their duty back. Why are they drawing it back now? They are doing that because it is too damn complicated. There is too much red tape, it is too confusing. That's why.Simplification is good. It will help the people out there now who are paying duty but who should not be paying duty. In itself it will not necessarily attract one new investor. It is simply cleaning out the stables now. That is not good enough. The government was talking about expanding investment. `Investing for Growth' was about expanding investment, not about tidying up the mess that is there now, not about making it easier to get back the money that people should not be paying.Just look at that $100 million being paid by businesses now. Despite all the rhetoric we have had about the effect of the wholesale sales tax on business, the government has known all the time about the $100 million duty being paid that should not be paid. It knows that, and it has known that for some years. It has taken years to get to this stage. This is simply a tidying up exercise. This is not about investing in new industries, this is about helping those that are already in there to get their money back.That is not good enough. We actually have to go forward. We have to get ahead of the game. We cannot always be five and 10 years behind. This stuff here is probably at least 10 years behind the world. The Asian foreign trade zones are way ahead of us with this stuff, miles ahead. The tragedy is that we have got a window of opportunity now for perhaps the next two or three years with the new investment phase and we are well positioned to capture a lot of that investment. If we are not ready now it will go elsewhere, and then it will be another missed opportunity. The warning is there and government members should pick it up and look at what is involved with this. This is not about politics, this is about simple, logical policy. (Time expired)11:04:0012765Entsch, Warren, MPMr ENTSCH7K6LeichhardtLP10—in reply—I would like to thank the members for Denison, Barker, Blaxland and Newcastle for their contributions to this debate on the Tradex Scheme Bill 1999 [No. 2], the Tradex Duty Imposition (Customs) Bill 1999 , the Tradex Duty Imposition (Excise) Bill 1999 , the Tradex Duty Imposition (General) Bill 1999 , and the Customs Tariff Amendment (Tradex) Bill 1999 [No. 2] . I certainly would like to respond to a number of issues raised by members during the debate.As members would be aware, bills for the implementation of the Tradex scheme were originally introduced into the House on 24 June 1999. In early September the department received new legal advice from the Australian Government Solicitor, reassessing their original view that there were no legal or constitutional difficulties with the Tradex legislative package.The focus of the new legal advice was in relation to whether the bills complied with certain provisions of the Constitution. In particular, section 55 of the Constitution provides that laws imposing tax, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only.The Tradex scheme provides for the imposition of Tradex duty in circumstances where goods are dealt with other than in accordance with the provisions of the Tradex scheme. The Australian Government Solicitor's new advice highlighted the potential for Tradex duty to be seen as a duty of customs or a duty of excise under certain circumstances and recommended that the original Tradex Duty Imposition Bill be replaced by three new imposition bills. Thus, to put the issue beyond doubt and to ensure that Tradex duty was not open to challenge on the basis of the validity of laws imposing taxation, the government decided that the only pertinent course was to withdraw the original legislative package and replace it with the bills being debated today. Three new Tradex duty imposition bills ensure that Tradex duty can be collected in circumstances where it could be argued that the tax is a duty of customs, a duty of excise or where the duty is neither a duty of customs nor a duty of excise.The issue of the appropriate tariff rate that is to apply to goods imported under the Tradex scheme that are diverted to the domestic market was also raised during the debate. Tradex allows importers to import goods free of customs duty and sales tax on the condition that the goods are re-exported in their original or modified form. Tradex does, however, provide flexibility to the importer for the diversion of goods in the domestic market in circumstances where exporters' orders have been cancelled or in circumstances beyond the importer's control which mean that the goods are not exported. In these circumstances, the importer is liable to pay Tradex duty on the goods diverted to the domestic market.Tradex duty is merely an amount equivalent to the customs duty that would have been payable at the time of import had the goods not entered under the Tradex scheme. In short, these goods face the same tariff treatment as they would have done if they had been imported in the usual way. Some have argued that the tariff applied to goods that are sold on to the domestic market should not be the sum of the duty on the components but rather the tariff that applies to the final good where this is lower.Both the Tradex scheme and the related Manufacturing in Bond scheme are designed to enhance international export competitiveness and not impact on domestic assistance arrangements. They are not designed to allow companies to circumvent assistance arrangements and budget settings in relation to the three per cent duty on business inputs under the Tariff Concession scheme.As you are aware, the Productivity Commission is currently conducting a review of Australia's general tariff arrangements and the associated concession schemes. The government is not considering any changes to tariff policy prior to the completion of the commission's inquiry.In conclusion, the Tradex Scheme Bill 1999 [No. 2] and the four associated bills provide for the introduction of new, streamlined arrangements for Australian exporters who import goods for further processing prior to export or export goods in the same condition. Tradex will provide real benefits to Australia's exports and, together with the introduction of the goods and services tax, will improve our international competitiveness as a trading nation. It is pleasing to see that there is broad general support for this important policy initiative, and I commend these bills to the House of Representatives.Question resolved in the affirmative.Bill read a second time.UNKNOWNEntsch, Warren, MPMadam DEPUTY SPEAKER (Mrs Gash)—If no member wishes to consider the bill in detail, I will put the report question forthwith. The question is that this bill be reported to the House without amendment.Question resolved in the affirmative.Bills12767r93812767Consideration resumed from 14 October, on motion by Mr Entsch:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.10000DEPUTY SPEAKERMadam DEPUTY SPEAKER (Mrs Gash)—If no member wishes to consider the bill in detail, I will put the report question forthwith. The question is that the bill be reported to the House without amendment.Question resolved in the affirmative.Bills12767r94012767Consideration resumed from 14 October, on motion by Mr Entsch:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.10000DEPUTY SPEAKERMadam DEPUTY SPEAKER (Mrs Gash)—If no member wishes to consider the bill in detail, I will put the report question forthwith. The question is that the bill be reported to the House without amendment.Question resolved in the affirmative.Bills12767r93712767Consideration resumed from 14 October, on motion by Mr Entsch:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.10000DEPUTY SPEAKERMadam DEPUTY SPEAKER (Mrs Gash)—If no member wishes to consider the bill in detail, I will put the report question forthwith. The question is that the bill be reported to the House without amendment.Question resolved in the affirmative.Bills12768r84912768Consideration resumed from 21 October, on motion by Mr Entsch:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.10000DEPUTY SPEAKERMadam DEPUTY SPEAKER (Mrs Gash)—If no member wishes to consider the bill in detail, I will put the report question forthwith. The question is that this bill be reported to the House without amendment.Question resolved in the affirmative.Adjournment12768Motion (by Mr Entsch) proposed:That the Main Committee do now adjourn.1276811:12:0012768Gibbons, Steve, MPMr GIBBONS83XBendigoALP00—I intend to give the chamber a report on the goldmining industry in Bendigo, but before I do so, in view of the tragic events in Parkes yesterday, I would like to offer, on behalf of the people of central Victoria, our heartfelt sympathies to the families, friends, colleagues and, indeed, the company, of the four miners who were so tragically killed in that unfortunate accident. I know that I speak for all of central Victoria—indeed, for all of Victoria—in expressing that heartfelt sympathy.The Bendigo goldfield is the second largest goldfield in Australia after Kalgoorlie's Golden Mile and is one of the top 10 in the world, with a total production of 22 million ounces of gold between 1851 and 1954. The gold rush caused by the discovery of gold at Bendigo resulted in the population of Australia doubling in only a few years. The wealth generated, some $9 billion at current prices, was a major factor in the rapid and successful development of the state of Victoria.The Bendigo goldfield is unique as it represents the greatest concentration of deep mine shafts anywhere in the world. Within the goldfield there are 140 shafts in excess of 300 metres deep, 67 shafts in excess of 600 metres deep and 11 in excess of 1,000 metres deep. At various times the deepest shafts in the world were found within the Bendigo goldfield. As with all historic mining areas, the work force lived within walking distance of the mines, creating a township surrounding the shafts. Bendigo is unusual in that the township continued to prosper following the cessation of mining, resulting in the current situation where in excess of 50,000 people live directly on top of the goldfield. With the passing of time, even the residents of Bendigo, let alone Victorians in general, have forgotten the sheer magnitude of the mining upon which the city was founded.Bendigo Mining is currently developing a decline to access reefs beneath the historic workings of the Bendigo goldfield. To ensure the safety of the decline and improve the understanding of the field, the company is reconstructing a large portion of the historic workings present within the goldfield.To date, the company has spent in excess of $1 million researching historic workings and computerising plans. By the end of 1999, the company will have digitised all of the available level plans for the entire goldfield. In addition, almost half the shafts in the field have been researched in great detail—and the material for that has been gathered from mine managers' reports, the Bendigo Advertiser newspaper, et cetera. This will enable the reconstruction of all historic workings associated with these shafts, even when plans no longer exist. The company is willing to make all this information available—and any new data, as it is generated—at no cost to enable the construction of a detailed physical model of the Bendigo goldfield.The model of the Bendigo goldfield will need to be at a scale of 1:500 to adequately demonstrate the enormous scale of mining undertaken in the past. To reduce the scale of model to, say, 1:1,000, would significantly reduce the impact and appeal of the model as a significant tourist attraction. Major workings extend throughout an area 12 kilometres long by four kilometres wide with workings up to 1.4 kilometres deep. Thus, at 1:500 scale the model will be 24 metres long by eight metres wide and three metres deep. A typical 500-metre deep shaft will be represented by one metre.The idea of this model is to assist the company in its mining operations currently, but, more importantly, to provide a tourist resort in Bendigo equal to or, I believe, better than that which exists in Ballarat, our sister city. I believe that this company will be very successful in that operation. They are requesting some $60,000 for a feasibility study to do that, and I am very happy to support that.I am also pleased to inform the House that Mr Doug Buerger, the General Manager of Bendigo Mining, will be in Canberra next sitting week to brief both the government and the opposition on plans for the project and to highlight the very important part of the mining industry throughout Australia that this project represents. So it is not just an important project for Bendigo or central Victoria; it is an extremely important project for goldmining throughout Australia.1276911:16:0012769May, Margaret, MPMs MAY83BMcPhersonLP10—In this International Year of Older Persons, it is fitting that the Commonwealth government recognises the contributions of older Australians in our community. Last week, I had the great pleasure of presenting certificates and a memento to those people who are some of society's tireless volunteers—the recipients of the Commonwealth Recognition Awards for Senior Australians in the McPherson electorate.The Commonwealth recognition awards were established by the federal government for the International Year of Older Persons as a way of recognising the enormous contribution that senior Australians make to our communities. The recipients of the Commonwealth Recognition Awards for Senior Australians in my electorate comprise a group of extremely caring, committed and dedicated people. Each has left an indelible mark on our Gold Coast community, and, if it were not for many of these people, there are many community projects which I am sure would have fallen flat or never got off the ground in the first place.Edna Harrison of Coolangatta was the overall winner of the award for her outstanding contributions to our community. Mrs Harrison's achievements include 41 years of service to the Southern Gold Coast Chamber of Commerce, holding various positions over those years, including Vice-President and Coordinator of the Courtesy and Business of the Year Awards. Mrs Harrison has recorded 100 per cent attendance at Quota International meetings for 23 years, has served as president of the organisation and has been a board member for at least 15 years. As President of the Cancer Foundation, Southern Division, since her retirement two years ago, this remarkable lady now devotes two days a week to visiting and providing support and assistance to cancer patients at the Tweed Heads District Hospital, and extends her helping hand to their families and loved ones.The other award nominees were Ron Osbourne, Patricia Lesina, Joan Gilbert, Betty Mounser, Raymond Ruck, Marjorie Gimblett, Jean Oliver, Moira McGuinness, Jean McKenzie, Margaret Lopes, Adrian Maher, Joyce Andrews, Rita Higgs, Lee Wood, Joan Gray, Roland Glover and Shirley Beasley.I would also like to take this opportunity to thank the selection committee members who gave up their time to examine each nomination and to interview each of the nominees. I would particularly like to thank the chairperson of the committee, Marie Robbie, for her tireless work with the committee and the time she put into organising the committee and interviewing each of the recipients. My sincere thanks go also to Pastor Stirling Donaldson of Kings Christian Centre; Lorraine Corbett, Manager of Centrelink Palm Beach; Joan Power, Coordinator of St Louise de Marillac Nursing Home; and Dorothy Williams, Manager of the Respite Service, Gold Coast Family Support. Thank you all for your contribution and time.As the International Year of Older Persons comes to a close, we can reflect on the impact it has had on our communities and on the achievements we, as a society, have made. The Minister for Aged Care, the Hon. Bronwyn Bishop, launched the international year program of events in the McPherson electorate on 16 January this year. Since that time I have had the pleasure to attend numerous functions held by community groups, schools and other organisations to commemorate this special year and to recognise the contributions made to our society by older Australians. I have joined in a walk with older members of my electorate, spoken at schools on the topic of `Because you are special', opened a seniors' art exhibition and attended numerous other functions held by seniors and community groups to commemorate this very special year.As I mentioned several months ago in this House when I spoke about the program of events for the Gold Coast this year, our city has long been a haven for retirees, many attracted to the coastal strip and to the city's hinterland suburbs because of the area's relaxed lifestyle and warm climate. One in every five people in my electorate is aged over 65. It has been tremendously encouraging to see such a strong, united effort by so many members of our community to acknowledge and embrace the International Year of Older Persons. I commend those involved in this special year and the way in which they have embraced it. The International Year of Older Persons has given people of all ages a chance to recognise the vital role of older persons in our society, which I am sure will continue well into the next millennium.1277111:21:0012771Hollis, Colin, MPMr HOLLISDH4ThrosbyALP00—Recently I received a letter asking about arrangements for the troops in Timor when they returned to Australia. The writer was not so concerned about the immediate arrangements as the ongoing and long-term arrangements. He made the point that Australians—or rather governments—are quick to send off troops but slow to look after them, long term, on their return.I have no doubt that our forces, who are doing such a magnificent job in Timor, will be well provided for. But there is a group of people who have been in Timor and are now back in Australia, and who I believe are being ignored—perhaps not deliberately but by oversight. That is the group who were there in the lead-up to the August ballot, especially the Australian Federal Police.No-one would take away from the excellent work being carried out by our forces, but we must recognise the work others did in the lead-up to the ballot and after. Many members of the Australian Federal Police feel rather like returning Vietnam veterans: they feel their contribution has been, if not overlooked, then ignored. Even more disturbing is that entitlements that were their due have not been paid. Whether this is the fault of the government or of the UN, to whom they were answerable, I am not sure, but I do feel the government should sort this matter out and sort it out quickly. It has been put to me that, if we in the parliament ask people—be they police, troops or whatever—to go to hell and back, we should not force them to grovel for their entitlements when they return.Emotionally the Australian Federal Police members have been through a great deal. They were, in some cases, in East Timor for three months. In that time they were able to develop relationships with the East Timorese within a community policing role. In the weeks before the escalation of extreme violence, much was done by the AFP members to encourage the confidence of the local people in the upcoming ballot. A great deal of faith and belief in themselves and their future occurred at this time.All have witnessed tragic events which will be with them forever. Much of what they witnessed has not been publicised because often the Federal Police were in isolated areas and the media were not there. I have heard of many cases of police being shot at, and cases of intimidation. Many also feel a sense of frustration as they were warning what would happen after the ballot. Their sense of frustration is heightened in that they believe—rightly or wrongly—that, had their intelligence been followed, much of the tragedy of Timor might have been avoided.As you would appreciate, Madam Deputy Speaker, the Australian Federal Police did a magnificent job in Timor—far beyond the call of duty. They deserve our recognition and thanks, and they also have a right to expect their entitlements. It is demeaning to them and should be an embarrassment to us that these people are being forced to haggle for their entitlements.I am not one for medals and decorations, but I suggest that we could have a special civilian medal for those people who served in Timor, apart from the military recognition. But, medals and entitlements aside, I suppose few can begin to understand the dimension of the horror that members of the Australian Federal Police experienced.At the very least, they deserve our understanding, respect and thanks for a job well done often under tremendous hardship and handicaps. It is a tragedy if these people feel like the Vietnam veterans. People did not want to know the Vietnam veterans when they came back. There was great dispute in this country about whether it was right or wrong for Australia to have been in Vietnam. My feeling about Vietnam has always been that the parliament of the day asked these people to go there. They went and they carried out the duty that was entrusted to them. As a parliament, we asked the Federal Police to go and they responded magnificently. They did a tremendous job and we owe them our thanks, understanding and respect for the job that they did.1277211:26:0012772Baird, Bruce, MPMr BAIRDMP6CookLP10—It is my pleasure to rise today to speak on the issue of unemployment in my electorate. I am very pleased to say that the Cook electorate has one of the lowest levels of unemployment in the country. In the statistics that have been provided, the latest census ranks electorates in terms of employment levels in 1996. The electorate of Cook had the eighth lowest figure for the whole of Australia.Since that time, the unemployment levels have continued to decrease. The unemployment figure in 1996 in the electorate of Cook was 4.5 per cent. Since that time, the figures that we have available for the Sutherland Shire, which includes my electorate, indicate that unemployment has reduced to 4.1 per cent in June 1997 and, in 1998, to 3.1 per cent. The latest figures that we have available for September 1999 are 2.6 per cent.That is a great credit on several levels. The great people in the electorate of Cook have shown their hard work and dedication. Their work ethic is strong and vibrant in the electorate and so is their dedication. It is about responding to the opportunities created by the coalition government. There is no doubt that this government has created many new jobs. The government's primary approach to job creation is through sustained economic growth. It is generally accepted that, without such a long-term sustainable improvement in employment, this would not be possible.Since the government came to office in March 1996, there have been 574,000 jobs created in Australia. To put that in perspective, in the last six years of the previous government, there were 396,000 jobs created. There are now a record 8.878 million Australians in work.In trend terms, the current unemployment rate is 7.1 per cent equalling the lowest rate since July 1990. Obviously, there are many factors that come into this. It is not by one factor alone; it is by the government's sustained reforms of our economy. In terms of economic management, over the last several budgets, the government has brought us into a sustained period of surplus budgets. This is in contrast to the last two years of Labor government when we had $24 billion in deficit budgets. That creates a lot of confidence in the economy. The measures of surplus budgets, low inflation, a low interest rate environment and structural changes to improve the economic efficiency in the labour market and the economy are all very significant.The employment reforms themselves are very significant. The coalition has moved for the retention of junior wage rates, which will do much to provide young Australians with a chance to obtain their first job. This will play a very significant part. If it had not been enacted, it would have had an impact on the jobs for 300,000 young people. Unfair dismissal legislation which changes the requirements in relation to unfair dismissals has been important. Much of the reform has been blocked by the opposition but the changes that have been made have been significant.The Job Network we established last year is proving to be a very effective system in helping people to gain work, particularly those who are most disadvantaged in the labour market. Job Network has clearly outperformed the old CES. In its first 16 months of operation, Job Network, through intensive assistance, placed more than 126,000 of the most disadvantaged job seekers in real jobs. That is an improvement of 50 per cent on the old case management approach, and that is very significant. The Work for the Dole scheme has received enormous support throughout Australia, and the recent announcement in terms of indigenous employment policy is significant for our indigenous population.It is my pleasure to say how proud I am that the unemployment figures in the electorate of Cook continue to go down and that we are in the forefront of the nation as a high employment area and electorate. (Time expired)1277311:31:0012773McLeay, Leo, MPMr LEO McLEAY4I4WatsonALP00—Yesterday, practitioners of Falun Dafa, also known as Falun Gong, came to Canberra for a national awareness day held on the front lawns here at Parliament House. Like a number of us in the parliament—indeed, I think you too, Mr Deputy Speaker—I have been approached by practitioners to help heighten awareness of their plight, particularly in China but also in Australia and elsewhere.In July this year the Chinese government banned Falun Gong, a meditation system which, since its introduction to China in 1992, has attracted millions of practitioners in over 30 countries, including Australia. Increasingly in the months since its banning there have been disturbing reports of what is happening to Falun Gong practitioners in China. There have been stories of imprisonment, torture, violent deaths and so-called suicides in what can only be described as highly suspicious circumstances. Recently, I have even heard about incidents of harassment of demonstrators in Sydney and Canberra. I find it amazing and very unsettling that people are being harassed by, some say, agents of a foreign government for carrying out these practices in Australia. It is all very worrying and, as citizens not just of this country but of the world, we should be concerned about what is happening.What is Falun Gong and why has it incurred the heavy hand of suppression in China? Its devotees say it is not a religion. They describe it as a meditation system based on the principles of truth, compassion and forbearance. It comprises sets of exercises designed to improve the mind and body—hardly a threat to government, you would think, but obviously there must be some reason for the Chinese government's reaction to Falun Gong. It has been reported that the official reasons include such things as: it was not registered by law, it had engaged in illegal activities, advocating superstition and spreading fallacies, hoodwinking people, inciting and creating disturbances, and jeopardising social stability. So obviously it is seen as some sort of threat by the Chinese government to the status quo. But take the hysteria out of it and what do you have? A movement which certainly does have a huge number of members; and, yes, they have engaged in peaceful protests to gain recognition and against government harassment in China. But it is hard to see how these facts could possibly warrant such massive overreaction on the part of the Chinese government.As I mentioned earlier, I know that I am not the only person in parliament who has been approached by representatives of Falun Gong. I have met with people from my electorate and heard their stories. It horrifies me to learn of this persecution. It seems incredible that a government can behave like this towards its own people. They are not a political group, they are not a religious sect, they are not fanatics determined to destroy society. Putting it as simply as possible, they are individuals who have discovered that there are a particular set of exercises which they like to practise because they improve their sense of wellbeing.This is not an issue which can remain hidden. Because of its huge international following, Falun Gong does receive lots of publicity and I know that others, particularly in the USA, where its founder now lives, are trying to address the situation with the Chinese government. Indeed, just last week the United Nations Secretary-General, Kofi Annan, visited Beijing. On the Friday before his visit he was reported as having expressed his concern about the Chinese government's treatment of the group and that he would raise the issue with Chinese leaders while he was there. Let us hope that he was able to do so.It seems to me that the Chinese government has set out on an impossible mission. It is trying to stamp out Falun Gong using coercion and brute force. The reports are that thousands of adherents have been imprisoned or ordered to undergo `re-education'. The Chinese government has conducted what the Sydney Morning Herald described as a `shrill' campaign against this `superstition', banning its gatherings and literature and and organising campaigns against suspected members in the workplace.It seems incredible that this is happening. But it also seems, from the reports we read in the press and what we witnessed here yesterday, that the Chinese government's tactics are not succeeding. The horrific treatment of Falun Gong members is not having what one can only presume to be the desired effect because people are continuing to demonstrate and practise. Some may have gone underground, but others are openly continuing to practise, in defiance of their persecutors, even when they have been subjected to degrading treatment. Falun Gong adherents are not going to give up their personal commitment. They are persisting, even though the government of China has ordered them to renounce their beliefs or face arrest. The Chinese government's continuing insistence on its suppression of Falun Gong can only lead to more suffering and injustice. Anyone concerned about human rights must share my concern about the plight of these people. I implore the Chinese authorities to rethink their response to Falun Gong before this most unfortunate crackdown has even more tragic results.1277411:36:0012774Elson, Kay, MPMrs ELSON6K6FordeLP10—I was very honoured last Friday to attend a special luncheon here in Parliament House, hosted by the Minister for Aged Care and attended by some very extraordinary Australians. I am speaking of course of the many senior Australians around the country who represented their electorates as outstanding recipients of the Commonwealth recognition award for senior Australians. These awards were established to help ensure that our celebrations for the International Year of Older Persons included national recognition of the role that senior Australians play in the community and in the lives of all Australians.This year is all about celebrating the wealth of knowledge, experience, talent, enthusiasm and skills that older members of our communities possess in such ample quantities. I believe the slogan `not old, just older' is a very apt one. Certainly there are many older residents in my electorate who are living proof that age is just a state of mind and that our later years can be the most productive and fulfilling of our lives. These people never seek recognition and are very modest and unassuming. They quietly and actively just go about helping others and making our local communities even better places to live.I have been very pleased in the past to honour many of these people with my own Forde community contribution awards for their outstanding voluntary work. However, it was indeed a privilege last week to present 20 Forde residents with a Commonwealth recognition award for senior Australians on behalf of the federal government. As I told these special people, I am personally very inspired by their ongoing contributions to our community. I sincerely hope that when I retire I have even half the drive and ability that they display every day.I would like to pay tribute in this House today to Joie Dwyer of Kalbar, Vincent Hertweck of Boonah, Larry Storey, 91, of Bethania, Stanley Miers, 83, of Beenleigh, Constance Miers, 72, of Beenleigh, Mac Smith, 82, of Beaudesert, George Harch, 80, of Beenleigh, Louisa Harch, 78, of Beenleigh, May Billiau, 71, of Beenleigh, Merle Brauer, 63, of Stapleton, Mabel Rodwell, 76, of Beaudesert, Albert Garcia, 88, of Beaudesert, Eva Woodrow, 88, of Mount Warren Park, Rae Doherty, 71, of Meadowbrook, John (Jack) Lewis, 92, of Beaudesert, Elizabeth Ellis, 80, of Beaudesert, Desmond (Des) Tutt, 74, of North Tamborine, Thelma Ward, 73, of Beaudesert, Mervyn Silcox, 83, of Beaudesert.Unfortunately, time does not permit me to outline all of the remarkable achievements of these people. However, I would like to take a few moments to pay tribute to one recipient who, sadly, passed away recently. Mr John Wiltjer of Eagleby spent the last 22 years devoting himself to helping local young people through the Beenleigh Police Citizens Youth Club. He was a tireless worker, raising thousands of dollars through his personal efforts selling raffle tickets every week. An ex-POW, he was an outstanding role model for local children. Unfortunately, John lost his long battle with cancer earlier this month. Shortly before he passed away he was presented with his award, and the extent to which he will be missed was evidenced by the many people who attended his funeral.Finally, I would like to tell the House about our overall local winner who represented us in Canberra last week, Ms Kath Ryan, 74, of Beaudesert. Kath is a lady who is known to many people throughout our area. She has been the absolute backbone of St Mary's Care and Concern in Beaudesert for over 20 years. Care and Concern is a practical organisation that offers assistance, advice and care when it is needed most.Kath's work in caring for the frail aged and disabled led her to help establish a special respite centre in Beaudesert, aptly called `Kath's House'. Not only did she establish the centre but she also helped to secure special Home and Community Care funding for the Beaudesert region. Her caring nature has touched the lives of many people and, as the grateful person who nominated her said, `Kath's whole lifestyle is about looking after other people in a voluntary capacity.'Kath has been an active member of the Country Women's Association for over 20 years. She is also a member of the Boystown Ladies Auxiliary, the St Vincent de Paul Regional Council, St Mary's tuckshop and P&C, and she has been on the Logan and Albert Rivers Regional Council for nine years. While I can list her membership of various important community organisations, there are simply not enough words to describe the impact she has had on the lives of so many local residents in Beaudesert and throughout our region. The demands on Kath are constant, yet she is always there first to offer a hand and to help out on other community events and occasions.The International Year of Older Persons has been a special time to pay tribute to these and many other older Australians throughout the nation. I certainly hope the recognition and celebrations can be carried over well into the next century, and that our appreciation of the abilities, drive and talents of our older citizens will continue to grow.Main Committee adjourned at 11.41 a.m.Answers to Questions in Writing12777The following answers to questions were circulated:12777(Question No. 897)89712777Sciacca, Con, MPMr Sciacca6J4BowmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 1 September 1999:(1) Have contracts been finalised with agents in Norway and Sweden working on behalf of his Department to process visas from Scandinavian countries for students wishing to study at Australian universities; if not; what is being done to address concerns raised by agents since early 1999 relating to (a) the level of student fees, (b) the level of medical examinations required for short duration courses, (c) processing times, (d) panel doctors, (e) administrative assistance, (f) additional costs, including couriers and (g) single and continuing points of contact for enquires.(2) Has a response been forwarded to the Australian Vice-Chancellors' Committee addressing its concern over the impact of the Scandinavian visa issue.(3) Have agents refused to negotiate contracts for activities on behalf of his Department beyond 1 October 1999; if so, what is the departmental assessment of the impact of the refusal.(4) What will be the impact on student visa processing from Scandinavia after processing is transferred to the Bonn centre after 1 October 1999, including the impact on (a) processing times, (b) handling queries and (c) student numbers.(5) Has his Department evaluated the competitiveness of Australia as a student destination in terms of (a) fees charged for visas compared with Canada, USA, UK and NZ, (b) requirements for extensive and expensive medical reports for all students and (c) delays in processing and approval; if so, what are the details.(6) Has action been taken to address shortcomings raised by agents in Scandinavia about members of medical panels and their suitability and effectiveness in providing medical assessment for student visas; if so, what.12777Ruddock, Philip, MPMr Ruddock0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—The answer to the honourable member's question is as follows:(1) No. The Department of Immigration and Multicultural Affairs (DIMA) has set up a temporary student processing office at the Australian Embassy in Stockholm to process the rising level of student visa applications from nationals of Norway and Sweden. Four of the agents who wished to discontinue the service they have hitherto provided have been briefed on the changes and will refer students to the new office. A fifth agent operating in Scandinavia, the Scandinavian Australia New Zealand Friendship Association (SANZFA), has already indicated it will continue with the existing arrangements between it and DIMA.(a) The application charge for a student visa is $290. This charge not only factors in the cost of processing student visa applications but also the cost of information technology initiatives and compliance activity in the student visa program. The $290 fee is a global one and applies to student applicants from all countries.(b) The Department of Health and Aged Care (DoHAC) has recently agreed for DIMA to conduct a trial of new streamlined medical processing arrangements for student visa applicants from Norway and Sweden. Under the trial, student applicants from these countries will only be required to respond to a strengthened health declaration which addresses issues of public health concern. This is possible because of the very low rates of tuberculosis in Norway and Sweden and the fact that health costs associated with these students are covered by their Governments.(c) As a consequence of the re-opening of the student visa processing service in Stockholm, and the streamlining of health procedures, a quicker and more effective service can be expected.(d) The Regional Medical Director (Europe) travelled to Norway in August 1999 and met student agents to discuss their concerns. Panel doctors in 8 cities in Norway were also visited.A number of strategies were developed which directly address the agents' concerns about panel doctors. These strategies include: additional training and support to panel doctors; the dismissal of one panel doctor and appointment of several additional panel doctors; the introduction of a regular meeting of all panel doctors biennially, and further administrative streamlining.The issue of health processing for overseas students from low risk countries is being further examined in a current review of health requirements for temporary entrants. DoHAC has also agreed to test the low risk student market in Norway and Sweden so that their students initially have only to sign a strengthened declaration. Only those students who identify a potential public health issue in this document will be required to undergo formal medical processing.(e) The staff at the new visa processing office in Stockholm will be able to provide students with student visa application advice and on other administrative issues as they arise.(f) The opening of the student visa application processing centre in Stockholm will significantly reduce costs to students, including courier costs and, in the majority of cases, the cost of formal medical processing.(g) The Australian Honorary Consul in Norway has been briefed on new arrangements so that students in Norway may collect visa application forms from that Consulate and forward them to Stockholm.The student visa processing centre at the Australian Embassy in Stockholm will be the key point for enquiries from Scandinavian students.(2) I am advised the Australian Vice-Chancellor's Committee (AV-CC) wrote to the Prime Minister on the Scandinavian student visa issue. DIMA provided input into the Prime Minister's response to that letter, which I understand has been forwarded to the AV-CC. My Parliamentary Secretary who is responsible for the student visa program has also written to the AV-CC advising of the new arrangements.(3) Discussions were held with the relevant education agents who operate in the student market in Norway and Sweden. Four of them who wished to discontinue the service they had previously provided indicated they did not wish to pursue formal arrangements with DIMA for the time being. DIMA has responded by re-opening a student visa processing office at the Australian Embassy in Stockholm. This should provide an improved service for Scandinavian students.(4) (a)—(c) Minimal to none. Visa applications from Norwegian and Swedish students will be processed by the new student visa application processing centre at the Australian Embassy, Stockholm. The DIMA post in Berlin will provide appropriate support as required.(5) The Government closely monitors Australia's competitiveness as an overseas student destination on an on-going basis. This is best done on an holistic basis rather than in terms of single issues. On the whole, Australia remains highly competitive as illustrated by the fact that overseas student numbers, particularly for the higher education sector, have continued to rise despite the Asian Economic crisis. (a) The cost of an application for an Australian student visa is higher than that imposed by most of our competitors. This, however, needs to be considered in the context of the more generous work rights that Australia provides to overseas students and the greater investigation and compliance costs associated with this. The more generous work rights can lead to a larger number of non-bona fide students seeking to apply for entry or seeking to subvert the work condition after arrival. The higher student visa application charge is designed to recover these compliance and investigation costs.(b) Australia has one of the lowest rates of tuberculosis in the world. This is in no small measure due to our strict health requirements. While there may be scope to streamline these to some degree (as evidenced by the Government's preparedness to trial a new arrangement for students from Sweden and Norway), there is a clear national interest benefit in maintaining our strict standards where students are coming from countries with a high risk of tuberculosis.(c) Student visa applicants whose medical results are locally cleared experience no medically-related delays in the grant of a student visa. Those applicants whose medical results need to be referred to Australia for clearance may experience a delay of up to 4 weeks in grant of their visa. New streamlined procedures to be tested in the student market in Norway and Sweden are likely to result in savings both in terms of time and cost to student visa applicants from those countries. DoHAC will continue to monitor public health issues in those countries and will react accordingly if there is any cause for alarm for Australia.(6) Refer to answer to Question 1 above.12778(Question No. 908)90812778Crean, Simon, MPMr CreanDT4HothamALP00 asked the Treasurer, upon notice, on 20 September 1999:(1) Is it still the case, as the Senate was advised on 1 June 1999 in a response to Estimates question on notice, Rural and Regional Affairs and Transport Committee, that according to the Treasury there is no settled policy for deciding which government levies are to be subject to GST and that before a policy can be agreed on, discussions will have to take place with the States to ensure a consistent application to all similar levies and charges.(2) If this is not the case, what approach will be taken in relation to the GST's application to government levies and charges. (3) Will he provide the full list of government levies and charges that will be subject to the GST, and those that will not.12779Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honourable member's question is as follows:(1) (2) and (3) All States and Territories signed the Intergovernmental Agreement on the reform of Commonwealth-State Financial Relations in June 1999. In signing, States and Territories agreed that the GST should not apply to some taxes, levies and compulsory charges. The principles for determining those taxes, levies and charges to be listed on the Treasurer's determination were agreed by the Commonwealth and all States and Territories in June 1999.The parties to the Agreement are currently in the process of agreeing on a list of taxes, levies and other charges that meet these general principles and therefore should be outside the scope of the GST. The complete list will be promulgated by a determination by the Commonwealth Treasurer as set out in section 81-5 of A New Tax System Act 1999.12779(Question No. 933)93312779Edwards, Graham, MPMr Edwards83RCowanALP00 asked the Minister for Defence, upon notice, on 23 September 1999:(1) What has been the cost of the Counter Terrorist Unit (CTU) since its inception.(2) How many Special Air Services Regiment (SASR) soldiers have been killed or injured maintaining the unit's operational readiness.(3) What sum has the Government spent on rehabilitating and deprogramming SASR soldiers as a result of physical or mental disability.(4) Has the use of gas and pyrotechnics changed since the early operations of the Counter Terrorist Unit; if so, is it due to a high casualty rate.(5) Was the work considered hazardous; if so, what were the hazards.(6) Is the CTU considered to be non-operational; if so (a) is the rate of death and serious injury acceptable for a non-operational CTU, and (b) will injured soldiers be eligible to receive appropriate benefits, including a service pension.12779Moore, John, MPMr MooreEI4RyanLPDefence10—The answer to the honourable member's question is as follows:The content of the following response does not include any reference to sensitive classified information. Should the honourable member wish to obtain any further information, a private briefing by Headquarters Special Operations can be arranged through my office. (1) Costing information regarding the Counter Terrorist Unit (CTU) is sensitive and cannot be made public.(2) Since 1980, 20 deaths and approximately 35 serious personal injuries have occurred. Headquarters Special Operations is unable to determine the number of minor injuries or stress related injuries. It is estimated that there are significant numbers of unreported (mostly minor) injuries and stress related illness and injuries that are of a prolonged nature and which are not manifested until middle age or after retirement from the Army.(3) Under the Safety, Rehabilitation and Compensation Act 1988 the Government provides rehabilitation services to those members of the Australian Defence Force who are injured in compensable circumstances. In 1998/99 $4.05 million was spent on rehabilitation. Information on how much of this amount was spent on SASR soldiers is not available. Systems are being developed which, in the future, will enable attribution of compensation and rehabilitation costs to unit level.(4) Yes. The use of CS gas and smoke pyrotechnics has been substantially reduced since the early 90's. The reduction in the use of CS gas has been due to a greater awareness of the dangers posed by these substances and as a result of some reported injury/illness.(5) Yes. Duties in the CTU were considered to be hazardous (along with most other facets of SASR training) and this still remains an area of employment where there is potential for death or injury.(6) CTU was and still remains categorised as non operational duty. Nevertheless, the capability has always been maintained at an extremely short notice to move. This drives the requirement to incorporate a high level of simulated realism into training activities against potentially hazardous skill sets.(a) There is no acceptable `rate' of deaths or serious injuries; every effort is made to minimise risks in training.(b) SASR soldiers receive the same level of benefits and entitlements as other members of the Australian Defence Force.12779(Question No. 952)95212779Crean, Simon, MPMr CreanDT4HothamALP00 asked the Treasurer, upon notice, on 30 September 1999:(1) In what quarter of what year was the lowest ever household savings ratio achieved.(2) In what quarter was Australia's (a) highest current account deficit recorded in dollar terms, (b) the highest ratio of household debt to income achieved and (c) largest foreign debt recorded, in dollar terms.(3) When was the largest (a) monthly trade deficit in Australian history and (b) quarterly decline in private expenditure on capital.(4) In what years since 1983 have export earnings from elaborately transformed manufactures fallen, in dollar terms.(5) In what month of what year was the lowest ever manufacturing employment figure recorded.(6) In each of the above cases, who was the Treasurer.12780Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honourable member's question is as follows:(1) This can be obtained from the ABS publication, catalogue no. 5206.0.(2) (a) This can be obtained from the ABS publication, catalogue no. 5302.0.(b) The ratio of household debt to income is not calculated by the ABS.(c) See ABS publication, catalogue no. 5302.0.(3) (a) This can be obtained from the ABS publication, catalogue no. 5368.0.(b) See the ABS publication, catalogue no 5206.0.(4) See the ABS publication, catalogue no. 5302.0.(5) See the ABS publication, catalogue no. 6203.0.(6) This can be obtained from the Parliamentary Handbook or the Parliamentary Library.12780(Question No. 978)97812780Andren, Peter, MPMr AndrenKL6CalareIND00 asked the Treasurer, upon notice, on 12 October 1999:(1) Is it a fact that (a) the GST compensation package for recipients of Commonwealth payments and self-funded retirees will not commence until July 2000 and (b) people are having to pay a GST component now on things like car insurance, registration, house insurance, contents insurance, prepaid car services, NRMA memberships, club memberships, subscriptions, annual medical insurance and post office boxes.(2) If so, is the GST placing additional financial pressures on those least able to pay; if not why not.(3) Why did the compensation package not commence in 1999-2000, given the transitional impact on low-income earners.12780Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honourable member's question is as follows:(1) (a) The Government has legislated to provide an up front payment of 4 per cent on 1 July 2000 and put in place indexation arrangements so as to ensure that allowances and pensions increase by 2 per cent in real terms.The Government has also legislated to help maintain the value of the savings of senior Australians following the introduction of the goods and services tax by providing two savings bonuses for self-funded retirees.Self-funded retirees and persons in receipt of pensions and allowances can also benefit from income tax cuts and the new 30 per cent tax rebate/benefit available on the cost of private health insurance which was introduced by the Government on 1 January 1999.(1) (b) The GST is payable in respect of supplies made from 1 July 2000 onwards. In the case of services where the supply of the service concerned spans the GST commencement date, that part of the service that attributable to the period after 1 July 2000 will be subject to GST and the GST will fall due in the supplier's first GST return. The ACCC price exploitation guidelines allow suppliers to include an allowance for this GST liability in the price charged for the service, in advance of the commencement of the GST, so long as the amount included does not exceed the net present value of the of the GST that they will be required to remit.(2)and (3) Some New Tax System measures have already commenced which benefit low-income earners. For example, the reduction in the wholesale sales tax came into effect during 1999-2000 (29 July 1999), and the 30 per cent tax rebate/benefit available on the cost of private health insurance began on 1 January 1999.12780(Question No. 979)97912780Andren, Peter, MPMr AndrenKL6CalareIND00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 12 October 1999:(1) Is it a fact that assistance under the Jobs, Education and Training (JET) program administered jointly by the Department of Family and Community Services and the Department of Employment, Workplace Relations and Small Business, is available to recipients of Parenting Payment; Widow Allowance; Partner Allowance; Widow B Pension; Carer Payment and some Special Benefit recipients, but not recipients of the Disability Support Pension.(2) If so, why are Disability Support Pension recipients excluded from accessing assistance under the JET program and what alternative assistance is available for such pensioners. (3) Is it anomalous that a parent in receipt of the Parenting Payment or a carer in receipt of the Carer Payment can receive assistance under the JET program, but that a parent in receipt of the Disability Support Pension with a dependent child cannot access assistance under the program; if not, why not.12781Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:Eligibility criteria for the Jobs, Education and Training program are the responsibility of the Minister for Community Services. I understand that the Minister for Community Services is in the process of answering Question 980, which broadly encompasses Question 979.12781(Question No. 989)98912781Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 13 October 1999:When will he respond to the matters referred to him by the Minister representing the Minister for Family and Community Services in my question No. 821 (Hansard , 22 September 1999, page 7830).12781Reith, Peter, MPMr ReithWI4FlindersLPWorkplace Relations and Small Business10—The answer to the honourable member's question is as follows:On 22 September 1999, the Minister representing the Minister for Family and Community Services provided information regarding the assistance provided through the Family and Community Services portfolio and asked me, as the Minister responsible for Employment, Workplace Relations and Small Business, to respond to the parts of the question relating to Job Network.As a preamble, I must draw a distinction between the employment services offered by Job Network and those offered through specialist employment services funded through the Family and Community Services portfolio. The distinction lies in the level of disadvantage experienced by the job seekers:. Job Network assists job seekers whose disability has a low to moderate impact on their work capacity, while. job seekers whose disability has a moderate to severe impact are assisted by specialist employment services funded through the Family and Community Services portfolio.Disability Support Pension recipients generally have a disability with a more severe impact and most of these people are assisted by the specialist employment services funded through the Family and Community Services portfolio.Overall, because Disability Support Pension recipients are a minority of all job seekers with a disability, the overwhelming majority of job seekers with a disability who receive employment assistance from the Commonwealth, are assisted by Job Network.The questions referred to me for response by the Minister representing the Minister for Family and Community Services were questions 1(a), 2(a), 3 and 4(a). I will respond to each in turn.(1) (a) How many persons with disabilities have received labour market assistance since the Job Network commenced in May 1998, through the Job Network.(1) (a) As at 31 August 1999 there were 156 876 job seekers with a disability registered with Centrelink as looking for work and accessing various Job Network services.From 1 May 1998 to 13 August 1999, Job Network provided the following assistance:. 26,174 job seekers with a disability were placed in a job through Job Matching (Flex 1);. 5,077 job seekers with a disability commenced with a Job Search Training (Flex 2) provider; and. 69,141 job seekers with a disability commenced with an Intensive Assistance (Flex 3) provider. 7,657 of these had been placed in a job by the end of the period, with the majority still receiving assistance to prepare for and find a job.(2) (a) How many persons on a Disability Support Pension (DSP) have received labour market assistance since the Job Network commenced in May 1998, through the Job Network.(2) (a) From 1 May 1998 to 20 August 1999 there were 2,505 Disability Support Pension recipients who were placed in a job through Flex 1 or commenced in Flex 2 or 3.(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.(3) From 1 May 1998 to 20 August 1999, the 2,505 Disability Support Pension recipients referred to in the response to Question (2)(a) received the following assistance from respective Job Network services:(a) 1,153 Job Matching (Flex 1) placements in a job;(b) 35 Job Search Training (Flex 2) commencements; and(c) 1,681 Intensive Assistance (Flex 3) commencements.Note: The total of Question 3 (a), (b) and (c) exceeds the number of job seekers in the response to Question 2 (a) because indi vidual job seekers may be included in more than one of the categories in Question 3.(4) (a) How many persons on a DSP provided with assistance through the Job Network, have achieved some job outcome, either as (i) full-time or (ii) part-time employment.(4) (a) From 1 May 1998 to 20 August 1999, the following Job Network placements were recorded for Disability Support Pension recipients:. 1,153 Job Matching (Flex 1) placements in employment, 569 in part-time employment and 584 in full-time employment. This included five placements for Job Search Training (Flex 2) participants, four in full-time employment and one in part time employment;. 187 Intensive Assistance (Flex 3) outcomes, 35 for part-time employment (more than 15 hours and less than 20 hours per week) and 152 for full-time employment (20 or more hours per week).In addition, post program monitoring surveys from 1 May 1998 to 30 April 1999 indicate that 3 months after cessation of assistance:. 20% of Flex 2 Disability Support Pension participants were in employment; and. 19.4% of Flex 3 Disability Support Pension participants were in employment.12782(Question No. 1003)100312782Martin, Stephen, MPMr Martin8I4CunninghamALP00 asked the Minister for Defence, upon notice, on 19 October 1999:(1) How many vehicles owned and used by the Australian Defence Force have asbestos brake linings.(2) Does his Department consider that there is any risk to serving personnel as a result of exposure to asbestos brake linings.(3) Has his Department conducted any safety studies into the use of, or prolonged exposure to, asbestos brake linings.(4) Is his Department aware of any suppliers that are able to provide brake linings that are not made of asbestos; if so, (a) what are the names of the suppliers and (b) has his Department considered procuring brake linings from them; if not, why not.12782Moore, John, MPMr MooreEI4RyanLPDefence10—The answer to the honourable member's question is as follows:(1) Australian Defence Force (ADF) Vehicles are categorised into three classes: Armoured Vehicles, Passenger and Cargo Vehicles and Construction and Engineer Plant Vehicles. The total fleet size is 14,454 vehicles. Currently, there are 3,780 Landrover Vehicles in the Passenger and Cargo class which have asbestos brake linings. The useful life of these asbestos brake linings expire in one year and they will be replaced with non-asbestos brake linings. It is possible that the 661 vehicles in the Construction and Engineer Plant class have asbestos brake linings as these vehicles are commercially procured. All of the remaining 10,013 vehicles have non-asbestos brake linings.(2) The ADF does recognise the hazard of asbestos contained in brake linings and has in place a comprehensive range of risk control measures to minimise the risk of exposure to serving personnel. The measures, detailed in Electrical and Mechanical Engineering instructions, EMEI Workshop E 410, Issue 2 dated March 1994, are taught and supervised for mechanics, and include:. Asbestos may be found in clutch and brake linings, gaskets and insulation.. Risk arises when asbestos fibres become airborne and are inhaled.. A register of equipment containing asbestos is maintained by the Asbestos Control Officer—Equipment, at the Army Engineering Maintenance Agency.Risk assessments are conducted where asbestos is determined to be present. During all maintenance or repair a designer respirator is worn. Thorough containment and disposal procedures, as well as appropriate warning signage requirements, are detailed. Even when new replacement components may not contain asbestos, supervisors and mechanics are to ensure safe working conditions by assuming asbestos is present.(3) In 1991, Justice J.D. Enfield completed a study into asbestos within Defence, under the direction of the then Minister for Defence, Science and Personnel, the Hon Gordon Bilney MP. Justice Enfield's findings were detailed in March 1991 in the Report of Independent Review of Asbestos in Defence.(4) (a) and (b) The ADF is aware of suppliers that are able to provide brake linings that are not made of asbestos. The ADF has a policy that non-asbestos brake linings are used where possible. Suppliers of non-asbestos brake linings used by the ADF include: Diesel Division General Motors (Canada), Krauss Maffai Wagman (West Germany), United Defence Systems (USA), IVECO (International Trucks Aust), Mack Trucks (Aust), Daimler Chrysler (Aub), Rover Australia, Case Corp Pty Ltd, Ford Pty Ltd, Kubota Aust, NS Komatsu, P&H Cranes Pty Ltd, Hitachi Corp, Jaques, Ingersoll Rand, tutts Tat Hong, Dynapac Pty Ltd, and Caterpillar. 12783(Question No. 1015)101512783Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 21 October 1999:(1) How many persons qualified as interpreters through TAFE and university conducted para professional or professional courses in 1997 and 1998.(2) Are similar numbers expected to qualify if the National Accreditation Authority for Translators and Interpreters (NAATI) is successful with its policy to abolish such courses.(3) What alternative options will be available to ensure professional training.(4) How many public meetings were conducted during NAATI's six month consultation period.(5) Is it a fact that many who sought involvement were not given responses by NAATI; if so, why.(6) What measures were undertaken to ensure independent oversight of NAATI's transparency in this matter.(7) Were public hearings conducted; if so, how many (a) hearings occurred, (b) witnesses were interviewed and (c) submissions were received.12783Ruddock, Philip, MPMr Ruddock0J4BerowraLPImmigration and Multicultural Affairs; Minister Assisting the Prime Minister for Reconciliation10—The answer to the honourable member's question is as follows:NAATI is a company jointly owned by the Commonwealth and State and Territory Governments (except the Northern Territory) and governed by a Board of Directors. Therefore it is not subject to ministerial direction on its daily affairs. NAATI has provided answers to questions 1 + 5 and 7. I have responded to question 6.(1) The following table summarises accreditations resulting from (a) graduations from the courses NAATI approves at a total of six institutions (4 TAFE Colleges and 2 Universities), (b) tests conducted by NAATI and (c) accreditations based on overseas qualifications.AccreditationsBy CourseBy NAATI TestBy overseas assessmentTotalPara-professional1997/981931973901998/99171201372First Professional Level1997/98156322485161998/9911441525554Advanced Professional Level1997/985121271998/99511218(2) NAATI is considering whether to continue approval of courses at the six institutions and has yet to make a decision. It does not have the power to create or to abolish such courses and therefore has no policy in this regard. There is no requirement for institutions offering translation and interpreting courses to have NAATI approval. Graduates of institutions with NAATI approval are recommended to NAATI for accreditation on the basis of their result in a final examination set, delivered and assessed by the training institution. Graduates of institutions without NAATI approval seek accreditation through the national NAATI examination. If the NAATI approval of courses were to be discontinued, graduates could still gain accreditation through the NAATI testing system. (3) As now, student demand will dictate the number of courses provided. The continuation of NAATI external examination for accreditation purposes will ensure a standardised benchmark for both employers and the profession. Whether or not it continues to approve some courses, NAATI has proposed that a minimum period of training becomes a pre-requisite for all candidates seeking accreditation through NAATI's national examination system. This should improve the standards of accredited interpreters and translators by providing training programs that are designed to meet the particular needs of students.(4) None. The consultation process so far comprises: February 1999 NAATI provided a copy of the proposal to its Members (representing State/Territory and Commonwealth Governments).March 1999 The (NAATI) Future Directions paper, including the issue of course approval, released to AUSIT and the NAATI Regional Advisory Committees which comprise representatives of service providers, educational institutions, practitioners and the professional association. Responses sought from all parties.May 1999 NAATI Board considered responses received, noting a diversity in views concerning the proposal on the courses approval issue. Board decided to seek further consultation.August 1999 The Board considered further submissions by the University of Western Sydney and the Victorian Regional Advisory Committee and decided to provide one further opportunity for consultation. Specific invitations for submissions were issued to 34 training institutions, 10 service providers and, again, the 8 Regional Advisory Committees.November 1999 NAATI has received a further 37 responses which are to be analysed and considered by the Board of Directors.(5) Yes. NAATI did not wish to respond to individual submissions but rather to respond with a report on the collective view when all submissions had been received. NAATI made some informal responses to early submissions by telephone and during its normal consultations that form part of every Board meeting. NAATI will respond to those who contributed when all submissions have been received.(6) As a company NAATI reports to its Members (representing State/Territory (except the Northern Territory) and the Commonwealth government) at general and extra-ordinary meetings of the company. Implementation of NAATI's initiatives and work plans are subject to the provision of financial contributions by the Commonwealth and State governments, decided at the annual Ministerial Council for Immigration and Multicultural Affairs. The Council has not yet been asked to consider any specific proposal to change NAATI's course approval regime, although I am aware that options are being canvassed.(7) Refer to (4) above. 12784(Question No. 1017)101712784Horne, Bob, MPMr HorneUU5PatersonALP00 asked the Minister for Defence, upon notice, on 21 October 1999:(1) Is he able to provide information on the role of Defence Properties in (a) the sale of a fully refurbished three bedroom cottage at Stockton Rifle Range for less than $6000 and (b) the supervision and protection of three buildings at Stockton Rifle Range which have been systematically vandalised and burnt to the ground by arsonists.(2) Will the buildings referred to in part (1)(b) be replaced; if so, when.12784Moore, John, MPMr MooreEI4RyanLPDefence10—The answer to the honourable member's question is as follows:(1) (a) The Defence Estate Organisation, through a local real estate agent, has been endeavouring to sell the Stockton Rifle Range cottage for $1,000, which was its reserve price when it was auctioned on 29 May 1999. In the event that a sale is not achieved, Defence will consider removal or demolition of the cottage. The cottage had not been refurbished.(b) Following the closure of the Stockton Rifle Range and the withdrawal of the Defence employed range warden from the range, the Defence Estate Organisation engaged a commercial security firm to undertake periodic security patrols of the property. However, because of its location and the nature of the property, it has been prone to vandalism.(2) No, because Defence is to dispose of the property. Due to the vandalism problem, the Defence Estate Organisation intends to demolish the five remaining Defence-owned timber buildings, all of which have been assessed as being of low or no heritage significance.12784(Question No. 1023)102312784Ferguson, Laurie, MPMr Laurie Ferguson8T4ReidALP00 asked the Minister for Defence, upon notice, on 21 October 1999:(1) Has the Navy lodged a submission with the WA Government seeking to run a work camp for prisoners in that State; if so, (a) on what date was it lodged, (b) what is the proposed location of the work camp, (c) what tasks does it propose that the prisoners perform, (d) are these tasks additional to the Navy's normal operations or do they replace the functions of existing personnel, (e) how many prisoners does it request and (f) how may civilian or uniformed Defence personnel will be involved in managing the proposed work camp. (2) Has the State Government made a decision about the proposal; if so, what are the details.12785Moore, John, MPMr MooreEI4RyanLPDefence10—The answer to the honourable member's question is as follows:(1) No. The Navy was in fact approached by the Western Australia (WA) Minister for Justice proposing that a work camp be established at Garden Island as part of the WA Ministry of Justice Adult Program Work Camp Project. This proposal was received on 12 May 1999 and is currently being considered.(2) As this matter has been initiated by the State Government of Western Australia, any issues relating to it need to be addressed to the WA Minister for Justice.