2000-04-133915REPS1588902000-04-13—————Mr SPEAKER (Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Bills15889R104515889Bill presented by Mr Hockey, and read a first time.1588909:31:0015889Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—I move:That the bill be now read a second time.I rise today to introduce a bill that further improves Australia's world-class financial regulatory system. This bill builds on the financial sector reform legislation already implemented by this government in response to the recommendations of the 1997 financial system inquiry, chaired by Mr Stan Wallis. That package of legislation instituted wide-ranging measures aimed at improving the efficiency, competitiveness and stability of Australia's financial system.These reforms have not gone unrewarded. Indeed, one of the underlying factors in Australia's strong performance throughout the Asian crisis was the capacity of our financial markets to maintain stability in performing their basic functions. The performance of Australia's markets during this time has been recognised internationally. The United States Federal Reserve chairman, Dr Alan Greenspan, told the International Monetary Fund and World Bank seminar in Washington late last year that Australia's economy had been largely unaffected by the recent Asian financial turmoil `arguably because Australia already had well-developed capital markets as well as a sturdy banking system'.The Financial Sector Legislation Amendment Bill is modest in the context of the overall financial sector reform package undertaken by this government. Nevertheless, it is an important step in the government's drive to develop and maintain a world-class regulatory framework for the Australian financial sector: a framework which assists the financial sector to be efficient, responsive, competitive and flexible but which retains the principles of stability, prudence, integrity and fairness. The focus of this bill is to:help ensure the safety of superannuation savings by strengthening the enforcement provisions of the Superannuation Industry (Supervision) Act 1993;enhance the operation of the Banking Act 1959; andsimplify and modernise service provisions in the Reserve Bank Act 1959.These measures will update and enhance Australia's financial sector legislation. In particular, they will provide a more effective enforcement framework for the superannuation industry. This is a significant issue, given the strong growth in superannuation savings and their increasing importance as a source of income for individuals in their retirement. I will now turn to the bill in more detail.Amendment of the Superannuation Industry (Supervision) Act 1993The bill enhances the enforcement provisions in the Superannuation Industry (Supervision) Act 1993. The amendments include: giving powers to the regulators to disqualify persons from managing superannuation savings in certain circumstances; allowing the regulators to accept enforceable undertakings similar to the powers provided under the Trade Practices Act 1974 and the Corporations Law; clarifying the time limit within which prosecutions may be commenced; and changes to various offence provisions. Certain amendments also facilitate the application of the Commonwealth's Criminal Code to offences in the Superannuation Industry (Supervision) Act 1993.Amendment of the Banking Act 1959The bill provides for a set of miscellaneous amendments to the Banking Act 1959. With the exception of the unclaimed moneys provisions, these amendments are designed to enhance the prudential regulation of auth-orised deposit-taking institutions, ADIs.In particular, this bill grants the Treasurer, or delegate, power to attach conditions to his or her consent for an ADI to reconstruct or demutualise. This will ensure that any undertakings made by an applicant are enforceable and may facilitate a greater number of applications receiving consent. This bill also provides the Australian Prudential Regulation Authority, APRA, and the Treasurer, or delegate, power to seek an injunction if certain sections of the Banking Act are breached. It also ensures that references to `information' throughout that act have consistent meanings. Furthermore, this bill widens the circumstances where APRA can issue directions if it considers that there is a prudential risk, and clarifies that APRA has the power to appoint itself to investigate the affairs of an ADI.In relation to unclaimed moneys, this bill facilitates the rationalisation and consolidation of the Commonwealth's unclaimed moneys provisions. Specifically, the bill allows the Treasurer to delegate his or her functions under the Banking Act to other Treasury portfolio agencies in addition to the Department of the Treasury.Amendment of the Reserve Bank Act 1959The bill amends the Reserve Bank Act 1959 to simplify and modernise the Reserve Bank service. Service provisions cover the Reserve Bank's ability to engage staff and formulate their conditions of employment. The replacement provisions are more appropriate to modern day management and are consistent with reforms in the Commonwealth public sector.The bill also makes minor miscellaneous amendments to other pieces of financial sector legislation. Further, it clarifies the extent of APRA's powers to provide actuarial services over the period the Australian Government Actuary was part of APRA.This bill not only builds on the financial sector reforms already undertaken by this government but emphasises our commitment to ongoing reform which will ensure that Australia remains at the forefront of world's best practice in financial market regulation.The financial sector is a key driver in the economy. The measures contained in this bill will further enhance this sector's ability to contribute to our record economic growth; they help consolidate Australia's position at the leading edge of financial sector reform; and, finally, they contribute to our continued efforts to secure Australia's place as a centre for global financial services.I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Mr Stephen Smith) adjourned.Bills15890R104415890Bill presented by Mr Williams, and read a first time.1589009:39:0015890Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I move:That the bill be now read a second time.The Family Law Legislation Amendment (Superannuation) Bill 2000 is another landmark in the Howard government's ongoing reform of family law. Under this legislation, couples will for the first time be able to divide their superannuation interests on marriage breakdown in the same way as they can divide their other assets.In recent years, we have seen superannuation become an increasingly valuable component of the asset wealth of most Australian families. Ninety-one per cent of employees held a superannuation account in 1999. As a nation, we hold over 20 million superannuation accounts in more than 200,000 funds. The aggregate value of superannuation assets is estimated at $439 billion, around double the level of five years ago. Moreover, this is projected to reach around $700 billion by June 2005 and $1 trillion—that is, $1,000 billion—by June 2010.Despite this wealth of funds, many couples whose marriages break down do not consider superannuation among their assets when they arrange their property settlement. In a recent study entitled Superannuation and Divorce in Australia, the Australian Institute of Family Studies noted the increasing significance of superannuation among family assets. The institute found that superannuation may approach, or even exceed, the value of the family home for many couples who have limited assets. The average superannuation balance per person is now about $54,000, with wide variations depending on years of membership and the level of contributions. By June 2010 the average balance is projected to increase to $80,000 and by June 2020 to around $135,000. However, the Institute of Family Studies found that, despite the increasing value and importance of superannuation, separating couples did not consider splitting it in more than half of all the cases where property was divided. Even if couples negotiating a family law settlement do recognise that superannuation is an important asset, there is currently no mechanism for superannuation held in one person's name to be divided or transferred to the other. Nor can the Family Court order a third party, such as a superannuation fund trustee, to provide benefits to a former spouse at some future time, even though this might provide the fairest outcome for both spouses.The Family Court can, and does, take superannuation interests into account and divide other property accordingly. However, this is not an ideal solution because it often means that current property—usually the family home—has to be traded away in exchange for superannuation that may not be able to be accessed for many years. In many cases, this may leave one person with a house but no retirement income, and the other person with no accommodation but significant retirement income that may not be accessible for many years.This legislation is designed to address the inequity and inflexibility of this situation.The bill will amend the Family Law Act 1975 to allow superannuation to be divided on marriage breakdown. This division will be able to be achieved in one of two ways: either by agreement of the separating couple or by order of the court.The bill will permit separating couples to make binding agreements about how to divide their superannuation interest or interests. This gives people the flexibility to settle their own financial affairs wherever possible, and therefore to avoid costly and protracted litigation.This is consistent with the approach set out in schedule 2 of the Family Law Amendment Bill 1999, which is currently before the parliament. That bill will allow couples to make binding financial agreements either before or during marriage, or after marriage breakdown, about how any or all of their property is to be divided on marriage breakdown.The superannuation bill will provide that couples may make a superannuation agreement, in the context of these broader financial agreements, to specify how their superannuation will be divided on marriage breakdown.The government recognises that, in some circumstances, couples will want to defer an agreement about how their superannuation interests are to be divided. This might be because the person who holds the superannuation interest is nearing retirement, or another condition of release, at which time the actual value of the interest will become known.The bill therefore provides for couples to make an agreement to `flag' their superannuation interest. This agreement would prevent the superannuation trustee from dealing with the flagged superannuation interest until the flag has been lifted either by further agreement or by court order.When a superannuation agreement is in force, the trustee of the relevant fund will be required by law to give effect to the agreement.The bill contains special provisions to ensure that people do not enter into contrived arrangements. Significant penalties will apply where these are detected. Where a couple has separated but not yet divorced, at least one of them will have to sign a document called a breakdown declaration. This declaration will state that the couple is still married but that they have separated at the time of the making of the declaration. If the value of the superannuation interest is greater than the eligible termination payment threshold determined under the Income Tax Assessment Act 1936, then an additional declaration will be required.For people to be able to make agreements about dividing their superannuation, they will need information about the fair value of any superannuation interests to be taken into account upon marriage breakdown. For this reason, the bill provides that a superannuation trustee must provide information to the spouse of a member so that both parties are aware of the details of superannuation interests that are involved. Valuation is a particularly important issue for defined benefit schemes where there is a vested benefit and an unvested value. The unvested value is generally not accessible until the fund member satisfies certain requirements specified by the fund. The value of an interest in such a plan is typically based upon years of service with an employer and salary levels prior to retirement, as well as contributions and investment earnings. As the final benefit is dependent on future events, the full value of the retirement benefit cannot be predicted with certainty at the time of marriage breakdown. The value of an accumulation plan is generally more easily ascertained. For this reason, the bill will provide for different methods of valuing a superannuation interest, depending on the type of interest. The details of how the value is to be calculated, including actuarial information, will be set out in the regulations. This will ensure that people are aware of the value of the interest they are dealing with in the agreement, and will also ensure that there can be no dispute about how the value is to be calculated. Obviously it is preferable that people are able to make their own arrangements for dealing with superannuation interests. However, if they are unable to agree, the court will have the jurisdiction and power to make an order to divide superannuation interests. Such orders will usually be made as part of a broader court order dealing with all of the property of the parties that has not been dealt with in a financial agreement. These orders will bind the relevant third party superannuation trustee. As with superannuation agreements, the court will be able to make an order either to split a superannuation interest or to `flag' an interest and deal with it later. The amendments will apply to all marriages, including those that were dissolved before the amendments commenced. The amendments will not apply, however, where a property settlement has been finally concluded, whether by formal agreement or by court order. In addition to the amendments of the Family Law Act, the bill makes a number of consequential amendments of other legislation. Amendments to the Superannuation Industry (Supervision) Regulations will allow the creation of a new interest for a non-contributing spouse who is to receive payments under an agreement or order to split a superannuation interest. That interest will be carved out of the withdrawal benefit of the contributing spouse's superannuation interest. The bill provides for preservation of superannuation money by making the superannuation payment subject to regulations that provide for payment out of a superannuation fund or retirement savings account. Membership of the fund is intended to provide the new member (the non-contributing spouse) with similar membership rights to those enjoyed by other members in the fund. These rights would include the right to receive the annual report and other information and the right to be paid when a condition of release is met by the non-contributing spouse. The amendments of the Superannuation Industry (Supervision) Act 1993 contained in the bill are designed to facilitate these amendments. The Superannuation (Resolution of Complaints) Act 1993 provides a low cost dispute resolution mechanism to deal with complaints from members and beneficiaries of superannuation funds about decisions of trustees that are not settled through a fund's internal complaints mechanism. The amendments to the complaints act will permit non-contributing spouses, for whom a new interest in the fund is created, to make complaints to the Superannuation Complaints Tribunal about their treatment by the superannuation trustee in appropriate circumstances.The amendments of the Family Law Act and the consequential amendments of other legislation will commence on the first anniversary of the day on which the bill receives the royal assent. The reason for the delay in commencement is to allow the superannuation industry and relevant government agencies to make the necessary adjustments to their information and computer systems to implement the division of superannuation on marriage breakdown. I commend the bill to the House and I present the explanatory memorandum.Debate (on motion by Mr Stephen Smith) adjourned.Bills15893R96015893Debate resumed from 9 December 1999, on motion by Mr Slipper:That the bill be now read a second time.09:49:0015893Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Medicare Levy Amendment (CPI Indexation) Bill 1999 proposes to amend the Medicare levy low income exemption thresholds for individuals, married couples and sole parents in line with CPI movements. The shading-in thresholds, which ensure that taxpayers earning just over the low income threshold will not face the full levy, will also be adjusted in line with CPI movements. This has been done by the Howard government in each year it has been in government except for 1998-99. Indexation was suspended in 1998-99, with the support of Labor, because the relevant CPI figure was negative. The thresholds for individuals will increase from $13,389 to $13,550 for the 1999-2000 year. Individuals whose income is between $13,350 and $14,648 will be subject to the shading-in provisions yielding a Medicare levy of 20 per cent of their income over $13,350. The family income exemption threshold is increased from $22,594 to $22,865 for couples with no children, increasing by $2,100 for each dependent child in the family. Sole parents enjoy the same exemption provisions. The low income threshold is also adjusted in the Medicare levy surcharge legislation, which imposes a tax penalty on taxpayers who do not have private health insurance. The bill is estimated to cost $1 million in revenue in 1999-2000, $20 million in 2000-01 and $10 million in 2001-02. The bill continues Labor's practice of annually indexing Medicare levy thresholds and should be supported and will be supported by Labor in this House and in the Senate. I just note briefly in passing that it provides an opportunity for me to reiterate Labor's ongoing support for Medicare, which we pioneered back in 1983 when the Hawke government came to office. Something like two million Australians had no health insurance of any kind, and therefore for them illness was not only a personal problem of some magnitude but potentially a financial disaster. So through Medicare we have been able to produce one of the best health systems in the world. Those of us who have the opportunity to travel to other countries from time to time or have relatives living in other countries are acutely aware that our health system is much better than those of other places. In many other places you really cannot afford to become ill in any way.I add that the government have been dragged kicking and screaming to support Medicare. They vehemently opposed Medicare in earlier years, and it was only the ongoing impact of election defeat after defeat which caused them to revise their view on Medicare. Even now they seek to undermine Medicare at every available opportunity. They have put billions of dollars of taxpayers' dollars into propping up private health insurance, which always intrigues me because, every other time you hear government members talking about the world in general, they are deeply hostile to subsidies to the private sector and they chant the mantra of the market—`Leave everything to the market.' On the matter of health insurance they take a different view.Labor believes that health care should be on the basis of need rather than on the basis of people's capacity to pay or their wealth, and we will always fight in this place for that proposition. In my own state of Victoria we have seen disastrous consequences from the former Kennett government's privatisation of ambulance contracts and its various privatisation efforts in relation to hospitals. We have seen those disastrous consequences, which are now starting to be addressed by the Bracks government. We are certainly conscious of the importance of ensuring that health care is delivered on the basis of need rather than a person's ability to pay. With those remarks I indicate again that Labor supports this legislation and wishes it a speedy passage through the parliament. 09:54:0015894Washer, Dr Mal, MPDr WASHER84FMooreLP10—The Medicare Levy Amendment (CPI Indexation) Bill 1999 seeks to amend the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999. The purpose of these amendments is to, firstly, increase the Medicare levy low income threshold for individuals, married couples and sole parents. Its second purpose is to raise the Medicare levy surcharge threshold in line with consumer price index movements. The low income threshold is designed to exempt those people who have very low earnings from paying the 1.5 per cent Medicare levy. It is designed for those who are perhaps studying and have a part-time job, or for workers who may have worked, for one reason or another, for only part of the year. The exemption cuts in at $13,389 but will be increased in line with the CPI by an extra $161 a year. The bill also increases the family income threshold by $271 to $22,865, with an additional $2,100 for each dependent child in that family.The debate on policies affecting our health system is never far from the surface in the Australian community. Not a week goes past in my electorate office that I do not hear a complaint about the cost of private health insurance or the length of time to wait for an operation. It is rare, however, that I receive a complaint about the quality of service my constituents receive from the health industry—a point which I think reflects a basic truth that, on a global scale, our health system enjoys an enviable reputation. Having said that, I point out that the state of indigenous health in this country is still disturbing, and I know the Minister for Health and Aged Care shares my concern and has taken some very positive steps in this area.I believe that as a government we have a responsibility to engage the public in an informed debate about the way we run our health system, through better education and communication. The Medicare levy is the subject of much discussion in the community, but I am always surprised at how little people know of how that money is spent or what role it plays in the much larger picture of universal health care. An example of this came up just recently in a letter to the editor in my state's only daily newspaper, the West Australian. The author was arguing that, by world standards, Australia does not spend enough on health care. He cited figures that he felt supported this argument: that Germany spends 10.7 per cent of its GDP on health, Britain 6.8 per cent of GDP and France 9.6 per cent. He then went on to say that in Australia, as the Medicare levy is only 1.5 per cent for the taxpayer, we therefore must spend 1.5 per cent of GDP on health. The figure is, of course, around eight per cent of GDP, which is pretty much in the middle ground in global standards. In terms of the Medicare levy, in the 1998-99 year it represented just 18 per cent of the total health budget. That may be a natural conclusion to draw by someone not fully versed on health funding issues. If our constituents are ill informed, then I think that it is something we as parliamentarians have to take on the chin. We owe it to our constituents to discuss the issue of health funding without the theatrics and political point scoring that distorts the truth and confuses the basic issues. Only then can we have a worthwhile debate.This was never more evident than during the nursing home funding debate a few years ago, which I witnessed as a GP and not as a parliamentarian. The Howard government's fundamental aim was to bring nursing homes up to the same standard as hostels. They did this by giving them the same funding mechanisms as hostels, based on the principle that those who could afford to contribute to their own care and accommodation should do so. The hysteria that accompanied this debate was manufactured, unnecessary and against the interests of our ageing population, who deserved a better system than they had had before these very crucial reforms.This brings me to a fundamental message that we have to explain to the Australian taxpayer: that the unrealistic expectation many people have regarding full and universal public medical coverage whilst maintaining low and globally competitive taxation rates is not sustainable. It is a pertinent point that was recently made by Phil Ruthven in the Business Review Weekly, when he said: It is still extraordinary that modern societies still believe that health should be `free' as an inalienable right of humanity.I do not pretend that it will be easy to change what is an ingrained mindset for many people. However, in order to maintain the integrity of our health system and ensure that there will always be a safety net for those who are disadvantaged, we have to start dealing with this. That is why I support any measure to encourage those who can afford it to contribute more equitably to their health care through private health insurance.Another aspect of the bill deals with aspects of the Medicare levy surcharge that was introduced for high income earners without private health insurance. Through the bill the thresholds for the Medicare levy surcharge will also be increased to $13,550 to be consistent with the changes to the low income threshold. The Medicare levy surcharge, combined with the 30 per cent rebate has had a noticeable impact on the membership levels of health funds. A positive spin-off to this was the announcement last month that the March premium increases were set to be the smallest in a decade. Better still, eight of the 44 funds in Australia, which cover 37 per cent of the health fund membership base, will not increase premiums at all. Members of health funds will reap many long-term benefits as their funds secure increases in membership. Due to Lifetime Health Cover, younger members will join the funds and this will remedy the current situation where the majority of members are older and therefore make more claims than the younger, healthier members will.The last hurdle to overcome with the private funds is the elimination of gap payments—which, alongside the cost of premiums, has been the biggest bone of contention with potential health fund members. This week has seen the introduction of a bill into the House that deals with this issue by legislating to allow gap cover schemes or known gap schemes without the need for contracts or purchaser-provider agreements between the doctor and the funds. It is clear that, although we still have many challenges to face in maintaining our world-class health system, this legislation as well as the bill I am speaking on today will provide the necessary tonic to ensure its future will be considerably brighter. I commend the bill to the House.10:01:0015895Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—I am very pleased to be here today to support the Medicare Levy Amendment (CPI Indexation) Bill 1999 but I want to raise two concerns about aspects of Medicare indexation arrangements that are seriously weakening the Australian health care system. The main issue is the failure of the government to properly index payments to the states under the Medicare agreements to make sure that public hospitals can maintain the service standards that Australians expect. I will come to this issue in a minute, but first I want to deal with another problem with the Medicare levy surcharge.The Minister has failed to deliver on the commitment which he gave to the parliament to introduce regulations to make sure that people taking out private health insurance policies with large excess payment requirements are not eligible for exemption from the Medicare levy surcharge. Most new members joining health insurance funds have been taking out policies which require high up-front payments or exclude important categories of high cost treatment. These policies are really just a way for people to avoid payment of the Medicare levy surcharge and do not give any incentive not to use public hospitals. In other words, the apparent rise in private health insurance numbers is telling a different story from that which the government claims.People are taking these products up but are not moving out of the public hospital system. The figures in fact are staggering. Of the 158,555 new policies taken out during the last year for which we have figures, December 1998 to December 1999, no fewer than 129,825 were for products which had front-end deductibles and exclusionary features. In other words, 82 per cent of the new members of private health insurance funds were buying heavily discounted policies. There is no evidence that the increase in the number of people with private health insurance has reduced the number of people in public hospitals. In fact, the Department of Health and Aged Care have been unable to come up with a single piece of evidence to show a downturn in demand on public hospitals in the last year as a result of the 30 per cent rebate. By contrast, Victoria has given evidence to the Senate committee on public hospital funding that shows that demand for public hospitals in that state is growing by more than three per cent per annum. Utilisation of private hospitals is not following the same pattern. If the minister were serious about addressing this problem, he would do what he had already given a commitment to do last year and act to close the loophole for policies which are designed mostly just to avoid the Medicare levy surcharge. The minister told the Senate that he would introduce regulations to remove the exemption from the Medicare levy surcharge for insurance policies with high front-end deductibles or exclusions. Unfortunately, since he made this promise, there has been no action whatsoever, and I would call on him to explain when he will deliver on this promise that was made in the Senate.I want to turn to the second issue, which is of even more significance: the minister's failure to properly index the Medicare payments to Australia's public hospitals. Around the country we are all very well aware that the public hospital system has been stretched to the limit by the policies of this government and coalition state governments. We have daily stories about the crises in our hospitals and the problems faced by hospital managements all around the country in trying to deal with inadequate funding. There are growing signs that the government is about to make this worse. Recent statements by the Prime Minister have been a clear indication that the government has abandoned its commitment to maintain its grants in full to the states for health and education, following the introduction of the GST. The Australian health care agreements provide for grants to the states for public hospitals. These are agreements that were entered into in 1998 and run for five years. The government knew, one would assume, what they were signing when they entered into the agreement in 1998, and they continue to claim that they are delivering on this agreement. About $5.9 billion will be paid out under these agreements this year, accounting for about half the cost of running the state public health system.The minister is always claiming—in fact, I think he did it again yesterday—how wonderful these agreements are and boasting that they provide a total of $4.5 billion extra to the states spread over five years. This sounds like a lot of money, but when you look more closely the minister's claim is very misleading. The amount of funding required in the year 2003 to run our public hospitals to service a population of over 20 million is far more than was required to service the population of 17.5 million in 1993. By 2003 we will have had 10 years of inflation, vast changes in medical technology and the introduction of many new drugs. The age profile of the community continues to change significantly, placing continuing extra burdens on our public hospitals which have, of course, also aged as successive governments have failed to maintain adequate capital investment to renew our hospital infrastructure. The minister's boast is unfortunately a cruel deception. The reality is that the negotiations over the Australian health care agreements left the states several hundred million dollars short of what was considered to be necessary to continue to deliver services to a growing population.But whatever debates we might have here about the starting point, there is a new threat now to the capability of the states to continue to service their populations with proper health care. The Commonwealth has very recently reneged on its commitment to properly index the agreements to meet the rising costs of health services. Last year the Commonwealth adopted a hardline position and refused to grant the states any more than a 0.5 per cent default increase. This compares with the ordinary consumer price index of 1.75 per cent for the year to last March, which itself was less than the actual increase in costs experienced by hospitals for wages and materials. The inflation in medical costs is well documented as exceeding the ordinary CP1 for a range of reasons, and the Bureau of Statistics in fact prepared specialist indices to measure cost movements in the health sector. The states have been outraged by the Commonwealth's attitude, which clearly has been driven by a desire to slam the brakes on funding for public hospitals by the Commonwealth. Labor and coalition, state and territory governments alike, have been disgusted by the minister's change of heart because under the agreements signed by the minister there was a provision for the appointment of an independent expert arbiter to determine the actual rate of indexation in just such a situation. This clause was put in back when the agreements were signed to prevent any deadlock by binding both parties—that is, the Commonwealth and the states—to make sure that we did not have the situation that we now face. The Commonwealth has abused the process and has refused to accept the recommendation of the independent arbiter.The Minister for Health and Aged Care agreed to enter this process. He actually nominated Mr Ian Castles, the Vice-President of the Academy of Social Sciences in Australia and the former head of the Australian Bureau of Statistics—an expert person and well suited to the role of arbiter. The minister extended the terms of reference from just 1999-2000 to consider how the agreement should be indexed in the future. As we will see, this is very significant. The arbiter duly called for submissions and reported on the due date of 31 October last year. He analysed the problem in great technical detail and considered all the arguments presented to him. He concluded that the Commonwealth were wrong in the views they expressed and he made a clear recommendation that the best and most appropriate form of indexation was to increase the payments under the Australian health care agreements by the consumer price index—that is, 1.75 per cent—plus 0.5 per cent. In the case of the 1999-2000 payments, this requires an average national indexation of 2.25 per cent based on the previous March quarter CP1 figures.But the Commonwealth refused to accept the umpire's decision. Two days before Christmas, when the minister knew that he would get minimum scrutiny, he rejected the arbiter's report and announced he would unilaterally impose an outcome based on an average one per cent rise for the states. This left the states about $100 million a year worse off compared to the arbiter's recommendation of a 2.25 per cent increase. So in one stroke the Howard government sliced the equivalent of a major teaching hospital off their contribution to our public hospital system. At exactly the same time we discover that this government has happily allowed the private health insurance rebate to blow out by an incredible $500 million a year, which is money lost to the health budget. The government has failed completely to show that there has been any reduction in public waiting lists as a result of this private health insurance rebate. So on the one hand it is pouring money into subsidising private health insurance, with little effect, and on the other the states are being cut back time and again.This bill gives effect to this year's indexation of the Medicare levy arrangements. As I have outlined, unfortunately another year has gone by and the government has let two serious problems continue—the indexation of payments to all the states and also the problems with the Medicare levy surcharge. The funds to our public hospitals have not been properly indexed, making it harder for the states to deliver services and setting back the prospects for improvement of the quality of our public hospitals. The government nevertheless has at the same time found an extra $2 billion for private health insurance subsidies—a massive $500 million more than originally budgeted—without any evidence whatsoever of a reduction in pressure on our public hospitals. They managed to find $500 million extra for the private health insurance rebate, but cannot find an extra $100 million to make sure that our public hospitals are properly funded. We certainly need to make sure that Medicare is properly protected and strengthened for the future.I am pleased to say today here in the House that the opposition is 100 per cent committed to this task. Unlike the situation under the present government, which is refusing to take the actions that are needed to properly fund our public hospitals through proper indexation of the grants to the states, we will see a very different result if we have a Labor government that will make sure that public hospitals are properly funded so that they can do the job that Australians expect. 10:14:0015898Lawrence, Dr Carmen, MPDr LAWRENCEXS4FremantleALP00—The Medicare Levy Amendment (CPI Indexation) Bill 1999, as we have heard, actually provides for the amendment of the Medicare levy threshold in line with CPI movements, and it continues Labor's practice of annually indexing Medicare levy thresholds. It is in fact a very rare example of government action which actually supports, rather than undermines, the Medicare contract between the government and the Australian people. The tragedy is that in so many other ways the government has been shredding that contract and seeking to destroy community confidence in Medicare. Promise after promise has been broken. In June 1995 John Howard, the now Prime Minister, said:I would rather promise half of what people might: want and honour 100 per cent of it than commit myself to everything and deliver only half of it.Of course, he has broken that promise, and many others like it, his 1998 election night commitment to reconciliation being the most recent example. During the election debate in 1996 Mr Howard solemnly intoned:... every single dollar of the promises that I made to the Australian people are going to be kept ...In reality, the Prime Minister has short-changed the Australian people to the tune of at least $17 billion, and probably more, worth of broken promises over four years, not to mention the never, ever promise on the GST. One of the clearest promises this government made—and it was made by the coalition before the 1996 and the 1998 elections—was that they would not change Medicare: on their oath, they would not change Medicare. They were insistent that they would retain it in the form developed and implemented by Labor. They call themselves friends of Medicare. With friends like that, who needs enemies? They said they would not revert to the Fightback formula, with which we are all familiar. And in the coalition health policy launch before the last election we got the assurance:We will maintain Medicare in its entirety ...And further:None of the health policy initiatives will entail cuts to funding for public hospitals ...As we have just heard, the opposite is the case. These were very important promises to the Australian people, since it is almost certain that one of the main reasons the conservatives lost in 1993 was their commitment to wind back Medicare and the public hospital sector. They got the message that people did not like it, so they changed their tune, changed their official position at least. After years of attacking Medicare—indeed, decades—their official public stance is now, as we have heard, that they support and value Medicare. I am sorry I do not believe it. They are all innocence when accused of watering down universal access and public provision, which is what they have been doing since their election in 1996. Indeed, the current minister regurgitates more than his usual volume of bile when this suggestion is made, and he usually directs it at our shadow ministerThe government went to the last election and the one before that assuring the public that they would maintain Medicare and improve access to appropriate health care, including reducing waiting times. They have failed on all counts. The reality is very different from these promises. Once in government the Liberals' longstanding antipathy to Medicare was quickly in evidence, and still is. It has been consolidated in the series of moves which undermine Medicare's integrity. Their actions belie their pious posturing on this point, and there is a strong strand of hostility evident in their actions. That is ultimately how they have to be judged, not by their words. We have seen since 1996 a combination of policy neglect and some pretty savage cuts to the public system. This follows several years of similar action by conservative state governments. It has compounded the problem.In 1996, for instance, in the first budget $800 million was cut from public hospitals alone by a combination of cuts to financial assistance grants to the states and by direct cuts which were justified on very spurious grounds of `cost shifting'. We are all probably well aware that the Commonwealth Dental Program was completely shelved, $400 million abolished. Pharmaceutical co-payments for pensioners and families reduced government funding by $732 million in that budget alone, and transferred the costs directly to the users, again undermining the Medicare contract. A further $1 billion was saved by freezing the GP rebate and restricting provider numbers, again undermining Medicare. This was, right at the outset, a full-frontal attack on the cornerstones of the Medicare compact with the Australian people, especially since these funds, insultingly, went to prop up the private health funds. Thirty per cent of people had private health insurance; 70 per cent were paying for that. As Premier Kennett remarked in his typically pungent fashion, this was `money down the drain'. This is one case where I agree with him, and there are not many. The use of money, needed for public hospitals, to pay for the private health insurance rebates was also a very clear breach of another promise in their 1996 policy document, which stated: ... the private health insurance incentives will not be funded from the public hospital system or the health grants to the states ...Perhaps the `not' was a typographical error. It is clear that they always intended this switch, as they foreshadowed in Fightback. We have seen a sustained strategy to undermine our faith as a community in the capacity of Medicare to provide a reliable, quality health care system for Australia. We are seeing longer and longer waiting lists, industrial disruption, increased costs and greater anxiety about standards of care. And they all take their toll. Our hospitals and their very dedicated staff are now working under what I think is intolerable pressure, and it is starting to show. And if this was not a sufficient indication of the government's desire to corrode the key elements of Medicare, in 1997 a further $673 million was removed from the budget. A string of Medicare offices were closed—mainly, I might say, in Labor constituencies. That restricted access to full payment services, again undermining Medicare.The negative effects of this and other elements of the conservative strategy are now very substantial, and it is fair to say that hospitals in our public system are on the edge. Severely ill patients are being left for hours on trolleys in hospital corridors. Every time people hear a story like that they think, `Well, I must go off to the private system.' It is pushing them away. Privatised services in a lot of states are actually cutting access to critical services, like palliative care and psychiatric services. Staff are severely overworked and as a result turnover is extremely high. In some cases there are shortages of nurses. In my own state there have been glossy ads to recruit school leavers, but there are no effective remedies in sight and the problem is not going away. It is because the conditions they work under are intolerable. In my own state too the children's hospital, Princess Margaret, has been forced to rely on public donations to upgrade its intensive care unit. This is not a frill; this is basic. While the Premier, Mr Court, is busy building a belltower to his own memory—and it will be his memory—worth $5.5 million, just $5 million in total was allocated last year for the capital works needs in our metropolitan hospitals. The women's hospital, King Edward, alone needs at least $20 million to bring it up to standard.A recent technology audit has shown that these two hospitals have medical equipment which is unsafe, unreliable and obsolete. It is no wonder that doctors are fleeing, too. A lot of specialists are being lured to the private system by big cash injections—higher salaries—and they are less willing to work in the underfunded public sector with its inadequate equipment. What is the result? Waiting lists blow out yet again. These strategies have been accurately described, I think, by one medical practitioner as the `piecemeal necrosis of Medicare'. I agree. What is astounding to me is that the government has taken no action to remedy the number of problems in our health system, particularly the need for extra funds.Indeed, as we have heard, the government has cut back on what should be available to the states. This has compounded the problems created by conservative state governments ripping funds out of hospitals over the last few years. What has been the government's solution to this? To slash its own funding even further and to put money into the private hospital system. It has been willing to pour funds, as we have heard, into what is an ill-conceived and very expensive rebate scheme for private health insurance. This money was pilfered from the public hospital system. Any health economist could have warned them—and many did, as it happens—that the introduction of these rebates into an open-ended private health insurance market would simply result in higher costs; and so it has. In the first year of operation the costs have blown out by $500 million. And how many extra people do we have in private insurance for that $2.19 billion per annum and rising? Somewhat less than three per cent. This is a windfall for the suppliers of services in the private sector, but it does practically nothing for consumers, especially for that 70 per cent who rely on the public health system—increasingly nervously, I might say. The costs, as I have suggested, have blown out well beyond those budgeted for—from $1.3 billion to $2.19 billion. Every new policyholder adds to that already obscene cost. Every time this strategy succeeds in bringing a new person into private health insurance, up go the costs, and there is no reduction in pressure on the public system. I will discuss in a while why that is such a stupid policy. The rebate is a subsidy to the private health insurance industry which—and I think this is an important point—already exceeds the budgetary assistance given to the mining, manufacturing and primary industry sectors combined. It is a subsidy for 30 per cent of the community.The government has consistently argued that the more people have private health insurance the less will be the pressure on the public health system. In a way, it means to ensure that by taking funds out of the public system. Unfortunately it is absolutely wrong about that point. It could not be more wrong. Some very recently completed research by Professor Duckett and Terri Jackson from the School of Public Health at La Trobe University, which is due to be published next week in, I think, the Medical Journal of Australia, concludes, after careful analysis, that the new health insurance rebate is a very inefficient way of assisting public hospitals—if that is indeed what it was designed to do; forgive my scepticism. They found—and there are precedents for this—that the estimated average cost per weighted separation, which is a fancy way of saying the cost per patient or per admission adjusted to take account of differences in the ways costs of care and depreciation are met, shows that private hospitals are more expensive than public hospitals. They are not more efficient; they are more expensive—to the tune of $1,941 in the case of a private hospital compared to $1,774 in the case of a public hospital. That is a very conservative estimate. So every time you transfer someone from the public to the private system you are costing Australians, either as consumers or taxpayers, more money. Does that make sense? It does not make any sense to me.They found in their analysis that, if the subsidy that is now being applied in private health were applied directly to enhancing the capacity of the public hospital system, that system could easily meet most of the additional numbers of people required to be accommodated—some 60 per cent. Again this underlines, if it needed underlining, that this is a very inefficient way of taking the pressure off the public system. In fact it does nothing of the kind, especially when you consider the fact that a lot of the procedures undertaken in private hospitals are unnecessary. Why else would you have a 40 per cent caesarean section rate among some women privately insured? That is not natural, I can tell you.I think it is timely to have a look at the attacks that have been made on Medicare, particularly as there is plenty of international evidence that this formula—moving people from public to private by providing rebates for private health insurance—is a recipe for an expensive, second-rate system which is ultimately unfair to low and middle income families. They cannot afford to keep up private health insurance, even with the rebates. This formula also produces inferior health outcomes. You spend more and you get more intervention, but people are not any better off. Perhaps we should not be surprised at this because for his whole political career the Prime Minister has been an opponent of Medicare and universal health care. We are now seeing his attitudes realised in policy and action, as opposed to the fine words he speaks before every election campaign. The Prime Minister voted against Medibank when he first became an MP. In fact I think that was probably the first vote he ever took in the joint sitting of the houses at that time. In the early eighties he dismantled Medibank when he was Treasurer. He opposed it again in the late eighties when he became the Leader of the Opposition—indeed he railed against it—and again in 1993, with the much derided Fightback package. Before the 1996 election the old John Howard—before he became Prime Minister—said, among other things, that `Medicare had been an unmitigated disaster'. He called it `medi-mess' and a `shemozzle'. He said he would `pull it apart' and `get rid of bulk-billing'. He knew that the community approval of Medicare, however, and their repudiation of the Fightback model in 1993 meant that the government had to change its tune, as I have indicated. With their noses pretty bloodied by that experience, the conservatives have tried to soften their stance.We have been asked in this community to believe, against the evidence, that the coalition unequivocally support Medicare—clearly they do not—and to believe that John Howard was a changed man, but clearly he is not. Blood will out and his change of heart was never really believable, as the track record of the government now shows. If you listen to what they have been advocating over the last 30 years, you can see this, perhaps in a slightly different form, coming to pass. The conservatives and especially the Prime Minister have argued at various times for the abolition of bulk-billing; limiting access to public hospitals to the disadvantaged, and they are heading in that direction very quickly now; increasing the Medicare levy, and that has been done; introducing compulsory fees, and they have tried that in various areas; introducing unaffordable tax breaks for private health insurance, and we have doozey of a scheme that is going to cost taxpayers dearly; opting out of Medicare in favour of private health insurance, and that is on in force; reducing the Medicare rebate, which was frozen for a period; providing big subsidies to private health insurers and private hospitals; and allowing unfettered gap insurance, and we are about to see some version of that, too.These very stale old prescriptions are now being introduced by stealth. People are being told one thing and the government are doing another. The Liberal Party and their coalition partner have had no ideas about health care for 30 years. They have always resented the Medicare model and are wilfully determined, in my view, to destroy it without any comprehensive examination of the impact of their actions. For instance, regarding those cost equivalents I talked about earlier, why would you do that as a matter of public policy? They really want to stifle discussion and prevent careful analysis by saying, `No, we're friends of Medicare. We're behind Medicare. What are you talking about?' They are visiting neglect on the public provision of key health services. They apparently hope that the public system will become the residual system and private provision will prevail.They talk about needing to have a robust private system. What about a robust public system? It is the one that the majority of Australians use. They hope to convince the community that only through private health insurance and private medicine can they expect decent services. We have seen that on the television night after night. The only way you can survive, we are told, and get good care is with private health insurance. Fortunately, that happens to be absolute rubbish, but they are pushing hospitals in that direction. People are being told that their taxes cannot buy good health and cannot buy good hospital services so they will have to take out private health insurance. The government have been spending millions of dollars on advertising, advertising which effectively at its core denigrates the public system. They should be boosting and improving the public system for the majority of Australians. Their advertising and their behaviour suggest that the public system, since it is for the less well off, need not be too flash. They say, `Don't worry about it. You can get out of it. You can jump the queue, go to the private system and get the best care there. We will look after the people who cannot afford it in the public system.' When it comes to public provision, they think near enough will do. Well, I have another message for the minister and the government. It will not do, and the people of Australia will not let it do. It is fair to say that Medicare is under serious threat. The coalition government's health policy is now determined not by the people in this place but by the private health insurance industry and selected specialist medical practitioners, some of whom have got some pretty good breaks at various times from this government. The 30 per cent rebate for holders of private health insurance is being paid for by the general taxpayer, and it is ample evidence that the coalition are already well advanced in implementing their real anti-Medicare agenda. Whether they are vehemently opposing Medicare or claiming to help it—and they have worn both hats at various times—their policies have the effect of promoting private insurance at the expense of the public system. I believe that the quality of the health care system, the public system, the one available to the majority, is one of the key indicators of whether we have a right to call ourselves a decent, caring society. In my view, the current government clearly fail this test. Australians paying the Medicare levy, which is what this bill is about, do not want to see the health system cut, hospitals privatised and the development of a two-tier hospital system. They do not want to see our basic social infrastructure run down and marginalised. To their view, I say: hear, hear.10:33:0015902O'Byrne, Michelle, MPMs O'BYRNE84SBassALP00—The Medicare Levy Amendment (CPI Indexation) Bill 1999 seeks to raise the Medicare levy low income exemption threshold for individuals, married couples and sole parents in line with consumer price index movements and to adjust the `shading-in range'. The shading-in thresholds mean that taxpayers who earn just over the low income threshold will not face the full Medicare levy but a shading-in adjusted in line with CPI movements. It is a continuation of the practice commenced by Labor to annually index Medicare levy thresholds.It is important to support this bill because Medicare is important to the Australian community. There is an expectation amongst the Australian community that there will be a hospital bed available when one is required. There is an expectation that there are emergency services available for young children when they are needed. There is an expectation that when there is a need for urgent medical attention it is available. Medicare is the only thing that has made that achievable in Australia. There is no requirement in Australia for a check of a patient's wallet before his or her pulse is checked. Our medical system in Australia should provide medical attention to all Australians on the basis of need, not on the basis of wealth. Universal health care is one of the legacies of Labor's time in government.Since the introduction of Medicare, it has been the practice of the government of the day to index the low income exemption of the Medicare levy to the consumer price index. The intention of this indexation is simple: to ensure that through changes in the CPI and therefore in the cost of living those on low incomes are not disadvantaged by consequential rises in incomes and/or allowances. The logic of this is very simple. Medicare was designed as a universal health system such that all members of the Australian community, regardless of their material circumstances, are able to access medical services. The system is simple in its operation. Through the application of the community rating principle and with appropriate concessions made for those on low incomes, Medicare has been able to effectively provide health care for Australia with the underlying principle that all Australians deserve health care, not just those who are well off or have purchased private health insurance.As we are all aware, state governments are the primary deliverers of health services. In order to put Medicare into a Tasmanian context, I would like to take a few moments of the House's time to explore the most recent Australian health care agreement with the states on increasing federal grants to states for the provision of medical services. As with all agreements of this sort, there were differences over what the Commonwealth should contribute. As a mechanism for developing a solution, an arbiter was appointed. Mr Ian Castles was very well-credentialled to fulfil this role as a former head of both the Australian Bureau of Statistics and the Department of Finance and brought skills and insight which it would be difficult to equal. The response of the federal government to the report produced by this independent umpire was to ignore his recommendation. The recommended formula proposed by this independent umpire was to have the effect of providing to Tasmania an extra $3 million in 1999-2000 and an extra $32 million over the life of the agreement. Instead of accepting this formula derived by an independent umpire, the federal government offered Tasmania significantly less: $2 million less in 1999-2000 and only $19 million over the life of the agreement. This government seems to be going out of its way to cut the available funding to hospitals. I am sure this is only a reality because of the government's lack of commitment to the funding of public hospitals. This increases pressure on staff and places additional pressure on the states in attempting to deliver effective medical services. I mention this because I am concerned every time I hear this government mention the word `Medicare'. I get a cold shiver because I do not believe that this coalition government and the Prime Minister in particular are committed to Medicare in any way. I have good reason to be concerned, because the Prime Minister is on the record as being opposed to Medicare. He has been a constant critic and has repeatedly attacked Medicare. He has only been dragged to the position of mouthing Medicare platitudes because of public sentiment. Medicare is popular because it guarantees medical attention when it is needed. Medicare is popular because it is an essential component of the provision of health care in Australia.This bill will increase the threshold for the low income exception from $13,389 to $13,550 for the 1999-2000 year and for individuals who have an income slightly higher than $13,550 there is a shading in provision. This shading in will be at a rate of 20 per cent for income between $13,550 and $14,648. But this legislation goes to the original intent of Medicare providing medical services to the whole population regardless of wealth. The family income exemption threshold will increase by $217 to $22,865 for couples with no children and increase by an additional $2,100 for each additional dependent child. This, quite rightly, takes into account the additional cost implications for families with children when adjusting the Medicare levy threshold. Ensuring that low income individuals and families maintain full accessibility to medical treatment through Medicare without undue financial hardship is essential. In raising this limit, the parliament and indeed the government are recognising the impact that increased taxes, levies and charges have on low income earners. It is a pity that this same recognition has not been taken appropriately into account with the formulation or implementation of the GST, because it is important to remember that the GST will have serious implications for the delivery of medical services. Despite assurances from the government that medical services will be tax free, the impact on hospitals will be huge. We need to remember that the Commonwealth, through the states, funds hospitals. One very simple example is the impact on food in hospitals. Burdening our hospitals with having to differentiate between food that is served to patients and that which is served to staff and visitors to the hospital will have an impact on hospitals. The administrative burden of this simple GST will be very large indeed and, with the funding to hospitals constricted, it seems quite clear that the government is doing little to support the public hospital system. All the government has done with the GST in the case of families is to introduce a totally unacceptable compensation package worth nothing to struggling families. I support this bill but warn the government that merely paying lip-service to Medicare will simply not be enough. Australians expect and they deserve better in health care. 10:40:0015904Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—in reply—Thank you, Mr Deputy Speaker, for the opportunity to sum up on behalf of the government on this important piece of legislation, the Medicare Levy Amendment (CPI Indexation) Bill 1999. At the outset I would like to thank all honourable members for their contribution to the debate on this bill. It is regrettable that opposition members have not concentrated on the subject matter of the bill before the House. The Medicare Levy Act 1986 provides an exemption from the Medicare levy for low income individuals and families. Exemption from liability for the Medicare levy surcharge is also provided by reference to the low income thresholds. This bill will provide for increases in the thresholds for individuals, married couples and sole parents. For example, the threshold for individuals is to be increased from $13,389 to $13,550 and for couples with no children from $22,594 to $22,865. These increases are in line with increases in the consumer price index. The legislation itself is not controversial, and both sides of the parliament are supporting the Medicare Levy Amendment (CPI Indexation) Bill 1999. However, the Australian Labor Party comes into the chamber and seeks to attack this government on its health policies and on our support for a healthy Australia.LS4Ferguson, Martin, MPMr Martin Ferguson—That wouldn't be hard. 0V5Slipper, Peter, MPMr SLIPPER—I would like to place on record some facts. The member opposite claims that the government's record is not good. Quite to the contrary: the coalition believes that all Australians should have access to a high quality health care system. The coalition is committed to a viable and universally publicly funded health system called Medicare. When one listens to the contributions made by some honourable members opposite, it seems as if the message has not got through to them. The coalition also believes in a strong private health sector to complement the public system. The private health system allows Australians to choose their own doctor and hospital and helps to alleviate pressure on the public system. I would like to tell honourable members that during 1999-2000 the health portfolio will receive nearly $24 billion in budget funding, with $4.3 billion being raised from the Medicare levy. When one listens to the honourable member for Jagajaga and other honourable members opposite, one could almost be misled into believing they were part of a government that did indeed deliver reasonable health care for Australians. It is appropriate at this stage to look at Labor's record, because they have nothing to be proud of. Labor failed to deliver adequate health outcomes for all Australians. They failed to deliver meaningful solutions on rural health. During Labor's period in government, they allowed a decline in rural health services and an exodus of general practitioners from the bush. They failed to immunise Australia's children. XJ6Anthony, Larry, MPMr Anthony—What a disgusting record.0V5Slipper, Peter, MPMr SLIPPER—It is a disgusting record of the Labor Party. In 1996 Australia's full immunisation rate for children was at a dangerous 53 per cent, well below places such as China, Algeria, Laos and Vietnam. The member for Fremantle had the gall to come in here and criticise this government. The Labor Party huff and puff about their support for indigenous health. They failed to improve indigenous health. By 1996, the National Aboriginal Health Strategy had collapsed and the health of indigenous Australians was relatively poorer than it had been in 1983—that sad year when the Hawke Labor government was elected. What else has Labor failed to do? Labor ignored the private health system for 13 years. Let us look back: in 1983 when Labor was elected to office, nearly two out of three Australians were covered by private health insurance. By March 1996, this proportion had plummeted to below 34 per cent, even though former health minister Graham Richardson had warned in 1993 that, if private coverage fell below 40 per cent, the entire health system would collapse. While Labor was in government, private health insurance premiums increased by an average of 12 per cent a year. In many cases, people simply could not afford to remain part of the private health insurance sector. Consequently, the exodus from private health placed unsustainable pressures on the public system and, if allowed to continue, this would have required the building of two large hospitals each year solely to cope with the increase in public demand. Labor's poor management of the health system left it badly in need of repair. The cost of Medicare and the PBS was growing at unsustainable rates. It is interesting that the cost of the Medicare benefits schedule increased from $2.3 billion to over $6 billion from 1984 to 1996. The cost of the PBS doubled in Labor's last term in government. The Labor Party likes to talk about election promises. The Labor Party constantly broke its election promises not to increase the Medicare levy. Following the introduction of Medicare by Labor in 1984, the Medicare levy was increased in December 1985, again in July 1993 and once again in 1995.The simple fact of the matter is that the Labor Party in office did very little for health. There has also been a suggestion by opposition members that we ought not to support private health insurance, as indeed we have, and that we should simply give more money to public hospitals. Let me again clarify this situation for honourable members and for those members of the community who are listening to this debate. The coalition has increased the funding given to state and territory public hospitals to a record $31 billion over the life of the 1998-2003 agreement. This amount represents an increase of over $7 billion—a lot of money in anyone's terms—or 25 per cent in real terms, above what Labor gave to public hospitals in its last Medicare agreement signed in 1993. It is now up to the states and territories to match the federal government's increased public hospital funding, and the budget papers show that this financial year—that is, 1999-2000—the states and territories on average intend to increase their own hospital expenditure by only 0.3 per cent compared with the federal government's 7.1 per cent. I think on any objective criteria, the federal government is more than meeting its fair share of public hospital expenditure and, combined with the private health incentives, the coalition is restoring accessibility, equality and balance to the Australian health care system.In her contribution, the honourable member for Jagajaga claimed that my colleague the Minister for Health and Aged Care has failed to introduce legislation to deal with policies with large excess payment requirements. I want to put the record straight for the benefit of honourable members. The minister and the government are committed to dealing with these types of policies. Legislation has not yet been introduced, but will be introduced as soon as practicable. The honourable member for Jagajaga also claimed that there is inadequate funding to the states for public hospitals. The Labor Party, including the member for Jagajaga, opposed the government's tax reform package. This includes the GST, the revenue from which will all go to the states and territories, and this is exactly what the states and territories have been after: a reliable source of revenue to fund health, education and other matters. The opposition is being absolutely hypocritical and we reject absolutely what the opposition has been trying to say most inadequately in this parliament.The coalition has reformed the Australian health system over the last four years. When Labor was in government it was completely bereft of ideas on how to tackle the challenges of new technologies and changing demographics and their impact on the health of all Australians. Labor had three health ministers between 1993 and 1996—none of whom was capable of or dedicated to genuine reform. On the other hand, the coalition remains committed to a high quality health care system for all by combining a universal health system, Medicare, with the freedom of choice provided by a strong public sector. The coalition also acknowledges the importance of ensuring that those Australians living in rural and remote parts of the country have similar access to health services as those who live in the city. The Labor Party stand condemned for their hypocrisy, for the way they come into the chamber and ignore the fact that for 13 years they failed comprehensively in the area of health and, might I say, in so many other areas of governance. The Labor Party were rejected at the 1996 election and the 1998 election. Yet, instead of coming in here and apologising for what they failed to do, we find honourable members from the opposition coming in here criticising the government and covering up for their absolute failure in the area of health reform. As I have said, all honourable members actually support the terms of this bill. The Labor Party have been debating something else and running away from their failure in the area of health. I am very pleased to commend the Medicare Levy Amendment (CPI Indexation) Bill 1999 to the chamber. Question resolved in the affirmative. Bill read a second time.15906Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Slipper) read a third time.Committees159061590615906NaN:00:0015906Mr SLIPPER,MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—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: Proposed ABC Sydney Accommodation Project, Ultimo, NSW.The Australian Broadcasting Corporation proposes to consolidate its television accommodation in Sydney in a way that meets its organisational and strategic objectives. At one level, the needs of the ABC for the project relate to particular problems with the current television accommodation at Gore Hill. At another level, the project is part of the response by the ABC to the changing media environment.This proposal involves development of the vacant southern portion of the Ultimo site of the ABC, adjacent to its current building in Harris Street, together with adaptation of the existing building and disposal of the majority of the Gore Hill site. It would then be proposed that the Lanceley Place portion of the Gore Hill property be retained and redeveloped through a sequence of minor works.Much of the existing television accommodation at Gore Hill is inadequate. It is in need of significant refurbishment and maintenance, as it does not meet basic requirements of television accommodation of being safe, functional and economical and providing a satisfactory environment for creative work. Ad hoc development over the past 45 years has resulted in 24 separate buildings, causing disadvantages in terms of efficiencies related to communications, space and functional relationships within the ABC. The proposed development will replace inadequate Gore Hill buildings and facilities with accommodation at Ultimo that is up to date, functional, safe, compliant and designed to maximise efficiency, output and creativity.The broadcasting industry is currently undergoing a major transformation with the advent of digital broadcasting. This project will provide the ABC with the facilities required for digital production and transmission, including studios suitable for both wide-screen standard definition television and high definition television production. The Ultimo building will house current television, radio and online staff and facilities and will enable cross-media production.The estimated out-turn cost of the proposal is $109.5 million. With three-quarters of the Gore Hill land available for sale, revenue potential for application of the digital conversion program of the ABC will be maximised. Subject to parliamentary approval, construction will commence in mid-2000 with completion and occupancy two years later. In its report, the committee has recommended that this project proceed. The Australian Broadcasting Corporation welcomes the support for the Sydney accommodation proposal expressed by the committee and agrees with its specific recommendations, which will be implemented as appropriate throughout the course of the project. In conclusion, I would like to thank the committee for its support. I commend the motion to the House.Question resolved in the affirmative.Bills15907R98015907Debate resumed from 9 December 1999, on motion by Mr Slipper:That the bill be now read a second time.10:56:0015907Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I move as an amendment to the motion for the second reading:That all words after “That'' be omitted with a view to substituting the following words:Whilst not declining to give the bill a second reading, the House expresses its concern with:(1) the delay in the government's bringing this legislation before the parliament;(2) problems which have come to light recently in relation to the administration of the Australian Taxation Office;(3) the government's misleading claims for its taxation proposals;(4) the problems that exist in the implementation of the various new taxation arrangements;(5) the reluctance of the government to effectively tackle tax avoidance in Australia;(6) the Australian Taxation Office's role in the implementation of the new taxation arrangements; and(7) the underlying unfairness and complexity of the new taxation arrangements.Labor supports the closure of any loophole that allows tax avoidance of any sort, particularly when it involves non-residents of Australia. We encourage overseas investment, but the same rules that apply to resident Australians should apply to non-residents. Therefore, we do strongly support the integrity measures concerning alienation of Australian real property by non-residents. The provisions in this section of the bill seek to overcome the decision in the Lamesa Holdings case in 1997. There, the full Federal Court decided that real property held by a non-resident through a chain of companies did not fall within the terms of the alienation of real property provision in the Australia-Netherlands double tax agreement. The Treasurer announced in a release on 27 April 1998 that:In deciding on this course of action, the Government considered the alternative of seeking to appropriately amend each of Australia's numerous DTAs. However, the process of individual amendment would absorb considerable time and resources. Moreover, in the interim, revenue losses could be significant. In these circumstances, and as the amendment will do no more than make Australia's taxing rights effective, the Government has concluded that the appropriate course is to strengthen the legislation.The decision of the court posed a significant threat to the Australian revenue base. This type of structure could be used to avoid tax on all Australian real property. However, rather than acting quickly, the Treasurer waited many months and finally issued a press release on 27 April 1998 announcing that intention to legislate to overcome the Lamesa decision.We obviously support the decision to close the loophole, but the handling of this issue by the Treasurer has been a disgrace. Legislation was not introduced until almost 20 months after the announcement. Also, it has had such low priority that it is only scheduled for debate in the House this week, after being introduced four months ago. The impact of this is that the legislation is very retrospective. If passed in its proposed form, it will operate at least two years retrospectively. So, if it does not get priority and does not get passed until June this year, that would mean it will be passed around 26 months after the original announcement. The Senate Standing Committee for the Scrutiny of Bills examined the legislation and reported that the retrospectivity of the legislation contravenes the Senate resolution of 8 November 1988, which states that:... where the Government has announced, by press release, its intention to introduce a Bill to amend taxation law, and that Bill has not been introduced into the Parliament or made available by way of publication of a draft Bill, within 6 calendar months of the end of that announcement, the Senate shall, subject to any further resolution, amend the Bill to provide that the commencement date of the Bill shall be a date that is no earlier than the date of introduction of the Bill to the Parliament, or the date of publication of the draft Bill. Also, they seek to get responses from ministers, such as the Treasurer, when this situation of highly retrospective legislation arises. If the Treasurer did respond to the committee's report, it was not published by the committee. It is quite normal for legislation to take some months after a press release before being presented to the Senate, but it is quite another matter when that delay is more than two years. While we support these measures which shore up the Australian tax base, we are highly critical of the severe retrospectivity of these proposals.There are some other issues in the bill which I will briefly touch on—income tax deductions for gifts and extending the period of deductibility for certain donations. So the St Patrick's Cathedral Parramatta Rebuilding Fund will be extended by two years to 25 February 2002, the Australian National Korean War Memorial Trust Fund by one year to 2 September 2000 and the Shrine of Remembrance Restoration and Development Trust by five years to 1 July 2005. Labor has supported the provision of tax deductible status to these funds and will support these amendments which lengthen the period of deductibility.The third part of the legislation deals with the income tax exemption termination for non-resident sports persons, clubs and associations. The bill proposes to repeal two old provisions which provide exemptions for non-resident sporting persons if they represent the controlling body of their outdoor athletic sport or game and also non-resident sporting clubs or associations if they are from a Commonwealth country, if they are representing the controlling body of the sport or if the team representing the association or club plays cricket, football or other similar matches. I do observe that these provisions which are being repealed give rise to some pretty substantial anomalies. So if you are a non-resident 100-metre runner you would be tax exempt, but if you are a 100-metre swimmer from the same country you would be subject to the tax. So, as the shadow Treasurer has observed, he does not know where this quite leaves you if you are a triathlete, to say nothing of a beach volleyball player if the tide comes in. This bill is proposing to remove the existing exemptions, and Labor will not oppose those amendments.The bill also contains in relation to the capital gains tax a number of technical amendments and corrections of errors. According to the explanatory memorandum, none of the amendments change the policy reflected in the 1936 act. On that basis, Labor will not be opposing this measure either.Yesterday, in relation to the Taxation Laws Amendment Bill (No. 10) 1999, I expressed a series of concerns about the administration of the Taxation Office, and I wish to speak to my second reading amendment concerning those matters. Amongst other things, I expressed concern about allegations concerning the role of the New South Wales opposition leader in relation to the issue of private binding rulings and representations made to the former Assistant Treasurer, former Senator Jim Short, back in 1996. In response to these allegations, Kerry Chikarovski has said that her only recollection of dealings with Mr Short was in 1996 when she arranged a meeting in relation to a taxation ruling on child care, and her denial further consists of her saying:... there have been occasions in which I have organised meetings for my ex-husband ... I have made representations to ministers ... ministers have then chosen to go ahead with those meetings.And she says she did not think this was inappropriate. She also says:You're telling me that this was a meeting with the Assistant Treasurer, who was obviously dealing with taxation matters. I would have thought it was not inappropriate for me to make a representation for a company which deals in taxation matters to the minister who has carriage of those matters.This is a very unconvincing denial indeed. On her own admission and that of her ex-husband, he runs a company that is involved in tax minimisation schemes. You would have to ask and wonder for how many other meetings Mrs Chikarovski has used her influence to arrange meetings with government ministers. I would also note that tax office rulings are signed by the Commissioner of Taxation. Why would a company want to meet with the minister in relation to these matters rather than meet with the commissioner? The allegation that I made yesterday—the allegation that was passed on to me—is well and truly alive. We on this side of the House want to know what private binding rulings did the Remuneration Planning Corporation receive after the change of government from 1996 onwards—and we regard that as a matter of great importance. There was also a response from Mr Chikarovski to this matter. In his response, he said: Our clients are some of the who's who of Australia involved in the legitimate aim of tax minimisation.Mr Deputy Speaker, I never said anything different—you got me. The whole point of raising this matter is to express concern that there have been people using these kinds of schemes to essentially make the payment of tax optional. We have seen changes between the draft and the final binding rulings concerning the issue of employee benefit schemes. I indicated yesterday to the House that the tax office had issued in October 1998 a draft binding ruling concerning employee benefits schemes and, between the time that was issued and May 1999, the tax office added to its final public ruling on this matter:The ruling does not apply to taxpayers who have received a Private Ruling ... and have implemented the arrangement ruled on, in substantially the same terms as the Private Ruling.Given the massive controversy concerning the misuse of private binding rulings that has arisen following the arrest of Mr Petroulias, I believe the tax office must disclose the representations it received concerning its draft ruling. It is necessary, in order to restore public confidence in the tax office, that we get to the bottom of this matter and identify who has really been involved in it and what their role was. Mr Chikarovski said, and I quote him again:Our clients are some of the who's who of Australia involved in the legitimate aim of tax minimisation.I want to say to the House that this company—notwithstanding the fact that the tax office says that it has cracked down on these employee benefit schemes—is still at it. I have here a copy of a document from what is known as the Kenneths Group. The document is described as a `Proposal for employee participation plan and remuneration planning', prepared by Mr John Day on behalf of the Kenneths Group and the Trinity Management Group. Information concerning the structure of this company is on page 19 of this plan. It says:The Plan company is a special purpose, unlisted public company developed by specialist employee share plan and taxation advisors, Remuneration Planning Corporation Pty Ltd (`RPC').It indicates:A Participant may also inspect the Constitution at the Plan company's offices either at 110 Sussex Street, Sydney or 16 Degraves Street , Parkville, Melbourne.Further into the document, on page 28, it notes that the Trinity Management Group is the body to implement this particular plan. It says:TMG is jointly owned by the Kenneths Group and Remuneration Planning Corporation Pty Ltd.This company is clearly a related company to the Remuneration Planning Corporation. If we look at the nature of this plan, we can see, for example, on page 9 that it has devised a scheme for bonuses and for substantial parts of salary to be paid as bonuses. These become tax deductible with no fringe benefits tax or on-costs, payroll tax or WorkCover or superannuation guarantee payments to be made. The annual bonus goes towards acquiring shares in the company. On page 13, there is a reference to contributions to the employee incentive plans being tax deductible, having no fringe benefits tax, no surcharge or contributions tax, no superannuation guarantee charge, no payroll tax or no WorkCover payments. Again, on page 18, there is reference to salary sacrifice arrangements so that funds made available from salary sacrifice can be contributed by the company to the employee incentive plan. On page 26 of the document, there is reference to what is called the `fair market remuneration payment', which once again will not be subject to fringe benefits tax, surcharge or contributions tax, payroll tax or WorkCover. Make no mistake, Mr Deputy Speaker, this is all about high wealth individuals and big end of town tax avoidance. It is still going on via Mr Chikarovski's company, and no doubt others, even though the tax office is supposed to be cracking down on it. This is a matter of great concern to the opposition and is one of the reasons why we are convinced that there needs to be a proper inquiry into the tax office's rulings and the tax office's handling of this area.I will also comment further on the observations I made in the parliament yesterday concerning the role of the Commissioner of Taxation, Michael Carmody, about these issues. There was a joint statement by the Taxation Office and the Australian Federal Police yesterday which, amongst other things, said:The joint investigation—into the Nick Petroulias matter—commenced approximately 12 months ago, after the matter was referred to the AFP.It goes on to say:As is normal in such matters, relevant ministers' officers were informed on the day warrants were issued.It is apparent from this joint statement that Commissioner Carmody provided no advice to the Treasurer concerning the issue of the police investigation during 1999, prior to his reappointment for a seven-year period. The question that arises here is: did the commissioner provide any advice at all to Treasurer Costello about the problems in the tax office concerning the issue of private binding rulings during 1999? I think we are all entitled to an answer to that question, and that remains a very significant question indeed.I also go to the question of the cost of tax avoidance identified through these employee benefit non-complying superannuation, offshore superannuation and similar schemes. To try to answer that question, I refer to a submission put by the Taxation Office itself to the House of Representatives Standing Committee on Employment, Education and Workplace Relations. That submission says:The intelligence and compliance data gathered to date on tax aggressive employee share and incentive trust arrangements indicates that contributions peaked in 1997 and 1998 income years.Let me note that this is dated 30 April 1999, so it will be very interesting to see what sort of data the tax office has for 1999-2000. It says:The pre-lodgement activities undertaken by the ATO last year and resultant publicity appear to have reduced the attractiveness of these schemes.It goes on to say:The tax aggressive employee share, welfare and incentive trust schemes detected and on which we have ascertained contribution levels, to date, have involved over $400,000,000 in contributions. The arrangers of these schemes are charging around $15,000 for `modest' contributions of between $100,000 and $600,000. For higher contributions they often work on a percentage basis. The more aggressive marketers we estimate are making up to $4,000,000 on their marketing efforts. On past experience, we would expect this income to be washed through their own EPA.The ATO is not as progressed in relation to its investigations of superannuation schemes. AUSTRAC data has shown that many millions of dollars have left the country and have been deposited with offshore trustees of superannuation funds. The benefit in these arrangements are that many countries only tax income sourced in that country and therefore the super fund avoids payment of any tax. The ATO is currently reviewing the products of over 40 promoters involved in the “employee benefit arrangements” described above. On the data we have to date, we would estimate that the total contributions made by the clients of these identified promoters will, on a conservative measure, amount to approximately $1.5 billion—$1.5 billion! The tax office goes on to say:We have also recently detected early evidence that some aggressive marketing was taking place regarding new schemes for non-complying superannuation funds. The arrangements promise the ability for taxpayers, particularly PAYE employees to set up a structure that would allow them to claim a deduction for superannuation which reduces their taxable income to whatever level they choose and for the super fund to avoid the 47% tax. These arrangements are not included in the total contribution figure provided in the previous paragraph— that is, the $1.5 billion. It goes on to say: The ATO is now starting to see evidence that these arrangements have been implemented. The fee structure in these arrangements ($60,000 to $4,000,000 and over) appears to be flexible between a 5 to 10 per cent range. One promoter has made over $300,000 on just four sales. In recent times the ATO has emphasised the need to be more pro-active regarding “real time” intelligence activity. In respect to the detection of mass marketed arrangements this has meant that the ATO has interacted with the promoters of these arrangements while selling is still in progress and months before the due date for the lodgment of tax returns. That submission was put forward in April last year. Yet, as I have just indicated to the House, we still see evidence that these schemes are being promoted. We still see evidence of widespread tax avoidance from high wealth individuals. So it is blindingly obvious that the tax office has not got on top of this problem. I also refer to reports in the Business Review Weekly just a week or so ago concerning rulings that, in the words of the Business Review Weekly, `made tax optional'. They refer to a ruling on 29 September 1998 which gives a favourable private ruling to Sydney solicitor and tax adviser David Bonnell. The ruling carries the stamped signature of a former deputy tax commissioner David Butler. But it is the case that, once armed with a private ruling in his own name, Mr Bonnell has admitted to the Business Review Weekly that he began to mass produce the schemes from his office word processor. This ruling has, in effect, enabled Mr Bonnell to claim unlimited deductions for 1999-2000. Again, on 21 October 1998 there was an advance opinion, which was stamped by the deputy commissioner in charge of large business and international tax, Mr Jim Killaly, but said by Business Review Weekly to be processed by a middle ranking officer named Emmanuel Aivaliotes. Mr Aivaliotes was involved in providing favourable advance opinions, two of them on 18 December 1998. Again, on 15 February 1999, the superannuation technical unit at Bankstown issued a letter to a specific taxpayer regarding controlling shareholder superannuation. It indicated:The [tax office] has been advising clients that a taxpayer with a controlling interest in a company can make contributions to a superannuation for his/her benefit as an eligible employee of the company.The letter goes on to say that those contributions are not subject to the standard superannuation contributions tax or to the superannuation surcharge. At the same time as we have this draft ruling cracking down on employee benefit trusts and non-complying superannuation funds, the tax office was giving favourable rulings concerning controlling shareholder superannuation, creating, in the words of Business Review Weekly, a `dual tax system where it was optional to pay tax'. All of this raises a whole series of questions for the government and for the tax office—questions about what action it has taken to crack down on employee benefit trusts and when; what action it has taken to crack down on non-complying superannuation funds and when; what action it has taken to crack down on controlling shareholder superannuation schemes and when; and, if there is no difference in terms of tax legitimacy between controlling shareholder superannuation and the employee benefit trusts and non-complying superannuation funds, how it is that the rulings I have just referred to were being issued at exactly the same time as the tax office said it was cracking down on employee benefit trusts and the non-complying superannuation funds. There are many other questions we could ask of the government and the tax office concerning the handling of this issue. Just what is the status of those private binding rulings that have been issued by the tax office? Are they still binding? Is that former tax officer who was quoted recently as saying `Tax avoidance is still widespread, but we are just not tackling it' correct? Why was there no central registry in the tax office to keep track of private binding rulings, thereby allowing tax minimisers to shop around tax offices around the country for the most favourable private rulings? We would ask the government and the tax office: is it still their intention to extend the system of private binding rulings, as was proposed by the government's response to the Ralph report? If so, do they intend to do this before the commissioner's review of private binding rulings is complete? There were media claims that tax office rulings stamped with a signature of a high ranking tax office official were sold to investors for up to $20,000. We need to know whether that is correct. We want to know about the role of the commissioner in approving or vetting the appointment of Mr Petroulias as first assistant commissioner in the tax office. We want to know about those reports that a second tax official named in police warrants who was under investigation for corruptly accepting benefits for tax rulings is apparently still working in a key position in the Sydney tax office. We want to know just when the tax office became aware of the practice that some of those tax avoidance scheme promoters were attempting to use a single private binding ruling many times for many different taxpayers and what they have been doing about it.Clearly, the problem here is that the tax office has been preoccupied with the introduction of the goods and services tax and that it has been overworked and underresourced. An example of this was reported just this morning where the chairman of a parliamentary committee, the member for Wannon, David Hawker, opened a parliamentary hearing yesterday by telling tax office officials that evidence to date had alleged `systemic failings in ATO data and systems quality' in the administration of the tax file number system. Indeed, it is reported that, according to the tax office, the National Crime Authority is investigating a widespread scam involving unlawful purchase of tax file numbers for money laundering. The response to this by the ATO deputy commissioner, Dr Bob Webb, was to admit that.3K6Cameron, Ross, MPMr Ross Cameron—I raise a point of order on relevance, Mr Deputy Speaker. You have been very gracious to date. The shadow minister wants to go into a wide-ranging discussion of ATO policy in relation to tax avoidance. It has no bearing on the relevance of the bill. I suggest the honourable member be brought back to the bill10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—I thank the honourable member for Parramatta. I do point out to him that the operative area here is the long title of the bill which says: `relating to taxation and for related purposes'. That generally covers a wide range.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Thank you, Mr Deputy Speaker. I am happy to provide the member with a copy of my second reading amendment which goes exactly to the issue to which I am speaking. In his admission, Dr Bob Webb said pressures of introducing the new tax system had prevented the tax office from improving its data collection. `We have given priority to tax reform,' he said. That is the cat being let out of the bag. We have a tax office which is focused on the introduction of GST, PAYG and the Ralph business tax changes, to the exclusion of other priorities. Whether it be a scam involving the unlawful purchase of tax file numbers, whether it be the controversy concerning private binding rulings, whether it be the way in which they have handled the fuel substitution scandal—dropping the ball for collecting excise after it was passed to them from Customs, whether it be the way they are handling superannuation guarantee compliance—where many workers are missing out on superannuation when companies become insolvent because the tax office has not got the resources to properly follow up superannuation guarantee compliance, in all these areas the tax office has dropped the ball and is not focusing on the integrity of the taxation system. It is not ensuring that we do not have tax avoidance and that all taxpayers are dealt with fairly, because the government have fitted them up with an unworkable, incredibly complex GST and have not given them sufficient resources to do their job properly. Indeed, there are plenty of reports around about tax office employees leaving the tax office to work in the private sector for significantly higher salaries and, accordingly, staffing problems and other chaos occurring within the tax office. For these reasons, there needs to be an inquiry into the tax office's administration. (Time expired)10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Is the amendment seconded?LS4Ferguson, Martin, MPMr Martin Ferguson—I have pleasure in seconding this amendment. It is an appropriate amendment in the light of the issues raised by the shadow minister. I reserve my right to speak. 11:26:0015913Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—The member preceding me, the honourable member for Wills, has taken the opportunity to have a very wide-ranging discussion of matters relating to the tax system and has presented his proposed amendment. Can I suggest that if you want to have a discussion of integrity in relation to compliance and the taxation system the record of this government and the one that preceded it provide a study in contrast, beginning with the introduction by the Treasurer of the Charter of Budget Honesty, shortly after we were elected in 1996. It said that, if we are going to expect taxpayers to abide by a higher standard of honesty and compliance, governments ought to submit themselves to the same sort of scrutiny. That followed the extraordinary situation where the Australian people and the then opposition were led to believe that the books of the government were in good shape. When we came to government we found that we had an annual hole in the budget of roughly $10,000,000,000. We then submitted ourselves to the scrutiny of the public gaze and ensured that every future government of the country would do the same thing through the charter of public honesty, and public policy in this country is much better and more transparent for that result.In relation to compliance and tax avoidance, we then bit the bullet and tackled fundamental tax reform. Through the new tax system we introduced measures which will result in a huge clamping down on the cash economy, which has regrettably been a feature of this country for many years. The introduction of the business tax numbers for small businesses throughout the country for the first time gives a powerful driving economic interest in compliance when, for so much of the life of the current sort of wobbly, creaking and groaning tax system, there has been this powerful incentive to non-compliance and to creating a black economy or a cash economy. We have now created settings in the legislation which are going to flush out the cash and give businesses an incentive to get receipts and to declare income, otherwise they will not be able to claim back the GST they have paid on their inputs. That represents a watershed shift in culture. So we see that while the government is leading by example through the Charter of Budget Honesty we also have the guts to tackle fundamental tax reform, to encourage disclosure, to encourage one set of books and to clamp down on the cash economy.Australians fundamentally are entitled to know when they pay their share of tax that others are likewise contributing their fair share. That is largely what the bill before the House is about; not this wild, speculative fishing trip which the member has just indulged himself in. I note the remarks in the Sydney Morning Herald today that the member is brave under parliamentary privilege in making allegations and impugning the reputation of other state political leaders, particularly Kerry Chikarovski. Of course, she is not in the chamber and does not have the opportunity to defend herself or her family. The cloak of privilege is obviously emboldening the member. He is welcome at any stage of the day to walk outside and give a press conference to the same effect, but frankly I would be stunned if he did.This measure before the House is about giving assurances to the working PAYE taxpayers in my electorate of Parramatta, those who do not have the capacity to engage in complex schemes of arrangement. It is about ensuring that the honest PAYE taxpayer is not getting slugged to make up for the deficiencies in revenue created by tax evasion. In fact, the bill before the House has a number of different purposes, the principal one of which is to correct an anomaly in the double taxation agreements arrangements. That anomaly arises by virtue of the fact that the current legislation relating to double tax agreements has allowed interests in property to escape the net. It arises as a consequence of a recent case in which a taxpayer was allowed to avoid liability for tax for alienation of interests in real property in Australia by the creation of interposed entities. The complexity of the arrangement is illustrated by a paragraph of commentary on the Lamesa case from the Parliamentary Library's Bills Digest , and I quote: In this case a US business decided to acquire an Australian mining company through interposed entities. A US limited partnership was created and it acquired an Australian subsidiary company. A Netherlands company, Lamesa BV (the taxpayer), was interposed between the US partnership and the Australian company. The Australian subsidiary (Australian Resources Limited) then acquired another Australian subsidiary (Australian Resources Mining Pty Ltd). Australian Resources Mining Pty Ltd then acquired all the shares in a listed mining company, Australian Resources and Mining Company NL, through a takeover. Australian Resources and Mining Company NL owned a subsidiary, Arimco Mining Pty Ltd which owned mineral exploration rights.It then goes on to a second paragraph which also flushes out the complexity of the arrangements. The court found it not to be evasion, but to be legitimate minimisation. The government is saying that the average, honest PAYE taxpayer is carrying his or her weight and paying their fair share, but here we have a transaction where the profits assessed to Lamesa were $76 million for the 1993-94 income year and $128 million for the 1995-96 income year. Clearly we had an anomaly which is flushed out in the double tax arrangements with the Netherlands and the government has simply moved to fix it and close the loophole, and that is the purpose of this bill. It does involve a degree of complexity. The measure is saying that an interest in property is taxable, as well as the real property itself. That creation of interposed entities, which vest interests in corporations and then allow the transfer of those interests by a transfer of shares, will also be caught under the provisions of the double tax agreements. That is a perfectly conventional and appropriate measure in the sense that we want to ensure that the big end of town carries its weight.The bill has a number of other purposes, one of which has a particular interest to me as the federal member for Parramatta, because the bill extends tax deductibility to the St Patrick's Cathedral Parramatta Rebuilding Fund Appeal for another two years. Perhaps I can just re-acquaint the House with the facts of that matter. I recollect the day absolutely vividly in February 1996—just about a week before the election on 6 March—when I stood outside St Patrick's Cathedral with a crowd of others gathered with Father John Boyle, the parish priest, and watched this magnificent old sandstone building erupt in flames and be almost entirely consumed. It had been the practice of the church—and still is—that the church should be kept open for as long as possible to allow parishioners and others who happen to be passing by to go inside for a moment of reflection. On this occasion the young man who went inside was a bloke with some history of mental illness and he set about to burn the building down, and was ultimately quite successful. For many of my constituents who had held christenings, weddings and funerals in that building it was a tremendously moving, tragic and emotional time. The Catholic community of Parramatta is really to be congratulated on the way in which they have rallied together. There has been nothing in the spirit of vindictiveness; just a determination quietly to regroup and rebuild, and the supplementary purpose of this bill is to provide some assistance to them in that regard.The Bishop of Parramatta, Bishop Kevin Manning, has gained the assistance of the firm of architects—Mitchell, Giurgola and Thorp—who had responsibility for the design of this Parliament House, and they have agreed to take on the task of assisting with the cathedral rebuilding. They have come up with an excellent design, and following the payment of insurance moneys Bishop Manning estimates a shortfall of about $3.3 million. One of the problems was that, when Parramatta became a diocese and St Patrick's became a cathedral, St Patrick's was manifestly inadequate for the needs of the diocese. I regret to say that to this day—or up until the time the cathedral burnt down—any school in the parish that had more than 600 or 700 students could not have their annual mass or graduation service in the cathedral because it simply was not big enough. So we had a situation where students from Parramatta had to go to St Mary's in the city because no cathedral in Western Sydney was big enough to house them. So it is particularly gratifying to me that we have in prospect the rebuilding of the cathedral and a worship hall next door which will have the capacity to seat 850 people. The Governor-General, Sir William Deane, is acting as patron of the fundraising appeal, which was launched in May 1998. Since then the local community and businesses have contributed over $500,000 to the fundraising effort, but there still is this gap of $2.8 million outstanding. That is the objective of the next two years. It is a source of some regret to me that we have not been able to do more for St Patrick's than provide this deductibility, and it was particularly disappointing to me to see that the St Patrick's Cathedral submission to the Federation Fund was unsuccessful. It was a well-constructed and argued submission, but as all of us in this place are aware the number of great causes which do not receive government funding is very large indeed. I wish the Bishop, the Most Reverend Kevin Manning, Father John Boyle, the fundraising committee, the Governor-General and the local community well.It is a very extensive community indeed. This diocese contains 46 parishes and 74 schools with 43,000 pupils. It services a very large number of Australians, and not just in my electorate. It takes in the local government areas of Baulkham Hills, Blacktown, the Blue Mountains, Hawkesbury and Penrith and in my electorate both Holroyd and Parramatta, so it has a vast community to serve and look after. That provision of the bill gives me particular pleasure, and I commend it to the House.11:41:0015915Emerson, Craig, MPMr EMERSON83VRankinALP00—I wish to speak on Taxation Laws Amendment Bill (No. 11) 1999 in respect of the Lamesa Holdings case, and then go on to talk about the second reading amendment that has been moved by the member for Wills, in particular paragraph (5) of that amendment which expresses concern over the reluctance of the government to effectively tackle tax avoidance in Australia.Today is a day of shame for this country and for this government because the government has squibbed the task of addressing a major avenue of tax avoidance in this country. I will explain further how it has done that and I will also talk about the reasons it has done that. In the case of Lamesa Holdings, the government was very slow in responding, but at last we have legislation which deals with the problem created by the interposing of an entity as a device for tax avoidance. We welcome the legislation in Taxation Laws Amendment Bill (No. 11) 1999 dealing with Lamesa Holdings, and similarly we welcome and support the other measures in the bill. In respect of the broader issue of the reluctance of the government to tackle tax avoidance, because in the case of Lamesa Holdings it took a very long time for the government to act, we have learned from the front page of the Financial Review, in an article entitled `Tax: Costello buckles to contractors' demands', that the Treasurer of this country has capitulated to his party room for very base reasons and has allowed a massive avenue of tax avoidance to go unchecked. The article says:Individual contractors who faced paying personal income tax from July 1 have been given a reprieve, with the Treasurer, Mr Peter Costello, relaxing the original plans for the new tax provision.The concessions in the legislation were negotiated because of the extreme sensitivity of the Liberal Party back benches over a law that could alienate key constituent groups.In other words, the Treasurer capitulated for base political reasons. It goes on to say:Mr Costello told a meeting of the party room last night that a contractor would have to satisfy only one of four criteria to avoid having to apply for a special ruling from the Tax Office to avoid personal income tax.The criteria comprise:Having a business premises.Having two or more unrelated clients.Being able to satisfy the Taxation Commissioner that the entity is not a loss-making operation and that tools of trade are supplied, which could include a mobile or a laptop.The entity has one or more employees who perform at least 20 per cent of the work.The government made a commitment to this parliament and a commitment to the opposition that it would proceed to implement the measures outlined in the Ralph Review of Business Taxation relating to tax avoidance through the alienation of personal services income. On a reading of this, a dependent contractor will be able to escape these provisions if, for example, that contractor has a home office. That could just be a desk in a garage. That, on the reading of this, could be sufficient to be able to avoid tax. Or in respect of the criterion that tools of trade are supplied—which could include a mobile or a laptop—if a contractor who is really a PAYE employee goes out to the shop and buys a screwdriver or a hammer, he or she can avoid the tax obligations that would apply to a PAYE taxpayer. Or you could set up an arrangement where you received $1 a week from a friend and, therefore, you are not a fully dependent contractor. The whole thing is an absolute disgrace. It is a capitulation by the Treasurer. He has dishonoured the office of Treasurer of Australia by capitulating for base political reasons. On 24 November last year there was an exchange of letters between the shadow Treasurer and the Treasurer where the Labor opposition agreed to pass the government's business tax changes if the government met several conditions. These were, to quote from the shadow Treasurer's letter:Detail on the measures not yet before the Parliament, particularly the revenue raising measures, at a level that allows us to reasonably conclude that their stated intention will be achieved. This would ideally be in the form of draft legislation.And then:An absolute and public guarantee that these measures, when the details are known, will be implemented in full.It goes on to talk about a third condition, which is an anti-avoidance provision in relation to capital gains tax. But our shadow Treasurer said we want:An absolute and public guarantee that these measures, when the details are known, will be implemented in full.The Treasurer said in the parliament that the shadow Treasurer:... put three conditions on the opposition supporting the government's business tax package. I announced to the House the government has met all three and that should mean that the opposition supports in its entirety the government's business tax reform agenda.He goes on to say:... the government announced its position in relation to the so-called integrity measures of alienation of personal service income and non-commercial losses on 11 November 1999. They were measures recommended by the Ralph committee, they have essentially been adopted by the government and we have put more detail on them.So that was the arrangement. That was a matter of integrity, where the shadow Treasurer and the Treasurer agreed and the Treasurer said, `You can trust me. I will implement these measures in full.' He has not. He has abrogated his responsibility as Treasurer of this country, because he has backed down, completely capitulated. When asked this morning on the AM program whether this would cost a bit of revenue, the Treasurer said:Well, at the end of it, the measure raises in its first year, I think, $190 million, or something of that order.So he talks about a two-year transitional period in which it raises nothing, and at the end of that two-year transitional period—that is, in the third year—it would raise $190 million. He said he would implement this in full. I have here a table from the Treasurer's press release No. 74 of 21 November 1999, which cites the revenue gains from implementing this measure in relation to the alienation of personal services income. They were, in their respective years, $380 million, $480 million, $495 million, $515 million, and $530 million. According to the Treasurer this morning the first year is gone, because of the transitional period; the second year is gone, because of the transitional period; and in the third year he will be collecting around $190 million, instead of $495 million.When you add up the hole that has been created by the Treasurer's capitulation to the party room last night, it works out at $1.160 billion. I wonder what the financial commentators of this nation are going to say when they find that the Treasurer of the country, in a sleazy party room deal, capitulates and squanders $1.2 billion so that he can appease the backbench. Yesterday or the day before the government spent $500 million on a petrol rebate scheme for the bush, and now it is squandering $1.2 billion just to appease the backbench. Why? Because the backbench has had representations from people who have been involved in tax avoidance who say, `We're going to vote against you.' So the backbench go to the Treasurer and say, `Look, we have to do something about this,' and he says, `Okay. Fine. I will give in. I will cave in.' He said that he is implementing the Ralph recommendations in full. That is what the Treasurer said. He promised it. He said, even today, `Yes, we are implementing them in full.' I have just shown there is a $1.2 billion hole. This is what the Ralph review had to say about the alienation of personal services income—which is now completely condoned by this government:These practices raise significant issues of equity and pose a growing threat to the income tax base ... It is clearly inequitable that some taxpayers should be reducing their tax liability by using interposed entities to alienate income while other taxpayers also deriving personal services income, including ordinary wage and salary earners, pay the correct amount of tax.It goes on to say:In addition to the tax consequences, income alienation can result in highly remunerated individuals being able to reduce their taxable income to a level that entitles them and members of their families to a range of income-tested government payments. Alienation can also enable these individuals to avoid a range of other obligations such as higher education contribution charges, Medicare levy and superannuation surcharges and child support payments.That is what the Treasurer is now condoning as a result of the decision that he made last night. The Ralph report said:A safeguard arrangement will allow a service provider, who has received 80 per cent or more of payments for personal services from one service requirer or associate of that service requirer, to seek from the Commissioner of Taxation a decision that the 80 per cent/one service requirer rule should not apply.Such a request will be considered on the facts of the particular case. However, an application will not be successful if the interposed entity has been consistently receiving payments from one service requirer, and it cannot be demonstrated that the interposed entity is conducting an independent trade or business.That is what the Ralph report said should happen. Nothing like that is happening at all. Because, if you go out and buy a screwdriver or if you have a laptop or a mobile phone you can avoid these provisions completely. I cannot understand how the Treasury could even stand by a figure of $190 million in the third year. How will it raise $190 million if all you have to do is buy a screwdriver to not be caught in this provision?There is a big history to all of this because the Prime Minister is the friend of tax avoiders. Very early on, in 1984, he said, `We smashed the tax avoidance industry; we brought it to its knees.' He keeps going on about how he did all these great things to smash tax avoidance. He said:That is why the former Government was the one that smashed the tax avoidance industry in this country ... all tax avoidance of substance in the 1970s was destroyed by legislation that I introduced as Treasurer.He then went on in the same speech on the Income Tax Assessment Amendment (Capital Gains) Bill 1986 to say:The Opposition opposes this capital gains tax measure. We have said repeatedly that we will repeal it when we are elected to government.He says, `We are against tax avoidance, but we do not want a capital gains tax that taxes the artificial conversion of income into capital gains. No, we do not want that, and we are going to oppose it.' And they did—they voted against it. He said:What is wrong with a capital gains tax is not only its actual impact but also its psychological impact, because capital gains taxes will psychologically act against capital accumulation by small business in Australia.Then, most despicably, the now Prime Minister went to the length of warning members of the government in marginal seats that he would be campaigning against them. For example, he said:The honourable member will have plenty of opportunity, because during the election campaign in the seat of Hunter, which I am visiting at the weekend, we will have great delight in ramming that right down the honourable member's throat. He will be one of the great oncers of this Parliament and is on my hit list. The honourable member is on my hit list in large letters and, boy, are we going to have fun. We are going to have fun in going around and saying, `Look, we are for tax avoidance and we are against Labor, which introduced the capital gains tax. We are going to extract a big political price from you.' That is what the current Prime Minister said. He will stop at nothing. He then went, again in that speech on the capital gains tax bill in 1986, and said:One of the worst nasties of option A is the Government's iniquitous capital gains tax.Again there is the threat, because he continues:Over the months ahead I can tell all Government members—particularly the nine who are on our hit list for the next election, the nine who will be bundled out at the next election—that they will have that rammed down their throats.He talks about the fringe benefits tax as an iniquitous tax and says, `We are going to oppose that, too.' The fringe benefits tax and the capital gains tax were put in place by the Labor government to specifically clamp down on tax avoidance, to smash tax avoidance. The Prime Minister said, `No, we have done all that.' Now here they are again, 16 or so years later, saying, `We have smashed all the tax avoidance.' The Treasurer actually said in 1996, `If there is any tax avoidance we will crack down hard on it.' But he has not. On 11 September he said:This government is concerned about tax avoidance and tax rorting. This is a government that is prepared to act against it.... ... ...This was a government prepared to act against tax avoidance, unlike the Australian Labor Party, as you have seen, which is extremely sensitive about its record on tax avoidance.Wherever we saw tax avoidance we acted against it. We implemented the capital gains tax and the fringe benefits tax against the wishes and against the votes of the members of the current government, including the Prime Minister of Australia. Today is a day of shame because the Treasurer of this country has dishonoured the office of Treasurer. He has a responsibility to protect the integrity of the income tax system, but he has no integrity. These are supposed to be integrity measures. What a joke! The Treasurer of this country has no integrity and he deserves no respect. I am pleased to quote from Alan Kohler in the Financial Review of 4 April this year where he says:Lawyers, accountants and business people call it avoidance to escape the stigma of evasion, and to allow their subsequent attendance at church, but they are little more than fancy thieves.These are the friends of the Liberal Party, the Treasurer and the Prime Minister. Why did the Treasurer capitulate? Why has he dishonoured the office of the Treasurer of Australia? For one reason and one reason only: the Prime Minister and the Minister for Employment, Workplace Relations and Small Business want the alienation of personal services income to go ahead unchecked, even though it is a major and expanding avenue of tax avoidance, so they can pursue their industrial relations agenda. They want to completely de-unionise the building industry and they are prepared to pay a very high price to do that. In this case they regard $1.2 billion as a very cheap way of de-unionising the building industry. Union members are encouraged effectively to become dependent contractors, get a whole lot of tax lurks by taking on that status and then leave the union of course. That is what the Prime Minister wants. He continues his industrial relations agenda, his obsession, to get rid of the award system and to sack the independent umpire.We hear the Minister for Employment, Workplace Relations and Small Business in this place just about every day saying, `Labor is for the unions' and so on. By and large we are for the unions, and we are proud of it. This government, in its obsession to smash unions, has said, `We are quite happy to hand over $1.2 billion so that tax avoidance can continue unchecked.' Senator Gibson, in the Senate inquiry on the business tax reform process, referred to a comment by former Treasurer Ralph Willis that the revenue estimates from this could be four times larger than the official ones—that is, from cracking down on this area of avoidance. Senator Gibson cited those figures because he wanted to prove that the whole package was revenue neutral. It suited him to say that then, and I think he is right. The avenue for avoidance here now formally opened up by the government will spread right through the PAYE tax system. We may be witnessing the beginning of the dismantling of the PAYE tax system in this country because if it is good for the building industry and good for other industries it will be good for every industry. At some stage we will not have any PAYE taxpayers because they will all be sanctioned by the government to become contractors and therefore enjoy those extra tax concessions. The Treasurer, who should be ashamed of himself, promised the Labor opposition that he would implement these measures in full. He has not. He went and faced the opposition from the party room. He has obviously made the choice between honouring the position of Treasurer of this country and his leadership ambitions. He has got railed against him the Prime Minister and his rival, the Minister for Employment, Workplace Relations and Small Business, saying, `We are against what you are trying to do.' He has said, `This is going to prejudice my leadership ambitions so I will capitulate to the backbench.' This government has no guts at all when it comes to smashing tax avoidance. The Treasurer is a disgrace. He will come in here and say, `We're implementing it in full.' He will give us this doublespeak about how there are no revenue losses whatsoever, but he has completely capitulated. I say to the Treasurer—and he will understand this—`Don't forget to water them geraniums, Treasurer'. You know what that means and you know that you have dishonoured the position of Treasurer in this country. You have sanctioned a major and growing avenue of tax avoidance in this country for one reason only, and that is to further your leadership ambitions. It is a day of shame and disgrace for the Treasurer of this country.12:01:0015919Rudd, Kevin, MPMr RUDD83TGriffithALP00—I rise to speak on the Taxation Laws Amendment Bill (No. 11) 1999, which is a technical bill which relates to a number of quite discrete subject areas. These relate to: integrity measures concerning the alienation of Australian real property by non-residents; the income tax deduction for gifts; the extension of periods of deductibility for certain donations; the income tax exemption termination for non-resident sportspersons, clubs and associations; and capital gains tax. They are a range of technical amendments seeking to correct errors which have gone through this House in previous legislative exercises.Labor has moved a significant amendment to this bill, which goes to, firstly, the nature of the government's misleading claims on the raft of its taxation proposals and bills before the House; secondly, the unfairness of its overall taxation package; and, thirdly, the complexity of that package, both from the business community's perspective and from the perspective of consumers, those who have to live with this tax. This has also presented the Australian Taxation Office with an administrative nightmare, not to mention the other problems that the office is currently experiencing. My remarks will be addressed in large measure to these particular amendments.First and foremost, it is important to address the whole sorry saga of John and Wendy. All of us who were candidates in the last federal election remember clearly the government's use of cameo examples in terms of who would be the net beneficiaries of the government's taxation proposal, the ANTS proposal. We remember the specific claim made by the government prior to the election that nobody would be worse off under the GST and the related measures to be introduced with it. We also remember the particular language used by the Prime Minister in April last year, when he again said that no-one would be worse off under this package. What a tangled web we weave in this place. When we look at the detail as it has unfolded we clearly find evidence that the government, through the Prime Minister and senior ministers, both prior to the election and subsequent to it, have effectively duped Australian voters and the Australian community into believing the proposition that nobody will be worse off. Through the evidence which has been presented to this parliament in the last week or so, we have also seen that there are significant sections of our community who will be worse off as a consequence of the introduction of this package. We have seen the unravelling of all the claims that have been made in the period to date as the details of it become increasingly clear to those in the community who will have to suffer the consequences. I will go to that example of John and Wendy. If John, for example, earns $30,000 a year and Wendy earns $28,000 a year and Wendy decides to take at least a year off to look after her two children from, say, December 2000, she will lose $67 a fortnight in parenting payment because her income disqualifies her under the annual income test. Previously she would have qualified almost as soon as she stopped working—and that was by complete and explicit policy design. It was Labor's measure designed to help families with the costs that they face as soon as babies are born. The Prime Minister has deliberately decided to put that out of reach. John and Wendy are not going to be better off. They are going to be $29 a week worse off, and that is before the GST bites in. After the GST comes in, they will be $63 a week worse off—and that comes from a government that has said on repeated occasions in this place and in the broader community, both prior to the last election and subsequent to it, that nobody will be worse off.How are the government going to try to make good on this promise? The Prime Minister was confronted on this matter in question time in this place on Monday this week. The Prime Minister claimed that John and Wendy would now be $12 per fortnight better off, yet he has ads going around the country which now say that the typical family will be between $40 and $50 better off. Out there in cameo land on the sorts of political representations that the government have put to the whole community, are they trying to say that people like John and Wendy do not represent average Australian families? Are they not a typical family?On top of all that, we are now confronted with probably the most goading and galling exercise of all, and that is the $80 million taxpayer funded television advertising campaign running right across the length and breadth of this nation which again repeats the untruth that no Australian will be worse off as a consequence of the introduction of this package. It says, `Relax, John and Wendy. The government is providing special assistance for the cost of raising children.' It implies, `Bob's your uncle. It will all work out in the morning. Don't worry, no-one's going to be any worse off.' The reality is exactly the reverse for significant groups in the community as a consequence of the introduction of this package. Sometimes I wonder where this government finally gets off. The bottom line is that, when you look at the whole question of the propriety and probity of public advertising in this country, this breaches historical benchmarks.I come from the state of Queensland and I lived through the Fitzgerald inquiry. A large part of the Fitzgerald inquiry's examination of the probity of the administration of that state by the National Party in the period through until 1989 was of its use and abuse of public advertising. Those of us from that state would remember how every Sunday night before the 6 o'clock news Joh Bjelke-Petersen would come on to the television screen, usually driving a D9 bulldozer, courtesy of the taxpayer, and then would run a five-minute commercial entitled `Queensland Unlimited' broadcasting to the length and breadth of the state of Queensland, using the taxpayer funds of the people of Queensland and saying, `Look, Queensland is a great place. There is not a problem under the sky. We basically have everything under control. We are running a pro-development agenda. We have the reins of government well in hand. Every citizen of this state is in a good state of security and wellbeing.' We all know with the benefit of hindsight what an extraordinary set of misrepresentations that was. But the principle was this: we had on weekly television the abuse of public funds, taxpayers' money, to run a patently party political message to the Queensland community articulating the political interests of that government.When I look at this $80 million taxpayer funded advertising campaign today, I see no distinction between what this government is doing with such a huge slice of public funding measured againt what the Bjelke-Petersen government did in the 1980s in Queensland. It is equally as sick, both in its intention and in its execution. It is a blatant exercise in political propaganda. If you look at those advertisements, they are entirely advocacy exercises. They are not about the provision of public information to a community that needs it in order to understand the detail of the tax; they are political advocacy exercises and show every hallmark of the Queensland precedent to which I have referred. What could that $80 million be spent on? We have had debates in this place about the erosion of Commonwealth government funding to higher education. We all know about that from the number of students that come into our electorate offices who can now no longer afford their HECS contributions and whose ability to access Austudy has been effectively undermined by the changes that have been introduced by this government; yet the government can quite happily find money in its pocket to pull out $80 million and spend it on a public advertising campaign in order to get itself out of political hot water on a tax package that is running off the rails. We have had debates in this place about the adequacy of Commonwealth contributions to child care. We have had debates in this place about the adequacy of Commonwealth contributions to disadvantaged schools right across this country. We are going to have a debate in this parliament soon about things like the inability of this government to continue to fund properly the operations of Radio Australia across the region and across South Asia and beyond, as well as the proposed sale of the Darwin transmitters. Why? Because the government cannot find $12 million to sustain that operation. Yet it can find $80 million in order to politically prop up its moribund credibility as far as this taxation campaign is concerned. It can find $80 million to spend on saving its political hide—or to try to do so—yet it cannot find $80 million to contribute to critical areas of public and social need right across this nation.Each member in this House knows from their electorates that there are community organisations, HACC programs, SAAP programs and people in dire need in the individual communities that we represent for whom $80 million would represent the absolute solution of their particular problems. But this government says, `No, we do not have enough money for that but we can bring in the Josef Goebbels unit and whack up a few ads on the television in order to convince everybody that this is the tax package of the century.' Well, it is not.The proof of the government's deception on this issue of GST winners and losers was finally underlined in this House on Tuesday when the Deputy Leader of the Opposition, Mr Crean, asked the Prime Minister a very simple question. His question was, given the Prime Minister's statement of the previous week, whether he was able to confirm whether the following proposition was true or untrue:The average family will receive a tax cut of $47 a week after factoring in the goods and services tax. Again, the question to the Prime Minister was: Can you now confirm that the $47 a week you quoted is before the goods and services tax is factored in, not after? The answer from the Prime Minister? It is not worth repeating, but the shorthand answer of the Prime Minister was to duck and weave, meaning, `I am not going to answer that in a month of Sundays.' The bottom line is that this government's credibility has been completely blown in its repeated attempts to run an argument about the net wellbeing of Australians before and after the introduction of the tax and whether or not the tax has been factored in to the numbers that have been used.How is the government responding to its problems as it has encountered public exposure of the fact that there are large groups of Australians who are going to be worse off as a result of the introduction of this package? What is its policy on the run response to this particular problem? Well, at five minutes to midnight I think the political realisation finally hit that it had a problem; that is, there were a number of groups in the community who were going to be worse off and they were becoming increasingly vocal. Enter from right field Senator Jocelyn Newman with the top-up payments system. Whacko, here we have a top-up payments system that has been dreamt up on the run. The government was asked in this place in question time: if you are serious about this proposal, if you are serious about believing that there are going to be transitional problems for people in particular payments categories in terms of the introduction of the GST and its impact on them, presumably in the forward estimates you have already allocated a quantum of money to fund this program? What was the answer in this House? Sorry, no, we do not actually have a particular amount of money set aside for this purpose. In other words, what we have with this proposal, this top-up payments scheme, is a cute piece of political rhetoric. It is a nice press release to whack out there, something for the government backbench to wave at their disgruntled constituencies and say, `Look, we have a method that can cope with any difficulty that you happen to experience temporarily post 1 July once this thing comes in. It is called the top-up payments system. What do you have to do about it? Well, we are not sure what you have to do about it but we think there are some forms for you to fill out. You will have to substantiate how you have become worse off as a result of the introduction of the tax and other changes to the benefits system. You have to substantiate your claim; you have to produce the receipts, the dockets and all the rest of it,' forgetting the fact that the receipts and the dockets do not actually have the GST stamped on them. 83DMurphy, John, MPMr Murphy—No, it is hidden. 83TRudd, Kevin, MPMr RUDD—So it is a hidden tax because this government, unlike any other government in the OECD that has introduced a consumption tax, does not propose to disclose the actual dimensions of its tax on the dockets and the receipts provided to consumers. Yet, as far as the people who will be trying to access the so-called top-up payments scheme are concerned, they have to somehow substantiate how they are going to be worse off using a range of basic documentation which, in large part, does not contain the information on it that will presumably be needed to demonstrate what extra costs they have had to encounter.I wonder where these sorts of bright, breezy proposals, such as this top-up payments scheme, come from. Can you imagine the meeting in the Prime Minister's office or the Treasurer's office where this was probably dreamt up? You can just picture it. There is Mark Textor in one room. He has just got the polling in from the night before and the government is in trouble. This GST thing is really starting to bite. There are a few people from the Treasurer's office, someone from the Prime Minister's office and some poor benighted bureaucrat from the Department of the Treasury, trembling because he can see the prospect of a further call on public revenues being demanded, all sitting around saying, `What are we going to do about this problem because we know for a fact that the government has introduced a set of measures which will cause a significant slice of the community to be worse off. What are we going to do about it?' Enter Mark Textor. He said, `What we need is some transitional camouflage. That transitional camouflage we could call a top-up payments system. That is something we can all use out there in the suburbs to convince our individual constituencies that there is a mechanism out there that can provide them with some temporary economic justice. But do not worry, Treasury; we do not expect any money is actually going to be expended, for the simple reason that we are going to make it so inaccessible and so difficult for would-be users of this scheme that they will not be able to make any substantial call on it.' Nice piece of politics! You have to think about people like Mark Textor. He has been pretty busy of late. He has had to come up with some key lines and themes on how to handle this particular problem. He has been very busy on the stolen generation problem. He has been very busy on mandatory sentencing. He has also been providing, I think, people in the office of the minister sitting at the table, the Minister for Immigration and Multicultural Affairs, with new key lines and themes on how to manage the immigration and refugee debates. He has been providing useful political armoury in terms of how this government is going to manage its overall political campaign of wedge politics. We have had job snobs and the rest of it. Mr Textor has been very busy—but not too busy to provide the government with some key tactical and political advice about how to massage and manage this emerging problem in terms of those who will be the demonstrable, measurable, quantifiable losers as of 1 July this year. We should look at how we in the opposition have sought to tease out of the government how this thing is to be used. For example, the Leader of the Opposition, Mr Beazley, on Tuesday of this week, again asked the Prime Minister a very simple question about how the scheme was to operate. He said:Prime Minister, I refer to your claim that all GST losers can apply to a special unit in the Department of Family and Community Services for an income top-up. Why does this last for only three months? What happens to people who are worse off after 30 September, such as John and Wendy...The answer from the Prime Minister, apart from the usual and conventional duck and weave: do not worry; if people are disadvantaged they can `make submissions'. They can make submissions to whom; using what criteria, using what evidentiary base? How do you actually fall across the line in terms of accessing these top-up payments?We had a further question from Jenny Macklin, the member for Jagajaga, on who precisely would be able to access top-up payment provisions. She asked the Prime Minister about the actual income characteristics of those who would be eligible. She asked the Prime Minister:Why does Minister Newman's press release cut off the top-up payments provisions under family tax benefit part B on 30 September? Won't this ensure that the only carers eligible for your payment will be those who have earned more than $10,000 between 30 June and 30 September—an annual salary of $40,000? Isn't it the case that only 15 per cent of working women earn more than $40,000 a year? Prime Minister, haven't you constructed this top-up payment to ensure that the 85 per cent of female carers who need it most will not be eligible for it?The answer to this question from the Prime Minister was to duck and weave: `I don't want to get into the detail of that.' The bottom line is that this whole scheme has been constructed to ensure that there is minimal access to it in order to minimise the call on public revenues but, most critically, to provide this government with some political camouflage on the way through the immediate political difficulties they will face as of 1 July this year.We had from Michael Lee, the shadow minister for education, a similar question to the government in relation to whether this top-up scheme would be made available to students who are relying, for example, on benevolent trusts in order to fund their way through university. The answer from the Prime Minister in terms of whether they would be eligible for top-up payments was to duck and weave, meaning, `Of course not. This is too difficult, too hard. Remember, the ultimate rationale of this whole scheme is that we do not want people out there in the community accessing this thing; we just want to be able to say in the overall public debate that in fact we have a mechanism which the community can draw upon without providing the community with the means through which substantially to make use of it.'The bottom line in this whole debate is that, as we all know and as multiple speakers from the opposition have commented over the last 12 months and multiple commentators in the community have similarly commented, prices are going to go up as of 1 July. They will go up by a margin considerably in excess of the 1.9 per cent to which this government has given recognition. Furthermore, the income tax cuts that this government promises as of 1 July will not compensate for what occurs. The changes to benefits payments will similarly not compensate for the changes that will occur. We have seen time after time in example after example in this place how changes in price structures are going to adversely affect the living standards of Australians after 1 July. We have had presentations in this House on how the cost of road transport will increase. We have had admissions from the government's own side, through Eoin Cameron in Western Australia, about the impact on basic things such as beer prices. The bottom line is that what we have with this government is something that is, at its core, a naked political strategy to try to camouflage its political difficulties as it approaches the sword of Damocles on 1 July, hoping that mechanisms such as the top-up payments scheme, that dissimulation on the fate of John and Wendy, will be sufficient to get them across the line. And it will not. 12:21:0015924Crean, Simon, MPMr CREANDT4HothamALP00—I rise in support of the amendment to the second reading of Taxation Laws Amendment Bill (No. 11) 1999 moved by the member for Wills. I take this opportunity to draw attention to one specific element of that amendment which states: (5) the reluctance of the government to effectively tackle tax avoidance in Australia . . .I rise to express concern about a serious revenue risk to the budget now and into the future due to the cave-in by the Treasurer in his party room meeting last night—a cave-in reported in today's Financial Review and confirmed by the Treasurer on AM this morning; a breach of a commitment given in this parliament and given in an exchange of letters with the opposition; a cave-in which shows that this Treasurer continues to be soft on tax avoiders. This is a Treasurer who slugs punters and small business with a new tax, the GST, but does special deals to ensure that others will pay little or no tax. This Treasurer is a serial tax avoidance offender.This latest episode could cost the budget up to $3 billion per year, according to John Ralph, if not addressed properly. But, if we go to the Treasurer's transcript today—because this is the first we have heard from him as to what is involved—this is what he said. He was asked on AM, `How much is this going to cost the budget, given that you made a commitment that the Ralph reforms as well would be revenue neutral?' This was the Treasurer's response:There is a transitional provision which will have a cost to the budget, a two-year transitional provision. Well, at the end of it, the measure still raises in its first year I think $190 million or something of that order.Unless there is a better explanation by the Treasurer, the opposition takes this statement from the Treasurer to mean that the transitional measure that will operate for two years will raise no money. Effectively, that is what he has said on radio this morning. He says that we will have a cost to the budget, a two-year transitional provision, and at the end of it the measure will raise in its first year $190 million—in other words, after the transitional period. So, unless there is a better explanation of this, what we are looking at is that for two years there will be nothing, and in the first year of operation there will be $190 million.Let us compare that with what the Treasurer, in his press release on 11 November last year, put out as part of the final costings for the business tax package. I am reading from table 2 in attachment O to that document, which identified the revenues that were expected to be obtained by dealing with this measure, which is called `the restricting alienation of personal services incomes'. What we had there were revenue gains of $380 million in the first year, $480 million in the second year, $495 million in the third year, $515 million in the fourth year and $530 million in the fifth year. That is roughly a total of some $2.4 billion over that time.The only figures that we have got to deal with at the moment are those that came out of the Treasurer's radio interview this morning. There, instead of $380 million in the first year, we get zero; instead of $480 million in the second year, we get zero; instead of $495 million in the third year, we get $190 million; and for the final two years there has been no indication so far of what that will involve. So money that is already factored into the budget—already factored in because it was part of the revenue neutrality test, part of the basis upon which we did the agreement with the government on business taxation—for these two years, being $380 million in 2000-2001 and $480 million in 2001-02, is now reduced to nil. That is a huge hole, a massive hole. But it gets worse because the Treasurer's new first year, he says, will only raise $190 million, not $380 million; and not the $495 million that we should have been getting in that third year, but $190 million only.So what we have today is the Treasurer, on his own admission on radio today, opening up a $1.1 billion hole—over three years, $1.1 billion. And this is a Treasurer who talks about fiscal responsibility; this is a Treasurer who talks about his integrity. This is a Treasurer who cannot deliver. We do not know what the figure will be over the five years. But we have, on the information today, the potential for a $1.1 billion hole over three years. That is more than the Timor tax will raise. So what we have is a Treasurer who is slugging income earners who earn over $50,000 with a new income tax, but he is letting tax avoiders off again by the same amount—$1.1 billion. So PAYE earners, ordinary wage earners, cannot avoid the new income tax he is hitting them with, but these tax avoiders can. It is an absolute disgrace. The Treasurer should hang his head in shame. He should apologise to this parliament and go back into his party room and get agreement. He does not have to convince his party room on this; he has bipartisan support from us to deal with this. NV5Forrest, John, MPMr Forrest—Mr Deputy Speaker, I rise on a point of order. The bill currently under discussion relates to a range of matters. I would draw your attention to the fact that the member's speech is irrelevant to the nature of the bill. I would ask him to be relevant to the nature of the specific bill and the provisions provided in it.10000Causley, Ian (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Hon. I.R. Causley)—The honourable member for Mallee may not be aware, but there has been an amendment moved which gives a wide-ranging capacity to debate this particular bill. So the honourable member for Hotham is in order.DT4Crean, Simon, MPMr CREAN—I thank you, Mr Deputy Speaker. I know that the government does not want to hear this. I know that the government does not want to hear the plain truth because it is a telling truth. This is a government that will slug punters, slug ordinary wage earners, put 10 per cent on just about everything they buy and hide it on their receipts, but go soft on tax avoiders.If you are proud to get up in your electorate and support that inequity, my friend, go off and do it because we will take you to the next election pointing to that distinction. This GST that is being introduced is already an unfair tax. Do not make it more unfair. Part of the fundamental reason why we were prepared to agree with this government on the business tax reform was because revenue neutrality was the fundamental by which we delivered equity, by which we said the measures that occur in terms of business tax reform have to be paid for by themselves within that sector. We pointed out to the government that this was one critical area that was opening up as a massive tax avoidance loophole. John Ralph referred to it in his ness tax reform wherebusi he said:Where payments in respect of personal services are made to an individual through an interposed entity, tax may be avoided by income alienation.... ... ...These practices raise significant issues of equity and pose a growing threat to the income tax base. The use of such arrangements to reduce the tax liabilities of individuals means that people in substantially the same financial and work situation would be paying significantly different levels of taxation.It is clearly inequitable that some taxpayers should be reducing their tax liability by using interposed entities to alienate income while other taxpayers also deriving personal services income, including ordinary wage and salary earners, pay the correct amount of tax.What sort of system is it if the government defends a position in which PAYE earners not only get a new tax, a new 10 per cent GST, but are put at further disadvantage when they are in that particular circumstance of work operation? That is why it is such a disgrace that the Treasurer has buckled under the pressure and that his party is prepared to perpetuate further inequity.Let us just go to what the Treasurer said in the parliament when this deal was cut with Labor. He said in his press release at the time that he had to `restrict the ability of individuals to reduce tax by diverting the income they earned from their personal services to an entity—a company, a trust or a partnership—known as the alienation of personal services income. This undermines the income tax base and it raises significant equity issues.' So concerned was he about it that he even brought forward the operative date of the measure to 1 July 2000. We have been waiting for the detail of this legislation, and we still have not seen it. We understand—so embarrassed is the government by this cave in, so taken by surprise in the party room and rolled—that it is still trying to finalise it. But I suspect that this legislation will be brought in at the eleventh hour tonight. It will be brought in just as the parliament is about to rise for a period of 3½ weeks before the budget. This is a disgrace and the government is trying to hide it from proper scrutiny. This is a Treasurer who reached an agreement with us to do something about the measures. He undertook to involve us and give us access to the draft legislation so that we could satisfy ourselves as to what the measures are, and we have not seen it. This is a Treasurer who has broken yet another agreement and another commitment in terms of the new tax system. But let that surprise no-one because, after all, it was the Prime Minister who said we would never, ever have a GST. It was the Prime Minister who said, `No-one will be worse off under this new tax except tax cheats.' It looks very much like ordinary Australians will be worse off and the tax cheats will be better off. This is a government of duplicity unheralded in this parliament. It is a government that has misled the Australian public time and time again, and this is just another example of this shameful episode that we are facing. When the Treasurer agreed to bring in legislation to deal with the problem that he is now running away from, he said in this House on 24 November:I begin by referring to the letter that the Deputy Leader of the Opposition sent to me, which he read into Hansard.Of course, they were the exchange of letters that occurred when the detail and the agreement on business taxation was reached. He went on to read my letter:To summarise, we are seeking:... ... ... An absolute and public guarantee that these measures, when the details are known, will be implemented in full.That is what I asked of the Treasurer as one of three conditions to agreeing to the business taxation proposals. The Treasurer said in this parliament on 24 November, `We agree to the three points.' In other words, he agreed to the absolute and public guarantee that, when the details are known, these measures will be implemented in full. There are two tests by which that is going to be judged, and I have already referred to one—that is, table O. It is the fiscal test. It is the one that says, `You back up with the same figures that you put out to the public in November as to what you intended to do; you back up by Treasury analysis to show that the same figures will be achieved from what you specifically announce.' In other words, when you have developed the proposals, back them with the same figures that you have asserted to the Australian public will be realised by this crackdown on the measures.According to today's news stories, he has failed that test. He has failed it miserably. If what we have is the rat hole called a transitional period which yields no revenue and then in the first year only $190 million, instead of what should have been close to $1.3 billion, we have a $1.1 billion deficit. We have tax avoiders pocketing money that should be paid into the taxation system. We know that, because of what they avoid, more has to be collected from ordinary taxpayers in this country. It is an absolute disgrace that they introduce a Timor tax on ordinary wage earners but give the tax avoiders this $1.1 billion bonus.As I said, they are in such a panic in the Treasurer's office that they still have not got the detail. It will be scurried into this place so that it will not be open to any scrutiny tonight. We will give it as much scrutiny as we can as soon as the detail is known. The other test that it has to meet is the drafting instructions test. When the Treasurer wrote back to me—agreeing to the arrangements by which they would implement those measures in full—he listed the directions that he would be issuing to the drafters of this legislation to be implemented in full. We will want to test the legislation against all of those points. We will see whether, in addition to failing the fiscal test, he has also failed the detail test.According to a news report today, Mr Costello told a meeting of the party room last night that a contractor would need to satisfy only one of four criteria to avoid having to apply for a special ruling from the Taxation Office. The criteria, according to this report, comprise: having a business premises, or having two or more unrelated clients, or being able to satisfy the taxation commissioner that the entity is not a loss making operation and that the tools of trade are supplied, which could include a mobile or a laptop; or the entity having one or more employees who perform at least 20 per cent of the work. There are four tests, but a contractor has to satisfy only one. You know the one that is going to be the easiest to satisfy: `I have got a mobile telephone.' What an absolute joke! Under that principle, there would not be any money raised by this measure. There are more than four million mobile telephones in this country now, and that is all contractors have to show to get themselves out. Let us have a look at the detail of what comes forward. This is a Treasurer who has misled the Australian public and has misled this parliament. He said these measures would be implemented in full. According to the fiscal test, they are not being met in full. If these criteria are going to be the basis by which the government are going after tax avoiders, God help us. It means that we will have an even further divided society. We will have people having to pay this new 10 per cent tax on just about everything. We will have taxes, like the Timor tax, being brought in to plug the budget deficit. Yet the government are letting the tax avoiders go free—opening up more fissures in the budget, opening up more losses to revenue and putting at risk the budget and the fiscal stance of this nation. This Treasurer is a disgrace. His word cannot be taken. It is another example of how they have deceived the Australian public as to their intentions. They ought to be condemned for it. We will be making sure that every opportunity is used to bring home the deceit, the betrayal and the dishonesty of the government through its Prime Minister and its Treasurer. (Time expired)12:41:0015927Murphy, John, MPMr MURPHY83DLoweALP00—Mr Deputy Speaker, if you will just permit me before I make my contribution to this wide-ranging taxation debate, to pay tribute to the Parliamentary Christian Fellowship Group, I notice that since I was in the chamber earlier this morning a psalm has been left on our seats. I suspect Ross Cameron, the member for Parramatta, has had a hand in this—I pay tribute to him—and I dare say the member for Mallee, too. For the benefit of the House, I am sure I will be able to draw strength when making my contribution to this debate from reading Psalm 91, which says:If you make the Most High your dwelling—even the Lord, who is my refuge—Then no harm will befall you, no disaster will come near your tent.I hope no disaster befalls me or comes near my tent in my contribution. Also, somebody whispered in my ear that the member for Hughes, Danna Vale, left a very important Easter symbol—an Easter egg—on each of our seats this afternoon. I think that is a wonderful thing because those of us who are committed Christians draw strength from the resurrection of Jesus Christ. I would like to thank Mrs Vale and also the member for Parramatta.10000Causley, Ian (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Hon. I.R. Causley)—I think the member for Franklin was involved as well.83DMurphy, John, MPMr MURPHY—Yes, I thank also the member for Franklin, Harry Quick—well done. Returning to the debate, the expression `death and taxes' is known as death and the GST. The Liberal-National-Democrat parties, who claim to be the supporters of Aussie battlers and small business, have chained their limitless tax on the purses of all hardworking Australians. In my electorate of Lowe, there are many hardworking Australians on modest incomes. These voters are honest and hardworking people, raising their families, and today they are having to make sacrifices from their wages to pay for higher interest charges on their home mortgages, to which will be added the pain of the Howard government's GST.2K6Brough, Mal, MPMr Brough—You want to take away their tax cuts.83DMurphy, John, MPMr MURPHY—For the benefit of the Parliamentary Secretary to the Minister for Employment, Workplace Relations and Small Business, at the table, they will need their tax cuts to pay for the additional costs imposed from this regressive GST—you know that, so tell the truth. The voters have been promised tax cuts, but already these are evaporating even before they see them. All the cuts will be absorbed by higher prices. Even if the cuts are to be found, they will come from the shallow pockets of public schools, pensions, hospitals and so on. We all remember the promises of this supposedly honest Prime Minister—the vision splendid of the Howard government; a vision that has taken us backwards where Australia will become one of those mediocre nations that belong to the flat earth regressive tax society. Where is the end of the rainbow that Treasurer Costello with such self-satisfaction is always telling us about? Australian Democrats leader, Meg Lees, and her colleague Senator Andrew Murray have destroyed the one glimmer of hope that most Australians carried with them at the last election. They blindly and sheepishly fought for a prime seat at the dinner table of the Prime Minister. They tried to show that they possessed what it takes, that they were a party of absolute substance and wisdom, perfect to lead all Australians out of the bosom of their existing tax system. They said we needed a bigger reservoir to tax in order to make the millionaires pay when they eat at their five-star restaurants. They diligently used their numbers in the Senate to make the GST appear progressive. All Australians were led to believe that there would be more freedom and equality. But they could not pull the wool over the eyes of Senator Brian Harradine. He understood the nonsense of their argument which suggested that a regressive tax would lead to lower taxes. The folly of their deliberate and fatuous strategy was obvious to the Australian Labor Party right from the beginning. The National Party ought to be ashamed of itself for being conned by the Liberal Party into implementing such a dishonourable, regressive tax. They have hurt many Australians living in country Australia. The voters will remember them. The GST has continued to receive much controversy as day by day major sectors of Australian society are realising and feeling the cancerous nature of its impact. After all, the GST is certainly a tax designed by the Liberal and National parties' big end of town. Yes, this GST has created equality—this flat tax has descended equally on both high and low wage earners. The Howard government believes in the equality of payment but not in receipt. As I said in this House on Tuesday during the MPI debate, how can a flat tax be fair? I believe the GST will quickly erode Australians' net pay. A worker taking home, say, $470 per week will have this amount reduced by 10 per cent. With the Howard government's GST in the workers' pockets, the real value of wages will weaken. With prices going up to cover costs, workers will change expenditure patterns and this will reduce the income of all Australians with only their labour to sell. The GST is a reduction of wages by stealth. That is why the government does not want the GST shown on receipts. And I pay tribute to the member for Griffith: in his speech a few moments ago he exposed that to great effect. If the worker is to maintain the real value of income as reflected in the cost of living, then it seems an increase of $47 per week in wages will probably be sought. This can easily lead to a new round of inflation which monetary policy may not be designed to counter.The GST is an unfair and pernicious tax that will be chained to all the people living in Australia, especially those with only their labour to sell, and at 10 per cent they will be worse off. A new chapter of hardship has evolved with this regressive tax. It will become a part of Australian history with the villains being the Howard Liberal-National government and their sneaky compatriots, the Australian Democrats. The Howard government's GST is an unfair tax on the cost of wages. It will directly undermine the quality of maintaining a worker's family. No amount of compensation will ever satisfy its rapacious, regressive greed. The failure of this GST will be a constant threat to the stability of our society. Manipulation by some individuals will be uncontrollable. Treasurer Costello is always so haughty when he reminds us about the GST as it applies to other countries. Let us not follow like sheep. We are being led as lambs to the slaughter. The Howard government has shifted taxation responsibility primarily from those who actually own the means of production and exchange to those with only their labour to sell. In contrast, the people of the United States of America were truly visionary—their constitution prevents regressive taxes. Benjamin Franklin well knew Adam Smith, author of The Wealth of Nations. Franklin and others could foresee problems arising from such taxes. 224 years is a long time since Smith wrote his great work. And Australia has grown into a nation with much of Smith's philosophy. With the rapid growth of technology since World War II, it is sometimes hard to see the fleet cycles inherent in the capitalistic system. Today in Australia we see our dollar constantly falling and, as a resource rich nation, this can lead only to more concentration of ownership of our rural and mining industries. The Howard government does not seem to have learnt from history. By introducing this GST it will make life harder for new wealth creation. Those with only their labour to sell will find it more difficult to save. The small businesspeople, risking their meagre savings as business capital, will be greatly exposed to the monopolists.We have all experienced the way banks deal with ordinary Australians. It seems to me that warnings by the Treasurer to the banks not to profit from interest rate rises exposes his fear to maintain absolute confidence in a market system he so valiantly champions. The high exposure of debt to income by many Australians seems to have the Treasurer rattled. But then he is on record for suggesting that Australians' wages earned outside metropolitan areas ought to be reduced. I said something kind at the start of this speech about the member for Parramatta, but the member for Parramatta also is on record as suggesting that people in the country unable to earn an income should come to the city. That is unacceptable. I come from a little country town called Dunedoo in New South Wales and I can imagine how the people of Dunedoo would be feeling today listening to that sort of message from the city slickers. I hope it is never repeated. It seems to me that we are experiencing an unfortunate clash of two patterns, both of which are creating chaos for this poorly performing government. Firstly, the policies of the Howard government are challenged by international events in the money market. Secondly, this government is unable to control economic forces and it is reacting against workers' wages internally as a consequence of the GST. With the appearance of dark clouds on the global economic horizon it would appear that economic hardship will be exacerbated by the Howard government's belief that capitalism, at any cost, is the foundation of democracy, market freedom and the good life. Whilst this form of capitalism has been around for a while and will probably be around for a while to come, the inherent problems from its inception are still very much with us. This is why we oppose the GST. As the global investment bubble is forever growing, it will be a rude awakening for the Howard supporters to realise that, under his management of capitalism, democracy is for sale to the highest bidder. The market is centrally planned by global mega corporations, larger than most states. The destruction of Australian jobs and livelihoods is rewarded as a virtuous act. The devastation of Australian lifestyles to make money for the already rich is treated as progress. We live in a global casino where the croupiers are faceless bankers, money managers and hedge fund speculators who operate with a herd-like mentality and are praised by a seemingly uncaring government that values greed and promotes avarice. You only have to see the news reports from the stock exchanges to see the volatility of trading. The men and women of Australia, the so-called stakeholders of this nation, depend on honest, transparent government. They have been treated very unfairly by the Howard government, a government who promised to govern for all. We only have to read `Abbott at Odds on Welfare' in the Sydney Morning Herald of 8April 2000 on page 49 in the `Opinion' section by Adele Horin in which the following statement appeared:If National Party MPs are not alarmed by Abbott's denigration of the unemployed, they ought to be.With the GST adding to the plight of the unemployed, the Nationals ought to be terrified. The difference between today's capitalist economy and the type Adam Smith had in mind is vast. Adam Smith would have detested the power of mogul monopolists. He would have told Prime Minister Pitt that using money to make more money for people who already have so much more than they need would be against the sovereignty of all the people. But today, with a concentrated commercial mass media, the moguls and their sycophants are very apt in cloaking themselves in the rhetoric of democracy. The market is their outward dedication to the elitist principle that sovereignty properly resides not in the person but in money and property. We only have to listen, watch, and read daily to appreciate the pushing and shoving that occurs to keep that dream alive. We are told daily by economic rationalists that deregulation and economic globalisation are necessary to free the market. But I think they have forgotten that markets should serve people. Their function ought to be intelligently regulated by a democratically elected government in accordance with a well-designed democratic constitution. I recall that Senator Harradine questioned the constitutionality of the GST. I have heard defenders of global capitalism ask, `What is your alternative? We have all seen that central planning, as in the former Soviet Union, didn't work.' My answer is, `I favour a real market economy', as explained by Adam Smith in his book The Wealth of Nations:The impossibility of taxing the people, in proportion to their revenue, by any capitation, seems to have given occasion to the invention of taxes upon consumable commodities. The state, not knowing how to tax, directly and proportionably, the revenue of its subjects, endeavours to tax it indirectly by taxing their expense, which, it is supposed. will in most cases be nearly in proportion to their revenue. Their expense is taxed by taxing the consumable commodities upon which it is laid out. Consumable commodities are either necessities or luxuries.Smith clearly goes on to define necessities and luxuries, and sums up as follows:As the wages of labour are everywhere regulated, partly by the demand for it, and partly by the average price of the necessary articles of subsistence, whatever raises this average price must necessarily raise those wages so that the labourer may still be able to purchase that quantity of those necessary articles which the state of the demand for labour, whether increasing, stationary, or declining, requires that he should have.A tax upon those articles necessarily raises their price somewhat higher than the amount of the tax, because the dealer, who advances the tax, must generally get it back with a profit. Such a tax must therefore occasion a rise in the wages of labour proportionable to this rise of price.The Treasurer would have us all believe that the worker has no right to seek a higher wage to compensate for the GST. This scenario would be understandable if we made a law that required Treasury to refund the so called bracket creep. We all know that a good deal of the $12 billion promised in tax cuts comes from stored up inflation. It is clear that honesty is not a core policy of the Howard government. Poor old blind Freddy could see that the GST is a direct tax upon the necessities of life. It operates in the same manner as if we were to have a flat and direct tax upon the wages of labour. Gerry Harvey, executive chairman of the Harvey Norman and Domayne retail chains, seems to understand the realities of the GST in practice better than the Prime Minister and his Treasurer. Gerry Harvey said, in a recent article in the Sun-Herald on 27 February.2000:Retailers had lots of tricks up their sleeves to make sure the GST did not cost them money.The real cutting remark seems to emanate from Peter Dixon, Director of the Centre for Policy Studies at Monash University, when, in the same article, he says:There is no need to worry about profiteering, because if someone does not pass on a reduction in taxes or whack up prices to the maximum 10% with GST, then a competitor will.Surveys indicate that Australian supermarkets are dominated by a highly centralised monopoly of ownership and that the products voters purchase from these are reported to be 85 per cent foreign owned. The ubiquitous well-known Australian citizen, Dick Smith, has recently released a survey which clearly shows that the products we buy from industries that do not employ Australians account for 85 per cent of average goods in a monopolised business. The claims by the Howard government that a 10 per cent GST tax will, over time, make products cheaper is absolute nonsense. No-one believes that. I believe that the propaganda machine actually believes its own lies. Because they have repeated them so many times, they can no longer distinguish them from the truth. Or are they wearing rose-coloured glasses? Eloquently written by Adam Smith, the following quotation describes the taxes upon luxuries:The high price of such commodities does not necessarily diminish the ability of the inferior ranks of people to bring up families. Upon the sober and industrious poor, taxes upon such commodities act as sumptuary laws, and dispose them either to moderate, or to refrain altogether from the use of superfluities which they can no longer easily afford. Their ability to bring up families, in consequence of this forced frugality, instead of being diminished is frequently perhaps increased by the tax.I know that the demographers in Australia will see some frightening statistics. In any event, Smith's statement, when applied to the GST policy by the Howard government, reeks of doom and gloom. Smith continues:Taxes upon luxuries have no tendency to raise the price of any other commodities except that of the commodities taxed. Taxes upon necessaries, by raising the wages of labour, necessarily tend to raise the price of all manufactures, and consequently to diminish the extent of their sale and consumption. Taxes upon luxuries are finally paid by the consumers of the commodities taxed without any retribution.This means that the wholesale sales tax is set by the government to be paid for by the owners of the means of production and exchange. It is a cost for which they have to budget. The owners incorporate the tax into the price of the product and distribute it, and the retailer puts on his margin. The GST is entirely different. It is a cost that we, the consumers of both middle and lower income brackets, have to struggle to budget for. It is a deficit against our own living wage.The Ralph report indicates the fundamental distortions which come from the GST and I am sure they will eventually be reported to the community as unintended consequences, like victims left lying in a killing field. A short while ago the member for Rankin exposed that very clearly.Adam Smith has certainly had a very profound impact on many of the world's great thinkers and philosophers. Men like John Maynard Keynes saved capitalism from its own destruction. The New Deal and the Marshall Plan emanated from his ideas. The IMF and other revolutionary projects are used to redistribute the fruits of those who labour to create wealth and promote the vine of capitalism.We Australians believe in a fair go. The Australian Labor Party from its birth has fought hard and long to preserve these values. We are constantly on guard against the cruel realities of capitalism that are part of every Australian family's day. Our eminent Leader of the Opposition strives to make all Labor policies comply with the `fair go' ethic. Our rural towns are bleeding to death; so are many parts of our metropolitan areas. The owners of capital make huge turnovers and pay exorbitant fees to their directors and top management people. These same owners fail to pay their workers and subcontractors their just dues. The GST will never adequately redistribute wealth. The states will constantly be in distress with their ever growing deficits. With the introduction of the GST, we will see if the Howard-Anderson government is able to reduce foreign debt by balancing international trade to ultimately reduce Australia's shameful, ever increasing poverty. (Time expired)13:01:0015931Bevis, Arch, MPMr BEVISET4BrisbaneALP00—I rise to support the amendment moved to the Taxation Laws Amendment Bill (No. 11) 1999 by my colleague the member for Wills. In doing so, I want to address the developments that occurred earlier today when the Treasurer announced the government's backdown on a key element of the Ralph review. This government heralded the Ralph review as a major change to corporate taxation and a change that would see a fairer system in place on a revenue neutral basis. After some considerable debate, the shadow Treasurer, Simon Crean, extended a bipartisan hand of support to a Ralph review package on a number of undertakings. One of those undertakings was that the package would be revenue neutral. Another was that the known tax loopholes, the known tax evasion methods engaged in by too many people, would be closed. This morning the government reneged on that; this morning Treasurer Costello welshed on the undertakings he gave in this parliament, the undertakings he gave privately and the undertakings he gave publicly outside this parliament. Because the government wanted to pander to a section of its own backbench and did not have the intestinal fortitude to deal with these tough issues squarely, as it likes to tell the public it does, the government last night at a party room meeting decided to do in the Treasurer and his commitments, to hang him out to dry—I am sure the Minister for Employment, Workplace Relations and Small Bus-iness is pleased about that outcome—and it decided to blow a $1 billion hole in its own es-timates over the course of the next three years. By welshing on the undertakings that it would close the loopholes currently used by contractors—and in particular that group now identified as dependent contractors—and by allowing that group of people to access tax evasion techniques, the gov-ernment this morning announced changes that mean $1 billion worth of revenue will be denied to the Commonwealth. We need to un--derstand what that means. It means that those decent, ordinary Australian workers who do not have access to those tax avoidance measures and who work week in, week out and pay their taxes earnestly and hon-estly every fortnight when they get their pay will have that $1 billion debt fall to them. This is not $1 billion that no-one pays; this is $1 billion that ordinary decent Aus-tralians have had slugged on to their shoulders because this government cannot keep its word.The Labor Party and the parliament are going to be very keenly pursuing that commitment that the government gave and which this morning it has reneged on. If the Treasurer and the government party room think they can get away from their undertakings so easily, they will quickly find out that not just the parliament but the people of Australia will not tolerate it. Those ordinary wage and salary earners who pay their tax before the money even gets into their hands know that they are already having to shoulder too heavy a burden. They know that, when the GST comes in, they will have to shoulder an even heavier burden because, by and large, they are the people who do not earn the incomes over the $100,000 mark and who score well under the government's tax regime. These are people who spend just about all of their wages. They are ordinary Australian family people whose wages cover the rent, the food, the upkeep of the house and looking after the children's welfare and, if they are lucky, they have a bit of money set aside for a holiday once a year. They spend virtually all the money they get. Under this government's tax system, they pay tax up-front before they get the money, and when they go to the shop to spend it they will pay tax again on everything. If they get their hair cut, they will pay tax on that; when they go on their annual holiday, they will now pay tax for the motel accommodation, which they did not pay before. This government is going to slug them again on that. These are the people who deserve relief. Instead of getting relief, today they got an extra $1 billion bill foisted on them by this government's hypocrisy and by this government's lack of intestinal fortitude.The Ralph review and the commitments that were given by the government to it were integral to the Labor Party's support of that package. You just blew a $1 billion hole in the revenue neutral calculation of that measure. Not only have you skewed it by $1 billion but you have foisted that $1 billion on decent, ordinary Australian working men and women. I think the Liberal Party, the Treasurer and the party room had better have another look at that issue. If they think the parliament is going to lie down and wear that, they are in for a shock.That was the unexpected news of this morning. I must say it was unexpected because I foolishly took the Treasurer at his word. I have been telling people since then that the government had given this commitment and that we had no reason to doubt that they would honour it. I now see that that was a foolhardy position for me to adopt—that I should have given any credence to an undertaking given by the Treasurer. For me to believe that an undertaking given by the Treasurer in the parliament, in public and in private might actually mean something obviously reflects my view of what a person's integrity and word is about. Clearly, the Liberal Party and the Treasurer have a different view of what someone's integrity and personal standing account for. With this government, it counts for little. 008K0Byrne, Anthony, MPMr Byrne—Was it non-core?ET4Bevis, Arch, MPMr BEVIS—Indeed, as my colleague has interjected, it was a non-core promise. In fact it was three non-core promises on the one issue. It may well be that in his quest to become the next leader of the Liberal Party the Treasurer has decided that he should emulate the Prime Minister's performance on promises and undertakings and that he can give these sorts of promises and just squirm out from under them. He cannot squirm out from $1 billion. Ordinary Australians are not going to be landed with that bill because this government does not have the intestinal fortitude to close the tax loopholes for some of its mates.There has been a lot said about the problems of this government's new tax scheme and the hardship that the GST is going to impose. A lot of people have focused on the goods aspect of it. Increasingly, people are starting to comprehend the impact it will have on services. There is also the impact it will have on those people who are just about to become unpaid tax collectors for this government. Those people, particularly in small business, do not have large accountancy divisions, do not have large IT sections. They do their own accountancy work and at the end of the quarter or at the end of the year they see their local suburban accountant to try to get the bookwork tidied up for the various returns they have to submit. Those people, as we know, are significant employers in this country. By and large they work extraordinarily long hours and they seek to make an honest dollar.Not only are they now discovering the burden of compliance; they are now falling prey to other less reputable firms that have taken the opportunity of their vulnerability to score excessive profits. I want to read a letter I received from a business just outside my electorate; it is on the border and it is frequented by people in my electorate. The letter is from a Night Owl shop, a convenience store. There are some 1,000 of these Night Owl franchises around Australia. The owner of this franchise wrote to me and said:I run a small convenience food store in a fairly competitive market. My technology supplier is Retail Technology & Services Ltd. (RTS), a listed public company. Through its subsidiary, RETECH GLOBAL, the old B&H, it is attempting to blackmail me into spending $7,990 to become GST ready on my scanners and PC. I still use a perfectly adequate DOS system and only need to have that system modified to cope with the GST. RTS/RETECH GLOBAL could modify (amend) the system at a finished cost of $200 per store. They have 500 DOS users out of a total customer base of 1100.So that is nearly half of the client base using a DOS system. The letter went on:A charge to each DOS retailer of $400 would give them a net profit of at least $200 per store; a net of 100% on cost—a handsome return. The gross revenue is $200,000; the net profit is $100,000. They are not satisfied with that. Instead they are forcing us to make a choice. UPGRADE ALL HARDWARE & SOFTWARE FOR $7,990ORGO BROKE (NO DOS MODIFICATIONS—NONE!)The attached letter sets out the detail.The letter from the owner of the store went on:There is already an overload of work at store level to cope with GST, without having to cope with this nonsense. ... We have no hope of absorbing $7,990. We are prohibited from increasing prices beyond the impact of the GST on products.He finishes by saying:There are 499 other stores in Eastern Australia (plus some in WA) in the same boat. Most are incensed with this blackmail tactic. Retailers are not able to recover cost increases arising from being fleeced, if the ACCC guidelines are to be believed.I have looked into this matter. The concerns of that store owner are absolutely right—they are being fleeced. The company has written to all of these firms involved in the operation of Night Owl franchises and it is true. They have said to the people who operate a DOS system: ... you will need to convert to Grocery Manager for Windows prior to implementing the modifications for GST.The conversion package will include ...Then it sets it out: the new computers, the new operating systems, the wholesale sales tax stocktake valuation, the recalculation of cost prices—and so it goes on to the tune of $7,990. If you happen to be one of the 50 per cent or so of Night Owl stores who already operate on their new system, they will put the GST module on for $1,500, which I would have thought was a pretty decent sort of mark-up in any event. But they are not willing to offer a GST module for the DOS operators at all. These 500 small businesses—members of parliament will know these stores; when we finish our late night meetings and are on our way home, I do not know about the rest of you, but I have seldom not called into a Night Owl store to pick something up on the way home—are open all hours of the day and night to make a quid and to provide a service. They are now confronted by a supplier who has looked at what this government has done and said, `Well, come in, spinner. Here's my opportunity to make a killing. These companies have to be GST compliant or the government will take them to court; they'll be gone. So they have to be GST compliant. We maintain their computers, so here's our opportunity. We will not just mark up the price of the GST module; we'll sting them for a whole new computer and operating system—$8,000, thank you very much.' What does this government say about that? This government says, `We are going to give that operator a $200 cheque.' This store is going to get a $200 cheque from this government to pay an $8,000 bill. Two hundred dollars is what John Howard and Peter Costello think these businesses should get to compensate them for an $8,000 bill. This particular store owner wrote to the government as well. He wrote to the Deputy Prime Minister and, I might say, to the Prime Minister. To the best of my knowledge the Prime Minister has not answered, but the Deputy Prime Minister did. The office of the Deputy Prime Minister and Minister for Transport and Regional Services wrote back on 4 April. The letter was signed by the senior adviser, David Kelly. This is what he said in part:It seems unlikely that your provider's reluctance to offer a cheap upgrade offends any consumer legislation ... So, as far as the Deputy Prime Minister is concerned, `Sorry, it doesn't look as if there's anything wrong here.' The letter from the Deputy Prime Minister went on:... but it is probably worthwhile contacting the ACCC about it.Not that the minister's office were going to do it. Not that they could pick up the phone or send a letter off to the ACCC. They said to this store owner, `When you're doing the rest of your paperwork tonight, you might like to do up a letter to the ACCC. We don't think it breaches any law, but why don't you write to them anyway?' That is a lot of help and assistance! It will go with the $200. It will make a big difference to the plight of these 500 store owners. But the letter got worse. The letter then went on to say:The glib answer to your problem is to find another supplier ...This is the considered opinion of the holder of the second highest office in this land, the Deputy Prime Minister—`The glib answer to your problem is to find another supplier.' It then went on, though, to say:... but I take it from your letter that you and other retailers are committed to these people through the existing software. Well, you are damn right. In other words, it was a glib answer. It was also useless. So the Deputy Prime Minister's advice is, `Contact the ACCC, contact the ATO as well, but really I don't think there's anything you can do about it.' Just in case when the store owner read through the letter he did not get the message that the Deputy Prime Minister's office was not about to do anything and did not think it could, not even pick up the phone to the ACCC, the letter concluded by saying:I can assure you that I can understand your frustration, but this is not an area where Mr Anderson could apply any direct pressure. Well, thanks for sending me the letter. That is wonderful! That is the response this proprietor has got from the government. The government has foisted upon not just the consumers of Australia but the business people and in particular the small business people of Australia a system which is burdensome, harsh and unfair. When confronted with these problems, its answer is to provide glib and useless answers such as the one I have just read from and to provide very little acknowledgment of, much less understanding and empathy for, the plight of these people.We have written to the ACCC and we will be pursuing this matter on behalf of this business and other businesses in this situation. The government needs to wake up and improve its act. It has got a bad tax. It is confusing and it is confused about its own tax. It has a bad tax which it is implementing poorly. This is a convergence of the worst set of circumstances and now we know it is a bad tax being implemented poorly, causing great consternation amongst businesses. It is also providing opportunities for unscrupulous operators to do the sort of thing that I have just set out in the parliament today.There is no reason why this shop owner and the hundreds of others in exactly the same situation should be effectively blackmailed into paying out $8,000. If the government thinks the conversion cost for this is no more than $200, and that is all it is giving these people, my suggestion to the government is that it provide a written guarantee to these small business people of Australia that it will meet any cost they incur above $200—that is, the government will pick up the bill above $200. If the government wants to be fair dinkum about it and honour its promise that no-one will be worse off, it seems to me that that is a fair compromise. So I would say to the Treasurer: while you are back-pedalling on all the other things you have back-pedalled on, you should give some thought to that and do something decent for the small business people who are feeling it coming and going. The small business people are getting it both ways at the moment from this.Finally, let me return to where I started in relation to the government's undertakings to close tax loopholes. This is a very serious issue. It is not to be taken lightly that the government today flippantly announced a $1.1 billion hole in its revenue base over the next three years. That is just over the next three years; it gets worse as you go through the out years. That $1.1 billion totally throws into disarray the tax reform package that the government was proposing to pursue from the Ralph inquiry, and I strongly urge all members of the government to think twice about that if they want to see the Ralph reforms through this parliament. 13:19:0015935Byrne, Anthony, MPMr BYRNE008K0HoltALP00—I would like to preface my comments on the specifics of the Taxation Laws Amendment Bill (No. 11) 1999 with a couple of remarks which are very much along the lines expressed by the shadow Treasurer, Mr Crean. Today is a black letter day for the people of Dandenong, Doveton, Endeavour Hills and other areas in my electorate, but it is a red letter day for people in Armidale, Toorak, Crows Nest and Potts Point. It is also the completion for the Treasurer of his conversion to the dark side. The Prime Minister is obviously taking him down the dark side of non-core promises—the Prime Minister with the fistful of dollars. This is the Treasurer who has been encouraged to go down that path, to basically make a commitment to respect the integrity of the taxation system and to implement structural reform of the taxation system, but who, when it becomes convenient and there is a bit of pressure, follows the source and thus goes down the path of reneging on core commitments.I would like to discuss the Taxation Laws Amendment Bill (No. 11). It is an omnibus bill covering four separate subject areas. These areas are the integrity measures concerning the alienation of Australian real property by non-residents; income tax deductions for gifts and extensions of periods of deductibility for certain donations; income tax exemption termination for non-resident sports persons, clubs and associations; and capital gains tax, technical amendments and corrections of errors. I want to touch on the first point regarding the integrity measures concerning the alienation of Australian real property by non-residents. These provisions seek to overcome the decision in the Lamesa Holdings case in 1997. This case held that no Australian tax was payable on a profit earned by a non-resident from selling—that is, alienating—their interest in Australian real property. The reason no tax was payable was that the interest was not held directly but rather through a chain of interposed companies. Rather than selling the interest in the mine, one of the interposed companies was sold; thus technically the non-resident was not selling Australian real property but an interposing company. This ruling was inconsistent with Australia actually being able, in practice, to collect the tax that it was allowed to collect under the various double taxation agreements. Therefore, the bill includes a new provision that will act as an interim measure ensuring that the holding of Australian real property through a chain of companies or other entities will be ineffective in avoiding tax on effective dispositions of that Australian real property. It is interim in the sense that, once a specific provision has been negotiated in a DTA, the provision no longer applies.One point of concern with respect to this legislation is why it has taken so long for the legislation to come to this place. It is a little bit like Minister Reith with his issue of employee entitlements, where he announced the legislation was going to come into this place yet we are still waiting for it. It is the same in this case. An announcement was made 24 months ago about the legislation to correct the haemorrhaging of income that may occur in taxation, yet this is the first time we have seen the legislation. I question why it has taken so long for it to come into this place. It means that the legislation will be retrospective. If it is passed in its proposed form, it will operate for at least two years retrospectively—a bit like bottom-of-the-harbour. A lack of priority could mean it will not be passed until June 2000, around 26 months after the original announcement. The Senate Standing Committee for the Scrutiny of Bills examined the legislation and reported as follows:The retrospectivity of the legislation contravenes the Senate resolution of 8 November 1988 which states: Where the government has announced, by press release, its intention to introduce a bill to amend taxation law, and that bill has not been introduced into the Parliament or made available by way of publication of a draft bill within 6 calendar months after the date of that announcement, the Senate shall, subject to any further resolution, amend the bill to provide that the commencement date of the bill shall be a date that is no earlier than either the date of introduction of the bill into the Parliament or the date of publication of the draft bill.The committee also concluded:Pending the Treasurer's advice, the Committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference. If the committee did respond to this report, it certainly has not been published. It is interesting that, notwithstanding that the legislation has been introduced into this parliament, there still may be difficulties with its implementation, particularly with respect to the double taxation agreements. This was certainly recognised in the Bills Digest, which actually discussed the potential difficulty with respect to its implementation. I quote the concluding comment:The Lamesa case highlights one feature of having a network of DTAs where a shortcoming is revealed in an article, then all the affected DTAs must be renegotiated to correct the shortcoming. The renegotiation and redrafting of treaties is a lengthy and time consuming process. Changes to treaties are not effective until there is a bilateral agreement which is enacted. Unilateral amendments of treaties by domestic legislation are likely to be treated by the courts as treaty override and held to be ineffective. On this issue the OECD stated in its Report on Treaty Overrides that:The Committee [on Fiscal Affairs] recognizes that treaty negotiations, and renegotiations, are indeed time consuming but this is a factor which is common to all bilateral negotiations where a proper balance of advantage to both sides has to be found. Any unilateral abrogation of specific obligations destroys such balance and must be condemned. Another point that was made was:Another concern is the reaction of Australia's tax DTA partners to the proposed amendments to the alienation of real property article. The Minister's second reading speech states that Australia's DTA partners in the 31 affected treaties have been consulted on the proposed amendments but no reference is made on their views of the proposed amendments. The delay of 20 months between announcement of the measures and introduction of the legislation is curious. While this measure is described as being a response to protect revenue, the significant delay between announcement and introduction of the measures also raises the issue of whether the measures are likely to be effective.So we have an independent assessment of this legislation which says, notwithstanding the fact that this may be passed, that after it has been passed it could still be held up for some months subject to the clauses with respect to the DTAs. If the Treasurer was so committed to structural reform of the taxation system, of closing loopholes and of protecting our revenue base, why has it taken 24 months for this legislation to come to this place? I question the Treasurer's real commitment to this issue. The next point I want to go to is the issue of banks not paying their taxation, but I do not have the information with me so I will not touch on it now.IJ4Snowdon, Warren, MPMr Snowdon—No, do it anyway.008K0Byrne, Anthony, MPMr BYRNE—I think he has had enough criticism today. I think we will wait a bit longer. I will touch on the second reading amendment we have put forward, particularly in relation to the integrity of the taxation system. We know that the taxation system is in crisis. We know that the Taxation Office is struggling to come to terms with the implementation of this dramatic $33 billion structural change and transfer of taxation arrangements. We know and have certainly seen in recent times that the actual structure and integrity of the Taxation Office has been threatened. I would like to quote some comments made in Hansard yesterday with respect to this particular issue. It was said:The administration of the tax office is now in a state of chaos. As reported by a number of newspapers, Mr Nick Petroulias, who was the Australian Taxation Office's First Assistant Secretary between 1997 and 1999, was recently arrested at Melbourne airport with his two brothers, after 34 search warrants were issued across five states ... Mr Petroulias was arrested after an investigation into the potential misuse of advanced opinions and private binding rulings. The rulings and opinions are issued by the tax office as binding on itself and are widely relied on by tax advisers. It is alleged that Mr Petroulias corruptly issued particular rulings to applicants ... for the purpose of reducing or eliminating tax. It is very interesting with respect to that that we are touching on the structural integrity of the Taxation Office, the very same office that is supposed to administer this new taxation system. Mr Petroulias, who was actually in the Taxation Office, issued these private binding rulings to particular companies. There are some who had benefited from binding rulings that in some indirect way have some association with the government. So on the one hand we have the Treasurer and the Prime Minister talking about the structural integrity of the taxation system and how they are going to make sure there is no evasion, but, on the other hand, in real practice we have an indirect association. That indirect association comes through the Remuneration Planning Corporation, a Sydney based company involved in general tax advisory services and one which has been very active in tax avoidance schemes, particularly private binding rulings. The Remuneration Planning Corporation employs and is part owned by Mr Kris Chikarovski who, as we well know, is associated with someone in New South Wales.So the government is talking about closing these taxation loopholes and strengthening the integrity of the taxation system, but in reality for some of its mates it allowed private binding rulings to occur unchallenged for a period that appears now to be over 12 months. How do we contrast that for the people in Doveton who are watching all of this happening and saying, `We've got the imposition of a taxation system and we've got the mates basically being allowed, because of their higher income and contacts, to evade paying their fair share of tax'? This issue will be quite instrumental and quite significant in the run-up to the post-implementation of the GST.I would like to make a couple of comments with respect to what the Commissioner of Taxation had to say about exempting some types of food and not others, and the evasion of taxation. Treasurer Peter Costello warned against exempting some food items from the GST and taxing others. He described it as nightmare on main street. The Commissioner of Taxation, Mr Michael Carmody, agreed with the Treasurer. In a strongly worded speech, the taxation commissioner said: Non-compliance is inevitable. In the UK, fish and chip shops selling both fresh and cooked fish typically report that 30% of their sales are cooked fish (taxable) and 70% are fresh (tax-free). Anecdotal reports indicate the reverse is closer to the truth. 70% cooked and taxable and 30% fresh and tax-free. I also imagine that fish and chip shop owners don't particularly like the VATman standing in the business all day to observe the true picture—but that is the only viable type of compliance check where distinctions on food are made. The reality is, of course, that ensuring practical compliance by businesses in these circumstances is impossible.So, in effect, we have the perception that the mates are being looked after, but the individuals who are having a terrible compensation package foisted upon them, particularly those in the lower income belts in my electorate, are basically saying, `What is good for the goose is good for the gander.' I am certainly not encouraging non-compliance with taxation but there must not be an environment, particularly in this current environment, where the Treasurer of this country, who has made a binding and longstanding commitment privately and publicly, welshes on that commitment. What does that say to the general public? The perception of politicians in this place is low enough, but when we have the Treasurer of the country, the apprentice Prime Minister, welshing on a commitment that he made faithfully in this place to the Australian people and then blithely writing off the $1 billion hole that it leaves, what does that say to the Australian public? What does that also say to the people I had the honour of representing at a GST rally? I am referring to a group of students at Chisholm TAFE on fairly low incomes who attended a GST rally because they were concerned about how they were going to cope with the imposition of a GST. They have signed a petition that I cannot table because of the language that has been used, but I think it summarises the outrage out there, outrage that will be accelerated and exacerbated by the announcement made by the Treasurer today. I will read from this document briefly. It is entitled `Get your filthy tax off our bodies', and states:We are outraged that the Liberal government has imposed a GST on tampons and sanitary napkins. This is clearly a tax on being a woman. It is just one example of the discriminatory nature of the GST. By placing a GST on essential items such as books, milk products and fastfoods, it will make it harder for working class people and poorer people.So we have the counterpoint to what is actually happening today with the Treasurer's convenient announcement, with those who are struggling and those who will be very poorly compensated by the imposition of a GST. I could go further but I made a commitment not to speak at length on this issue. I summarise by saying that it is all well and good putting legislation in two years too late but what effect does that legislation have when you have a lack of commitment and a lack of will on the part of this government to actually police the breaches of these regulations? On that note, I sit down.13:35:0015938Snowdon, Warren, MPMr SNOWDONIJ4Northern TerritoryALP00—I want to thank the member for Holt because I think he, as a new member of this place, has demonstrated how quickly he has come to terms with his job representing the people of Holt. The way in which he presented himself this afternoon on their behalf is to be commended. I say to the honourable member for Holt: keep on keeping on. That speech was a very good contribution to this debate. I am sure his constituents who have the good fortune to get a copy of his speech will see what a wonderful job he is doing on their behalf.Today I do not want to talk about the constituents of Holt; I want to talk about the constituents of my electorate of the Northern Territory. I want to remind the House of the amendment before the House, moved by the Labor Party. It has seven parts. They are: “whilst not declining to give the Bill a second reading, the House expresses its concern with: (1) the delay in the Government bringing this legislation before the Parliament;(2) problems which have come to light recently in relation to the administration of the Australian Taxation Office;(3) he Government's misleading claims for its taxation proposals;(4) he problems that exist in the implementation of the various new taxation arrangements;(5) the reluctance of the Government to effectively tackle tax avoidance in Australia;(6) the Australian Taxation Office's role in the implementation of the new taxation arrangements; and(7) the underlying unfairness and complexity of the new taxation arrangements”.It is these last two items that I want to spend my time discussing. I want to particularly talk about the impact of these proposals on people in my electorate but also those in other electorates who live in very remote communities. I have given a number of speeches in this place or in the Main Committee over the last couple of weeks in which I have made the point that in my view those people who frame this legislation and members of the government who advocate the interests of regional Australia have no real understanding of regional and, in particular, remote Australia. They have no real understanding of the implications of this legislation for the citizens of Australia who live in the many small remote communities dotted around Northern Australia. They have no real understanding of the impact of these pieces of legislation on the large number of very small Aboriginal outstations around northern Australia. It is about that that I want to talk.What I want to address myself to today is the impact of the GST—and, in particular, the question of ABN numbers—on Aboriginal artists. It is an issue which I do not think has been properly understood by the department—certainly not by the Treasurer, that is clear. But then again, we all know about the Treasurer and we would not expect him to know much at all, especially as it relates to regional and remote Australia. This is just another example.I am going to talk in particular about Aboriginal artists who live around Central Australia, principally around Uluru. These are artists who sell their works through Maraku Arts. Maraku Arts is an organisation situated at Uluru which services 941 artists in the south-west of the Northern Territory, the bottom bit of the Northern Territory, the far east of Western Australia, the Ngaanyatjarra lands and the Pitjantjatjara-Yankunytjatjara lands of the top end of South Australia.What we need to understand about these artists is that, under advice from the Taxation Office, they have been told that they will have to have an ABN number. I do not know whether that strikes you as strange, Mr Deputy Speaker, but it strikes me as bloody absurd, and I will explain why. The Maraku Arts Centre, of which I have spoken, deals with these 941 artists in two states and the Northern Territory and travels 3,600 kilometres every six weeks to service them, to purchase art from them. Given that annual earnings from these artists varied last year from $65 to $15,000, it is unclear whether they are to be determined as hobbyists or people operating a business for the purpose of the new tax system, specifically the pay-as-you-go system. In any case, few Aboriginal artists would consider what they are doing could be described as running a business or working; rather they would see it as a legitimate cultural activity in the indigenous context. But if they say they are running a business or they seek to make a profit from their work, they are likely to be no longer regarded as unemployed, and that has particular problems in relation to the social security system.Advice which has been received by these artists via the Maraku Arts organisation is that all Aboriginal artists should apply for an ABN number to avoid arts centres, galleries and other marketeers withholding 48.5 per cent of the sale price of their works—unless, of course, the artist can show a signed declaration stating that they are doing the art as a recreational activity, not primarily to make money. Now I ask you, Mr Deputy Speaker! If they have an ABN number, they will have to issue an invoice with every sale of their art work, and the invoice must show the ABN number to avoid the above. If they do not show the ABN number, if they do not give an invoice, they cop 48.5 per cent being knocked off their income. Let us understand what we are talking about here. We are talking about communities, people whose first language is not English, who speak Pitjantjatjara, Yankunytjatjara or Ngaanyatjarra, who in most instances will not read and write English, let alone their own languages. Is the Taxation Office, is the Treasurer, is this government really expecting that each of these individuals should register for an ABN number and then involve themselves in the paper transactions that need to be undertaken to legitimise their activities so that they do not pay 48.5 per cent of their income in tax to the people who purchase their product from them? Mr Deputy Speaker, I ask you: if you had any inkling of the real world, if you had any understanding of the situation in which these people find themselves, how could you come to the decision that these people are running a business and that these people must have an ABN number?I was in the Pitjantjatjara lands last week. I went to Maraku Arts. I spoke to some of the artists. My Pitjantjatjara is halting, but I can converse. How does the Taxation Office converse with these people? How does the Treasurer get his message to these people? What efforts have been made by this government to ensure understanding by these people—and in this instance I am talking about the 941 artists at Maraku, but there are literally thousands of these artists right around northern Australia. They might speak Arrernte or Pitjantjatjara or Warlpiri or Jingulu or Mutpura or Gundjehmi or Gumatj or Rriratjingu or Gurindji. They could speak any of these languages, and English would not be their first language. The language that they converse with in their home communities will be their first tongue. Most of them will not be able to read and write English. Most of them would not have been communicated with by the Australian Taxation Office in a way which they could properly understand.Whose obligation is it to communicate with these people? Does the Australian Taxation Office have an obligation to ensure that each and every Australian understands what they are committed to as a result of these new taxation arrangements? I say that that obligation rests fairly and squarely with the Commonwealth; yet nothing has been done. When I spoke to people around Uluru last week, it became very clear that absolutely no effort at all had been made by the Australian Taxation Office to communicate with these people. Indeed, I have in front of me a letter which was sent to the Australian Taxation Office on 18 February. We all remember `reply in five'. It is now 13 April: what happened to reply in five? This letter relates particularly to Maraku Arts, and it raises the question of whether these people should be treated as hobby artists or whether they should have an ABN number. Of course, this letter has not been responded to.The arts organisation which actually represent Aboriginal artists across the top end of Australia—the Association of Northern, Kimberley and Arnhem Aboriginal Artists, or ANKAAA—wrote to their member organisations asking them to contemplate the implications of, or their understanding of, the direction from the tax office that every one of their artists needs to have an ABN number. Let us understand what we are talking about here. We are talking about people who live in the remotest parts of Australia, who may or may not have telephone access in their home communities—and given the state of Telstra's recent installations, most do not and if they do, there is only a public telephone; they certainly will not have a home telephone, but there might be an office telephone which they can use—and who, by and large, will not be able to read and write English and, if they do, not to the extent that they could understand the tax determinations and rulings that are put out by the Tax Commissioner.When ANKAAA wrote to its constituents, it made the very clear point that if an artist has an ABN number and is also registered for the GST—which is a very faint possibility, because I cannot think of any of these artists who would make $50,000 a year—he will have to fill out and return to the tax office a quarterly business activity statement. Let us assume some did. Who is going to fill out this quarterly business activity statement for them? Whose responsibility is it to educate these people about their responsibilities? Whose responsibility is it to make sure that these people are able to comply with the law? Is it their own responsibility? Are they supposed to pick this up out of the ether by a process of osmosis? How are they supposed to do it? What we know is that the government has done sweet—very little; I was nearly going to use a profanity. 10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—I am glad you didn't.IJ4Snowdon, Warren, MPMr SNOWDON—But far be it from me to do so. What we know is that little or no effort has been made. It is a matter of grave concern that we should be in a position in this parliament to be considering a situation where there are literally thousands of Australians who live in these remote communities across the top end of Australia who are penalised because they are poor, who are penalised because they are illiterate, who are penalised because they do not have English as a first language and who are penalised because they are artists. As the ANKAAA newsletter says:If some accountants in the cities can't fully understand this new system, which seems to change almost daily—don't we agree—how can someone living in the bush be expected to?It is a simple question that requires a simple answer. But no answer will be forthcoming from this government, no answer that will make sense to these people.I make the observation that over the past week or two there has been much public discussion about the issue of mandatory sentencing in the Northern Territory. One of the outcomes of that discussion was a deal between the Prime Minister and the Chief Minister of the Northern Territory. That deal included resources being provided by the Commonwealth—I think $5 million—for the provision of programs to deal with juveniles and the provision of an interpreter service. It may come as a surprise to you, Mr Deputy Speaker Nehl, that when the Chief Minister was previously asked the question about an interpreter service, he said:The provision of interpreter services as a long-term solution, to my mind, is the equivalent of providing a wheelchair to someone who has not learned to walk. It is not an appropriate long-term solution.What do we say to these Aboriginal artists about their inability to comprehend the taxation act, their inability to comprehend the instructions from the Taxation Office or their inability to understand the obligations they confront under this heinous new tax? Do we say to them, `We will provide you with an interpreter service'? Not on your nelly. There has been no indication from the Commissioner of Taxation, the Taxation Office or the Treasurer that they will provide people who can converse in the first language of the people whom I have spoken about, whether their language is Arrernte, Pitjantjatjara, Yankunytjatjara, Ngaanyatjarra, Warlpiri or any of those other languages. Has there been any effort by the taxation commissioner or this government to sit down and legitimately approach this need so that these people I am referring to can properly understand their obligations? Has there been any attempt by this government to sit down with these people and discuss their concerns about the new taxation system and try to meet their concerns in a constructive and appropriate way? There has been no attempt, and that is evidenced by the failure of the Deputy Commissioner of Taxation to respond to the letter sent to him on 18 February.We are told by the Treasurer, `Get your ABN number, brother. If you don't have your ABN number, you'll be penalised.' Frankly, I think it is a joke. We have a situation where in a lot of instances these people do not have a motor car, and in some cases they do not even live in a house but just live rough in the bush. Certainly most, if not all, will not have a filing system and will not be able to directly correspond to the taxation commissioner. Someone has to do it on their behalf.At the end of the day it is clear what the government intends—that is, organisations like Maraku and ANKAAA should assume that responsibility on behalf of the government and become the tax collectors. What they will be expected to do, on behalf of the Commissioner of Taxation, the Treasurer and the Prime Minister, is communicate with each and every one of these individual artists in a way they can understand and do the paperwork for them. That is clearly what is in the mind of this government. Yet will the government provide the appropriate resources to these organisations to do that? Has the government sought their advice on the most appropriate way to communicate? Has the government done anything to ameliorate the worst impacts of this very harmful taxation structure that it is putting in place? It has not done a thing. It has approached ATSIC and said, `Let ATSIC do it on our behalf.' Like hell! Why should ATSIC assume the responsibility of the taxation commissioner or the taxation department? Why should any other Aboriginal organisation assume that responsibility if it is not resourced appropriately and contracted to provide the work? Something needs to be done to ameliorate the concerns of these Aboriginal artists. If the government is half fair dinkum about the concerns and needs of the people who live in regional or remote Australia, this is the least it can do. 13:54:0015942Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—The Taxation Laws Amendment Bill (No. 11) 1999 is an omnibus bill to amend the law relating to taxation for related purposes. In my contribution to this debate, I wish to speak to one measure relating to the extension of the period of deductibility for certain donations, but because I will be interrupted by question time I will leave that issue for a later hour. It also gives me the opportunity to discuss the context in which we find ourselves with the changes to tax policy at the very moment. I wish to speak to the second reading amendment moved by the member for Wills which outlines some of the opposition's concerns about the way in which the present changes to taxation are taking place.Today could be a no more appropriate day to be discussing the problems the government is having in its administration of tax because we have seen yet another backflip on a decision relating to tax matters. I refer to the decision overnight to give a business tax reprieve which will see a $1 billion hole put in the post-Ralph committee changes to business tax. It is these types of changes that are making it very difficult for the opposition to come to some position about which changes it is willing to support the government to put in place. Like many areas of government administration, the implementation of tax changes by this government has been deplorable. Even if we take the point that the opposition disagrees with the ideological base for many of the tax changes, the simple fact is that this government continually shows itself to be inept in the way in which it puts in place matters of public policy. Whether they be matters to do with nursing homes, taxation or a whole range of public policy, this government is characterised by its inability to do that in an appropriate manner. The opposition's second reading amendment mentions that there has been delay by the government in bringing this legislation before the parliament. The first item of the legislation is the integrity measures concerning alienation of Australian real property by non-residents. It arises out of a decision in the Lamesa Holdings case in 1997. What did we see from the Treasurer but delay in reacting to that decision. We saw that he reacted by issuing a press release on 27 April 1998—months after the decision was announced—with the intention to legislate to overcome the Lamesa decision. Now we have had to wait even further to get this legislation in place. The legislation was not introduced until almost 20 months after the announcement, and it has been given such a low priority that it is only scheduled for debate now and is likely to be in operation two years after the event with two years retrospectivity—around 26 months after the original announcement.As I said when speaking to another piece of legislation earlier today, there are other examples of this government's tardiness and delay in taking action to block up loopholes in different pieces of legislation. I refer to the way the GST is being implemented. I note the comments by the member for Northern Territory, wherein he highlighted the problems of not-for-profit organisations that operate in his electorate and their difficulty in being able to get proper information because of language difficulties. This is characterised by the way this government has been providing information for the not-for-profit sector in the way the GST changes will affect them. That type of information has been inadequate. These organisations go from simply being able to get tax relief by ticking a box to having to fill in all sorts of forms and activity reports. In the worst case scenario, many of the types of administration they will have to carry out after 1 July have not been put in place. The activity reports have not been made available. When members read that people are being told that everything to do with the GST is simple, it should read `complex', because not-for-profit organisations are having to fill in forms that do not relate to them—because they are not in the business of making money and they do not have the same culture as those in the business of making profit. In question time today, we will more than likely have either P1 or P2—the Treasurer or the Minister for Employment, Workplace Rel-ations and Small Business—come forward and say that all the things to do with the administration of the GST are hunky-dory, that everything is rosy. They will overlook headlines like that in the Australian of Tuesday this week, `Firms admit GST noncompliance', or in the Canberra Times yesterday, `Offer “not enough” to beat tax brain drain', where the article reported that the Australian Taxation Office are losing officers because they cannot keep hold of them as a result of not being able to remunerate them adequately. This whole system is in crisis.10000SPEAKER, MrMr 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 for Scullin will have leave to continue his remarks when the debate is resumed.Questions Without Notice159431594314:00:0015943Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Treasurer. Do you recall my seeking from you a personal, absolute and public guarantee that all of the business tax measures will be implemented in full? Do you recall giving me that assurance in writing and in the parliament, and I quote:The Government will introduce all the business tax changes announced in full.Treasurer, haven't you dogged it on your commitment to the parliament and to ordinary taxpayers?15943Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I see that the member for Hotham gets worked up about measures that he has not even seen yet. I would suggest that he look carefully at legislation which is being introduced this afternoon which introduces the measures that were recommended by the Ralph report in relation to the alienation of personal services income. It implements recommendations of the Ralph report in relation to alienation of personal services income, and the measure raises as a consequence $1.4 billion over four years—nothing like the ignorant and ill-informed material he put to the House earlier on today.The reason why this government is introducing measures on the alienation of personal services income is that in 13 years of government the Labor Party never moved in this area once. The member for Hotham would have people believe that the Labor Party is interested in this issue. After 13 years of government, the Australian Labor Party had done nothing. The most they had got to was in the famous 1995 budget when Mr Willis promised he would put out a discussion paper on the issue. He never put out a bill. He never introduced legislation. He never committed the Labor Party to doing anything. This is the government that had to pick up the unfinished business—because the lazy Labor Party did nothing over 13 years—and put it into legislation and bring it to this parliament. This is the party that has had the courage to do the hard work when Labor did nothing, and the ill-informed ranting and raving from the member for Hotham—who stands condemned for absolute inaction—will not change that position one iota. 1594414:03:0015944Charles, Bob, MPMr CHARLESOT4La TrobeLP10—My question without notice is to the Treasurer. What is the Treasurer's response to attacks on the integrity of the Commissioner of Taxation?15944Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—Yesterday there was made probably one of the most disgraceful attacks on a public officer in this country that has ever been made in this House. Yesterday the shadow Assistant Treasurer stood up in this House and insinuated that the Commissioner of Taxation may have delayed a criminal investigation to secure a reap-pointment. It was one of the most disgusting allegations that has ever been made in this parliament, and it was made in this parliament for one reason, that he wanted to abuse the privilege of this place and take protection against a gross libel of the Commissioner of Taxation.If the Leader of the Opposition had any courage at all he would publicly reprimand the shadow Assistant Treasurer. The Commissioner of Taxation yesterday released a statement saying that he took great exception to this suggestion, outlining that throughout the criminal investigation he sought the cooperation of the Australian Federal Police, and said that, in accordance with advice from the Australian Federal Police, ministers were notified when warrants were executed. The insinuation that was put forward yesterday by the shadow Assistant Treasurer was, frankly, a disgusting slur on the Commissioner of Taxation.If this were a leader of the opposition who had any courage at all he would discipline the shadow Assistant Treasurer. Let me remind the Leader of the Opposition of what he said on 31 March 2000. He was asked by a journalist whether the Labor Party was part of a conspiracy to damage the ATO. He said this on 31 March 2000:That particular allegation is completely untrue. We, of course, don't have that sort of influence, and if we had that sort of influence, it would never be directed against the public servants.He said:We in politics don't turn—not on our side of the House—don't turn our attention on the bureaucrats.That is what you said on 31 March 2000, whilst on that side of the House the shadow Assistant Treasurer got up yesterday and turned his attention on the bureaucrats and, under privilege in this place, made a disgusting insinuation about the Commissioner of Taxation. If you had any leadership at all you would stand by your comments on 31 March. You would pull him into line. You would tell him to retract, or you would sack him.1594414:07:0015944Crean, Simon, MPMr CREANDT4HothamALP00—My question is again to the Treasurer. Do you recall telling the parliament on 24 November last year:I do not want it to be said that in any respect we have not met your offer. We have met it in full ...Didn't your pledge to deliver the Ralph business tax reforms in full, as announced by you on 11 November 1999, include a crackdown on tax abuse through contract arrangements worth $2.4 billion over the next five years? Will your legislation deliver the $2.4 billion and, if not, haven't you dogged it on your commitment?15944Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—The measures which the government is putting in place are implementing the measures which were recommended by Mr Ralph, and they are measures which are being put in place in the Income Tax Act for the first time.DT4Crean, Simon, MPMr Crean—Answer the question!10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition!DT4Crean, Simon, MPMr Crean—Get him to answer the question!10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition knows that that sort of behaviour will not be tolerated. The Treasurer has the call.CT4Costello, Peter, MPMr COSTELLO—The reason this government is implementing it is that in 13 years of Labor government nothing was ever done—nothing was ever done in 13 years.DT4Crean, Simon, MPMr Crean—Mr Speaker, I rise on a point of order which goes to relevance. It was the specific point about $2.4 billion being delivered in full. Will it be, or have you dogged it? 10000SPEAKER, MrMr SPEAKER—The Treasurer was responding to a question about whether recommendations from the Ralph business tax reform group had been delivered, and I call him.CT4Mr COSTELLO—And the reason this legislation is being introduced this afternoon by this government, the reason it is the first government in Australian history to do this, is that for 13 years the Australian Labor Party did nothing. Let the Australian Labor Party point to one piece of legislation on the issue.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—I am listening to the Treasurer.CT4Mr COSTELLO—This government came to office when the Labor Party after 13 years said it would publish a discussion paper. It never did. This government had a recommendation from Mr Ralph, and this government is going to legislate that.PE4Beazley, Kim, MPMr Beazley—Mr Speaker, I rise to raise a point of order on relevance. The question pointed out that there was a $2.4 billion line. He has just talked about a $1.4 billion line, and he will not answer the question on whether or not he is implementing that arrangement in full.10000SPEAKER, MrMr SPEAKER—The Leader of the Opposition will resume his seat.PE4Beazley, Kim, MPCT4Mr COSTELLO—The—10000SPEAKER, MrMr SPEAKER—The Leader of the Opposition and the Treasurer!DT4Crean, Simon, MPMr Crean—What did you say about Bernie Fraser? You hypocrite!10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition knows that a good deal of licence is extended to him because of his office, but the chair expects him to reciprocate in some way in the House. The Treasurer was asked a question about the Ralph reforms and, within the confines of relevance, he is answering it.CT4Mr COSTELLO—What John Ralph recommended was that people who rendered services in an employee like manner should be paying marginal income tax rates. What this government will be delivering is legislation that provides for people who are employees or delivering employee services to pay personal income tax rates. And what this government will also be delivering—as was recommended by Mr Ralph—is that those people who are genuine, independent contractors in a personal service business will be able to go into the business taxation system, as Mr Ralph recommended. This will be the only government that has ever introduced legislation on this issue, and it fell to this government because of 13 years of Labor Party nothingness.They can run around and cast slurs on the Commissioner of Taxation, but if this man had any courage at all he would be pulling the shadow Assistant Treasurer into line today.5I4McMullan, Bob, MP10000SPEAKER, MrMr SPEAKER—The Manager of Opposition Business chooses to simply ignore the chair, and so do members on my right.1594514:12:0015945Kelly, De-Anne, MPMrs DE-ANNE KELLYFK6DawsonNP10—My question is addressed to the Minister for Health and Aged Care. Would the minister inform the House how the federal government is ensuring better quality of, and better access to, general practice for all Australians, and particularly for people living in rural Australia such as my constituents in Dawson? Is the minister aware of any alternative policies in this area?15945Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—I thank the honourable member for Dawson for her question. Medical work force issues have been a very difficult and intransigent problem over decades but we have had very substantial success in work force issues relating to general practice because of the provider number legislation that was passed by this parliament and came into effect on 1 November 1996.This legislation was recently reviewed by Ron Phillips, a former health minister of New South Wales, who found that the legislation had been particularly effective in two areas. In having a look at the government's success in getting more doctors into rural Australia, Mr Phillips said data received from a number of organisations indicated there had been an increase in the number of doctors in rural areas. While not ascribing it solely to this legislation, he went on to say that the likely reason was that it was the result of a package of reforms of which the provider number legislation `is a fundamental element'. The second thing that Mr Phillips found that this legislation had been successful in doing was addressing bottlenecks in work force supply. In his words, `exceptions to the legislation, for example, the rural locum relief program, have ensured that particular work force supply bottlenecks have been addressed'. When this legislation was passed a sunset clause was placed in it. It was placed in the legislation because of concerns at the time put quite hysterically by young doctors and vested medical interests. The claim at the time was that 400 doctors a year would be out of work as a result of this legislation. Well, by now we would have 1,600 doctors unable to gain a training place because of this legislation. The parliament put a sunset clause in so that we could be sure that no young doctor would be disadvantaged. Mr Phillips looked specifically at this area and made the following point:... an attempt was made throughout the review to identify a single junior doctor who had missed out on a training place. Despite continued anecdotal assurances that such people did exist the review was unable to identify any such individuals.Here we have a piece of legislation that has been single-handedly responsible for the rural locum replacement program and a fundamental element in getting more doctors into rural areas. You can understand my surprise that when this sunset clause came up for appeal yesterday into the parliament the Labor Party voted against it. The net result of voting against the sunset clause is that the rural locum replacement program will die. The direct result of voting against this sunset clause is that up to 150 doctors in rural Australia, who are there today because of exemptions to this legislation, will no longer have their practice restricted to areas of need.To give the honourable member for Dawson some idea of the success of the rural locum replacement program, in the electorate of Capricornia, for example, in the December quarter of 1999 alone—in one quarter—37 doctors went in and provided locum relief for local doctors. Somewhere closer to town, in the electorate of McMillan in Victoria 10 doctors in the December quarter alone went in to provide locum relief. Locum relief is actually very important, as even the opposition understands. On radio station 2CR Central West the shadow minister, in an interview with James Gruber on 30 March, in saying what was important to get doctors into rural areas, said:It is these other issues about getting a locum. It is so they can continue to get their medical education or just have a day off.The opposition here is prepared to destroy the one thing that has got locum doctors into rural Australia, a fundamental issue in helping us get more doctors into the country, all for expediency. Ron Phillips put it very well when talking about the effect of this legislation on young doctors. He said:There is no doubt the sunset clause has been used as an effective weapon to create a climate of fear for medical graduates. Therefore, its removal will ensure a more certain and secure environment for the future of medical graduates and lessen the unrest which has been effectively fomented by vested interests.The Labor Party have given in to vested interests. They have been prepared to do what is expedient rather than what is right by rural Australia. The Leader of the Opposition has got no ticker on this. He is prepared to tag along with whatever is easiest to do, and he has sold out rural Australia.1594614:17:0015946Crean, Simon, MPMr CREANDT4HothamALP00—My question again is to the Treasurer. I refer him to his press release of 11 November last year showing the revenue impact of the business tax reforms. I ask the Treasurer: will the changes forced on him last night by his party room have any bottom-line impact on these figures?15947Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—As usual, the member for Hotham is false and misleading the House. No changes were forced on me whatsoever last night, as I think at least 120 members and senators who were independent witnesses would attest. That is because the Ralph measures have been introduced as recommended by Mr Ralph with a transition measure in relation to people who were in the prescribed payments system, who have two years in which to get a determination from the commissioner and will be recognised because they are in the prescribed payments system during that period. This was put in place as a transitional measure to prevent the commissioner having to give 230,000 private determinations by 1 July. People in the prescribed payments system have already been recognised—by virtue of being in the prescribed payments system and not under PAYE—as not being employees. They are precisely the people that Mr Ralph recommended should not be part of this system. I will actually read what Mr Ralph said, if you like, because I think you will be so embarrassed when you see the legislation. We might as well get to the point now. Mr Ralph said that the measures should apply to people who were `employee-like', who rendered services to a service requirer in an `employee-like manner'. That is, the measure should apply to people who worked in an `employee-like manner'. Mr Ralph said that they should not apply to people who were independent contractors. He said the mechanism for telling the difference, whether you are working in an employee-like manner, would relate, inter alia, to:. . . the manner in which services are being carried out having regard to the level of control exercised by the service requirer in relation to matters such as the time of work and actual hours of work required and where the services are to be performed;In other words, if the service requirer did not have the power to direct in relation to hours, time of work and where the services were to be performed, the services would not be performed in an employee-like manner and the measures would not apply. That is the test you will find in the legislation, where the test of the independent contractor is set out, the test of the independent contractor at common law—namely, the difference between a contract of service and a contract for services. A contract for services is where a contract is entered into for a job where the contractor remains at risk and where the contractor is required to supply their own plant or equipment. That is the test.DT4Crean, Simon, MPMr Crean—Mr Speaker, I raise a point of order that goes to relevance. It was a very specific question about him attesting to the measures equating with the figures he put out last November—very specific. If he wants to introduce the legislation, bring it in early. Don't hide it until the last minute.10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition will resume his seat. He has made his point of order. By any measure the Treasurer's comments were focused on the business tax reform and its impact on the economy, and I deemed him to be relevant.CT4Mr COSTELLO—When I am asked whether or not we are implementing the Ralph recommendation and I go to what Ralph recommended and then I go to what is in the legislation, on any view, it is precisely relevant.10000SPEAKER, MrMr SPEAKER—I have so ruled.CT4Mr COSTELLO—It is precisely on the point of law that I am addressing the House. Mr Ralph said that people who are rendering services to a service requirer in an employee-like manner should be paying tax on the marginal rate. What the government is introducing in legislation—for the first time; never done under 13 years of Labor government—is a provision which says people who are not in business and are not independent contractors will be taxed as individuals at the marginal rate. The test of an independent contractor is found in the legislation.PE4Beazley, Kim, MPMr Beazley—Mr Speaker, I raise a point of order on relevance. It may be that this answer would be appropriate—although we would not agree with it—to other questions. There was only one aspect to the question that the Treasurer was asked. There was a presentation of the bottom line and he was asked what effect the measures he has introduced were going to have on the figures produced last November. That was all he was asked in this question—nothing else.10000SPEAKER, MrMr SPEAKER—The Leader of the Opposition will resume his seat. Treasurer, I am at something of a disadvantage. I confess to the Leader of the Opposition, as he would be aware, that I was discussing a separate matter with the Clerk and not following closely the Treasurer's comments. I will listen to the Treasurer's remarks and allow him to continue. CT4Mr COSTELLO—Because they implement the Ralph recommendations in full, in the full-year effect the revenue is as costed in the policy. If you were only to wait until the legislation was introduced, you would have all of the costings and all of the legislation to prove that we have followed the Ralph requirements in full within the full year outside the two-year transition period and with the full cost being recovered, which was factored into previous budget statements.DT4Crean, Simon, MPMr Crean—Mr Speaker, I seek leave to table attachment O from the minister's press release so that we can determine if he has implemented it in full.Leave not granted.10000SPEAKER, MrMr SPEAKER—I remind all members of the House that, if they have drawn the Speaker's attention by reason of interjection on at least three occasions, it would be reasonable for them to be warned and then of course, on any further infringement, to be immediately required to excuse themselves from House.1594814:24:0015948Nelson, Dr Brendan, MPDr NELSONRW5BradfieldLP10—My question is addressed to the Minister for Foreign Affairs. Minister, recently there have been a number of significant developments in the Asia-Pacific region. Would you inform the House of the government's approach to these developments in the region and are you aware of alternative approaches to this particular issue?15948Downer, Alexander, MPMr DOWNER4G4MayoLPMinister for Foreign Affairs10—I thank the honourable member for Bradfield for his question. I recognise the great interest that he takes in Australian foreign policy and international issues. He makes a very valuable contribution to the government and to the parliament on those issues. As members know, the government's approach to the region is one of practical engagement. As we have seen in recent times the government has been engaging very successfully in practical ways with our neighbours in ASEAN through the AFTA CER process. We have made good and constructive progress in our dealings with Indonesia in recent times and a significant contribution to helping to reduce tensions on the Korean Peninsula between North Korea—the Democratic People's Republic of Korea—and South Korea.I think one of the things this government will be remembered for, too, is the practical role—not just the rhetorical role—we played in bringing to an end civil war and conflict in Bougainville and in East Timor. Now, over the last few days, we have been playing a particularly active role in trying to assist the Solomon Islands government in bringing to an end the tension—indeed one could go so far as to say that the conflict—that currently exists in the Solomon Islands. I would just like to take this moment to acknowledge that there has been very close cooperation on this matter with the New Zealand government and my New Zealand counterpart Phil Goff. I must say that the New Zealand government has been extraordinarily cooperative and a very warm and close partner as we have worked through this issue of the Solomon Islands.The honourable member asked whether there was any alternative approach to this. I can say to the House that, like many members, I read with some interest an article in the Bulletin this week that included an interview with the Leader of the Opposition. As usual, little was devoted to the issue of foreign policy. However, on foreign policy the Leader of the Opposition claimed that if he were the Prime Minister he would somehow be more active. But of course we never hear how. He just says, `I would be more active' and then moves on to the next round of attacks on the government. We never know. I suppose the Leader of the Opposition himself would not have read that article because he has made it clear that he does not like to read articles about himself in case he might be hurt by the criticisms. I would have thought if ever there was an example of somebody lacking ticker that was as good an example as you would ever find. Despite the fact that the Leader of the Opposition says he would be more active, it has to be said that within Australia, outside of the parliament, we find no record of him making any speech on foreign policy at all in 17 months. For a man who wishes to be active in this field, he has 17 barren months behind him. As for the member for Kingsford-Smith, it is interesting to record how often he asks questions on these issues that he says he is so interested in and that we should be more active on. Over the last 141 days the member for Kingsford-Smith has failed to ask a single question on the great issues of Australia's engagement with our region and the world. This has been an extraordinarily exciting and interesting period in international history, but for 141 days he has not thought it worth while asking a question. Of course you do not get paid for asking questions, so that is perhaps why he does not bother. The only person on the Labor side who talks about foreign policy is the former leader Paul Keating. This is the man, the House will remember, who said that if he had remained Prime Minister and if all of them had remained in government, there never would have been an Asian economic crisis. If the Leader of the Opposition had still been Deputy Prime Minister, Asia would have been spared its economic crisis. Of course Mr Keating's attack on the government over East Timor is not repudiated by the Leader of the Opposition, who obviously, by his silence, associates himself with Mr Keating and with Mr Keating's low-grade views on high-grade policy.1594914:29:0015949Crean, Simon, MPMr CREANDT4HothamALP00—My question is again to the Treasurer. I ask him: how can you claim your crackdown on tax avoidance will produce all of the money that you originally promised and deliver Ralph in full when you have given all of those abusing the system a two-year tax holiday while the Taxation Office works on the GST and you are going to allow them to keep abusing the system if they can simply prove to the tax office that they own a mobile phone? Haven't you blown an enormous hole in the budget by allowing yourself to be rolled in your party room last night?15949Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I know that the Deputy Leader of the Opposition goes on about mobile phones, which is a new issue to me. It is certainly not part of the legislation. He is one of those people who, if unable to make a point on the facts, will try to change the facts in order to try to make some kind of grubby political point. As I said earlier, I think the Deputy Leader of the Opposition would be better informed if he actually read the legislation which is being introduced this afternoon. I think people should hear the allegation he just put. The allegation he just put is that people who are in the prescribed payments system would, because they are in the prescribed payments system, be able to avoid tax. That was his proposition. If the prescribed payments system was not actually introduced by the Australian Labor Party—5I4McMullan, Bob, MPMr McMullan—You don't know, do you?CT4Mr COSTELLO—I do not know. It might have been introduced earlier, but certainly over 13 years of Labor Party policy I never heard the Labor Party complain about the prescribed payments system. In order to go into the prescribed payments system, you had to get a declaration. The declaration showed that you were not in the PAYE system; you had already been recognised for the purposes of taxation as not being in the PAYE system, and you had a determination from the commissioner to that effect. If you have a determination to that effect, what the government have sensibly said is that you can rely on that during the transitional period. We will do that rather than have 230,000 people, 120,000 of whom are already under the PPS, come in for individual declarations between now and 1 July. I would have thought it was a very, very sensible system.Leaving aside this matter of tax, let me make one last point. The Labor Party is obviously not interested in tax from this measure. If it was, it might have done something in 1983, 1985, 1987, 1989, 1991, 1993 or 1995. What the Labor Party really hates is independent contractors. The Labor Party hates independent contractors because they do not join the CFMEU, which produces union officials that sit on the Labor Party front bench. On this side of the House, we have always recognised the rights of independent contractors and will go on recognising them. They were recognised by John Ralph, and we are not going to be a party to the CFMEU, or the puppets that it pulls here, trying to use independent contractors to get them back into trade unions. We respect the rights of independent contractors, people who are genuinely in business, who undertake some risk and who have always been recognised as being subcontractors. We want to make sure that their rights continue to be respected. 1595014:33:0015950Barresi, Phillip, MPMr BARRESIZJ6DeakinLP10—My question is addressed to the Minister for Employment Services. Is the minister aware of claims made in the House yesterday that the Job Network is failing to provide adequate assistance to job seekers and that the Job Network is not providing access to training for job seekers? What is the government's response to these claims?15950Abbott, Tony, MPMr ABBOTTEZ5WarringahLPMinister for Employment Services10—I note that there were just two CES offices in the electorate of Deakin a few years ago and that there are now 10 Job Network sites. I thank the member for his question. I am aware that in her MPI speech yesterday the member for Dickson, the shadow minister for employment and training, said that the Job Network was failing job seekers. She said that she was receiving letters and phone calls almost every day from dissatisfied job seekers. I know that MPs on both sides of this House do sometimes get letters of complaint. I know this because they always forward them to me, and my department does its best to resolve the matters. I know that there is a job seeker complaints hotline. Its phone number is 1800 805260. That has handled some 13,000 complaints over the last two years from an average of 800,000 registered job seekers at any one time. I am pleased to say that 95 per cent of these complaints have been cleared up within five days.The interesting thing is that, despite receiving letters every day, the member for Dickson has not made a single representation on behalf of job seekers. In the 18 months that I have been responsible for the Job Network and in the six months that she has been shadow minister for employment and training, she has not made one representation on behalf of job seekers. The question is: what is she doing with all these letters? She is not running an electorate office; she is running a dead-letter office. The sad thing is that she is not helping her constituents; she is using their letters as nothing but political ammunition, and that is a very sad indictment of any local member.EZ5Mr ABBOTT—The member for Dickson also repeated Labor's tired claims that the Job Network was a failure because it did not necessarily provide training. I have a document in my possession headed up `employment information' which states: The Job Network member can put together a tailored package to meet an employer's particular business needs. This could include short-listing and interviewing job applicants, wage subsidies, training or other support.As if to emphasise the point, on the next page this document states:Job Network members can use their fees to provide training or wage subsidies. This is an official brochure distributed by the Labor member for Paterson. This is what the member for Paterson thinks the Job Network does. XW4Kernot, Cheryl, MPEZ5Mr ABBOTT—Obviously the member for Dickson has not persuaded the member for Paterson nor has she persuaded the members for Hotham, Batman, Hunter, Dobell, Barton, Cunningham, Corio, Banks, Bowman, Perth, Lilley and Wills, her fellow frontbenchers who all walked out on her yesterday before she walked out on the debate that she had herself instituted. Opposition members interjecting—EZ5Mr ABBOTT—They really are a pretty rum mob opposite. There are the know-alls who write books and then there are the know-nothings—QI4Price, Roger, MPMr Price—Mr Speaker, I raise a point of order: how is this relevant to the question and how is he responsible for Labor Party members? 10000SPEAKER, MrMr SPEAKER—The minister was asked to make a comment about the Job Network, as I understand it, and was asked for a comment about employment. I thought that is what he was dealing with.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The member for Prospect might want to check what yesterday's MPI was about. The minister is relevant and I call him.EZ5Mr ABBOTT—There are the know-alls opposite who write books and there are the know-nothings who are too frightened to look at the newspaper every day.5I4McMullan, Bob, MPMr McMullan—Mr Speaker—10000SPEAKER, MrMr SPEAKER—The minister will resume his seat. If the Manager of Opposition Business is raising a point of order on relevance—5I4McMullan, Bob, MPMr McMullan—Yes, I am.10000SPEAKER, MrMr SPEAKER—The Manager of Opposition Business is entirely right because the opening remarks of the minister bore no relevance to the question.EZ5Mr ABBOTT—I am very, very happy to help the member for Dickson to resolve the problems that are brought to her attention. But she has got to bring them to my attention first. She has got to table these letters, bring the letters to me and show me the letters before she puts them in a pathetic press release.PE4Beazley, Kim, MP10000SPEAKER, MrMr SPEAKER—The Leader of the Opposition knows better than anyone else that, until he is recognised, he will not get the call.1595114:40:0015951Lee, Michael, MPMr LEEMG4DobellALP00—My question without notice is addressed to the Prime Minister. Does the Prime Minister recall the letter he wrote to me yesterday responding to my question about full-time research students on scholarships being losers under his GST package? Prime Minister, how does the new GST assistance scheme identified in your letter relate to the John and Wendy top-up scheme announced by Senator Newman on Monday? What funding have you allocated to this second GST assistance scheme? Why is it that, with only 79 days to go before the GST is introduced, you have provided no details to research students about how claims of GST loss should be made, whether receipts should be kept to prove GST loss and how claims will be assessed under your second GST assistance scheme? 15951Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—The scheme that I referred to in the letter that I wrote to the honourable member for Dobell was announced last year and bears no relationship to what I mentioned yesterday. 1595114:41:0015951Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—My question is addressed to the Minister for Finance and Administration. Would the minister inform the House of the benefits of the government's planned sale of Telstra that have already occurred? Is the minister aware of any alternative policies that would jeopardise the future benefits of the government's proposed full sale of the company?15951Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—I thank the honourable member for Curtin for her question and I also acknowledge her significant and continuing contribution on economic matters to the government and to the House. Yesterday, I indicated clearly that the government intends to fully privatise Telstra. That policy is subject to an independent telecommunications service inquiry which will determine the adequacy of service levels, particularly in regional Australia. That inquiry is under way. Whilst I will not pre-empt the outcome of that inquiry, I do know that Australia needs a large telecommunications company which is globally competitive. I noted from a breakout story in the Australian Financial Review this morning that the Leader of the Opposition will address the Sydney Institute tonight in what has been billed as a landmark speech on Labor's policy for Telstra's future. That article indicates that the Leader of the Opposition may attempt to justify Labor's antiprivatisation stand. That is a stand, of course, which Labor shares with Cuba and North Korea—the antiprivatisation stand. He may attempt to justify that stand tonight by arguing that Telstra's dividends will outweigh in economic terms the economic benefit of retiring about $50 billion worth of government debt that could occur if there were full privatisation. I hope this speech addresses the real issues on Telstra such as: how does Labor expect Telstra to compete in this rapidly changing and increasingly globalised telecommunications industry while it remains shackled to government ownership? This is an industry in which companies like AAPT are permitted to grow at rates exceeding 20 per cent per annum, yet Telstra is restricted from using a commonly used business strategy of raising capital through offering shares. Telstra is forced to tap into its precious cash reserves or go into debt to fund expansion, and it must do that in order to compete and in order to survive. How can Labor claim to rely on Telstra's future dividend stream to fund its new nation building initiatives when Telstra's capacity to compete globally is undermined by continued majority government ownership? How can Labor assure the 2.1 million Australian shareholders, the people who have invested their financial futures in Telstra, that there would be anything left if the decisions on business were made by the member for Perth here in Parliament House if Labor were ever in government? How can Labor guarantee that Telstra is going to have the financial capacity to invest in the network that will provide telecommunications to regional Australia if again it is constrained from operating in a truly commercial market and operating on a sound business plan?If you want Telstra to fund nation building initiatives, you do not gamble on the assets of Australian taxpayers; you do not assume that there will be an ongoing flow of dividends when you constrain the capacity of the company to be in that market and to compete. You reduce debt, as this government has done in reducing Labor's debt, using the proceeds from the sale of Telstra. You reduce the public debt interest payments. You put money into social benefits. Some $2.2 billion from the proceeds of the sale of Telstra has gone into regional and rural Australia. And, of course, you make room to fund programs in the health, education and welfare areas which the sale of Telstra and the reduction of public debt interest has allowed.One thing is certain: if Labor ever get into government, they will sell the rest of Telstra. As I said yesterday, the article about the Leader of the Opposition in the Bulletin entitled `The Accidental Leader' states: He is against the sale of Telstra but he didn't really used to be and many in his inner circle are convinced he would sell it if in officeWe know what the Leader of the Opposition did when he was the Minister for Finance. He sold Qantas for some $1.45 billion. He sold half the Commonwealth Bank for some $1.7 billion. He sold the Commonwealth Serum Laboratories for $299 million. What did the Australian people get as a result? They got the highest unemployment on record, the highest unemployment for decades, $10 billion worth of budget deficit and $98 billion worth of increased general government debt. Two things are certain: Labor in government would not roll back the GST; they would sell Telstra.1595214:47:0015952Lee, Michael, MPMr LEEMG4DobellALP00—My question is again addressed to the Prime Minister. Prime Minister, given that your letter to me yesterday confirms that there will be losers under the GST, including certain full-time research students in receipt of scholarships, do you also concede that students in this position will require compensation not only for this year but also for all subsequent years of their study? Prime Minister, is it not also true that future students in the same situation will also require ongoing compensation? Prime Minister, will you now give a commitment to this House that your new GST assistance scheme, identified in your letter, will extend beyond 30 September to provide ongoing compensation payments so that current and future research students are not losers under your GST?15952Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—What I said in the letter was to remind the member for Dobell of an arrangement that was announced last year arising out of the discussions that we had with the Australian Democrats. MG4Lee, Michael, MP10000SPEAKER, MrMr SPEAKER—The member for Dobell has asked his question. ZD4Mr HOWARD—It was made very clearly and very openly last year and it was made very clear in the letter I wrote to the member for Dobell that for people who regard themselves, by reason of being outside the social security or income tax system, as not getting the benefits that people within the social security and income tax system get under tax reform, there is a mechanism. MG4Lee, Michael, MP10000SPEAKER, MrMr SPEAKER—The member for Dobell!ZD4Mr HOWARD—That does not amount, as the member for Dobell so erroneously claimed, to a concession that there will be, to use his words, `losers under the GST'. If, in fact, there is a mechanism whereby people who claim that they are not within the social security system or within the tax system but are affected by the introduction of a goods and services tax can seek replacement compensation, they cannot by definition be losers. That is why the claim made by the member for Dobell is completely wrong.This claim made by the member for Dobell is of a piece with the claim made this morning by the Leader of the Opposition in his regular doorstop. No wonder he does not read newspapers; he is talking all the time. Outside Parliament House this morning, the Leader of the Opposition angrily drew attention to the fact that under the GST plan, under the maps that were released yesterday by the government—MG4Lee, Michael, MPMr Lee—Mr Speaker, I raise a point of order. The question related to whether there is a one-off payment or ongoing payments of compensation to students. It has nothing to do with diesel maps. Get back to the question: one-off or continuing.10000SPEAKER, MrMr SPEAKER—The member for Dobell will resume his seat. The Prime Minister was responding to a question from the member for Dobell—MG4Lee, Michael, MP10000SPEAKER, MrMr SPEAKER—I warn the member for Dobell! I will not tolerate the chair, no matter who occupies it, getting advice while it is in fact giving a ruling. The member for Dobell is warned. The Prime Minister was responding to a question relative to a letter that he had sent to the member for Dobell. He then proceeded to illustrate the point he was making by referring to a comment made by the Leader of the Opposition at a doorstop this morning. I do not know what the Leader of the Opposition's comment was about. For that reason, I call the Prime Minister.ZD4Mr HOWARD—Mr Speaker, what I was referring to was an element of the tax reform package. The question asked by the member for Dobell related to tax reform. I was making the point that the Leader of the Opposition this morning made the absolutely unbelievable claim that the fact that some people are going to get the diesel rebate and others are not is the fault of the government.PE4Beazley, Kim, MPMr Beazley—There is nothing remotely related to the diesel maps in any form in the member for Dobell's question.10000SPEAKER, MrMr SPEAKER—The Leader of the Opposition will resume his seat. The Leader of the Opposition draws an even longer bow by suggesting there is nothing remotely related in the matters of tax reform and diesel maps. I have to agree that the diesel maps do not bear any relevance, as far as I can tell, to the member for Dobell's letter.1595314:52:0015953Bailey, Fran, MPFRAN BAILEYJT4McEwenLP10—My question is addressed to the Minister for the Arts and the Centenary of Federation. How is the government ensuring that all Australians get adequate standards of telecommunication services? Is the minister aware of any alternative policies in relation to this issue?15953McGauran, Peter, MPMr McGAURANXH4GippslandNPMinister for the Arts and the Centenary of Federation10—I thank the member for McEwen for her question. I know that she is a vigorous fighter for communications infrastructure in her electorate. She, like all members on the government side and the rural and regional constituents we represent, will be very pleased at Telstra's announcement yesterday: $350 million new and additional investment in upgrading of rural telecommunications infrastructure, on top of $700 million earlier this year. Of course, it has been welcomed by our constituents, by the NFF. Interestingly, it will create 700 new jobs over the life of that three-year project. It is going to commence very shortly and will focus on those areas experiencing the poorest and the worst service. What has been lost, I notice, in public commentary on this issue recently is the compulsion on Telstra to invest amounts of this size in the customer guarantee service, which this government introduced and which holds Telstra in a monetary sense to introducing new levels of service for rural and regional customers. This money is a direct response of the government's legislation, which we introduced—something that the opposition, when they were in government, failed to do, and, of course, they are now riding in on our coat tails.I am also asked by the honourable member whether there are alternative policies—and I think we know the answer to that. There simply are not on the part of the ALP—and no wonder, when you look at the most profound, intensive interview profile on the Leader of the Opposition in a very long time, `The Accidental Leader', the man who does not read newspapers. If he is not going to read the major dailies of metropolitan Australia, he certainly is not going to read anything from regional Australia. He does not know what is happening in regional Australia. Why else would he claim that his secret weapons, his most powerful salesmen in regional and rural Australia, are the member for Hotham and the member for Batman, former ACTU chiefs? What he says is this:When asked about how Labor will win the bush, he says—with a straight face—that Simon Crean and Martin Ferguson are popular in rural Australia...Oh yeah, well let's test it. Why don't you go out and tell them—QI4Price, Roger, MPMr Price—Mr Speaker, I rise on a point of order under standing orders 145 and 142. How is the minister responsible for how Labor will win in the bush? What relevance does that have to the question that was asked?10000SPEAKER, MrMr SPEAKER—The member for Chifley will resume his seat. The member for McEwen asked the Minister for the Arts and the Centenary of Federation a question relative to rural Australia, and it was in that context that I deemed him relevant.XH4Mr McGAURAN—What are the alternative policies proposed by the ALP and others in regard to regional Australia? It is obviously to send out the former ACTU presidents to win over the bush. Mr Beazley is quoted in the article:“It is not going to be difficult,” says Mr Beazley. “They actually like Crean and Ferguson. They remember Crean when he was primary industries minister ... Ferguson when he was ACTU president made a speciality of bush workers.They made a speciality of putting them out of work, particularly in abattoirs. They remember you all right. So you go out, the new bobbsey twins, the new glimmer twins—Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The minister will come to the question.XH4Mr McGAURAN—And he does not read newspapers. Mr Speaker, you do not have to be a psychologist to know that this is a Leader of the Opposition in denial and he is taking everybody else with him. He does not know what is happening in regional Australia. So, to finish my point, when you go out as the bobbsey twins, take a couple of others: the member for Melbourne, secretary of the clerks union; the member for Brisbane, secretary of the teachers union—what a delegation that would be—and let us see the welcome you would get.1595414:57:0015954Lee, Michael, MPMr LEEMG4DobellALP00—My question is again to the Prime Minister. Is the compensation for full-time research students one-off or ongoing?15954Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I announced last year—and I refer the honourable member for Dobell to that announcement—a scheme whereby people who are not part of the social security or taxation arrangements under the tax reform plan can apply for compensation in lieu of that, and I invite their attention to that announcement.MG4Lee, Michael, MPMr Lee—Mr Speaker, I seek leave to table the letter from the Prime Minister outlining his views on this.Leave granted. 1595514:59:0015955Haase, Barry, MPMr HAASE84TKalgoorlieLP10—My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Would the Deputy Prime Minister outline to the House how the new Diesel and Alternative Fuels Grants Scheme will operate; what are the benefits of this scheme?15955Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for his question and, given the enormous size of the electorate that he represents, he will know just how important the reduction in transport costs is to the wellbeing and future opportunities of the people he represents. As I commented yesterday in the House, there is no doubt that the confirmation of our reform to taxation arrangements in relation to transport have been very widely welcomed. Whether it is the National Farmers Federation or the Australian trucking industry saying that this is a win-win not only for industry but also for Australia, or whether it is the VFF or whoever, it has been very widely welcomed.However, I do notice there is a little misunderstanding about how it will actually operate. It is not hard to think that there might be some who have a bit of a vested interest in confusing how it might operate. Indeed, those opposite are responsible. They are getting around as best they can some quite extraordinary misinformation about how the new arrangements will work. In fact, a very good example of this emerged this morning in a doorstop interview with the Leader of the Opposition when he said:Now we see this extraordinary mapping of Australia with thin grey lines going down highways and areas massively disadvantaged by finding themselves on one particular side of the line.It is quite evident that the Leader of the Opposition has no idea about how the new arrangements will work—and it is probably because he does not read—so it is therefore important that I inform the House. At the outset, all business users will be able to claim a credit for the GST on fuel. So all businesses will find business fuel costs fall by around 10 per cent. In addition, I reiterate that businesses running 20 tonnes gross vehicle mass or more for road transport anywhere in Australia will have access to the grand scheme to reduce excise to 20c a litre. Businesses running vehicles between 4½ tonnes and 20 tonnes GVM will also have access to the grant if they are servicing non-metropolitan areas.Here are a couple of critical points that the Leader of the Opposition, and those who might be ill advised enough to listen to him, ought to take on board. Firstly, it does not matter where the business has its premises. That is irrelevant. Secondly, it does not matter where the business buys its fuel. What matters is the journey undertaken by the vehicle—between two places outside a metropolitan area, between a metropolitan area and a country area or between two metropolitan areas. The only journeys that will not attract the grant are journeys within metropolitan areas, and those six are defined as Sydney, Newcastle and Wollongong; Melbourne and Geelong; Brisbane, the Sunshine Coast and the Gold Coast; Adelaide; Perth; and Canberra. The boundaries were drawn, as is known, on the basis of statistical local areas. If at least 20 per cent of an SLA was a contiguous urban area centre, it was considered metropolitan, and there we basically have the maps.I want to return to what the Leader of the Opposition said this morning. He clearly misunderstands how the scheme will work and he clearly misrepresents those who will win and those who will miss out. The most appalling aspect of this is that, when he points to those he describes as massively disadvantaged, he fails absolutely to display the courage necessary to point out the one central elementary fact in all of this: inasmuch as the arrangements are a little more complicated than we originally intended them to be, that is wholly, solely and completely the fault of the Labor Party in this place. There is no other way around it. It is the fault of a Leader of the Opposition with no vision, no courage and no capacity to take forward the interests of rural and regional Australia, let alone the broader Australian economy. He ought to do nothing short of apologising.1595615:04:0015956Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—My question is to the Minister for Finance and Administration. Can you confirm that in March you met with the proponents of the Speedrail high speed train project, including joint venture partner Leightons? Is it not a fact that you advised Leightons and the other joint venturers that government funding for the project would be more likely if the full sale of Telstra went ahead? Isn't Mr Tim Besley, chair of the government's Telstra inquiry, also chairman of Leightons? If government financial support for Speedrail is linked in this way to the full sale of Telstra, how can Mr Besley possibly chair the government's Telstra inquiry?15956Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—I have been having regular meetings with the proponents of the Speedrail project now for some years. After all, the route goes through my electorate and it is of significance to my constituents. I am continually given a briefing on the progress. On a number of occasions, they have come to the seat of Macarthur and conducted community meetings, and they have kept me informed of those things. I am very grateful that they have kept me informed, and I have endeavoured to give them every assistance that I can within the proper bounds.I can say very, very clearly that when the government made a decision following the report that was put together by the officials of three governments—the federal government, the New South Wales government and the ACT government—to nominate a preferred tenderer, and that decision was announced in August 1998, from that point on it was a case of looking at the details that could be brought forward by the preferred tenderer. The government's condition has been—and this has always been stated by me—that it be at no cost to budget. Many proposals that have been discussed with me have indicated that that represents some difficulties or otherwise. The report that has come through is being evaluated at the present time. I have not seen it, but I have made it abundantly clear that the government's rules are that it be at no cost to budget. If they think that there is a capacity of government to do otherwise, I have indicated that there is nothing that I know that would suggest otherwise.The honourable member asked me something about the chairman of Leightons. I think I am aware—I am not certain of this—that he is on the board of Leightons. Whether he is the chairman or not, I do not know. I do not know what that has to do with the Speedrail project. I do not know what that has to do with the fact that there are many, many organisations who will come and talk to me as a member of parliament and in my role and who will give me some ideas about what they want to do. All I can say is that the government's rules are clear. I have certainly stuck by them in all my conversations. If there is to be a decision on Speedrail—and it is yet to be determined whether it may or may not be favourable—the rules in place at this point in time are that it be at no cost to budget.1595615:07:0015956Baird, Bruce, MPMr BAIRDMP6CookLP10—My question is addressed to the Treasurer. How is business tax reform making Australia more competitive? What investment opportunities does it open up?15956Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for Cook for his question. The government is not only reforming the indirect tax system in Australia to take place on 1 July, reforming family payments to take place on 1 July and cutting income taxes in Australia's largest ever income tax cut on 1 July but also reforming the business taxation system. That has involved cuts in capital gains tax, particularly of benefit to small business. The cuts in capital gains tax and company tax have given Australia a new international competitiveness and have made Australia a good destination for foreign investment.First of all, on capital gains tax, prior to the government's reforms, the top rate of capital gains tax in Australia was 48.5 per cent compared with 34 per cent in the UK and 18 per cent in the US. That top rate has been cut to 24¼ per cent, which is lower than the UK top rate at 34 per cent and only slightly above the US rate at 18 per cent. Our bottom rate of capital gains tax now at 15 per cent is again lower than the UK and slightly above that of the US. In relation to company tax, however, the government's reforms, the first instalment of which takes place on 1 July—cutting the company tax rate from 36 per cent to 34 per cent, and then a year later from 34 per cent to 30 per cent—will mean that Australia has a lower company tax rate than the United States, New Zealand, Japan and Korea; will be on a par with rates in Germany and the United Kingdom; and will be, outside of Hong Kong and Singapore, the lowest company tax rate in the Asia region. This means that Australia is now an attractive destination for foreign investment. I read some statements, which were put out earlier in the week by some foreign analysts, saying that one of the key things you could do to improve the investment climate in Australia was the privatisation of Telstra. I think that point was being made by Mr Hale. We know that, by having a telecommunications sector in our stock exchange, we have been able to hook that stock exchange into new high-tech indexes, which have put Australia on the map in relation to foreign investment. We would not have had a telecommunications sector on the Australian Stock Exchange if it had not been for this government's effort for the privatisation of Telstra.For foreign investors, we now have arguably one of the most competitive capital gains tax regimes amongst developed countries. We now have a low rate by regional standards. Australia is a good destination for investment. That means more jobs for young Australians. This means that this government is about building an internationally competitive business taxation system for the future in this country.1595715:10:0015957O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—My question is to the Minister for Agriculture, Fisheries and Forestry. Minister, are you aware of serious allegations made about the Australian Fisheries Management Authority by the Parliamentary Secretary to the Minister for Industry, Science and Resources, the member for Leichhardt, on Channel 10 news on Friday, 7 April? I quote:There is corrupt elements and dishonest elements within the AFMA and I think it's about time that they were held—you know, responsible for their actions?Minister, do you agree with the parliamentary secretary that there are corrupt and dishonest elements in AFMA? If so, what do you propose to do about his allegations? If you do not, when will you approach the Prime Minister to have the parliamentary secretary sacked for his intemperate and unsubstantiated attack on the officers of AFMA?15957Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—I thank the honourable member for Corio for his question. I note with interest his determination to defend the honour of public servants—something that is not shared obviously by his colleagues on the front bench, who only yesterday in this House used the privilege of parliament to besmirch the reputation of people who give honourable service to our country.7T4Crosio, Janice, MP10000SPEAKER, MrMr SPEAKER—The member for Prospect is warned.GT4Mr TRUSS—I am certainly aware that there have been allegations about the AFMA board, particularly in relation to the way it dealt with the Northern Prawn Fishery management plan, and a range of concerns raised by trawler operators, particularly in North Queensland but indeed in other parts of Australia. Those allegations were brought to my attention quite some time ago. The Parliamentary Secretary to the Minister for Industry, Science and Resources was no doubt referring to those sorts of allegations in his comments. I have provided the necessary information to my department for examination. At their suggestion, I wrote to the relevant parties and offered, if they were prepared to provide details of their allegations, to refer them to the Federal Police for examination. No information was forthcoming and so, in that regard, I consider the matter closed.1595715:14:0015957Jull, David, MPMr JULLMH4FaddenLP10—I ask the Minister for Defence what contribution Australia is making in the latest phase of the UN operations in East Timor.15958Moore, John, MPMr MOOREEI4RyanLPMinister for Defence10—I thank the member for Fadden for his question and also for his continuing interest in defence matters as a member of the committee in particular. On Friday I had the pleasure of seeing off our latest contingent of troops to East Timor, the 6RAR from the Enoggera barracks in Brisbane. They will form part of the 1,900 Australian troops remaining in East Timor as part of our contribution to UNTAET. Tomorrow, elements of 6RAR will relieve 5/7RAR. They will continue to provide a vital security presence along the east and west Timor border. Whilst the government welcomes the progress that has been made to date by the Indonesian government to curb militia activities, militia continue to disrupt East Timorese reconstruction. There are therefore risks involved in any deployment. However, the ADF troops are very well trained and skilled to deal with any situations that may arise. Australia can be rightly proud of the troops' efforts in East Timor. We can also be proud of the way in which the families of Australian servicemen and servicewomen have supported them through this difficult time. They have all played and are playing an important part in bringing peace to East Timor. I am sure all members of the House will join me in thanking the men and women of 5/7RAR for the excellent job they have done, at the same time wishing those going, 6RAR, the very best of good fortune. 1595815:16:0015958Edwards, Graham, MPMr EDWARDS83RCowanALP00—I want to address a question to the Minister for Veterans' Affairs. Minister, can you confirm that state TPI associations in Western Australia, South Australia, Victoria, Tasmania and two regional branches in Queensland have, in an unprecedented move, now carried unanimous votes of no confidence in you? Minister, can you also clearly advise the House and the veteran community whether you support `reasonable hypothesis' as the standard of proof required by veterans in support of their claims against the Repatriation Commission? Minister, why did the government in February of this year argue in the New South Wales Court of Appeal for that standard of proof to be raised to `balance of probabilities'? Minister, why are you seeking to downgrade veterans' entitlements by stealth? 15958Scott, Bruce, MPMr BRUCE SCOTTYT4MaranoaNPMinister for Veterans' Affairs and Minister Assisting the Minister for Defence10—I thank the member for his question. I advise the House that I recently went to Western Australia to meet with the TPI veterans over there and had a very good meeting with them. They raised a number of questions with me relating to the Veterans' Entitlements Act and the entitlements that they receive. I do take my job as veterans' affairs minister very seriously. I did go to Western Australia at the request of local members to talk with those members of the TPI Association in Western Australia. Following that meeting, I met with the state president of the RSL to discuss the issue with him as well. On my return to Canberra, I have spoken with the national president of the TPI Association and I have had discussions with him about the motions of no confidence in me. I take the issue very seriously, as does the government. The Veterans' Entitlements Act has been built up over many, many years and the entitlement has been progressed by successive governments. We have always sought on both sides of the House, I believe, to err on the side of generosity. I think that could be said for both sides of this parliament. I know that there will be a national conference of the TPI Association in the next month. I certainly will be waiting to hear of resolutions from that as well as from the RSL National Congress which also will be held later this year. I do keep in touch with the ex-service community. I think it would be agreed on both sides of the House that it is the responsibility of government to always refer—10000SPEAKER, MrMr SPEAKER—Minister, resume your seat.83ZIrwin, Julia, MPMrs Irwin—Point of order!10000SPEAKER, MrMr SPEAKER—Member for Fowler! The member for Cowan has not as yet been recognised. I of course will recognise him. I remind the member for Fowler of her obligations. I call the member for Cowan.83REdwards, Graham, MPMr Edwards—Mr Speaker, my point of order goes to a matter of relevance and it relates to the government's position on the change of the standard of proof from `reasonable hypothesis' to the `balance of probabilities'. I ask the minister to address that question. 10000SPEAKER, MrMr SPEAKER—I was not aware that the minister had concluded his answer. The minister has the call. YT4Mr BRUCE SCOTT—It was actually under the previous government that statements of principles were reviewed, and when we came to government those statements of principles were ones that we said we would review in consultation with the ex-service community. I have to give credit—and I think the ex-service community do—to the way those statements of principles were introduced under the former minister, Con Sciacca. There has been no change to the Veterans' Entitlements Act in relation to those statements of principles. 1595915:20:0015959Hull, Kay, MPMrs HULL83ORiverinaNP10—My question is addressed to the Prime Minister. Has the Prime Minister's attention been drawn to arguments in favour of the privatisation of Telstra and will the government respond to such arguments? 15959Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I can inform the House that very recently my attention was drawn to some very powerful arguments in favour of the full privatisation of Telstra. They are arguments that were very cogently put in a very, very long speech under the heading of `Asset sales: putting privatisation into perspective'. The two principal arguments contained in this speech really did grab my attention, and I agreed with them. I thought they went to the nub of the matter, to the centrality of this issue of public policy debate at the present time. The first of those arguments went as follows:But there are broader benefits to be gained from moving the ownership of assets into the private sector, most notably in achieving greater efficiency, stronger performance and improved competitiveness in some of our key national enterprises. Mark those words—`greater efficiency, stronger performance and improved competitiveness in some of our key national enterprises'. That was a very, very strong argument. I was very much impressed with that argument, and it was put with great directness and great lucidity. But that was not the end of it. I read further into that speech and I found another compelling argument, and this goes even more centrally to the debate about the sale of Telstra. It read:Some require—talking of enterprises—freedom from the residual constraints of government ownership—mark the word `residual'; you could even read 50.1 per cent into `residual', couldn't you?—to perform their full potential, including the freedom to seek capital from the market appropriate to the balance between risk and reward that only the shareholders of a privatised company are prepared to accept.I would give that almost 10 out of 10 as a statement in favour of privatisation of some of our great national enterprises. You could almost be forgiven for believing that that particular speech was directed towards the sale of the rest of Telstra. I think it probably was preparing the way for the sale of Telstra, because that speech was delivered on Thursday, 7 July 1994 to a gathering of the Life Insurance Federation of Australia at the Hyatt Hotel in Perth—and that gives you a little clue as to the author of the speech, doesn't it? I repeat the title of the speech: `Asset Sales—putting privatisation into perspective: an address by the Hon. Kim C. Beazley, the Minister for Finance'. I have to say, in all charity that should possess us all on occasions, that it was a very good speech. It was the speech of a person who believed then, as he will again if there is a turn of the electoral cycle, in the cause of privatisation. I understand that that same gentleman is tonight to deliver a speech roughly carrying the title `Why the rest of Telstra should not be sold'. In those circumstances and having read this speech, perhaps the title should be amended to read `Why the rest of Telstra should not be sold until we get back into government', because, deep down, the realities that possessed the Leader of the Opposition as then the Minister for Finance to make that speech in 1994 exist even more now. On this, as on so many other things, unfortunately, the Leader of the Opposition is walking both sides of the street. XW4Kernot, Cheryl, MPZD4Mr HOWARD—When he is in government he is all in favour of privatisation; when he is in opposition he is against it. When he was in government he was in favour of Paul Keating's option C, he was in favour of tax reform; now he is against it. But, of course, if he gets back into government he will be in favour of it again. Instead of walking both sides of the street—XW4Kernot, Cheryl, MPMs Kernot—What about `never, ever'?10000SPEAKER, MrMr SPEAKER—I warn the member for Dickson.ZD4Howard, John, MPMr HOWARD—In relation to the diesel maps, he was driving on both sides of the road because, in relation to the diesel maps, he was trying to allege that it was all the fault of the government that you had a disparity between the country and the city. It is all the fault of the Labor Party. The Leader of the Opposition has zero credibility on the issue of privatisation. It was in the national interest, as he argued so well six years ago, that government assets ought to be privatised. It remains in the national interest now, and nothing that the Leader of the Opposition will say tonight can gainsay that fact. It will only confirm the growing view in the Australian community that he does walk both sides of the street, he is devoid of policy courage, he is devoid of any policy commitment, and that will be further revealed tonight. Mr Speaker, I ask that further questions be placed on the Notice Paper.Questions to the Speaker159601596015:27:0015960Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—Mr Speaker, in accordance with standing order 150, I ask that you write to the Minister for Health and Aged Care concerning questions on notice Nos 460 and 461 which have remained unanswered for more than a year—just like a few other things—asking him to release the requested information on bulk-billing and doctor numbers.15960SPEAKER, MrMr SPEAKER10000PON/A10—I will follow up the questions.1596015:27:0015960Snowdon, Warren, MPMr SNOWDONIJ4Northern TerritoryALP00—Mr Speaker, I have a question to you. I have had representations from the people of Yirrkala in north-east Arnhem Land about the reproduction of the Yirrkala bark petitions, the first of which was lodged on 28 August 1963 and which, as you know, hang in this parliament. For some years, people at Parliament House responsible for authorising the reproduction of documents have referred people seeking permission to reproduce the bark petitions in books about Australian history, art and politics, amongst other things, to the Yirrkala community The community had obtained authority from the relevant clan leaders, elders and associations to administer the permissions in this regard. Part of the authority was a generous agreement to waive fees in the reproduction of the documents because they were seen as public educationally important to all Australians. In a letter to a Ms Kerrie Davies on 11 April 2000, the Director of the Parliament House Art Collection, Ms Louise Dauth, asserted that the Commonwealth is the copyright owner of the petitions because they are tabled documents and that there is now a fee of some $280 for the use of these images.Mr Speaker, I ask you if you are aware that the clan designs are indivisible from the people under Yolngu law and that they have not relinquished their rights to them by adding them to the petitions. Could you advise the House whether or not the parliament has negotiated an agreement with the rightful owners of these clan designs before this new assertion of ownership? Could you advise the parliament as to whether or not there was any contemplation by the parliament as to whether the assertion of copyright was in fact the appropriation of the intellectual property of the Yolngu clan leaders? Bearing in mind that there has always been a reproduction cost for slides of these items, could you advise as to whether or not the parliament is now profiting from this fee? And would you consider a request from the people of Yirrkala to waive, from today, the application of this fee, at least in cases of all appropriate educational reproductions?15961SPEAKER, MrMr SPEAKER10000PON/A10—I am not aware of all of the detail of the matter to which the member for Northern Territory refers. I am aware of a request for the petitions to be considered as part of an exhibition in the currently being constructed National Museum, and that was one thing that the Presiding Officers had sought advice on. It may be in that context that Ms Dauth has written to the Yirrkala people, but I will follow through the matter that the member has raised. 1596115:30:0015961Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—Mr Speaker, I have a question to you. Under section 150 of the standing orders, will you write to the Minister for Defence about my question on his failure to raise the issue of East Timor with the US? It is question 1127 on the Notice Paper.15961SPEAKER, MrMr SPEAKER10000PON/A10—I thank the member for Melbourne Ports.1596115:30:0015961Horne, Bob, MPMr HORNEUU5PatersonALP00—Mr Speaker, during question time today the Minister for Employment Services quoted from a document that he attributed to me and to my office regarding Centrelink services. I have a copy of my Centrelink information kit that I make available to anyone in the electorate who requires it. I have perused it carefully. I cannot find the words that he quoted from that. He has left the House, but I would ask that you write to him and table the document from which he quoted.15961SPEAKER, MrMr SPEAKER10000PON/A10—If the member for Paterson has been misrepresented, there is a facility that of course allows that to happen in the House, and I will facilitate that. It is not a matter for me specifically to take up, but I will follow the matter through and come back to the member for Paterson.1596115:32:0015961Kerr, Duncan, MPMr KERRRH4DenisonALP00—Mr Speaker, before the House rises for this session I would appreciate you taking on notice a question regarding the way in which chapter 11 of the standing orders applies to the 12 new ministers sworn in on 10 March of this year and designated as parliamentary secretaries.By way of background, plainly the constitutional status of what were formerly called parliamentary secretaries—and now I think correctly designated as ministers—was changed fundamentally as a consequence of the recent amendments to the Ministers of State Act. Before the changes, parliamentary secretaries were sworn as members of the Executive Council, but not as ministers of state. Therefore, they could not be given constitutional responsibility for administering a department. That was changed by their change of status under the act and, of course, the parliament under the present resolutions of the House dealt with this matter—as their status previously stood—by deeming them to be ministers for the purposes of all the standing orders, save for chapter 11, that is questions to the executive.However, what occurred in relation to this matter is that the Ministers of State and Other Legislation Amendment Act altered the basis upon which parliamentary secretaries are appointed. The previous act, the Parliamentary Secretaries Act 1980, was repealed and a new section 4 was inserted into the Ministers of State Act 1952 creating a new category of ministers designated as parliamentary secretaries whose numbers may not exceed 12. That act received assent on 29 February and commenced on 10 March, and on that date all parliamentary secretaries were in fact then sworn as ministers and their annual salary of $21,375 was paid from that date, and they of course are paid as ministers.The Constitution requires that each minister administer a department of state and the result is that each minister designated as a parliamentary secretary is now sworn in the same manner as are portfolio and other ministers to administer the departments of state for which they have responsibility. The Prime Minister's statement to the House on 13 March confirmed, and I quote:... the current 12 parliamentary secretaries were appointed by the Governor-General, under section 64 of the Constitution, to administer their respective departments.As ministers they are subject to the standing orders that apply generally. The question I ask you to consider and report back to the House on concerns the status and applicability of the resolution of the House adopted on 5 May 1993, which reads: ... for the purposes of the procedures of the House, any reference to Ministers shall be taken to include Parliamentary Secretaries, with the exception of references to questions seeking information (chapter XI of the Standing Orders).In law—if I might put it this way—such provisions are normally regarded as what are called deeming provisions; they take someone who is not something and treat them as if they were something. In this case they treated parliamentary secretaries who were not ministers, and for the purposes of the standing orders, as ministers, except regarding one particular provision, that is, in relation to asking questions of them. Plainly they are ministers and are sworn as ministers. Each of them is one of 42 ministers, as the expansion of the number of ministers under the Ministers of State Act has increased the number of ministers from 30 to 42.Mr Speaker, I would ask you to advise in relation to the resolution adopted by the House on 5 May 1993. On its face, it would appear that that resolution continues in force, but it applies only to parliamentary secretaries who are not appointed as ministers, because plainly the deeming of them to be ministers is no longer necessary. The provision in relation to the resolution is a spent resolution as far as ministers appointed as ministers as such, and of course that would then mean—in accordance with normal constitutional provisions and the responsibility of the executive to answer to the House—that they would be subject to the capacity of members of this House to ask questions of them as members of the executive, which is one of the fundamental provisions of parliamentary responsibility.10000SPEAKER, MrMr SPEAKER—I will work through the statement made by the member for Denison and respond to the House in due course.Questions Without Notice159621596215:37:0015962Abbott, Tony, MPMr ABBOTTEZ5WarringahLPMinister for Employment Services10Mr Speaker, I seek leave to satisfy the member for Paterson, who asked a question of you.10000SPEAKER, MrMr SPEAKER—The minister may proceed.EZ5Abbott, Tony, MPMr ABBOTT—Perhaps if I add to my answer to a question. The document I was quoting from says `Information for your Business', with `Bob Horne MP' on the bottom of the page, and `Employment Information, with the compliments of Bob Horne MP'.10000SPEAKER, MrMr SPEAKER—It may suit the minister to table the document.EZ5Abbott, Tony, MPMr ABBOTT—I table the document.1596215:38:0015962Scott, Bruce, MPMr BRUCE SCOTTYT4MaranoaNPMinister for Veterans' Affairs and Minister Assisting the Minister for Defence10—Mr Speaker, I seek permission to add to an answer.10000SPEAKER, MrMr SPEAKER—The minister may proceed.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The minister has the call and is responding to a question asked of him by a member of the opposition. I would have thought that there would be people anxious to hear him.CE4O'Keefe, Neil, MP10000SPEAKER, MrMr SPEAKER—The member for Burke is warned!YT4Scott, Bruce, MPMr BRUCE SCOTT—Mr Speaker, I have a letter which is addressed to the Prime Minister from the National President of the Australian Federation of Totally and Permanently Incapacitated Ex-Servicemen and Women Ltd, if I could read that for the benefit of the members of the opposition.10000SPEAKER, MrMr SPEAKER—In fact it should be read for the benefit of the House.YT4Scott, Bruce, MPMr BRUCE SCOTT—The benefit of the House. It says:It has come to my attention that a few disgruntled Special Rate (TPI) Veteran pensioners from Western Australia and one member from Victoria have written to some members of the Parliament expressing No Confidence in the Minister for Veterans Affairs, The Honourable Bruce Scott, MP. These members have not only overstepped the mark but have taken unto themselves without authorisation the responsibilities of the National President of the Federation to make public statements on behalf of the Federation. Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The member for Northern Territory! I remind the Deputy Leader of the Opposition.YT4Scott, Bruce, MPMr BRUCE SCOTT—It continues:I wish to place on the record that the attitude displayed by these recalcitrant TPI Members does not represent or reflect the feelings or attitude of the Executive of the Australian Federation of TPI Ex-Servicemen and Women Limited. The TPI Federation as a body has every confidence in the Minister and we hope that this ill-advised action on the part of some TPI members does not inhibit our ongoing dealing with Minister Bruce Scott on matters that affect TPI Veterans.It would be appreciated if the contents of this letter are distributed widely to members in the Parliament.83REdwards, Graham, MPMr Edwards—Mr Speaker, I ask the minister whether he will table the document, and I ask whether the minister can confirm that those branches have also passed votes of no confidence in the person who wrote the letter.Honourable members interjecting—10000SPEAKER, MrMr SPEAKER—I would remind all members that a warning has been issued to at least three of them and that the warning exists even when question time has concluded. The latter part of the member for Cowan's request will be denied by the chair, but I ask the minister if he is prepared to table the document. The minister has tabled the document.Personal Explanations1596315:41:0015963Mr BRUCE SCOTT,MPMr BRUCE SCOTTYT4MaranoaNPMinister for Veterans' Affairs and Minister Assisting the Minister for Defence10—Mr Speaker, I wish to make a personal explanation.10000SPEAKER, MrMr SPEAKER—Does the honourable member claim to have been misrepresented?YT4Mr BRUCE SCOTT,MPMr BRUCE SCOTT—Yes, I do.10000SPEAKER, MrMr SPEAKER—Please proceed.YT4Mr BRUCE SCOTT,MPMr BRUCE SCOTT—The New South Wales Parliamentary Secretary for Health, the member for Heathcote, Mr Ian McManus, today issued a press release in which he claimed the Australian war widows from the Korean War had been told to pay for their own sandwiches at the function to dedicate Australia's first national Korean War memorial because the $500 bill was too high. The release went on to say that the organisers wrote to me seeking help with the last $500 needed to fund the function but were told to raise it themselves. These claims are untrue. The facts are that the organisers wrote to me seeking a grant of $1,500 to pay the cost of refreshments.CE4O'Keefe, Neil, MPMr O'Keefe—Mr Speaker, it is your common practice in the chair that the minute a member states that the claim is untrue, when we try to show where it is untrue, you cut that person off at that point.10000SPEAKER, MrMr SPEAKER—The minister had indicated clearly where he had been misrepresented. I will continue to hear him but he cannot advance an argument.YT4Mr BRUCE SCOTT,MPMr BRUCE SCOTT—The facts are that the organisers wrote to me seeking a grant of $1,500 to pay for the cost of refreshments and a reception to be held at the Australian War Memorial.5I4McMullan, Bob, MPMr McMullan—Mr Speaker, I rise on a point of order: all the precedents for these matters do not allow the minister to advance the argument in the way that he is putting it. We actually do not mind, but if it becomes the new norm we will be quite happy to exercise that right.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—This of all weeks is hardly the week for anyone in this House to comment on the way in which personal explanations have been dealt with, given that a good deal of latitude has been offered by the chair to members on both sides of the House. The Manager of Opposition Business nonetheless has a perfectly valid point of order. If the minister has additional information that he wishes to convey to the House, then a personal explanation is not the opportunity to do so.YT4Mr BRUCE SCOTT,MPMr BRUCE SCOTT—The organisers subsequently wrote to the committee and were granted the $1,500 they requested. I table the letter. Contrary to Mr McManus's claims, there has been no approach to me or my department seeking an additional $500 above the $1,500 allocated to the committee. 10000SPEAKER, MrMr SPEAKER—The minister has made the point at which he has been misrepresented.YT4Mr BRUCE SCOTT,MPMr BRUCE SCOTT—In deliberately misconstruing the facts, Mr McManus brought unnecessary anxiety—CE4O'Keefe, Neil, MP10000SPEAKER, MrMr SPEAKER—The minister will resume his seat. The member for Burke will excuse himself from the House under the provisions of 304A. The member for Burke then left the chamber.10000SPEAKER, MrMr SPEAKER—It has become an increasing habit in the House for members on both sides to regard a warning from the chair as nothing more than the normal treatment of members by the chair. A warning is a serious matter. Once a member has been warned, if they once again draw the attention of the chair, the chair has no choice but to deal with them.5I4McMullan, Bob, MPMr McMullan—Mr Speaker, I just want to raise with you the fact that the circumstances of the member for Burke's reaction were that the minister had blatantly defied your ruling and continued to give the explanation, which you said he could not do.10000SPEAKER, MrMr SPEAKER—If the Manager of Opposition Business checks the Hansard he will find that the minister moved to the point at which he was in fact indicating where he had been further misrepresented. I would otherwise have required him to resume his seat. And, in fact, before he concluded his statement I did require him to resume his seat.QI4Price, Roger, MPMr Price—With great respect, that is the nub of the point: that you did require him to cease a personal explanation and he continued on to finish the sentence.10000SPEAKER, MrMr SPEAKER—If I were to apply the standing orders as I should, the matter of public importance would be somewhat at risk.R36Albanese, Anthony, MPMr Albanese—Tuckey would never be in here.10000SPEAKER, MrMr SPEAKER—And neither would the member for Grayndler. The member for Chifley, as someone who actively and vigorously pursues the standing orders, must be aware that any form of interjection is always out of order, and the way to draw the chair's attention is to rise. The habit of interjecting is something that should not be tolerated. Furthermore, the habit of interrupting the chair while in fact it has possession of the floor is even worse.Privilege1596415:46:0015964SPEAKER, MrMr SPEAKER10000PON/A10—Yesterday the honourable member for Stirling raised as a matter of privilege an approach her office had received from an officer of the Australian Taxation Office concerning questions she had placed on notice. The member said that the approach had three aspects which concerned her: an apparent questioning of her as to why she had asked the questions, a request for information as to the background details, and a suggestion that she consider withdrawing the questions. I know all members regard the ability to ask questions as a fundamental feature of the performance of their duties and that any interference with members in this regard is very serious. I have had some discussions with the honourable member for Stirling on her complaint. The information available to me at this stage is not such as to establish that priority should be given to a motion to refer the matter to the Committee of Privileges. It is possible that the approach to her reflected inexperience or naivety on the part of the officer concerned. With the honourable member's concurrence I am seeking more information form the Australian Taxation Office through the Treasurer.Auditor-General's Reports159641596410000Mr SPEAKERMr SPEAKER—I present the Auditor-General's audit report No. 39 of 1999-2000, entitled Performance audit: Coordination of export development and promotion activities across Commonwealth agencies.Ordered that the report be printed.Documents1596415964Reith, Peter (Leader of the House)Mr REITHWI4FlindersLPLeader of the House10—Papers are tabled as listed in the schedule circulated to honourable members. Details of the papers will be recorded in the Votes and Proceedings. Motion (by Mr Reith) proposed:That the House take note of the following papers:Productivity Commission—Progress in Rail Reform—Inquiry Report No. 6.Government Response to the House of Representatives Standing Committee on Communications, Transport and Microeconomic Reform, `Planning not Patching' and `Tracking Australia'. Report of the Rail Projects Taskforce `Revitalising Rail' and Report of the Productivity Commission `Progress in Rail Reform'.Government Response to the House of Representatives Standing Committee on Industry, Science and Resources `The effect of Certain Public Policy Change on Australia's R&D.Debate (on motion by Mr McMullan) adjourned.15965Reith, Peter (Leader of the House)Mr REITHWI4FlindersLPLeader of the House10—I present papers on the following subject, being a petition which is not in accordance with the standing and sessional orders of the House:Calls on the Federal Government to:relocate Impulse Airlines to Melbourne Airport;relocate aviation facilities from Essendon airport within 5 years; and refuse permits for passenger aircraft to fly out of Essendon airport.—from the member for Wills—462 Petitioners.Special Adjournment15965Motion (by Mr Reith) agreed to:That the House, at its rising, adjourn until Monday, 9 May 2000, at 2 p.m., unless the Speaker or, in the event of the Speaker being unavailable, the Deputy Speaker, fixes an alternative day or hour of meeting.Leave of Absence15965Motion (by Mr Reith) agreed to:That leave of absence be given to every member of the House of Representatives from the determination of this sitting of the House to the date of its next sitting.Matters of Public Importance159651596510000SPEAKER, MrMr SPEAKER—I have received a letter from the honourable the Deputy Leader of the Opposition proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the government to maintain a fiscal and monetary stance that will ensure sustainable economic growth and the equitable distribution of benefits from that growth.I call upon those members who approve of the proposed discussion to rise in their places.More than the number of members required by the standing orders having risen in their places—15:50:0015965Crean, Simon, MPMr CREANDT4HothamALP00—This week we have exposed more losers from the government's tax package and we have further exposed the hypocrisy of the Prime Minister's promise that there would be no losers except tax cheats. What has been revealed is plenty of losers except the tax cheats, with the rollover that the Treasurer has been forced humiliatingly to accept from his party room last night, a Treasurer who comes in here with mock indignation calling on people to withdraw statements, who cannot honour even his own commitment in this House, a person who will not give information in the chamber as to what the financial impact of new measures will be, a person who negotiated an outcome with us but until just now has only given us the draft legislation. And deficient draft legislation it is, because the draft legislation, as I understand it, contains no dollars and no explanatory memorandum. What sort of a sham exercise is this government running? It promised, it signed in blood its commitment on the alienation of personal services income. It signed up on the dollar figures, and it is bringing legislation in here today that does not, as we understand it, confirm those figures.What we have seen this week is plenty more losers out of the government's GST package. Families with children are going to be losers. The John and Wendy example demonstrated that. Graduate scholarship recipients are going to be losers. Self-funded retirees are going to be losers. The Prime Minister did not even attempt to answer that question. People on Commonwealth super are going to be losers in certain circumstances. And the petrol fiasco: $500 million introduced yesterday in this parliament to try to patch up the scheme whereby they still cannot deliver on their promise. Time after time yesterday they were asked specific questions as to what they would guarantee in relation to petrol prices in metropolitan areas, non-metropolitan areas and remote areas—the three areas in which they are going to develop this great spatial economics that the Treasurer was so quick to condemn on a previous occasion—but we still have not got the detail.We have got examples of top-ups in relation to the GST—and why, I might ask, would you need top-ups, if people were not going to be worse off? Top-ups are the commitment—but again no money. This is a government that thinks it can continue to get away with saying either that we have not raised a valid point or that they have got a mechanism to deal with it, yet does not come up with any dollar figures. It is only when we extract the detail that it is forced to come forward and specify the amounts.Then, of course, we have got the worsening of this situation of more losers in their ad campaign. You know the ads on TV: the one that says, `Relax, John and Wendy; you don't have to worry,' and the one about self-funded retirees sitting around the table being told that they have not got a problem. They are deceitful ads. The reason they are deceitful is that these people are being led to believe that average families will be $40 to $50 a week better off after you take into account the GST. The problem is that the figurings that they are using all relate to before the GST, and the John and Wendy example is the classic case in point.Do not take just our word for who will be worse off. Ann Harding, whom the Prime Minister wanted to quote approvingly earlier in the week, has actually said that this family will be something like $29 worse off after the GST impact. Understand the deception. There are no bounds to this deception. This is a government that will spend $80 million to lie in their ads about their tax and will have no qualms, when it is raised in here, in saying that there is nothing wrong with the ads. What could you do with $80 million in terms of the top-up mechanisms? What could you do in terms of self-funded retirees? There is a raft of issues that you could deal with, instead of deceiving people with their own money, taxpayers' money, in relation to the ads in question.They were the losers that were demonstrated this week, and there will be more to come. But, with all of those losers mounting up, and with all this policy on the run that they still cannot explain—the Prime Minister without a clue every time he comes to the dispatch box and is asked questions—we actually found some winners today. They are the tax cheats that are going to get off because of the Treasurer being rolled in his party room last night. These are the people whom John Ralph said we had to address. He said, and I quote from an interview that he did:In relation to what we call the alienation of income through corporatising, you have the choice of either tackling it and recovering, you know, about $400 million of tax that's forgone at the present time—that is now—or you do nothing about it and you say it is okay for everybody, and then I think we might have a cost to revenue of something like $3 billion instead of saving $400 million.They are huge figures, massive holes. They are not our figures; they are John Ralph's. He was the person appointed by this government to look into business tax reform. He is the one who has said that if you do not tackle this issue properly there will be a leaching of the revenue to the tune of about $3 billion, if left unattended to.It takes a very rare trick for a Treasurer to get rolled in his own party room. I must say that it did not happen on our side. But it has happened time and time again with this Treasurer. This Treasurer comes into this House and makes out that he is the picture of fiscal responsibility. He has got rolled in terms of the conurbations, in terms of the exemptions and in terms of petrol—because he wanted to put limits on it—and now he has been rolled on this particular measure. We can understand it, if he is up against the numbers in his own party room. But he actually had our support for these measures. He had the support of the Labor Party because that is what we agreed on, last November. It is a very rare trick for a Treasurer to get rolled in his own party room when we are in here, prepared to support his original proposal. We gave bipartisan support to these measures, because we accept that this measure is difficult. But it does require both sides of the parliament agreeing that, if it is fair enough to slug people with this new tax, it is fair enough to track down the tax cheats.We say that cracking down on tax avoidance should stand in its own right, and we have been critical of this government for failing in this particular area. But this is a person with our full support, and he has been rolled. And he has got the gall to come in here and talk about `ticker'. Some ticker this wimp of a Treasurer has got! He is a sell-out and he has been a serial offender when it comes to tax avoidance mechanisms.Let me just go to that question. The Treasurer was in here today, ranting about what Labor ever did to try to address circumstances. We actually put a proposal up in 1994 to stamp out tax avoidance share schemes being used by the wealthy. This was opposed root and branch by the Treasurer, who was then representing them.DK6Hockey, Joe, MPMr Hockey—Treasurer?DT4Crean, Simon, MPMr CREAN—The shadow Treasurer. I happen to have a document here. It is a submission that the shadow Treasurer back in 1994 took to his party room in relation to that particular measure—an anti-avoidance measure that we were proposing but that he ended up opposing root and branch. Let us hear what he had to say in this submission:The government's decision to impose the fringe benefits tax on employee share acquisition schemes is motivated by the desire to stamp out potential abuse of such schemes.It sounds like a pretty honourable intention. He says—Some of the potential abuses of these schemes have been identified: the potential for a crude form of income splitting, allowed loans or other investments into sponsoring companies used for the benefits of executive employees who were able to abuse the schemes through deferral of tax ...He identifies all the mechanisms that we are trying to close off. What is the recommendation of this great fighter against anti-avoidance schemes? This is what he says:The coalition should vote against the entire bill.What a hypocrite this guy is, coming into this place and saying that we did nothing, and yet that was the disgrace of his position when he was representing the parliament on that side. He went further today and asked in relation to the alienation of personal services income:What did the Labor Party do in its term of office?The Labor Party through Ralph Willis actually introduced legislation into the parliament. He publicly announced measures concerning income alienation in 1996. He fought an attempt to deal with those sensibly with the opposition at the time. What was the Treasurer's first budget? It was 1996 in relation to that proposal put up by us, the very mechanism that he is dogging it on today. This is what the budget said back then:In last year's Budget, the former Government announced that the pay-as-you-earn (PAYE) provisions of the income tax law that cover for the labour of certain individual contractors would be amended. These amendments were included in Taxation Laws Amendment Bill (No. 5) 1995, which lapsed with the calling of the election ... The Government has decided not to proceed with either of these proposals.Yet he comes into this place and says that we never tried to do anything about it. These are two classic cases where this guy has been caught out as a serial supporter of tax avoidance. When he has the opportunity to have our side of the House supporting him on it, he dogs it. When we give him more support and more armoury in this war so that people who are genuine payers of the tax system do not get screwed, he goes off into the party room and rather than say, `I've got the Labor Party on side to support these measures,' he rolls over. He gets done in his own party room. This guy is a shonk. This guy has got no ticker. DK6Hockey, Joe, MPMr Hockey—Mr Deputy Speaker, I rise on a point of order. If the Deputy Leader of the Opposition wants to make statements about a member of this House, I urge him to move a substantive motion. Otherwise, he should not use that sort of language.10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—The Deputy Leader of the Opposition has the call.DT4Crean, Simon, MPMr CREAN—Why isn't the Treasurer in the place today defending his position? We know this legislation is going to be snuck in at the eleventh hour. The House adjourns at 5.30 p.m. This is very important legislation which he would not answer a question on today in this parliament, and he is going to introduce it just before the House rises. He is a disgrace of a Treasurer, and he has not kept his word.Let me say this as far as his word is concerned. He made a commitment to me, both in terms of an exchange of letters and a statement in the parliament, that he would implement in full all of the measures that he had outlined in his response to the business tax proposals. This was in a press release issued on 11 November. It contains a table that I sought to have tabled today in the parliament. It is attachment O, table 2. It goes to the fiscal impact of implementing the measures that he said that he would introduce. There is a series of lines in that as to what the cost would be. In the first year of operation, it should produce $380 million, rising to $480 million, $495 million, $515 million and $530 million. That is some $2.4 billion over five years. This is what I asked him today:Will he guarantee that his legislation will still deliver the $2.4 billion that his press release said it would and which he agreed with me he would implement in full?Understand where we have got his guy. I said that I was going to pursue him like a rat up a drainpipe if he did not implement this particular measure. The test by which we will pursue him is the extent to which the Treasury signs off and says that the measures will still result in the same levels of payment. The second thing that we will be testing him against is the drafting instructions, the ones that he said in this parliament he had sent to the parliamentary draftsman to be included to give effect to the full implementation of these measures. We will be going through the legislation and seeing that every aspect of those drafting instructions is delivered on.We have a Treasurer who is weak, a Treasurer who is prepared to slug only ordinary individuals, a Treasurer who will stop at nothing to charge them 10 per cent on anything but hide the impact of the tax, and a person who, when it comes to really getting agreement in this place about cracking down on tax avoiders, goes to water. Talk about a guy with no ticker! The Treasurer is it. He has dogged it, he has continued to dog it and he should be condemned for it. (Time expired)WU5O'Connor, Gavan, MPMr O'Connor—He is the friend of the tax bludger!16:05:0015968Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—Thank you.WU5O'Connor, Gavan, MPDK6Hockey, Joe, MPMr HOCKEY—I would like to ask the member for Corio to withdraw that comment.10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Member for Corio, before you leave the chamber, I require you to withdraw that, please.WU5O'Connor, Gavan, MPMr O'Connor—What term are we referring to here?10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—I think you know exactly what you said.WU5O'Connor, Gavan, MPMr O'Connor—Was it that the Treasurer is a friend of the tax bludger? That was the statement I made, but the honourable Treasurer is not here to take offence—10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—Order! I hear the honourable member for Corio. I had, like the minister, misheard you. I accept what you say. There is no need to withdraw.DK6Hockey, Joe, MPMr HOCKEY—The member for Hotham is wrong. He is just plainly wrong. I urge the member for Hotham to hang around and wait for the legislation that is going to be coming before this House later today. The member for Hotham is walking out the door, and I will chase him like a rat up a drainpipe. If the member for Hotham is going to come into this House and make allegations about what is going to be in legislation later today and make assumptions about what is in that legislation, he had better be sure he is damn right because, under those circumstances, it will be a very embarrassing episode for the member for Hotham when he discovers what is in the legislation. The matter of public importance today is about an issue that we believed on this side of the House was near and dear to the Labor Party: The failure of the government to maintain a fiscal and monetary stance that will ensure sustainable economic growth and the equitable distribution of benefits from that growth.So they wanted to talk about fiscal policy, monetary policy, economic growth and the fair distribution of the nation's success. I am going to talk about those issues; I am not afraid to deal with the content of the opposition's matter of public importance, which they have chosen not to talk about. Let us talk about fiscal policy. As all members of the gallery and all those people listening to this broadcast would be well aware, when it comes to fiscal policy the Labor Party have created their own legend. The legend of the Labor Party is the truth that they are a deficit party. When in government the Labor Party tend to leave a bucket of deficit for the party that is coming into government, which is inevitably the coalition. Everyone would remember that, in 1996 when the Leader of the Opposition was the Minister for Finance, only a few days and a few weeks before the 1996 election, he was pledging to the Australian people that the budget was in surplus. Miraculously, within a matter of days, $10.3 billion was spent. So in comes the coalition government and it discovers—`whoa'—where has the surplus gone? That was their fiscal strategy. That was a great success story for the Labor Party, leaving a bucket of deficit for the coalition to deal with.Let us talk a bit about monetary policy, which is the second component in the Labor Party's MPI. Members on this side of the House, people in the galleries and all the people who are listening to this broadcast would be well aware that the Labor Party were the architect of interest rates of 17 per cent for the average home owner. That was the most significant issue that crucified small business in the late 1980s and early 1990s. That is when Paul Keating went to the Australian public and said, `This is the recession we have to have,' and he jacked up interest rates. He said he had Bernie Fraser and the Reserve Bank in his back pocket. 9K6Gambaro, Teresa, MPDK6Hockey, Joe, MPMr HOCKEY—And he said that he had the central bank of the Commonwealth in his back pocket. Interest rates went up to 17 per cent. Small business was screwed, people with small home mortgages and large home mortgages were screwed, the average family in Australia was screwed—and all thanks to the Labor Party. What a surprise that they should come in today and submit a matter of public importance about monetary policy and then not talk about it! How ironic that they should submit an MPI about fiscal policy when they left the Australian people with accumulated debts of $69 billion after their 13 years in government and then, when the MPI comes on for debate, they do not even want to talk about it.The third component mentioned in the MPI that the Labor Party wanted to talk about today was economic growth. The Labor Party wanted to talk about the growth that they had left for Australians. Members on this side of the House, people in the galleries and all those people listening to the broadcast would well remember that the Labor Party left Australia with an average annual inflation rate of 5.2 per cent per annum. So, no matter how much money you were earning, you were left with inflation of 5.2 per cent per annum from the Labor Party, compared with the coalition that has had an average 1.1 per cent per annum inflation. How ironic it is that the Labor Party, who had unemployment at a peak of 11.2 per cent, would submit an MPI for discussion and then not talk about unemployment either, given that the coalition has now delivered unemployment levels of less than seven per cent compared with Labor's 11.2 per cent. Why is it they submit these matters of public importance and then do not want to talk about it? I will tell you why: because the Labor Party are embarrassed by their history. Their actions and not just their words embarrass the Labor Party. How ironic it is that the Labor Party should come into this House and submit a matter of public importance for debate and then berate us about these issues—our performance on the economy, our performance on monetary policy, our performance when it comes to economic growth and claiming there is no fair distribution of wealth in Australia—when we on this side of the House, the people in the gallery and the people listening to the broadcasts would be well aware that, after the Labor Party introduced l-a-w tax cuts in 1993, they were then re-elected and delivered higher wholesale sales tax rates with not one dollar of compensation to Australian families, Australian retirees or any disadvantaged members of the community who were going to have to pay more tax under the Keating Labor government. On this side of the House, we well remember the promised l-a-w law tax cuts. Then the Labor Party came in and increased the wholesale sales tax from 10 per cent to 12 per cent, 20 per cent to 22 per cent, 30 to 32 per cent and so on, without one dollar of compensation for the Australian battlers. Yet they have the gall to come into this House and debate this matter of public importance, which talks about the fair distribution of wealth, when we are giving Australians the most generous tax cuts in Australian history, we are introducing the consumption tax and we are giving Australian families huge benefits that are going to make them between $40 and $50 a week better off. The Labor Party want to debate those issues, but they come into the House and do not even talk about them.There is a single reason this is the case. The Labor Party do not stand for anything. The Labor Party do not believe in anything. When the Leader of the Opposition is caught in the headlights and goes to the Sydney Institute tonight he will pledge that the Labor Party will do everything it can to stop the privatisation of Telstra. Yet not six years ago, the Leader of the Opposition, in one of those quiet little briefing sessions for industry groups, said `You know what: privatisation is pretty good. You know what: privatisation is necessary. You know what: telecommunication is a pretty important industry for Australia's future. We have to unshackle the telecommunications industry from the burden of government ownership.' The Leader of the Opposition has yet again been caught out. Why? Because he chooses to walk on both sides of the street. The Leader of the Opposition has already told the Labor caucus, `If we just hang on, we can surf our way into government on the GST'— Midget Beazley on the big malibu board going down the surf—`Wow, we're going straight into government,' with the net result that what he tells the Australian people is very different from what he does. We on this side of the House believe that we should be judged not on our words but on our actions. We believe that we should be judged not on what we say we are going to do but what we do. We deliver low inflation, we deliver high economic growth, we deliver lower interest rates, we deliver a better quality of life for Australians and we deliver a fair distribution of wealth that makes sure that the Aussie battlers are not suffering the full punitive measures of a government that may lie and deceive as Keating lied and deceived about tax reform. There is one significant philosophical issue that separates the coalition from the Labor Party: we on this side of the House believe in being fair dinkum with Australians. We believe in having the courage of our convictions. Our convictions may not necessarily be politically popular at times, and our convictions may not necessarily win all the seats we want to win at the next election or wanted to win at the last election, but, damn it, we are doing it because we believe it is right for the Australian people. We are doing it because we have the courage to say, `This is the direction Australia should head, this is in the best interests of the Australian people and we want to take the Australian people with us to a better quality of life.' The Labor Party, with all their hypocrisy, come into this House and as an example today debate a matter of public importance about economic growth, about the budget, about monetary policy, and do not have the guts to stand up here and talk about those issues. The member for Hotham, who lectures and berates us about honesty, did not have the courage to stand at this dispatch box and talk about economic growth, to talk about fiscal policy, to talk about monetary policy, to talk about the fair distribution of wealth to all Australians. Have no doubt about it: the Labor Party will be judged on their words as well as their actions. So when the Leader of the Opposition, without any courage at all, chooses to take the politically popular path rather than what is in the best interests of the Australian people, the sad part about it is that he is not only deceiving the Labor Party but also deceiving some of the Australian people who take him at face value. Over the next few months and over the next few years, we on this side of the House are going to do everything we can to make sure that the Labor Party are held accountable for both their words and their actions. 16:20:0015971Cox, David, MPMr COX83UKingstonALP00—The slide in the dollar below 60c last week will be seen as a turning point for perceptions about the performance of this government as an economic manager. After more than eight continuous years of economic growth, the last four of which the Treasurer claims have brought the nation to economic nirvana, the market has contradicted him. The outlook is laden with risk. From his rhetoric, that seems to be something the Treasurer has never contemplated. That is probably because he has been a Treasurer who has had the fortune to preside over relatively easy times. The challenges he believes he confronted when he came to government were exaggerated in his own mind, as have been his achievements. He has since become so convinced by his own propaganda that he cannot recognise the real problems facing our economy and deal with them. The nation will soon become the victim of his misjudgments in many areas, and he will soon be recognised to be a liability. With the budget only a few weeks away, it is important to take stock of where we are and where we should be going. The most basic thing to look at is the fiscal position. It is not sound. While the government did make substantial savings in its first two budgets, the Treasurer's interest in tight fiscal control was short lived. The immediate effect of the government's policy decisions in 1996 was net savings of $2.9 billion rising to $7.6 billion in 1999-2000, which is the year we are now in. It is important to temper one's appreciation of this achievement with the understanding that the government was going for quantity, not quality, when it made those cuts. Their impact was severe in areas like programs to assist the long-term unemployed get back into the work force and higher education. Schools and public hospitals were also hit severely and indiscriminately through reductions in payments to the states.The 1997 budget contained significant savings measures, but these were offset by new spending and tax cuts, with a modest strengthening of the fiscal position in 1999-2000. That is where the Treasurer's fiscal control seems to have come to an end. Whether that was because the Treasurer then contracted a case of fiscal fatigue or began to be consistently rolled in cabinet is unclear. What is certain is that, by the time of the 1997 mid-year review, the brakes were off and the spending was really starting to roll. New spending has been undertaken costing $390 million, but by 2000-01 the cost of those activities will have blown out to $1.5 billion. The year 1998 was an election year, with a budget containing spending initiatives costing $1.4 billion, with only small offsets. The financial consequences of those decisions today is a further $1 billion. The 1998 mid-year review shows that the election and the period immediately after it saw more spending of another $1 million. Your average political cynic usually assumes that governments stop spending after an election; this government did not. In 1999, there was a further $2.5 billion discretionary loosening.What has been the result of all that spending since the middle of 1997? The net impact this financial year of all of the government's policy decisions, since it proclaimed a fiscal miracle of $7.6 billion in savings in 1996, has been to spend all but about $1.7 billion of those projected annual savings. We can debate the relative merits of how the government has spent that money and what might have been a Labor government's priorities, but we no longer need listen to the Treasurer's overblown claims about his tight fiscal management. But that new spending of $6 billion is dwarfed by the deterioration in the budget bottom line in 2000-01 of $10.6 billion, due to all the policy decisions since 1996, including the implementation of the new tax system. The fact is that the Treasurer has now more than spent the projected 2000-01 surplus. The government had to implement the Timor levy to stop the budget sliding back into deficit. Now, this morning, we have discovered that the Treasurer has taken some more expensive decisions. He has reneged on an undertaking that he gave to the shadow Treasurer to implement certain revenue measures relating to the taxation of contractors. Our first estimate of that for 2000-01 is that it will cost the revenue $380 million. The opposition required that undertaking so that it could responsibly support elements of the Ralph reforms of business taxation without seeing the total tax base depleted. The consequence of that, without upgrading the Treasury growth forecast, is that there is probably now an apparent starting point deficit for the forthcoming budget.I can only say that the Treasurer is a big spender: he has spent his savings, he has spent the proceeds of economic growth, and still he continues to go on spending. No-one need take his claims of great fiscal responsibility seriously any more. The next time he attaches his signature to a letter committing himself and the government to any legislation in exchange for our support of other measures, we will treat it with the sort of scepticism it so richly deserves. Remember, you cannot trust this Treasurer.All this fiscal irresponsibility is coming home to roost at a difficult time in the lead-up to the budget, when the current account deficit is high, the exchange is under severe pressure and interest rates are rising. The current account deficit has been running at over five per cent of GDP for more than a year now. It was, in fact, closer to six per cent for the whole of the last half of 1999. Yet the Treasurer showed no sign of taking any action to do anything about it. He was as relaxed about it as he has been about the stance of his fiscal policy over the last three years. The consequence of that lack of action is that the markets have determined that it is a significant concern and have marked our dollar down.On 12 April, the Aussie dollar was trading at US59.5c. That is not the first time the Australian dollar has gone below 60c under this Treasurer. The last time was in August and September of 1998. Factors quite outside of Australia's control, being the Asian economic crisis, were the cause then. But now we face a similar problem when Asia is recovering. This time domestic factors have a greater bearing. And it is not as if the Treasurer was not warned. He was warned in very explicit terms, in public, with plenty of time to take corrective action and by someone on whose judgment he should have relied. The person who delivered that warning was none other than the Secretary to the Treasury, Ted Evans, in his post-budget speech to Australian business economists last year. In that address, Mr Evans said: In recent years, we have not been asking monetary policy to address the current account problem. Rather emphasis has been appropriately put on the role of fiscal policy—the generator of budget surpluses and contributor to national saving—to do that job, leaving monetary policy free to concentrate on its objective of maintaining low inflation without undue constraint on growth.This is a very desirable balance in the use of monetary and fiscal policies which may hold part of the answer to our longstanding current account concern; it is also part of the framework which underlies the judgment on medium term growth potential.The simultaneous achievement of sustainable CAD outcomes and low and stable inflation would be put at risk by a complacent attitude to the use of fiscal surpluses. A breakdown in the performance of one policy inevitably compromises the other.In the intervening year, we have indeed seen complacency with fiscal surpluses. Now let us look at the Reserve Bank governor's statement at the time interest rates were raised last week to see what consequences the government's fiscal policy has had for monetary policy. Mr Macfarlane said:The recent behaviour of the exchange rate also points to the need for some monetary adjustment. Until recently, purely domestic medium term considerations were the major reason behind monetary policy moves, and relativities with the rest of the world played only a minor part. With the fall in the exchange rate over the past two months, however, international financial developments have assumed a more important role. The fall has occurred in the face of a strengthening world economy, which ordinarily would be expected to put upward pressure on the currency. The bank's reading of this development is that it reflects an assessment by market participants that monetary policy settings in Australia have been, and could continue to be, more accommodating relative to other countries than is justified by our relative economic performance.The level of the exchange rate is not an end in itself, but is important insofar as it can affect future inflation, an important consideration under an inflation targeting framework.Disinflationary forces abroad are likely to be waning, and domestic inflation already is noticeably higher than it was in 1998.It is absolutely clear from that that the government's stance on fiscal policy has indeed compromised monetary policy. (Time expired)16:30:0015973Gambaro, Teresa, MPMs GAMBARO9K6PetrieLP10—I am pleased to support the Minister for Financial Services and Regulation, and I am quite surprised that the member for Kingston has come in and actually spoken about fiscal and monetary policy. It was quite interesting today to see an article about the previous speaker in the Financial Review. It states:David Cox comes up with a fiscal reality check for Treasurer Peter Costello.And I notice his past career is stated at the bottom of the article:David Cox, a federal Labor MP, was senior private secretary to Finance Minister Senator Peter Walsh and principal adviser to Treasurer Ralph Willis from 1986 to 1996.That was the worst period of fiscal irresponsibility that this country has ever been through. It is really rich of you to come in here today and lecture us about fiscal and monetary responsibility when you presided over a period that produced this country's worst fiscal history. It is absolutely shameful what you did to the Australian economy. It was your pitiful attempts at social and fiscal reform that made those years absolutely abysmal. You come in here and speak to us about the economy, you come in here and tell us how our performance rated, but let me set a few facts straight.Seeing as the former speaker does rank himself as an economist of some sort, I am very happy to give him the record of his party's achievements in government, which he knows only too well. When you left government in 1996, 1.9 million people were living in poverty, including nearly 600,000 children aged under 15 years. Between 1976 and 1992, the number of households in Australia earning between $22,000 and $72,000 a year declined from 62 to 57 per cent, and the number of people earning less than $22,000 doubled from 15 to 30 per cent. You also made some wonderful promises back then that you would take all age and service pensions out of the tax system—this was just before the 1993 election—and you reneged on that promise as well. But your fiscal record is really what we are here to speak about today, and I am happy to turn back the clock and reiterate the situation that you left us with in 1996.In 1996, when we came into government, we found out that we had a deficit of $10 billion, which was left by the Labor Party, and 1999-2000 will be our third surplus in a row. One of the things that we did do was introduce the Charter of Budget Honesty, which means that the tragic events of the past will never occur again. If Labor had remained in office, they would have taken Australia into even greater debt, and we would have been in an increasingly poor position both domestically and internationally, and I want to talk about that. In 1991-92 and 1995-96, you accumulated a deficit of $69 billion. The member for Kingston did not speak about that earlier. In the last two years of the Labor government, we had a cumulative budget deficit of $23.3 billion. It was shameful.This government has introduced a framework to ensure that there is good and correct conduct of monetary policy and recognises the Reserve Bank's independent role in endorsing this policy and also in its inflation objective. You quoted the Reserve Bank earlier. I am a member of the House of Representatives Standing Committee on Economics, Finance and Public Administration, and I do attend the hearings quite regularly, I am happy to say. I have a very different story from the last hearing when the Governor of the Reserve Bank came before the committee and spoke of monetary policy, which is what we are here to talk about. He spoke of our great achievements, and when he appeared before us again he said: The November Semi-Annual Statement—which I think was 29 November—highlighted a continuing expansion of domestic demand—fuelled mainly by strong household consumption expenditure and some temporary factors such as the proceeds of demutualisations and capital gains from privatisations.He then went on to talk about growing incomes, sustained high levels of confidence, low borrowing costs, wealth gains over a range of assets, a recovery in the housing sector and the prospect of increased investment spending over the next 12 months. The Reserve Bank governor is a pretty good judge of things to come. I got some information sent to me by the Australian Chamber of Commerce and Industry, `Survey of investor confidence for April 2000'. That survey of investor confidence says that the economy may have peaked as business conditions eased slightly in the April quarter 2000 and that the index is now at 63.8 per cent. So that says there is great recovery and great confidence, and the business sector described general business conditions as good or better. It went on to say that 62.5 per cent of respondents indicated that overall business conditions are good or better, while 11.6 per cent of the survey indicated that conditions were poor or worse, and they are mirroring exactly what the Reserve Bank governor had to say. Further on in the report, the Reserve Bank governor said:... the current financial year will be another good one for the economy.I know the members opposite do not like to hear good news, and some of the members from the opposition who were there for the two days of hearings did everything to try to get the Reserve Bank governor to admit that the economy was in terrible shape, but every statement or comment he made showed the financial responsibility of this government and our great performance. I know the member earlier was talking about the world economy and other factors around the world, so I will quote another extract from this report where the Reserve Bank governor was asked about the weak performance in the world economy in 1998. He said:As a result of stronger world growth, interest rates had been pushed up in most industrialised countries. Australia's tightening of rates was accompanied by similar occurrences in the USA, the United Kingdom and the European Central Bank, in Canada and in New Zealand.I would like to quote some more figures for the benefit of opposition members. I would like to bring them back to interest rates when they were in government. Variable mortgage interest rates are at 7.55 per cent, and they are still at historic lows. This compares with the peak when you were in government of 17 per cent, and business rates were 20 per cent—they were absolutely shameful in 1989. A lot of businesses went broke because of financial irresponsibility. Inflation averaged 5.2 per cent and unemployment reached 11.2 per cent. At the moment we have the best growth figures: four per cent throughout the year terms for 11 consecutive quarters since June 1997. We have the longest consecutive period of growth: four per cent or more since the June quarter of 1968 and the March quarter of 1971. Inflation has been at an all-time low of 1.1 per cent under the coalition compared with 5.2 per cent under Labor. These inflation levels are the lowest that we have had since 1960. Unemployment continues to improve, and we have an unemployment rate that is less than seven per cent—the lowest in 10 years—compared with 8.5 per cent when we were elected. Your record was just disgraceful then. Productivity growth averaged 2.6 per cent per annum under the coalition compared with an average of 1.5 per cent under Labor.In relation to our international responsibility, we were recently upgraded by Standard and Poor's from a AA rating to a AA+ rating. The International Monetary Fund said of Australia in February this year:...extended period of strong non-inflationary growth, and the remarkable resilience of the economy in the face of the Asian crisis. It noted that our performance reflected the `sustained commitment to sound macro-economic policies and ongoing structural reforms'. The Labor Party does not want to hear all this great news. One of the other indicators and comments was from Dr Paul Krugman from MIT who said that there are not enough Australian economies in the world. An article in the Economist of 7 September said:While the rest of the region staggered through its economic crisis, Australia against all odds and expectations has thrived.The word—I point out to the member for Kingston—is we `thrived', and we will continue to thrive. The government have gone through the Asian economic crisis. They have returned the budget to surplus. We have reduced unemployment, and we have introduced reforms that will take Australia into the 21st century proudly.10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—Order! I just remind the member for Petrie to in future refer her remarks through the chair. The chair was quite happy not to have such a fragile hide that all the `yous' that were used were taken personally. I did not think that I should interrupt the honourable member on this occasion, but I hope she understands and in future refers her remarks through the chair. The discussion has concluded.9K6Gambaro, Teresa, MPMs Gambaro—I apologise to the chair.Bills15975R106015975Bill presented by Mr Costello, and read a first time.1597516:41:0015975Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The New Business Tax System (Alienation of Personal Services Income) Bill 2000 will improve the integrity and fairness of Australia's taxation system. The government announced on 11 November 1999 that it would proceed to legislate in relation to the alienation of personal services income, following a recommendation from the Review of Business Taxation which was chaired by Mr John Ralph AO. This bill will prevent individuals reducing their tax by diverting the income generated by their personal services to a company, partnership or trust and limit work-related deductions available in those cases (and to an individual contractor in similar circumstances).The Ralph Review of Business Taxation noted that the practice of the alienation of personal services income posed a growing threat to the income tax base. In addition, the review noted that it was clearly inequitable that some taxpayers should be reducing their tax liability by using interposed entities or claiming excessive deductions, while other taxpayers also deriving personal services income, including ordinary wage and salary earners, pay the correct amount of tax.The measures contained in this bill implement the Ralph review's recommendations to address the alienation of personal services income. Rules are introduced dealing with the income tax treatment of the personal services income of interposed entities and individuals. Those rules will not apply where the individual or the entity is conducting a personal services business. Individuals and interposed entities who receive at least 80 per cent of their personal services income from one source will come within the provisions of the bill, unless the commissioner makes a determination that the income is from conducting a personal services business.The commissioner's determination that a business is a personal services business may be given on one of four grounds:. . . having two or more unrelated clients; . . . having one or more employees; or. . . having a separate business premises; or. . . that the individual or entity is producing a result, supplies their tools of trade and is liable for the cost of rectifying defective work. Legitimate contractors, for example those operating in the building industry, who are contracted to produce a result, supply their own tools or equipment and are liable for the cost of rectifying any defective work, will be covered by this last test.The object of these rules is to treat earnings from work in the same way under the income tax law, regardless of the legal structure used by the income earner.This bill only deals with issues of taxation.Specifically, the bill addresses the income tax treatment of personal services income and related deductions of an individual or entity earning personal services income.This bill does not affect the legal status of an interposed entity or deem an individual to be an employee for the purposes of any other legislation or industrial award.There is nothing in this bill which requires, or would require, an individual or entity earning personal services income to alter their current legal relationship between themselves and the source of their income.Personal services income may continue to be earned through an interposed entity, with no further tax consequences, if the income is not alienated and there is compliance with the other general provisions of the tax laws. This is the situation under the current tax laws and will continue to apply under the provisions of this bill.The new rules in this bill will:. . . treat income obtained by an interposed entity from the rendering of an individual's personal services as the income of the individual, unless the entity pays that income promptly to the individual as salary; and. . . limit deductions that the interposed entity is entitled to offset against the amount that is treated as the individual's income; and. . . limit the deductions that an individual can offset against their personal services income.Individuals who are entitled to claim business related deductions under current tax arrangements including insurance, workers compensation and the costs of obtaining work will still be entitled to claim these deductions, irrespective of whether they are a personal services business.The measure includes collection arrangements as part of the pay-as-you-go withholding system to ensure that tax is paid in a timely way where income obtained by an interposed entity is attributed to the individual worker.The measures only affect the tax obligations of the individual or entity earning personal services income and in some circumstances, their associates. The measure does not impose any additional obligations—including withholding obligations—on the acquirer of personal services.The personal services income measure will apply to assessments for the 2000-01 income year and later income years. The accompanying collection arrangements will apply to payments received by interposed entities from 1 July 2000.The government has also included in the bill a specific transitional provision to minimise the compliance burden associated with moving to the new tax system.Under this transitional provision, the Commissioner of Taxation will be able to make a declaration that has the effect that the regime will not apply to a class of contractors under the prescribed payment system who have payee declarations with the commissioner as of today. The declaration will apply for a period of two years, ending in July 2002.In designing this transitional provision, the government has had regard to the fact that taxpayers under the prescribed payment system are currently subject to withholding arrangements and are specifically recognised as independent contractors under the tax laws. The government has also had regard to the logistics of the commissioner being able to process a potentially large number of requests for an individual determination prior to 1 July 2000.The transitional arrangement will remove any additional compliance burden from the new rules that independent contractors currently in the prescribed payment system face in transferring to the new tax system. The legislation to implement the personal service income regime includes two tax imposition bills to safeguard the legislation against constitutional challenge.The government estimates that the alienation measure will result in increased revenue of $190 million in 2000-01 financial year, $290 million in 2001-02, $435 million in 2002-03 and $515 million in 2003-04.I commend the bill and present the explanatory memorandum to the House. I also present the explanatory memorandum to the New Business Tax System (Alienated Personal Services Income) Tax Imposition Bill (No. 1) 2000 and the explanatory memorandum to the New Business Tax System (Alienated Personal Services Income) Tax Imposition Bill (No. 2) 2000.Debate (on motion by Mr Kelvin Thomson) adjourned.Bills15977R105515977Bill presented by Mr Costello, and read a first time.1597716:49:0015977Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.This bill is part of a package of three bills that provides legislation to give effect to the government's announcement of 11 November 1999 that it would implement the recommendations of the Ralph Review of Business Taxation regarding the alienation of personal services income. The government has decided that it is prudent to have two tax imposition bills to safeguard the legislation against possible constitutional challenge. Full details of the measures in this bill are contained in the presented explanatory memorandum.Debate (on motion by Mr Kelvin Thomson) adjourned.Bills15977R105415977Bill presented by Mr Costello, and read a first time.1597716:50:0015977Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.This is the last of the bills that the government is introducing to implement a measure to address the alienation of personal services income and in doing so improve the integrity and fairness of the Australian taxation system. Full details of the measures in this bill are contained in the presented explanatory memorandum.I commend the bill to the House.Debate (on motion by Mr Kelvin Thomson) adjourned.Bills15977R106115977Bill presented by Mr Costello, and read a first time.1597716:51:0015977Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The New Business Tax System (Integrity Measures) Bill 2000 contains two important integrity measures. The Review of Business Taxation, chaired by John Ralph, recommended the measures and the government announced on 11 November 1999 that it would adopt them.The measures will:. . . limit the extent to which taxpayers can use non-commercial losses to reduce the tax paid on their other income; and. . . require that prepayments for services under tax shelter arrangements be deducted over the period during which the services are provided, rather than being immediately tax deductible.The non-commercial losses measure will improve the integrity of the tax system by limiting the extent to which losses from an individual's non-commercial business activities are used to reduce the tax paid on other income such as salary or wage income. The Ralph Review of Business Taxation noted that there was a significant revenue leakage from unprofitable activities carried out by taxpayers and that many of these activities are more like hobbies and/or lifestyle choices. The review recommended, and the government accepted, that it was necessary to implement a systemic solution to this issue rather than continue to rely on the current law which is resource intensive to administer.The new rules I am introducing today do not change the existing general law tests that determine whether an individual is carrying on a business activity; nor do they deny the deductibility of a loss from that activity.The rules ensure that individual taxpayers carrying on a business activity either alone or in partnership may only claim a loss from that activity against their other income in an income year if they satisfy one of five tests in that year.The tests look at the activity's level of turnover, history of profitability, the value of real property used in carrying on the business and the value of other assets used in carrying on the business. Only one of the tests needs to be passed to enable an individual's loss from a business activity in a year to be deducted against the individual's other assessable income, such as wages and salary.There is also a discretion to allow the losses where the business is affected by special circumstances, such as natural disasters, or is in its start-up phase.In addition, if an individual is carrying on a primary production business, the measure does not apply where their non primary production assessable income (excluding net capital gains) is less than $40,000. This assists those small primary producers who find it necessary to support themselves through moderate amounts of off-farm income (particularly during periods of hardship), while genuinely, at the same time, seeking to pursue their farm activities on a commercial basis.Where a test is not satisfied in an income year, the loss is deferred and can be offset in a future year against income from the activity or against other income if one of the tests is satisfied.These rules will apply to assessments for the 2000-01 income year and later income years.The estimated increases in revenue from the measure are $30 million in the 2000-2001 financial year, $230 million in 2001-2002 and $170 million in 2002-2003.The second measure in the bill deals with prepayments. Again this integrity measure is based on the recommendations of the Ralph Review of Business Taxation.The measure introduces new rules on when prepaid expenditure for services in respect of `tax shelter' arrangements is to be deductible. The effect is to align the deduction for the expenditure with the period during which the services are provided rather than being immediately deductible when the payment is made.Under the existing law, prepayments for things to be done wholly within 13 months, including those relating to tax shelter arrangements, are immediately deductible for small business taxpayers and for payments outside a business. This rule has given rise to many tax minimisation schemes, particularly end-of-year schemes.These new rules will reduce the tax advantages that are derived from participation in these tax shelters by limiting immediate deductibility for prepayments. This measure will promote equity in the tax system and more productive investment activity.The new rules will apply to prepaid expenditure incurred by all taxpayers under tax shelter arrangements after 1 p.m. Australian Eastern Summer Time on 11 November 1999.However, certain prepayments will be specifically excluded from the operation of the new rules. These include prepayments for:. . . interest on borrowings to acquire real property or interests in real property, publicly listed shares or units in widely held unit trusts; . . . premiums for building, contents or rent protection insurance;. . . interest on infrastructure bonds;. . . irrevocable commitments entered into before 11 November 1999; . . . and arrangements which have an ATO product ruling, where the ruling issued or the application had been lodged with the ATO before 11 November 1999.The estimated increases in revenue from the measure are $40 million in the 2000-2001 financial year, $100 million in 2001-2002 and $90 million in 2002-2003.Full details of the measures in this bill are contained in the explanatory memorandum.I commend the bill and present the explanatory memorandum to the House.Debate (on motion by Mr Kelvin Thomson) adjourned.Bills15979R105315979Bill presented by Mr Costello, and read a first time.1597916:57:0015979Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I move:That the bill be now read a second time.The New Business Tax System (Miscellaneous) Bill (No. 2) 2000 builds on earlier legislation implementing the government's landmark business tax reforms. It contains a wide range of measures, most of which are based on the recommendations of the Review of Business Taxation.The review was established by the government to consult extensively with business over a 12-month period and make recommendations on business tax reforms. Since the government announced its response to those recommendations, it has continued to extensively consult with business on the implementation details.The measures in this bill can be broadly broken down into six categories: scrip for scrip rollover relief, the taxation of life insurers, measures dealing with losses, measures dealing with the imputation system, other CGT measures and integrity measures.Scrip for scrip rollover reliefOne of the government's key business tax reforms is the provision of scrip for scrip rollover relief for takeovers between companies and between trusts, regardless of whether the entities are widely-held or private.This measure has already been legislated and took effect from 10 December 1999. It removes a major impediment to mergers and takeovers and allows start-up and innovative firms to undergo restructuring without triggering a capital gains tax liability.Schedule 5 of this bill puts beyond doubt that scrip for scrip rollover relief is available for: schemes of arrangement; where scrip is cancelled and reissued; and where a subsidiary company makes the takeover offer using its parent's scrip—so-called `downstream' acquisitions. These amendments are important because takeovers may utilise these types of features.Schedule 5 also contains integrity rules as well as some technical amendments.Life insurers measuresThis bill represents a major improvement in the competitive neutrality, the consistency and the integrity of the taxation system. It is indisputable that life insurance companies should be taxed on their profit at the company tax rate like all other companies. The former government announced its intention to review the taxation arrangements for life insurers in the 1995-96 budget. However, it did nothing. The government announced that it would reform the tax treatment of life insurers in its tax reform document A New Tax System. Since that time, the life insurance industry has been extensively consulted regarding the impact of the measures, both during the review of business taxation and subsequently. This bill now delivers the long overdue reforms.The bill will introduce new rules that will broaden the tax base for life insurance companies and friendly societies. The reforms will apply from 1 July 2000 and will ensure that life insurers are treated on a more consistent basis with other entities. Promoting this kind of equity across taxpayers is a key foundation on which the new business tax system is based as it facilitates much lower company tax and capital gains rates. The new rules will increase the integrity of the tax base and will also substantially reduce complexity. Losses measuresThere is a range of losses measures in the bill. They include those designed to: prevent the multiple recognition of losses in a company for tax purposes in certain circumstances, known as the inter-entity loss measure; modify and refine the continuity of ownership test and provide an appropriate link to the inter-entity loss measures; align the application of certain loss measures; and strengthen the unrealised loss measures where loss assets are transferred within a company group. These measures are based on the recommendations of the review of business taxation. Imputation measuresSmall individual shareholders will benefit from reduced compliance costs flowing from a measure that will extend an exemption under the franking credit trading rules. The effect of this measure will be that shareholders entitled to franking rebates of up to $5,000 will no longer need to consider the 45-day holding rule. This change recognises that such shareholders would seldom be caught by the franking credit trading rules. The imputation system, as it applies to life insurers, is amended in the bill so that franking credits and debits accrue to life insurance companies based on tax paid on income actually allocated to shareholders. This replaces the more arbitrary basis through which franking credits and debits currently accrue to life insurance companies.There are also other changes which are consequential on the broadening of the tax base for life insurers referred to earlier, including changes to franking accounts. Measures in the bill also recognise the introduction of the pay-as-you-go instalment system in allowing franking credits and debits to arise in relation to PAYG instalments and in recognising payments under PAYG before 1 July 2000 by early balancing companiesOther CGT measuresIn relation to capital gains tax, the bill ensures that the government's fundamental capital gains tax reforms introduced last year operate in the intended manner.Integrity measuresFinally, there are two other specific integrity measures in the bill. First, there are rules that will penalise taxpayers who obtain tax benefits from schemes to avoid, defer or reduce PAYG instalments. The rules are consistent with the framework of a general anti-avoidance rule. The general anti-avoidance rule in the income tax law does not apply to the PAYG system contained in the Taxation Administration Act.Second, there are technical amendments to the prepayments measure already legislated to ensure that the provisions operate in the way that they were intended, including correcting potential anomalies in the law. Full details of the measures in the bill are contained in the explanatory memorandum. I commend the bill and present the explanatory memorandum to the House.Debate (on motion by Mr Kelvin Thomson) adjourned.Bills15980The following bills were returned from the Senate without amendment or request:Appropriation Bill (No. 3) 1999-2000Appropriation Bill (No. 4) 1999-2000Radiocommunications Legislation Amendment Bill 1999Radiocommunications (Receiver Licence Tax) Amendment Bill 1999Radiocommunications (Transmitter Licence Tax) Amendment Bill 1999Appropriation (Dr Carmen Lawrence's Legal Costs) Bill 1999-2000Committees15981159811598117:04:0015981Lieberman, Lou, MPMr LIEBERMANXU5IndiLP10—I present the 14th report from the Publications Committee sitting in conference with the Publications Committee of the Senate. Copies of the report are being circulated to honourable members in the chamber.Report—by leave—adopted.159811598117:05:0015981Somlyay, Alex, MPMr SOMLYAYZT4FairfaxLP10—As required by the resolutions of the House, I table copies of notifications of alterations of interests and a statement of registrable interests received during the period 9 December 1999 to 12 April 2000.159811598117:05:0015981Moylan, Judi, MPMrs MOYLAN4V5PearceLP10—On behalf of the Parliamentary Standing Committee on Public Works, I present the report of the committee relating to HMAS Albatross stage 2 redevelopment in Nowra, New South Wales.Ordered that the report be printed.4V5Moylan, Judi, MPMrs MOYLAN—by leave—The report I have just tabled concerns the proposed construction of new facilities at HMAS Albatross, the Royal Australian Navy's major establishment for operational, training, engineering, administrative and logistic support for naval air squadrons. HMAS Albatross is situated 10 kilometres south-west of Nowra, New South Wales, 12 kilometres north-west of Jervis Bay and 176 kilometres south of Sydney. The Navy's facilities at HMAS Albatross have been developed over half a century. Construction of Defence facilities at HMAS Albatross commenced in 1940. In 1944, the Royal Navy Fleet Air Arm commenced flying operations from the base in support of naval forces deployed to the south-west Pacific. Further substantial upgrading of hangars and runways continued to June 1945.The Fleet Air Arm vacated Nowra—in the electorate of the member for Gilmore, who is in the House at the moment—in March 1946. Following a decision to retain the base for naval aviation purposes, the aerodrome was transferred to the Royal Australian Navy as Naval Air Station Nowra. On 31 August 1948, it was commissioned as HMAS Albatross.In April 1998 the Public Works Committee approved major development works under the stage 1 redevelopment. Those works included an integrated squadrons complex for Seahawk and Sea Sprite helicopters, an air traffic control complex and aircraft shelters.Stage 2 continues the replacement of unsuitable facilities, some of which are World War II vintage, and will provide HMAS Albatross with new capabilities. The proposed stage 2 works are aimed at providing modern, functional facilities which will improve the operational reliability and organisational functionality of HMAS Albatross. The proposal involves the provision of upgraded arrester gear; a helicopter corrosion control facility; a flight deck procedural training simulator; a visiting military aircraft hardstand; perimeter boundary and security fencing; a helicopter underwater escape training simulator; a new gymnasium; an extension to taxiway bravo; a helicopter wash facility; a helicopter ordnance loading apron; and engineering services and civil works. When referred to the committee, the estimated out-turn cost of the proposed works was $41 million. The committee has recommended that the project should proceed.The most important question asked by the committee, in the context of the Defence white paper, to be issued later this year, was: has HMAS Albatross a secure future? To this question, Defence responded in the affirmative, which will please the member for Gilmore, who was at the hearings. The committee agreed that the proposed helicopter corrosion control facility and aircraft wash facility will provide efficiencies in terms of personnel hours and maintenance. Flight deck procedural training simulators are required to train aircrew and flight deck operators in a controlled environment before practising manoeuvres in an operational role. The proposal involves the construction of two flight deck procedural trainers that will simulate the flight decks of Navy's frigates. The committee considers that the proposed flight deck procedural training simulators will overcome deficiencies with the existing simulator and provide a realistic and controlled training environment. The existing arrester gear on one of HMAS Albatross's two runways is a portable system which requires manual rigging and derigging. The committee considers that the proposed replacement of the portable system with a permanently installed system will overcome the potential in emergencies of having to route military aircraft in distress to civilian airfields and produce savings in personnel costs.Royal Australian Navy aircrew are required to attend biannual courses in helicopter underwater escape training for each class of helicopter. Such training aims to familiarise personnel with conditions and difficulties of escaping from a helicopter under controlled and safe conditions. The committee concluded with respect to the proposed helicopter underwater escape training simulator that existing facilities do not provide the necessary personnel management flexibility and cost effectiveness to conduct courses at short notice and realistic simulation of military helicopter types.The committee agreed that existing gymnasium facilities at HMAS Albatross, while containing state-of-the-art equipment, are substandard and inadequate for the purpose of providing eligible personnel with a suitable physical fitness and team games facility. The committee recommended that existing gymnasium equipment and other related items owned by the Commonwealth be used in the new facility.The committee was apprised of concerns relating to the adequacy of the on-site sewage treatment plant at HMAS Albatross. Given the sensitivity of the Currumbene Creek and Jervis Bay catchment area, the committee recommended that the on-site sewage treatment plant at HMAS Albatross be checked on a regular basis and if necessary improved to ensure it is being operated and maintained in a manner consistent with state and local government requirements. I commend the report to the House.Bills15982S22615982Message received from the Senate requesting the House to consider immediately the Human Rights (Mandatory Sentencing of Juvenile Offenders) Bill 1999.Bills15982R100715982Message received from the Senate acquainting the House that the Senate does not insist upon its amendments Nos 2, 3 and 4 disagreed to by the House.Bills15982R101715982Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.15982Bill (on motion by Mr Slipper)—by leave—read a third time.Bills15982R93915982Bill returned from Main Committee without amendment; certified copy presented.Ordered that the bill be taken into consideration forthwith.Bill agreed to.15982Bill (on motion by Mr Slipper)—by leave—read a third time.Bills15982R98015982Debate resumed.17:14:0015982Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—Before the interruption of question time and other business I was making some comments that were very much of a political nature. Before I resume those political comments I want to make some comments that are of an apolitical nature. Part of this legislation is to extend the period of deductibility for certain donations—that is, the income tax deduction for gifts. There are three such projects. One of those is the Australian National Korean War Memorial Trust Fund. The period of deductibility is to be extended to 2 September 2000. I would just briefly like to say that I think this war memorial is very important. I have learned over time that a number of veterans that served in the Korean War have felt that they have been a forgotten group of veterans. This memorial on Anzac Parade is a very important symbol that those veterans have not been forgotten. Some of the veterans who have attended my office with complaints about the lack of what they considered to be appropriate recognition of their service have told me some very chilling accounts of their service in the Korean conflict. I think that they are deserving of our commemoration and our respect. I know that they have had a difficult road to hoe because of the lack of recognition for certain medals and the fact that they believe that there was not proper Australian government recognition over and above those medals that they were able to receive as part of the UN force. Before returning to some more political matters in my speech I wish to divorce these comments from that, because this gives an opportunity, especially in the run-up to Anzac Day of 2000, to pay respect to an important group of those who have served overseas on behalf of Australia. That is not to say that one devalues any of the other contributions made in other conflicts that Australian service persons have been involved in, but I just wanted on this occasion to pay particular tribute to those who served in the Korean conflict.That said, I still hold to my support of the second reading amendment that has been moved by the honourable member for Wills. He has made certain comments about the way in which the government has put in place aspects of its changes to tax legislation, which have been considerable. We only have to look at the piece of legislation before us today, which is the Taxation Laws Amendment Bill (No. 11) 1999 to see that there has been a considerable number of changes. The Taxation Laws Amendment Bill (No. 10) 1999 has been returned from the Main Committee and has now had the third reading. We have also witnessed the introduction of a swag of taxation legislation arising from not only the Ralph report but other things. In Australian Rules parlance, in the time-on period of this session we have these bills being brought into the House at this late stage. One of the things that this second reading amendment goes to is:... the House expresses its concern with ...(6) the Australian Taxation Office's role in the implementation of the new taxation arrangements ...A number of examples have been given throughout the debate about the type of workload under which the tax office is almost buckling because of the amount of work that is being done. I made reference to a report in the Canberra Times of yesterday under the headline `Offer ``not enough'' to beat tax brain drain'. That article indicates:With skilled GST specialists in the Australian Tax Office reportedly being lured into private industry at double their salary, the Community and Public Sector Union says a 3 per cent pay offer to Tax Office staff is “nowhere near enough”.This is getting to almost crisis proportions at a time when the ATO needs to be able to attract appropriate staff because of the way in which dealing with the complexity of the new arrangements and new taxes is leading to a burgeoning industry out there amongst tax accountants. But we have got to understand that the ATO has to be properly equipped not only to implement the new arrangements but to continue its vigilance about proper administration of existing tax legislation. The other item that I wish to speak to is the last part of the second reading amendment:... the House expresses its concern with ...(7) the underlying unfairness and complexity of the new taxation arrangements.I want to pick up especially on the way that is affecting the not-for-profit sector. Whilst it is said that there are arrangements to put the not-for-profit sector outside of the GST net, the point is that it requires a very onerous administrative effort for these organisations. And some of these organisations, the government has to understand, are voluntary organisations. If you look at the type of applications that have to be put in—for instance, to register for an Australian business number, which some of these not-for-profit organisations are being forced to do—they introduce to these organisations concepts which are alien to the culture in which they operate. Basically that form caters for those that are in business, that are incorporated under business incorporation law. It is totally inappropriate to expect that the filling in of this form should be a simple notion for charity organisations that are incorporated under different pieces of legislation, such as in Victoria the Associations Incorporation Act. That type of terminology is alien to the way in which these organisations function. It also is difficult to believe that the government does not understand that some of the concepts that these organisations have to get their heads around about the way in which they do their business are also irrelevant to not-for-profit organisations. I think it has been adequately put in other debates in this place that we are moving from a system where these organisations were able to get outside of sales tax legislation, for instance, by practically just ticking a box. Having established that they were eligible for sales tax exemption, that continued if the organisation continued in that business. To then place onerous conditions on the registration—and these are volunteer positions—including the provision of people's own Australian tax numbers and the like, is, I think, not to understand the way in which these organisations actually operate. One of the things that is amusing is that at the end of the application form for an ABN you are asked to say how long it took you to fill in the form. I think the fact that it is taking some of these organisations up to eight hours to fill in the form is an indication of the different sort of culture the government has to understand it is dealing with in terms of these organisations. These are just some of the problems.I mentioned before question time that I had listened with interest to the honourable member for the Northern Territory talk about the organisations operating in his electorate, where the provision of appropriate information in both an appropriate cultural context and in other languages was important. I have to say that regrettably my experience in a northern suburbs electorate of Melbourne with a high migrant population and a high non-English-speaking background population is that when one asks the Australian Taxation Office whether information is available in languages other than English one gets the run-around. It does not seem that much effort is being made to provide information about the new tax system that will actually be able to be understood by those people who are going to be caught up in it.As I said before question time, the government's performance in putting in place the new taxation system is regrettably characteristic of the way in which it has put in place a number of its new policy measures. It really begs the question of whether the government is in fact competent in its management. I have to say that, while of course I am ideologically opposed to a number of the policies the government is trying to put in place—and I do not shy away from that; I think there is an understanding that that is the case—one of my greatest disappointments, having got over that hurdle, is to witness the incompetent way in which the government tries to put in place its policies. I think those of us on this side of the House that have had experience in government look at some of those on the government backbenches and understand what they are going through when they sit there looking in dismay at what this government's executive is actually doing.Until the government and the ministers of this government understand that, I think we are going to rock from one change to the next, from one misunderstanding to the next and from one shambles to the next. It is about time the government understood that often when people rise in this place and criticise the way in which policy is being implemented that criticism is not just based on opposition to the policy itself. It is really based on a desire to try, on behalf of constituents, to get to the bottom of the way in which the government thinks things should be put in place. That is a real problem we see from time to time in the way this government behaves, especially in the way it is putting its taxation laws into place. I know that we are going to continue to debate questions on the goods and services tax and other elements of the new tax system for quite some time. When the Prime Minister comes in in question time and challenges opposition members to come back after 1 July and ask questions, he can be assured that we will be here asking the questions. We will be asking those questions until we get the answers. I think we will be asking those questions until we return to the government benches and are able to deal with some of the problems that the government has put in place for itself. Debate interrupted.Adjournment1598510000SPEAKER, MrMr SPEAKER—Order! It being almost 5.30 p.m., I propose the question:That the House do now adjourn.0V5SPEAKER, MrMr Slipper—Mr Speaker, I require that the question be put forthwith without debate.Question resolved in the negative.Bills15985R98015985Debate resumed.17:28:0015985Martin, Stephen, MPMr MARTIN8I4CunninghamALP00—I have been waiting for three days for this. I thought I was going to be bypassed yet again.10000SPEAKER, MrMr SPEAKER—The member for Cunningham may be assured that that would never happen.8I4Martin, Stephen, MPMr MARTIN—I know that you would never delay me, Mr Speaker. It is just that unfortunately the government is not quite sure what its program is this evening—what it is going to allow to happen. I will take this opportunity, nevertheless, to make some comments on the bill that we are discussing tonight, the Taxation Laws Amendment Bill (No. 11) 1999. As has been pointed out, the opposition has moved an amendment to this bill. The bill itself is actually an omnibus taxation bill covering four separate subject areas. These areas are, firstly, integrity measures concerning alienation of Australian real property by non-residents; secondly, income tax deductions for gifts and extensions of periods of deductibility for certain donations; thirdly, income tax exemption termination for non-resident sportspeople, clubs and associations—an issue that I might have had a bit more interest in in the course of the last parliament as the shadow minister for sport; and, fourthly, technical amendments and corrections of errors in the capital gains tax legislation.It is the amendment moved by the honourable member for Wills to which I wish to refer some of my comments this evening. In particular, I would like to pick up the issue associated with paragraph (7): `the underlying unfairness and complexity of the new taxation arrangements'. It is to the charities and the not for-profit sector of the economy that I want to make specifically one or two points, which I hope the government will take on board. We are up to Taxation Laws Amendment Bill (No. 11) 1999 already. I therefore see no reason why we might not entertain a few more amendments before 1 July so that the unfairness provisions that exist with the Australian tax system may look after those people that are charged with the responsibility of looking after Australians that are in need of some special support.Last Friday I had the very great privilege to launch, on behalf of the Smith Family in the Illawarra, one of the most ambitious social support projects that the Smith Family has proposed in their eight decades of caring for Australian children. That involved a major expansion of their Learning for Life program, which has the ultimate intention of supporting over 70,000 financially disadvantaged children across urban and regional Australia. Given that it does go to urban and regional Australia, it quite obviously has an appeal to members on the other side, who constantly trumpet their support and concern for rural and regional Australia. So I do hope they give the comments that I am going to raise tonight some genuine consideration.The Smith Family's Learning for Life program was first established under the banner of Educate in 1988 as a junior secondary education scholarship program for children who might not otherwise be able to afford to complete their education. A decade later, the program has grown to cater for the needs of children across primary, secondary and tertiary education levels. Learning for Life, operated by the Smith Family, provides an opportunity for disadvantaged children to achieve their potential by meeting the basic expenses of their education and providing additional support when they need it. At tertiary level, mentors from the student's chosen field of study offer academic, professional and personal support. Among the growth priorities of the Learning for Life program are its expansion in rural areas and meeting the variety of learning needs. For example, a pilot program called Study Support has trialed telephone based buddy relationships between children with literacy problems and older, more accomplished students. Learning for Life sponsors provide one-on-one support for individual children. One hundred per cent of their donation goes to the child being sponsored. It is interesting that financial support for the Learning for Life program ranges from $204 to $2,000 per annum, depending on the age of the student. At the tertiary level, as I said, a mentor is also provided. Since 1988, the program has provided assistance to over 15,000 students from disadvantaged families around Australia, and the program currently supports 8,000 primary, secondary and tertiary students from ages four to 29. Currently, Learning for Life is a $6 million a year program. The Smith Family has set a target of $50 million by the year 2004 to run the extended program. This will support some 70,000 primary, secondary and tertiary students across urban and rural Australia, and 500 students are at present looked after from the Wollongong office, which is my immediate concern. Of those 500 students, 190 are in the first years of school, 235 are in junior high school, 65 are in senior years of high school and four are at university. The aim of the Wollongong office is to double the size of the program.The reason for outlining the statistics is to illustrate the fact that, because of circumstances in Australia at the present time, a large and unfortunately growing proportion of the population still requires support from external organisations like the Smith Family. The Smith Family themselves, in putting forward this program and asking private industry to support this program, are faced with some real dilemmas caused by the GST. The simple fact is that disadvantaged children—and a number of them were at the launch last Friday—would not be able to sustain their continuing attendance at school or in tertiary education were it not for the Smith Family and like organisations. But it is the Smith Family and like organisations that are going to be affected by the GST. The Learning for Life program aims to extend people's opportunities to be able to go to and stay at school. When you think about the cost of putting children through school these days—which goes to things like school uniforms, socks, shoes, books and tuckshop lunches—there is no tax on that at the present time. But there will be a 10 per cent GST.Charities like the Smith Family are therefore going to be less capable of supporting these people. Their ability to meet a lot of the costs associated with looking after those disadvantaged children to give them a start in life is going to be diminished, because they are going to have to pay tax on this. I make the plea, on behalf of Chris Bevan and all of the people that run the Smith Family in Wollongong—those dedicated individuals, the volunteers and the people in paid work with the Smith Family in Wollongong—and on behalf of charities like the Smith Family throughout Australia, for the government to introduce yet another amendment to the taxation laws bills so that this anomaly can be remedied.There is a view in the Australian community at the present time that this is an uncaring, unsympathetic government. I know my colleagues on the other side do not like hearing that, and I know probably deep in their heart of hearts they would like to believe that they are not. But when you go to Smith Family launches like this and you see young kids like Kristi, who was there, and others, who tell you of the circumstances of their personal lives and that they could not stay at school if it were not for the Smith family, and then you see that a 10 per cent GST is going to impede the Smith Family's delivery of services to these people, you start to question the integrity of those on the other side and what they have to say. This is an important issue which I will return to shortly. Under pressure from my colleagues, I seek leave to continue my remarks later. Leave granted; debate adjourned.Committees15987159871598710000SPEAKER, MrMr SPEAKER—I have received advice from the Chief Government Whip and Chief Opposition Whip nominating members to be supplementary members of the Standing Committee on Family and Community Affairs for the purpose of the committee's inquiry into drugs. Motion (by Mr Brough)—by leave—agreed to:That Ms J.I. Bishop and Mrs Irwin be appointed supplementary members of the Standing Committee on Family and Community Affairs for the purpose of the committee's inquiry into drugs. Adjournment15987Motion (by Mr Brough) proposed:That the House do now adjourn.1598717:38:0015987Baird, Bruce, MPMr BAIRDMP6CookLP10—On 11 October last year I spoke to a private member's motion brought before the House which focused on the whole question of the oyster industry. This industry is a very significant industry in Australia, employing some 14,000 people and worth a total of $30 million in its overall value at the gate. It is significant on a whole number of grounds: firstly, employment; secondly, its export potential; and, thirdly, because of its wide support from the Australian community at large. I am sure most members of the House would agree with me that oysters are one of the delights of the Australian culinary experience. The debate at the time focused on the importance of the oyster industry in employment terms, highlighted diminishing job levels within the industry and called on the government to exempt oyster farmers from valuing their crop as an asset to be considered as income for taxation purposes. I pointed out, firstly, that many of the job losses were due to natural causes such as the spread of the QX parasite, which has devastated my local oyster industry, and were not due to taxation compliance issues. Secondly, I pointed out that the taxation issue was one that the ATO is pursuing, not the government. In general terms, the ATO had ruled that stocks were to be evaluated and brought forward at the beginning of each financial year, which created cash flow problems. Changing accounting times will create problems in terms of the lack of liquidity for the farmers over the first couple of years, although it is clear that cash flow restrictions will be balanced out in the longer term. I rise tonight to thank the Assistant Treasurer, Rod Kemp, and the Minister for Trade, Mark Vaile, for taking an ongoing and active interest in this issue. The ministers both sat in on a meeting on 28 March 2000 between the Oyster Farmers Association of New South Wales and the Australian Taxation Office. At that meeting it was agreed that the OFA, the Oyster Farmers Association, and the Australian Taxation Office would consult further in relation to the ATO's proposed arrangements for minimising the effect of the transition to compliance with Australian tax laws. The Assistant Treasurer has today informed me that the Australian Taxation Office has agreed to allow deferral of the arrangements for 12 months, until the year ended 30 June 2001. This has given oyster farmers a bit of breathing space to deal with this issue. The President of the Oyster Farmers Association, Roger Clarke, has informed me that the Oyster Farmers Association will now model three scenarios portraying the likely effects on small, medium and large oyster growing operations to demonstrate their case to the Taxation Office. This industry is worth $30 million to Australia at the farm gate, so in economic terms the Australian Taxation Office has bigger fishing industries to fry. Having said that, however, it is vitally important to some small regional towns, such as Wallis Lakes, Manning Point and Narooma, where oyster farming is a major employer and an important part of the local economy. If the modelling done by the association reveals that there will even be a small number of farmers put out of business by the new accounting and taxation requirements, the welfare of those farmers should be the focus of the ATO. Metropolitan and regional MPs serving coastal electorates are still very interested in this problem. I have had a note from the member for Monaro today advising me that he was very supportive of the moves by the Assistant Treasurer on this issue. While this is something for the Australian Taxation Office to deal with at arm's length from the government, we trust that the tax office does the right thing by our local industry and leaves no motivation for us to pursue further intervention. So what we have today is a significant announcement by the Assistant Treasurer to provide relief for Australia's oyster farmers. It is a significant industry employing a large number of people—some 14,000 people directly. It is a commodity that is used widely in the catering and restaurant industry right across Australia. The fact we have seen this initiative taken today by the Assistant Treasurer, Senator Rod Kemp, and the Minister for Trade, Mr Mark Vaile, show their strong interest in the oyster industry, their concern about the value of the $30 million to the Australian economy and also their willingness to take on board this important issue. I congratulate them on their announcement today.1598817:43:0015988Sawford, Rod, MPMr SAWFORD3J4Port AdelaideALP00—Since the mid-1970s Australia has developed an education system where publicly funded private schools coexisted with public schools. However, central to that understanding was that public education was a public good and that there existed a clear divide between public and private education. This point of clear division should not be underestimated. During these times, a watershed educational report, the Karmel report, was published in this country and, in general terms, made a very positive contribution to educational debate. However, it had two major failings which have yet to be rectified: one was the failure to recognise the importance of resources for primary schools, and the second was a failure to recommend the elimination of the diversity that existed and that was supported by parents of the public secondary schools system. The diversity of the public secondary schools systems— technical schools, girls schools, boys schools, area schools, specialist schools, academic high schools and so on—was abolished in favour of a single comprehensive high school. The current remedy to the primary schools is mere tokenism. Literacy, numeracy, testing and civics programs are important, but they ignore the real problem and that is the lack of resources. The core problem in primary schools, whether they be public or private, has been the systematic withdrawal of funds for the last 20 years, largely by state but also by federal governments. The main problem with public secondary education is the growing rejection by parents and students of the sameness and conformity of the concept and practice of the single comprehensive high school. Parents want diversity. They want boys schools; they want girls schools; they want coeducational schools; they want academic high schools; they want the modern equivalent of a technical school; they want schools for the gifted; they want schools for the disabled; they want mainstream schools that accept disabled students; they want area schools, country high and technical schools; and they want agricultural schools. And all they get mainly is a single comprehensive high school.Changing the diversity that existed in public secondary education to that of sameness has been an unmitigated disaster for public secondary education. Economists have trouble acknowledging education or democracy, let alone understanding it. Yet for 20 years governments have slavishly followed economic rationalists who have demanded the reduction in size and role of the public sector. The way in which the public education system is being diminished is one of the least understood and discussed aspects of contemporary public policy. I stated earlier that public secondary education was severely damaged by the elimination of the diversity that previously existed. That elimination of diversity, that blurring of the public-private divide is about to hit the private systems of education as well. This government believes in blurring the distinction between public and private schools. Its central strategy has been the establishment of an education quasi-market, according to Associate Professor Alan Reid of Flinders University in South Australia. The Howard government believes that one of the impediments to the operation of an education market is the existence of both public and so-called private education systems. What is overlooked is that in the past there was very limited competition within the private school system and very little or no competition within the public system. It may be argued that there was some sort of competition between the public system as a whole and the private system, but that is all it was. That type of historical division served this country very well indeed.Current government policy is to create one system where all schools, public or private, compete for custom. That means that any consolidated education system, public or private, is in grave danger. To help this move to one system, the Howard government has sought to facilitate movement between public and private schools. Under this government, any new non-government school can be established without any analysis of the impact on neighbouring schools. Some people respond to that proposition by saying, `So what? Won't that relieve the resource pressure on the public system? Won't competition in the education market make for greater efficiency? What damage could possibly occur to the nation's future social fabric with an education system known for separatism, division, stratification and exclusion?' Quite a lot, unfortunately.One of the great strengths of the public education system is that it is comprised of students from a range of social, cultural, religious and socioeconomic groups. Public education comprised of diverse groups has helped this nation greatly to learn to live together and manage life in the mainstream without pushing their different identities into a single mould. Diversity is safe. Sameness is dangerous and simply does not work. If the drift continues, the diversity of public schools and, inevitably, private schools in time will diminish. That will be a time of great regret for a once proud Australian education system, both public and private. 1598917:48:0015989Roxon, Nicola, MPMs ROXON83KGellibrandALP00—Tonight, I would like to speak to the House about an ongoing problem in my electorate of Gellibrand, that being the very severe heroin problem. Everybody knows that Footscray is one of the four or five hotspots in Melbourne for the heroin trade and heroin use. I would like to speak briefly tonight about some fantastic work that the Footscray police have been doing in the area. They have had a blitz in recent weeks and undertaken an operation called `Operation Reform'. I am told that over 100 people have been arrested as a result of this operation, with half of those people charged with drug trafficking. Obviously, it is fantastic news for the traders and general public in the area that we are not going to allow drug traffickers in our area. I think we should also commend the Victorian state government for assigning 16 or so extra police in Footscray. This is the start of the Bracks government's commitment to providing more police in the area.Whilst I would like to commend the police for the work they have done and the Victorian government's attempts to deal with this issue, obviously that deals only with part of the problem. We are going to have a debate in my electorate very soon about a supervised injecting room. Footscray is one of the areas that has been proposed to have a supervised injecting room. When we deal with this controversial issue it is obviously important, while saying the police are doing a good job and dealing with the traffickers, to make sure that we deal in a compassionate way with the people who are addicted to this drug. Supervised injecting rooms are again one part of dealing with this problem. I would encourage calm debate. It is obviously going to be a difficult issue for our community, but I think it is part of what we need to do to deal with this problem. This federal government has let us down on this issue. Obviously, when dealing with the heroin problem it is very important not only to look at policing and harm minimisation strategies but also to provide sufficient funding for education, detox programs and rehabilitation. This government, despite its Tough on Drugs strategy, has recently crowed about the $4 million that it has allocated for 63 projects across Australia for community groups. Not one cent of that money has gone to my electorate of Gellibrand. Despite agreement across the country that Footscray is one of the centres for the heroin trade, not one of the projects that deals with rehabilitation, detoxification and many other community initiatives that seek to deal with this issue of drug abuse and illicit drug use in a compassionate way has been granted any funding from this government. I urge the government when it goes through its next round of Tough on Drugs funding to consider more favourably the applications made by the Western Region Health Centre and the Westgate Division of Family Medicine for the proposals that they have to deal with this issue constructively. I know also that the Footscray District Football League has proposed a mentoring program to try to assist young people who have a problem with illicit drug use. I also commend that to the government.The state government, through the Minister for Police and Emergency Services, Andre Haermeyer, has granted the Maribyrnong Council extra funding to deal with this issue. We do need assistance at the federal level. Policing is not sufficient. Supervised injecting rooms are not sufficient. Obviously, we do need to have funding from this government at the level of dealing with rehabilitation, education and detoxification.1599017:52:0015990McArthur, Stewart, MPMr McARTHURVH4CorangamiteLP10—I wish to put on the public record my admiration and support for Minister Tuckey for the signing of the RFA in the western region of Victoria. Minister Tuckey has worked positively to ensure the signing of the RFA by the Prime Minister and the Premier of Victoria. However, as members would be aware, there is still considerable debate in the Otways in western Victoria, and I draw the attention of the House to a very misleading document, circulated by Senator Lyn Allison, talking about this particular problem. This document is headed `Water or Wood-chips: Have your say'. I am concerned about two things: firstly, the very misleading material contained in this document; and, secondly, the speech she made last Monday in the Senate adjournment debate. What she alleges in the document and in her speech is that there are more jobs to be gained through tourism increasing throughout the Otways and that, therefore, timber logging should be stopped. She produces no evidence, except to draw attention to two submissions to local councils—the Surf Coast Shire and the City of Greater Geelong. I know for sure that the Surf Coast Shire had no alternative evidence about logging versus tourism. They took one point of view. Also, it is interesting to note that the Colac Otway Shire have not supported this particular argument. They are in the mainstream of logging in the Otways, they have heard both sides of the argument and they know that in the longer run jobs can be sustained if logging is undertaken in a sustainable and sensible way.Senator Allison in her document goes on to say that the water supply to Geelong is being threatened by catchments. People in the Geelong region know that the rainfall pattern over the last three years has been at its lowest for the last 100 years. But that does not stop the facts getting in the way of Senator Allison's allegations.After the many suggestions that logging has interfered with the water supply for Geelong, it is interesting that in the Geelong Advertiser of 31 May Dr Rob Vertessy, who is an expert on hydrology, made very strong statements saying that in no way was the run-off in the Otways affected by the forest harvesting. He noted the Victorian Department of Natural Resources and Environment's figure that only 0.3 of a per cent—less than one per cent—of publicly owned Otways forests are logged in each year. He added that, if this were the case, there would be a pretty minor effect. So we have the OREN Otways group claiming that the lack of water in Geelong catchments is because of the logging, but that is obviously not true. In the document Senator Allison goes on to talk about woodchips. She says that 70 per cent of the logs are turned into woodchips that are sold to Japan. Obviously, some of the residual timber is turned into woodchips by companies like Midway products. That is a lucrative and helpful part of the harvesting program and assists in keeping jobs in the Otways. Tourism is a very good industry in the Otways down the Ocean Road, but it works in conjunction with the timber industry—and the two are not in conflict. But, of course, Senator Allison wants to have them in conflict, wants there to be no logging in Victoria—in Australia, if given half a chance—and is suggesting that the logging be totally overturned. In that document, under the heading of `Endangered Species', she states that there has been `a dramatic decline in endangered plants and animals, such as the spot-tailed quoll'. When I was down in the Otways, they were having a bit of trouble finding the quoll, let alone in the particular area that was being logged.Could I say that just yesterday we had a problem with protesters holding up the logging. Law abiding, sensible, hardworking Australians who are legally entitled to be in the forest harvesting the timber have been prevented from doing so. As Mr Tuckey comments yet again, those workers are entitled, under the acts of Victoria and the Commonwealth of Australia, to harvest timber in a law abiding way, yet we have protesters preventing them from going about their lawful activities.I put on the record that Senator Allison is misguided and has provided misinformation to the parliament and to the electors of Corangamite. I suggest that she, the Democrats and those people supporting conservation principles get the facts and not put misleading information both in the parliament and through the electorate of Corangamite.1599117:57:0015991Plibersek, Tanya, MPMs PLIBERSEK83MSydneyALP00—I rise tonight to speak about the plight of the Kosovo refugees who are being forced to return to Kosovo against their will. I think it beggars belief that, in a country the size of Australia, we cannot find room for an extra 50, 100 or even 200 people who are, instead, being returned to what essentially remains an area of violence and danger with very few services for those people. During the Kosovo conflict, an entire region was devastated, and death, violence and human rights abuses occurred daily. We have had some very disturbing reports of those human rights abuses that occurred at that time. In fact, in the Australian just today, one refugee talks about his 11-year-old daughter who collapsed several days ago on discovering that the family would be returned to their homeland. He said:She has witnessed men having their ears cut off and being forced to chew them. She can't forget the 24 hours through the hills and the hiding. She has a clear picture of everything she went through.Of course this little girl does hold those memories still very strongly. It is only 11 months ago that those refugees came to Australia. Remember that at that time not only did the Australian public welcome those people but the Minister for Immigration and Multicultural Affairs, Philip Ruddock, was there with his Amnesty International badge on his lapel, very proudly doing what was a very politically popular thing at the time. Unfortunately, now the political agenda has shifted and he sees that there are votes in being tough on these people who face desperate situations when they return to their homeland.It is little wonder that these people are now leaving the refugee camps that they have been held in—in fact, some of them are taking any action they can to try to remain in Australia. I think it is only someone with absolutely no ability to empathise with the situation of people who have been living in war zones who could question these actions at all. Anyone who has a family and who is able to imagine what it is like to be told that they have to take that family back into a war zone must surely understand the actions of the refugees who are leaving those camps. I urge the minister to reconsider the decision to prevent these people applying onshore for protection visas. I think they must be allowed to apply for those protection visas onshore. 1599217:59:0015992Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—It is my melancholy duty to inform this House that perhaps the most important reason for the sudden necessity for the Kosovo refugees at Albury to leave their Safe Haven at Bandiana is to enable the refurbishment, which begins this weekend, of that centre for the arrival of the Ukrainian national Olympic team, who are to be housed at what was the Bandiana army camp. As a patron of the Safe Haven, the 64 refugees from Presevo are particularly in my mind—and I hope they are not on the conscience of the Minister for Immigration and Multicultural Affairs over the next year.10000SPEAKER, MrMr SPEAKER—Order! It being 6.00 p.m., the debate is interrupted.18:00:0015992House adjourned at 6.00 p.m. until Tuesday, 9 May 2000, at 2.00 p.m., in accordance with the resolution agreed to this day.Notices15992The following notices were given:Mr Lawler—to move—That the House:(1) notes the crucial importance of water to the ongoing growth of the Australian economy and to the environment of rivers and wetlands; (2) acknowledges the many initiatives implemented over the past decade to achieve more efficient use of water;(3) commends the Government for the directions created by the Natural Heritage Trust National Rivercare Program initiatives, particularly in regard to the Murray Darling Basin and the upper reaches of the Snowy River;(4) calls for all future water allocations to be used for environmental purposes to be only taken from savings from the NSW and Victorian distribution system and only after satisfying a test of the national interest; and(5) calls for proper financial compensation to be awarded to those who have their right to water taken away.Mr St Clair—to move—That the House:(1) notes the crucial importance of international trade to the ongoing growth of the Australian economy, particularly in rural area;(2) commends the Government for the ongoing development of bilateral trade with more and more countries;(3) urges the Government to continue its efforts to use sanitary and phyto-sanitary protocols to gain increased access of Australian agricultural and horticultural products to Korea, Taiwan and China; and(4) commends Australian agricultural producers for their ongoing efforts to secure such market opportunities.2000-04-13—————Mr DEPUTY SPEAKER (Mr Nehl) took the chair at 9.40 a.m.Statements by Members159931599315993Hall, Jill, MPMs HALL83NShortlandALP00—Today I wish to bring to the attention of the House a desperate problem that is affecting countless families throughout Australia. That problem is gambling and, in particular, gambling on poker machines. Figures from the Australian Bureau of Statistics show that poker machines are driving the gambling boom. Gambling revenue has grown by 42 per cent in the last three years, with $11 billion being collected in 1997-98.The expansion of the number of poker machines in hotels and clubs has almost doubled the amount of dollars spent on gambling. Gambling machines now account for $6.4 billion, or 58 per cent of all gambling income, and 2.3 per cent of the adult population loses $4 billion on gambling. Problem gambling leads to dysfunctional families and suicides. Recent figures show that there are at least 400 suicide deaths a year because of gambling and, generally speaking, poker machines or gaming machines—whichever you like to call them—are mainly responsible.People play these gambling machines for a number of reasons—for example, to escape their problems. Once they are there and once they get hooked on them it is a very difficult to get away from them. While walking along in a shopping centre they may hear some music and see some lights and that can act as a catalyst to their going to a club or pub to start gambling. People from all walks of life become victims of these machines. Honest people become thieves and liars. They lose everything including their house and car, and are even unable to feed their families.This was brought home to me very clearly when I received a letter from a constituent. She is an average person—a mother with a family. In that family there was one full-time and one part-time income. She had two children under five and a mortgage. Her husband developed a gambling problem. She knew absolutely nothing about it. He was able to access money in their account. He would go along to clubs, draw money from the account, and there would be nothing left in the account. She would go down to Coles or Woolworths to buy some food and could not draw money from the same account. When she went along to the bank they disregarded what she said, saying, `We know this happens but there is not much we can do about it.' That needs to be acted upon, as does the fact that when people suffer from this addiction they cannot get access to Medicare or private health insurance to receive any treatment.This is such an epidemic within our society that it is time that all governments recognise the extent of it and the damage caused by this form of gambling in our community. Governments raise billions of dollars in revenue from gambling and the least the government can do is to provide the victims of gambling with access to funded treatment—treatment programs through Medicare and private health insurance. (Time expired)1599315993St Clair, Stuart, MPMr St CLAIR84BNew EnglandNP10—In my electorate of New England, the wool industry plays a vital role from Tamworth in the south to Tenterfield in the north. The wool industry has been through good times and bad. Through these times the local communities have always been supportive and well and truly behind the industry. For the past 20 years in Armidale, which is in the centre of my electorate, an expo supporting the wool industry has been held. This year Armidale will host the 21st Wool Expo, held from 12 to 14 May.The Wool Expo has always been regarded as one of New England's premier events and certainly one of the nation's premier wool events, and this year I am sure will be no different. Wool Expo was started to show the positives of wool to consumers and new techniques of production for wool to farmers and, of course, for top makers. These days the basics are still there, with the main emphasis on wool. However, over the last few years it has grown to become a small field-day event, spread over a period of three days. This year will include, of course, the sheep and wool side of things as well as alpacas, yard dog trials—the trademark of New England—fine and superfine wool, craft, alternative industries, fashion parades, exhibitions and much more. People from all over Australia come to the New England for Wool Expo. Wool Expo is very much a community based event, with all sections of the community getting involved, from wool growers to the University of New England based at Armidale, from cloth designers to retailers—the whole spectrum of the wool industry is represented. In fact, this year will be the second time that I have had my own site, so that for three days I will be listening to the views of the industry and of the people of New England and the wider community.This year is expected to be the biggest year yet for Wool Expo, with more exhibitors and displays, along with a small animal farm for the children, free fashion parades from the Australian Fashion Awards, entertainment and, of course, the usual large range of food outlets. If that is not enough, this year we will see for the first time the Heiniger 100 shearing competition, with the grand finale of five New South Wales shearers attempting to break the world record by shearing 100 sheep in under 16 minutes and 33 seconds. Let us hope that they can do it.With more new people involved in Wool Expo this year, we have plenty of new attractions as well as the old favourites—something for everyone, regardless of age, industry or interest. I wish to express my congratulations to the organisers. I know that this year will be the most successful year yet. The wool industry is vital to the nation, and with successful exhibitions like Wool Expo in Armidale the wool industry will continue to grow strongly.1599415994Hollis, Colin, MPMr HOLLISDH4ThrosbyALP00—Last Monday in the chamber I raised the saga of the insolvency of Parrish Meats Supplies Pty Ltd. It is a sorry, pathetic saga involving hollow companies with no assets, fraud of the Commonwealth and deep disinterest by at least three government agencies. The collapse of Parrish Meats has also left 120 workers with a pathetic proportion of their statutory entitlements. I doubt whether the Treasurer, the Minister for Financial Services and Regulation and the Minister for Employment, Workplace Relations and Small Business will read my speech, but read it they should. Then they should tell me that there is no need for government agencies to investigate the demise of Parrish Meats Supplies Pty Ltd, South Coast Bulk Carriers and Obnora. Then they should tell me that the ATO and ASIC should not investigate the string of corporate collapses involving the directorships of Mr Colin Lord and Mr Ken Parrish. Then they should tell me that the minister for workplace relations and his department should not investigate the whereabouts of taxpayers' money seemingly provided for training purposes—money shifted around a despicable business empire in a shady attempt to keep it afloat only for the benefit of the Lords and Parrishes, a family entity that takes the concept to its extremes.I have also placed a series of questions on today's Notice Paper involving this matter. There can be no doubt that this is an outrageous case of fraud against the Commonwealth. We are talking about the fraudulent misuse of taxpayers' money. This government is determined to pursue people who tickle welfare; let us see it for once tackle the big end of town. Let us see how serious it is about fraud. People talk about fraud. I referred in my speech the other day to fraud. I have provided the evidence of fraud. People were claiming money, thousands of dollars, under training schemes. People were supposed to be employed for less than six months. Many people had worked there for years and years, and then they were signed back over. They got thousands of dollars of taxpayers' money fraudulently. The South Coast Labor Council and I will not rest until the 120 blokes who were sacked after years of service and their families get every single cent of their entitlements from the corporate chicanery and scandals of Mr Colin Stanley Lord and Mr Sidney Kenneth Parrish.1599515995Elson, Kay, MPMrs ELSON6K6FordeLP10—There has been a great deal of hype and hysteria during the last fortnight on the issue of reconciliation. I know there is a very genuine desire within the Australian community and certainly within this government that all Australians look forward to our future together in a united and inclusive way. How reconciliation can best be achieved is a matter for some debate. There is the question of who decides when we have reached that point and what it will take to get there. But the genuine desire that it be achieved and that we can put the past behind us is something which I feel all Australians have in their hearts. I believe that the solution, like that of many complex social problems, lies not with the government or with peak bodies or vested interests, but within local communities—in our neighbourhoods, in our community organisations. This is where stronger ties between indigenous and other Australians can be forged.I was delighted last month to plant a special `friendship tree' at Jimbelunga, an Aboriginal nursing home at Eagleby in my electorate. Jimbelunga is a first-class facility with wonderful, caring people. Our idea is that as the branches of this lovely jacaranda tree grow and expand, so too will the friendship and common bond that we all share. It is a simple symbol. I do not pretend it is a solution to all the difficulties facing reconciliation, but there was a great deal of kinship and pride in our local ceremony and a great deal of goodwill on all sides, which is exactly the approach that we all need.I know that this government, and the Prime Minister in particular, approach reconciliation with a great deal of goodwill and a genuine desire to move forward. We recognise the wrongs of the past. There are things that must be noted but not dwelt upon if we are to move forward. We have taken a very commonsense approach that our first goal must be to address basic health and education issues. This is where the great disadvantages still exist, and these are issues that were ignored under the Labor government.As someone who has visited many remote Aboriginal communities, I know that achieving equality and reconciliation is not about the things that the national media seem obsessed with. It is not about Charles Perkins's personal demons, it is not about land rights and it is not about saying sorry. It is about making sure that this generation of indigenous Australians enjoy the same health, housing and education opportunities as all Australian children do. That, in my view, is the basic starting point to achieving reconciliation. But, as I said, it will take a great deal of goodwill and a genuine desire in the hearts of everyone involved. I know that this government and the Prime Minister do have that genuine attitude, but I feel that there are a few Aboriginal leaders who will never hold goodwill in their hearts in dealing with our government—however beneficial it may be to the Aboriginal community—simply because of their personal politics. I think it is a great pity and the biggest stumbling block that we face. I also look forward to the Minister for Aged Care visiting my electorate and going to Jimbelunga. (Time expired)1599515995Adams, Dick, MPMr ADAMSBV5LyonsALP00—I am disturbed and very worried about the Kosovo people who have come to this country on invitation and who are now being bundled out unceremoniously and treated as criminals. You must have heard, as I did this morning, of the situation in Kosovo. The UN over there is saying `Don't be in a hurry to repatriate your refugee guests.' I use the word `guests' as that is what they have been. Their country is not ready. In fact, there are few services available. Housing is limited, people are terrified to go back to their old houses in the country areas because of the amount of unexploded ordnance still lying around. Many had houses in Serbian run areas, and there is literally nothing to go back to. The media has picked up on the mood of Australia and has helped to keep the Kosovo people's plight in front of us. There are no criminals—just frightened mums and dads trying to find refuge for their children. I have been keeping a note of the Internet bulletins on the situation in Kosovo. I have also been corresponding with a friend in Bosnia who has contact with Pristina. Both are saying that there is chaos—60 people to a house in some places, many without basic services. There are no phones and no postal service. There is no way of keeping in touch with friends in Australia if they do go back.I applaud the Tasmanian Premier for agreeing to sponsor the five still left in Tasmania, and I implore the federal minister for immigration to accept that there is a big feeling in Australia for these people and to be humane. Don't be petty. Let them stay. And let those who have made their way back under pressure reapply to come back; to come back home to Australia. I speak particularly of Dunny, who has left his girlfriend weeping in Tasmania while trying to do the right thing to come back. I will try to help him make his way back to Tasmania as soon as possible after he reaches Kosovo. The minister said that he would help if the boy went. He has a family here and they need him. They are a great Tasmanian family who have been in business for years, and they want him to come back. These people are not numbers or statistics. They are friends and now, in some cases, family. Australia has a responsibility for them whether or not the minister likes it. Minister, let them stay. Organise some conditions if you must, but let them stay. It is not a question of jumping the queue. They were not in a queue to start with when their homes were bombed and their families were beaten and killed. Let them stay. We asked them here because of public pressure and now we must help them. Let them stay.1599615996Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—Last Monday week, Cyclone Tessi bore down on the City of Townsville, Australia's largest tropical city. Fortunately, Cyclone Tessi did not cause much structural damage, but one of the results of the cyclone was that, on the morning after, 50,000 electricity consumers were left without power—some for up to four days. Ergon Energy have done a review of that particular incident. I would like to report to the Main Committee today on some of those issues.Hospitals, water and sewerage plants and major shopping centres were the first to have electricity supply restored, followed by the priority to meet other community needs. It was regrettable that it took four days to finally reconnect all consumers. That says something about the need to put power supplies underground in Northern Australia in areas subject to strong cyclonic winds. I note that in February the Queensland state government called for undergrounding of power in the south-east of the state. How could that be in an area which does not have the threat that North Queensland and Northern Australia suffer from constantly in the summer months? How could it be that the Queensland government would, as a priority, want to put power underground in the south-east corner of the state before considering the north? That is not good enough.What is also not good enough is the call from the state government—a clear signal—that, if we want underground power in North Queensland, we as consumers are going to have to help bear the cost. That is not good enough. The state government is responsible for a safe and secure electricity supply. The state government should be held accountable for providing that secure supply and for attaching the necessary priority for undergrounding of power in the state of Queensland to begin first and foremost in the northern part of the state.Another matter is the trees. We see this in all of our electorates where electricity authorities want to keep trees away from power lines. Of course, when the electricity authority comes along to prune the trees, the communities get upset because of what happens to the aesthetics. In Townsville, most damage from the cyclone was in areas where there was most resistance to having trees pruned. There is a clear message that the community has to be mindful that, if you leave trees in the vicinity of power lines, you suffer damage and loss of supply in high winds. 10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl—Order! In accordance with standing order 275A, the time for members' statements has concluded.Bills15997R101715997Debate resumed from 9 March, on motion by Mr McGauran:That the bill be now read a second time.09:58:0015997Griffin, Alan, MPMr GRIFFINVU5BruceALP00—As with the previous Therapeutic Goods Amendment Bill, the Therapeutic Goods Amendment Bill (No. 2) 2000, while non-controversial, makes some important and welcome improvements to the Therapeutic Goods Act which will benefit consumers and the medicine industry alike. Firstly, the bill makes it an offence to deliberately manufacture, supply, import or export counterfeit therapeutic goods. These offences, which not only undermine patent protection for therapeutic goods but place the health of the public at risk, up until now were prosecuted under the Therapeutic Goods Act for the lesser offence of manufacturing, importing and exporting therapeutic goods not included on the Australian Register of Therapeutic Goods.While this change is most welcome and is supported by Labor, it has been a little slow in making it onto the books. The World Health Organisation originally raised the issue of counterfeiting in 1988. Since that time, it has conducted workshops on the issue with member states. In May 1999, it passed a resolution that called on governments to expand their efforts to ensure effective drug regulation. Our government expressed a high level of commitment to the WHO principles of anticounterfeiting at the time and yet it has taken 12 months to put that commitment into action. If you take into account the fact that the November 1994 GATT TRIPS agreement, to which Australia is a signatory, imposed obligations on members of the World Trade Organisation to provide for criminal procedures and penalties to be applied, at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale, this legislation has taken even longer to appear.Why the need for speedier action on this point? Counterfeit products cost lives both in developed and, more particularly, in developing countries. While the word `counterfeit' implies a precise imitation of a genuine product, in the case of medicines this is often not the case. Counterfeit products may just have been repackaged and sold on or, at the worst end of the spectrum, the counterfeit medicine may contain entirely different and sometimes poisonous ingredients. In the middle of the range, counterfeit products may include the right ingredient at a lower—subtherapeutic—dose. This can be a particular problem with products used to treat infectious diseases, such as antibiotics, where using the wrong dose can lead to the development of antibiotic resistance in the community. In recent times, antibiotic resistance has become a major concern in developed countries, including Australia, where people are now dying from bacterial infections that can no longer be treated by antibiotics.On the far end of the spectrum, one particularly devastating example of the effects of counterfeit medicine, recounted by the International Federation of Pharmaceutical Manufacturers Associations, involves a tragedy that occurred in Haiti. In this case, 30 children died after ingesting counterfeit antifever medication that contained diethylene glycol, an industrial solvent used in antifreeze. In Nigeria 109 children died after taking a counterfeit medicine sold as medicinal syrup but which contained the same solvent. In Australia we have been lucky because there have been no such tragic incidents to date. While counterfeiting of medicines is not a major problem in Australia, it still represented 20 per cent of the 200 criminal charges laid in relation to offences involving therapeutic goods between 1991 and 1996. Of concern is the fact that these charges related specifically to offences of illegal export—that is, Australian companies selling substandard, unregistered products to countries such as Vietnam and New Guinea, countries which do not have the same rigorous regulatory standards that we enjoy. These are the very countries that the WHO is trying to protect. Dr M. Ten Ham, chief of WHO's drug safety unit, has said, `The less a country has an inspection and control system in place, the more likely you will find counterfeit drugs on the market.'Australia's proximity to such countries makes it a handy base for unscrupulous manufacturers to manufacture and export these products. We have an obligation to ensure that these manufacturers are shut down and penalised accordingly and that countries that are unable to afford or resource the type of excellent regulatory system we have are protected.Counterfeiting of medicines also has financial impacts—both on the health system and on our medicines industry. It is estimated that the trade in counterfeit medicines costs the international pharmaceutical industry billions of dollars per year, a cost that eventually has to be borne by the consumer. One of the major improvements gained by this provision in the bill is the introduction of severe penalties for this offence. Under the previous legislation, where people were prosecuted under the offence of dealing with unapproved therapeutic goods, individuals found guilty faced a maximum penalty of $26,400. On the passing of this bill, the maximum penalty for an individual who intentionally manufactures or supplies in Australia, imports into Australia or exports from Australia counterfeit therapeutic goods is five years imprisonment, a fine of up to $55,000 or both. For a corporation the fine may be up to $275,000. Counterfeiting of medicines is certainly an issue that deserves more attention than it has had so far and, to this end, again I repeat the opposition's support for this provision.The second provision clarifies the offence of dealing with unapproved therapeutic goods. I will not dwell on this except to say that anything that strengthens this law and provides greater protection for the community is a good thing.I would now like to move on to the third provision of the bill that relates to the advertising of therapeutic goods. This provision gives some teeth to the Complaints Resolution Committee, the body responsible for dealing with complaints arising from breaches of the Therapeutic Goods Advertising Code. Rather than giving companies that do not comply with the code and the rulings of the Complaints Resolution Committee what is essentially a slap on the wrist, this new provision will allow the Secretary of the CRC to cancel the registration or listing of the therapeutic good in question. In other words, the offender will no longer have a product to market.With the massive growth in the use of non-prescription, particularly complementary, health products, this is a very important provision. Recent surveys have shown that up to 37 per cent of Australians now use complementary medicines every two weeks, and 60 per cent of the population use them every year. On the whole, this is a good thing. If these products work—and the continued growth in sales indicates many must—then this shifts some of the burden off the Pharmaceutical Benefits Scheme and Medicare. However, these are active medicinal products for human consumption and, as such, they must be regulated in some way to ensure that they are safe and used safely.In acknowledgment of this, the government has established a section within the Therapeutic Goods Administration to deal specifically with complementary health medicines. In addition, the new Therapeutic Goods Advertising Code, which was released last week, has been reviewed to take into account the issue of advertising these medicines. Again, in recognition of the growing popularity of these products, these are good things and provide a level of protection for consumers. Unlike pharmaceutical products, complementary medicines can be advertised to the general public. The new code, while allowing these products to make claims about their efficacy in the treatment of the symptoms of certain diseases and conditions, also stipulates that these claims must be supported by evidence. As is the case with pharmaceutical products, members of the public or other stakeholders are able to make complaints about the advertising and promotion of complementary health care products if they believe such advertising is false or misleading. These complaints are heard by the Complaints Review Board and, if upheld, the manufacturer concerned has, until now, faced at most a fine, withdrawal of the offending advertising, and/or a requirement to print retractions. With the addition of the third provision of this bill, the Complaints Review Board now has real powers to punish manufacturers who are at the very least making snake oil claims and, at the worst, putting people's health at risk.While direct health claims for complementary health medicines must be supportable by good evidence, I would also say that the tone of the advertising must also be taken into account. Over the last year there have been several examples of complementary health medicines which have been promoted in an almost clinical manner as if they were, in fact, prescription products. This gives consumers an impression of scientific support for the product that may not exist. Prescription medicines have to go through rigorous testing procedures, including many years of clinical trials, prior to being allowed on the market. Complementary medicines do not, and should not mislead consumers into believing that such scientific heritage exists. So I would urge both consumers and regulators to look at not only the words used in advertising and promotion but also the tone and implications.The other issue I would like to touch on briefly is labelling of complementary health medicines. As I mentioned earlier, the continued growth in this market is an indication of the efficacy of some of these products. I am no scientific genius, as the member for Maribyrnong would no doubt concur, but what that says to me is that if they work, they are actually doing something in the body, they have an active ingredient. That being the case, they are also likely to have an effect on or with other complementary or prescription medications being taken.Consumers must be made aware of the possibility that these interactions may occur and that they may lead to adverse reactions. There have been a number of examples of this outlined in the international and Australian media recently. St John's wort has actually been shown in published clinical trials to be effective in the treatment of the symptoms of anxiety and depression. However, it seems that this herb is metabolised in the body in such a way as to cause dangerous interactions with a number of prescription products.The Therapeutic Goods Administration has posted a warning on its web site to doctors and pharmacists on these interactions and recommended that St John's wort not be taken with the following medicines: HIV protease inhibitors; HIV non-nucleoside reverse transcriptase inhibitors; Cyclosporin, to prevent organ rejection in transplant patients; Warfarin, a blood thinner; Digoxin, for treatment of heart problems; theophylline, for treatment of asthma; anticonvulsants; oral contraceptives; antidepressants; and migraine products. That list really says that, though there are matters of concern in the context of using St John's wort, St John's wort does actually have an impact on the body. This is not to say that people should stop taking St John's wort if it is working, but they should discuss with their GP or pharmacist which of the other products they should stop using.Another example of this was a recent warning by the Food and Drug Administration concerning a Chinese herb called quon dong. People with diabetes should not take this herb as it causes adverse reactions when taken with many diabetes medicines, no doubt a problem for the member for Maribyrnong. These examples raise two issues. Firstly, why aren't potential drug interactions or warnings placed on the labels or packaging of complementary health medicines in the way they are on prescription medicines? Secondly, how are we going to ensure that health professionals and their patients feel comfortable and able to discuss the use of complementary medicines as well as prescription medicines? I believe that the government and industry must act to address the first issue, and quickly. As regards the second issue, I believe pharmacists have a crucial role in counselling their customers about the medications they are taking and whether taking certain combinations is safe or not. Indications are that doctors are now becoming more knowledgeable about complementary health medicines. This is encouraging, but it is also their responsibility to proactively ask their patients questions about the use of these medicines. Surveys in the US have shown that most patients feel uncomfortable about discussing complementary health matters with their doctors, fearing that doctors will be dismissive about the issue. Whether they are or not, doctors have the responsibility to ensure that the health and safety of their patients come before their own beliefs and opinions.These concerns aside, I have been impressed with the way in which the majority of complementary health medicine manufacturers have worked with us—government and consumers—to ensure that their products are used and promoted safely. I congratulate the industry on its work and sincerely hope that the productive relationship developed between them and government continues. The greatest beneficiaries of this cooperation are consumers, who will be able to make informed choices about their health care knowing that the regulatory system that exists will protect their health and safety. On that basis, I commend this bill to the House.10:11:0016000Southcott, Dr Andrew, MPDr SOUTHCOTTTK6BoothbyLP10—The Therapeutic Goods Amendment Bill (No. 2) 2000 is a non-controversial bill that has bipartisan support. It makes a number of amendments to the Therapeutic Goods Act to improve the administration of the act. The main amendments are to introduce new offences for dealing with counterfeit therapeutic goods; to clarify the offence in section 20 of the act relating to the unlawful importation, exportation, manufacture and supply of unapproved therapeutic goods; and to introduce an additional ground to cancel therapeutic goods from the Australian Register of Therapeutic Goods.The Therapeutic Goods Act 1989 established a national system relating to the availability of therapeutic goods. Essentially, therapeutic goods must be entered as either registered or listed goods before they may be supplied in or exported from Australia. After a therapeutic good is evaluated it may be registered or listed on the Australian Register of Therapeutic Goods.The first main amendment proposed in this bill inserts a new part in the act to deal with offences relating to the manufacture, supply, importation or exportation of counterfeit therapeutic goods. It defines what counterfeit goods are and sets out the offence of dealing with counterfeit therapeutic goods and the penalties that apply.In 1996 the TGA reported that, since the commencement of the act in 1991, over 200 criminal charges had been laid in relation to offences involving therapeutic goods. Over 20 per cent of these related to offences of illegal export. Counterfeit medicines have been exported from Australia to Singapore, Malaysia, Vietnam, Spain, New Zealand, New Guinea and the United States. The export of medicines that have resulted in prosecutions by the TGA has involved offences by both licensed manufacturers and sponsors of goods not included on the Australian Register of Therapeutic Goods. More recently, the Parliamentary Secretary to the Minister for Health and Aged Care, Senator Grant Tambling, stated that 87 of the 577 offences prosecuted between 1992 and 1995 involved counterfeiting activities. So it is not something we hear a lot about but it certainly is there. The offences are in line with the WHO guidelines for the development of measures to combat counterfeit drugs. These guidelines describe counterfeit medicines as medicines that are deliberately or fraudulently mislabelled with respect to identity and/or source. Measures required under WHO guidelines require that member countries enact legislation that regulates the manufacture, importation, distribution, supply and sale of drugs so that counterfeit drugs are prohibited by law, to ensure that these drug control laws are enforced and to regard counterfeiting of drugs as a serious offence.The second main amendment replaces section 20(1) of the act. It aims to clarify the offence relating to the unlawful importation, exportation, manufacture and supply of unapproved therapeutic goods. The clarification is needed following recent judicial comments. In a criminal legal action, three different judges interpreted a provision in the Therapeutic Goods Act differently. In 1995, Pan Laboratories Pty Ltd was prosecuted in the District Court of New South Wales under the Therapeutic Goods Act 1989 for alleged offences arising out of the local supply and export of bulk quantities of evening primrose oil capsules in 1993. Pan had originally imported the evening primrose oil capsules into Australia from Thailand. The jury found Pan not guilty on three counts but guilty on the remaining 13 counts. The case went on to the New South Wales Court of Criminal Appeal. Then it was later, on appeal, when the judges disagreed about what the provision of the Therapeutic Goods Act meant.So this amendment is to give some clarification. It ensures that the burden of proof placed upon the Crown in relation to establishing the offence does not lead to different judicial interpretation. The Crown must establish that the accused intentionally imported, exported, manufactured or supplied goods and the goods were not registered. The Crown does not have to establish that the person had knowledge that the goods were not registered, listed, exempt or otherwise approved.The bill also amends section 30 of the Therapeutic Goods Act to add an additional ground for the secretary to cancel therapeutic goods from the register where a person does not comply with a direction or requirement made by the Complaints Resolution Panel in relation to an advertisement concerning therapeutic goods. One of the roles of the Complaints Resolution Panel is to ensure that any advertising of therapeutic goods complies with the Therapeutic Goods Advertising Code. Where a person does not comply with the panel's direction or requirement, this may be ground for cancellation of their goods by the secretary. They are the three main provisions of this bill. As I said before, it is a fairly simple amendment to the TGA. I commend the bill to the House.10:16:0016001Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—The Therapeutic Goods Amendment Bill (No. 2) 2000 seeks to make some long overdue changes to the Therapeutic Goods Act with regard to the manufacture and supply of counterfeit therapeutic goods. It has three purposes: the introduction of a new offence of dealing with counterfeit therapeutic goods, clarification of the operation of the existing offence of importing, exporting, manufacturing or supplying unapproved therapeutic goods, and the introduction of additional grounds on which registration or listing of a therapeutic good can be cancelled—namely, for failure to comply with advertising requirements.The changes are as a consequence of a review of the whole therapeutic goods administration conducted by KPMG. I note with a little dismay that the government responded to the KPMG review's recommendations in 1997 and it has taken some 2½ years for this legislation to reach the House. This kind of delay and tardiness in, firstly, coming up with the government response to reports and then translating that response into legislation is a worrying habit that this government has developed. That having been said, the opposition is not opposed to this legislation as its provisions overcome some of the deficiencies in the act as it now stands. The newly created offences will go some way to preventing and stopping the false and misleading labelling and presentation of therapeutic goods. The amendments allow a new ground for the cancellation of the registration and listing of some therapeutic goods. The bill widens the scope by which the secretary of the Complaints Resolution Panel can cancel the registration. Registration will be able to be cancelled when a direction to adhere to the Therapeutic Goods Advertising Code is not followed. That is a necessary and an important sanction which this bill will allow.Nevertheless, the opposition does have some concerns that this legislation does not go far enough. As the honourable member for Bruce indicated, a case can be mounted that there does need to be much stronger enforcement of the Therapeutic Goods Advertising Code to protect consumers. At the moment, it is only the scheduled medicines that are subject to close evaluation prior to marketing. However, lately there have been a number of cases where products of herbal origin are being promoted as having certain benefits and as if they in some way had gone through some formal approval process. There are some concerns that the legislation does not go far enough to enforce the advertising code with regards to these types of products.Last Thursday, in the Melbourne Herald Sun, in a front page article, there was a warning of parents creating a generation of pill popping children. The article stated that many parents seemed to be looking for quick fixes to minor medical problems, such as an overuse of paracetamol to relieve minor pains and fever. Overuse of paracetamol can lead to liver failure. Children as young as three are using adult antidepressants such as Aropax, Prozac and Valium. There are cases reported of an overreliance on vitamin supplements to make up for poor diet on fast food. While some of these are prescribed drugs, many are purchased over the counter or as natural remedies, and therefore the labelling and presentation of the drugs is vitally important. Rather than relying on doctors or medical information or recommendation of pharmacists to purchase the drugs, the consumer himself or herself is making the decision. Packaging, labelling and presentation of over-the-counter drugs to make the drugs seem more harmless or innocuous can, therefore, be potentially dangerous. Whilst I recognise that much has been done to improve the type of labelling, to the extent that the consumer should be well informed, these are decisions that need to be made not just by the consumer but in consultation with the professional people that are involved, whether they be the general practitioner or pharmacists. For instance, during an inquiry into prescribing for health that I chaired a number of parliaments ago, there was an indication that on these over-the-counter drugs the labelling only applied necessarily to doses for children under certain ages and for adults. One of the things that was put to us in evidence was that some of our senior citizens, because of the changes in their metabolism and body weight, should be warned that they should not take the same adult dose as the normal range of the population. We have to be aware that these informed decisions rely not only on the labelling, which is an important part, but on proper consultation with the consumers' professional advisers.Another thing that concerns me is that, as we see complementary health medicines gaining greater recognition and popularity, we should not do anything that might confuse consumers about their status. This is one of a number of areas where the impact of the GST has led to some confusion. Such confusion might, amongst those that are taking complementary medicines, give rise to concern that in some way government doubts their overall efficacy. Since the Democrats were able, in their negotiated deal on the GST package, to have most natural therapies put outside of the GST, there is one aspect that is of concern. Whilst the Democrats probably thought they had delivered natural therapy users a great victory by securing the same GST status for natural therapies as for others, they were wrong. And how wrong they were. The way that the operation of the GST on natural therapies is currently outlined is that the medicine will be GST free if it is recommended by a natural therapist and the whole dose is taken during that consultation as part of the service. The key here is that the whole dose has to be taken. Taking part of the dose at the consultation and then taking the rest away would not count as part of the service, and therefore would attract a GST. In addition, any therapies bought to be taken outside of the consultation and on an ongoing basis will attract the goods and services tax. Whilst this is quite a bizarre situation, to say the least, I am concerned not only about the tax grounds and the confusion for natural therapists in their role within the GST as tax collectors but also about the confusion that arises in the mind of the consumer in regard to what that sort of treatment of these natural therapies says about their efficacy. I know that natural therapists are in continuing discussion with the government about this anomaly and I hope that it is straightened out.That having been said, as has been said earlier in the debate there is nothing that the opposition has great problems with in the proposed amendments. We support the legislation. The outline of the need for us to have measures to counter counterfeit drugs and preparations has been well advanced. The advances that we can make in the proper labelling of medicines and those things that people are promoting as natural and complementary therapies also are important. I commend the legislation to the House.10:25:0016003Draper, Trish, MPMrs DRAPER0L6MakinLP10—I rise to speak on the Therapeutic Goods Amendment Bill (No. 2) 2000. The Australian community expects that medicines in the marketplace are safe, of a high quality and to a standard which is comparable to other countries. Australia enjoys an international reputation for assessing new drugs and therapeutic devices and for protecting the community from poor quality, unsafe and ineffective goods. Evaluating drugs is a complex and ongoing process, but Australia has one of the best systems in the world. Although this is the case, we must ensure that we maintain our close cooperation with international schemes and organisations to strengthen our links with international markets for Australian products, maintain our overseas accreditation of Australian products and continue the facilitation of an overseas supply of many necessary foreign drugs and devices.All therapeutic goods in Australia must meet certain standards—most of which are outlined in legislation. There are also a number of procedures in place to monitor these standards. Advertising of therapeutic goods is also subject to regulations. The advertising code ensures advertisements are truthful and appropriate and do not mislead the consumer. To this effect, the Therapeutic Goods Amendment Bill (No. 2) 2000 will introduce a new offence dealing with counterfeit therapeutic goods; clarify the operation of the existing offence of importing, exporting, manufacturing or supplying unapproved therapeutic goods; and introduce a further method by which registration or listing of the therapeutic good can be cancelled—namely, for failure to comply with advertising requirements. The Commonwealth Therapeutic Goods Act 1989 provides a national framework for the regulation of therapeutic goods in Australia and ensures their quality, safety and usefulness. It also establishes a uniform national system of control for the Australian availability of therapeutic goods. This framework is designed to ensure public health and safety.On entering Australia, therapeutic goods must either be registered or listed goods before they may be supplied to, or exported from, Australia. Before they are made available to the public and registered or listed on the register, there are a number of factors which are evaluated. Therapeutic goods are assessed with regard to their quality, safety and usefulness for the purposes for which they will be used. They are assessed regarding their conformity with the Australian and international standards, and their manufacture and quality control procedures are examined amongst other factors. This bill will introduce a new offence in relation to counterfeit therapeutic goods. The current act allows powers for entry, search and warrant to ensure that the act and regulations are being complied with, to investigate suspected offences, to obtain evidence and to detect counterfeiting of medicines. Counterfeit therapeutic goods will include those that are falsely labelled or advertised regarding their composition, manufacture or source.`Counterfeit' is defined as containing a false representation on the label or presentation in a document or record relating to the goods or their manufacture or in advertising for the goods. Examples of counterfeiting include deliberate copying of another manufacturer's product and misrepresenting it as the original product; substituting the wrong ingredient into a product or a cheaper ingredient; not including the labelled active ingredient in the product at all or putting something else in instead—for example, labelling and selling vitamin C tablets as an antibiotic; falsely labelling a product to misrepresent what is in it, perhaps so as not to disclose or identify certain ingredients. According to the KPMG Review of the Therapeutic Goods Administration, which was carried out on behalf of the Department of Health and Family Services in January 1997, over 200 criminal charges were laid in relation to offences involving therapeutic goods and over 20 per cent of these related to illegal export.My honourable colleague the parliamentary secretary to the minister for health recently stated, as did the member for Boothby, that 87 of the 577 offences prosecuted between 1992 and 1995 involved counterfeiting activities. The World Health Organisation has requested that governments and pharmaceutical manufacturers cooperate in the detection and prevention of counterfeiting pharmaceuticals. These amendments indicate the government's strong commitment. Intentionally manufacturing, supplying, importing or exporting counterfeit therapeutic goods will now clearly be an offence.The World Health Organisation recommendations relating to anticounterfeiting, as outlined in the 1988 World Health Assembly resolutions and publications on counterfeit drugs, highlight the need for individual countries to `have a legal and administrative framework in place to define and control the legitimate drug market and the drug distribution system before effective controls can be applied to illicit trade and counterfeiting'. Section 20 provides the framework for assisting in compliance with this World Health Organisation recommendation.The aim of the new section 20 is to make it clear that a person needs only to have intended to import, export, manufacture or supply therapeutic goods for use in humans to be guilty of the offence. This amendment has been introduced in light of recent judicial comments and the decision of the High Court in relation to the 1995 Pan Laboratories case against the New South Wales Director of Public Prosecutions. As the Minister for Health and Aged Care outlined in his second reading speech: Upon conviction of a sponsor of therapeutic goods at a criminal trial, a District Court judge held that the construction of this provision had a particular meaning, but on appeal to the Supreme Court, Full Court (Court of Criminal Appeal) by the accused, two Supreme Court judges held the provision could be interpreted differently, and a third Supreme Court judge held it had yet a third meaning. Upon appeal by the Crown to the High Court of Australia to resolve the actual meaning of the provision, the High Court held that the remedy lay in the amendment of the section, not in the appeal process.In response to this decision, this amendment will ensure that the burden of proof placed upon the Crown in relation to establishing the offence is clear and not open to such differing judicial interpretations. It will now be clear that the Crown must establish that the accused intentionally imported, exported, manufactured or supplied the goods concerned and that the goods were not registered, listed, exempt or otherwise approved. There will also be a new ground to cancel registration or listing. All advertisements which display more than the brand price, type of goods and place or time of sale must be approved for publication under the 1990 regulations. Therefore, all advertisements which appear in the mainstream media will generally require approval and will need to comply with the Advertising Code before they will be approved. The Complaints Resolution Panel will hear complaints and may request a person to withdraw an offending advertisement or publish a retraction. In summary, the amendments to the Therapeutic Goods Act 1989 will in effect replace subsection 20(1) of the act to make it clear that the fault element of the intention applies only to the act of importing into Australia, exporting from Australia, manufacturing or supplying in Australia therapeutic goods for use in humans. The subsection does not require that the fault element of intention needs to be proven in connection with whether the goods are listed or registered on the Australian Register of Therapeutic Goods or are exempt from inclusion on the register or are the subject of approval under sections 19 or 19A of the act. This new part of the act deals with offences for the manufacture, supply, importation or exportation of counterfeit therapeutic goods. This part sets out the offence of dealing with counterfeit therapeutic goods, the penalties that apply to the offence and what counterfeit goods are. The maximum penalty for an individual who commits an offence in relation to counterfeit therapeutic goods will be five years imprisonment and a fine of 500 penalty units—currently $55,000. A corporation that commits an offence may be fined up to $275,000. It will include an additional ground for the secretary to cancel therapeutic goods from the register where a person fails to comply with a direction given a requirement made by the Complaints Resolution Panel in relation to advertisements concerning therapeutic goods. The role of the Complaints Resolution Panel includes ensuring that any of the advertising of therapeutic goods complies with the Therapeutic Goods Advertising Code and, where a person does not comply with the panel's direction or requirement, this may be a ground for cancellation of their goods by the secretary. I commend the bill to the House.10:35:0016005May, Margaret, MPMrs MAY83BMcPhersonLP10—The purpose of the Therapeutic Goods Amendment Bill (No. 2) 2000 is to make a number of amendments to the Therapeutic Goods Act 1989. The bill enshrines in legislation the serious nature of manufacturing and distributing counterfeit or substandard drugs. The amendments introduce new offences and seek to clarify the offence relating to dealing with unapproved therapeutic goods and to punish suppliers who refuse to advertise their goods truthfully and ethically.It is important to note that this bill addresses the deliberate production and supply of counterfeit therapeutic goods. The government has previously commissioned a review into the Therapeutic Goods Administration and key aspects of Australia's regulation of medicinal products. The intention of this bill is to act on some of those recommendations. The bill aims to promote and enhance the reputation of the therapeutic goods industry and to ensure that the health and wellbeing of the Australian and overseas consumers are preserved. Any government has a duty to protect the health and interests of its citizens from substandard products and unscrupulous operators.Counterfeit drugs give false hope to consumers who may be suffering from a medical or possibly a cosmetic condition. In addition to protecting Australian consumers, as a government we must also work to expand upon Australia's reputation as a responsible, reputable export nation. Part of our international responsibilities as a signatory to the World Health Organisation Guidelines for the Development of Measures to Combat Counterfeit Drugs is to ensure that our legislation takes all necessary measures to prevent the production and distribution of counterfeit products. The World Health Organisation guidelines require that the legislation of member countries regulate the manufacture, importation, distribution, supply and sale of counterfeit drugs. The guidelines require Australia to ensure that this legislation is enforced and that our courts are able to impose harsh penalties on individuals or organisations that breach these laws.The counterfeiting of drugs is a serious offence, and it is time it was recognised as such. By signing the World Health Organisation guidelines, Australia has clearly already agreed to the principles that the Therapeutic Goods Amendment Bill (No. 2) 2000 outlines. Now we must put these principles into practice. If we compromise our reputation as a responsible international citizen in relation to therapeutic goods, it will not only damage our pharmaceutical industry but also have flow-on effects for our other export industries which we rely on heavily. But we also have a responsibility to those here in Australia. Turning a blind eye to substandard therapeutic goods would breach our responsibility not only to the upright members of the industry but also to public health considerations. If a consumer is using a counterfeit medicinal product with the wrong ingredients, an insufficient quantity of active ingredients or without active ingredients, they may be neglecting to use another product which would result in actual health benefits. The negative health consequences of neglecting to properly treat the problem could be serious. In short, this government does not believe that there are any benefits in allowing counterfeit drugs to be sold to the Australian people or exported to other markets.The bill's second main amendment will clarify the confusion surrounding section 20 of the act which relates to the unlawful importation, exportation, manufacture and supply of unapproved therapeutic goods. The decision of the High Court in the case of Pan Laboratories Pty Ltd and the Director of Public Prosecutions highlighted the ambiguous nature of section 20. Section 20 has been interpreted differently by a number of judges, both at the initial trial and on appeal to the point where the High Court found that the problem could be resolved only through an amendment to that section of the act. By amending this section, the government will clarify the burden of proof on the Crown in relation to establishing that an offence has actually occurred and that the intention was there to commit the offence. This will prevent the future spending of taxpayers' resources in the courts and the burden on the judicial system in an attempt to interpret this ambiguous section of the legislation.The bill's third main amendment seeks to enable the Complaints Resolution Panel to enforce the provisions of the Therapeutic Goods Advertising Code. This amendment gives the secretary an additional mechanism to cancel a supplier's goods from the Australian Register of Therapeutic Goods. This amendment applies if a supplier of goods advertises these goods in a way which contravenes the Therapeutic Goods Advertising Code and has not complied with a direction from the Complaints Resolution Panel to remedy that breach. Again, this amendment is about protecting the consumer, because it gives the Complaints Resolution Panel the power to enforce its decisions. It ensures that the panel is not a toothless tiger. If the public or another member of the industry identifies a problem or a hazard in the way a supplier is advertising or promoting its drugs to consumers, then this must be dealt with.The advertising code is there to protect the public from misleading claims and unrealistic expectations of the outcome that a product can realistically deliver. Because it is often the case that consumers of therapeutic goods are suffering from a health ailment or a desire to change an aspect of their physical appearance, there are often emotions attached that may make them more vulnerable to purchasing the product than they would otherwise be. Suppliers know that in these circumstances the attitude of `I'll try anything' often prevails. There have been instances where suppliers have used advertising to exploit that. More often than not, there are no miracle cures. The intention of this amendment is simply to ensure that a product lives up to the claims its promoters make. The amendment preserves a system of checks and balances as any decision to remove goods from the register is subject to review by the Administrative Appeals Tribunal. Therefore, reputable manufacturers and suppliers will not be affected, but the bad seeds in the industry will be weeded out. For the above reasons, and in the interests of public health and meeting our international obligations, I commend this bill to the House. 10:41:0016007Bishop, Bronwyn, MPMrs BRONWYN BISHOPSE4MackellarLPMinister for Aged Care10—The Therapeutic Goods Amendment Bill (No. 2) 2000 makes three main changes to the Therapeutic Goods Act of 1989. Firstly, the bill inserts new offences for the importation, manufacture, exploitation and supply of counterfeit therapeutic goods. Secondly, it clarifies the operation of an existing offence in section 20(1) of the act. Thirdly, it inserts an additional ground for cancelling therapeutic goods from the Australian Register of Therapeutic Goods, known as the register. The effect of the cancellation is to remove a sponsor's right to import, export, manufacture and supply therapeutic goods for use in humans as outlined by the member for McPherson.With regard to the introduction of offences relating to counterfeit therapeutic goods, these provisions seek to put into effect the recommendations of the KPMG review of the TGA in 1997 and the government's response to that view. The amendments also seek to give effect to the current World Health Organisation guidelines for the development of measures to combat counterfeit drugs. Counterfeit drugs pose a significant public health risk to consumers and also have the potential to damage the reputation of the Australian export industry generally and Australia's pharmaceutical export market specifically. These amendments allow Australia to honour its obligations as a responsible member of the international community in combating the trade in counterfeit medicines.With regard to the initiative to clarify the operation of the offences provision in subsection 21 of the act dealing with unlawful supply of therapeutic goods, there has been significant confusion about the proper construction of this provision. It was unclear which party had the burden of proving the elements of the offence and also what had to be proved. This became apparent following the prosecution of an accused before a District Court, a Supreme Court, the Full Court and a Court of Criminal Appeal. Four superior court judges held the construction of the provision had three different meanings. The Crown appealed to the High Court of Australia to ascertain the meaning of the provision. The High Court held that the problems arose from the construction of the provision and that the remedy lay in an amendment to the section not in the appeal process.This amendment will ensure that the burden of proof placed upon the Crown is clear and not open to such differing judicial interpretations. The amendment makes it clear that the Crown must establish: firstly, that the accused intentionally imported, exported, manufactured or supplied the goods concerned; and, secondly, that the goods concerned were not included in the register or otherwise exempted from the requirement to be so included. There is an exception in certain circumstances that the importation, exploitation, manufacture or supply of goods is unlawful unless the goods are included on the register.Finally, cancelling the therapeutic goods from the register will remove the right of the sponsor of the goods in question of lawfully importing, exporting, manufacturing and supplying the goods for use in humans. Recent changes to the therapeutic goods regulations confer additional powers upon the Complaints Resolution Panel, established under the regulations to deal with persons who publish advertisements in mainstream media about therapeutic goods in contravention of the Therapeutic Goods Advertising Code.The effect of this amendment is to provide that, where the Complaints Resolution Panel gives a direction or takes action to address unlawful publications of advertisements about therapeutic goods, and the person directed to take remedial action fails to comply with the panel's directions, then this may be an additional ground for removing the goods from the register. Any action taken to remove goods from the register is subject in the first instance to an internal review and then to the merits review by the Administrative Appeals Tribunal. I commend the bill. Question resolved in the affirmative.Bill read a second time. Ordered that the bill be reported to the House without amendment.Bills16008R93916008Debate resumed from 12 April, on motion by Mr Hockey:That the bill be now read a second time.upon which Mr Kelvin Thomson moved by way of amendment:That all words after `that' be omitted with a view to substituting the following words:Whilst not declining to give the bill a second reading, the House expresses its concern with:(1) recent revelations about the administration of the Australian Taxation Office;(2) the misleading claims of the Government concerning its taxation proposals;(3) the flawed implementation process of the various new taxation arrangements;(4) the role of the Tax Office in the transition to the new taxation arrangements; and(5) the fundamental unfairness and complexity of so much of the new tax arrangements.10:45:0016008Murphy, John, MPMr MURPHY83DLoweALP00—I rise this morning to generally support the Taxation Laws Amendment Bill (No. 10) 1999. As you know, the bill primarily deals with the following areas: income tax deductions for gifts, income tax exemptions for specific disaster relief payments, integrity measures for mining expenditure in relation to income tax and petroleum resource rent tax, and capital gains tax rollover relief for managed investment schemes and for film licence companies.I also support the amendment moved by the member for Wills and assistant shadow Treasurer, Mr Kelvin Thomson. The main purpose of the bill is to remedy inadvertent operation of certain tax laws and establish new rules which include: the transfer for pre-existing collective investment schemes to the requirements of the managed investment fund regime; exempts distributions from the Cyclones Elaine and Vance Trust Fund; and elucidates who may apply for a deduction for specified expenditure incurred in a petroleum exploration. I will deal with each of these amendments in turn and then I will say something about the GST.The managed investment funds were introduced in 1998 as a new structure for collective investment bodies. All collective investment bodies are expected to operate as MIFs by 1 July 2000. The main provision related to MIFs will ensure that existing entities who are presently operating under the old structure may have undesirable taxation consequences, chiefly regarding capital gains tax. The transfer of assets from the old identity to the new would constitute a disposal for capital gains tax purposes and result in the need to pay capital gains tax on any gains. The Assistant Treasurer has already announced capital gains tax rollover relief based on several conditions including: that the transfer of assets transpired according to the transitional provisions contained in the Managed Investments Act 1998; that there is no change in the underlying ownership of the property involved; and that the scheme existed at the time of the announcement.Basically, the bill works to amend the Income Tax (Transitional Provisions) Act 1997 to ensure that the rollover relief will also be available where a change which affects member interests satisfies the following conditions: there is no change in value between the members or classes of members; the market value of members' rights are not reduced; and there is no change in the membership of the scheme. These will generally apply where there is a subsequent change not essential to satisfy the requirements to change to an MIF but which will improve the operation of the scheme. I now turn to the Cyclones Elaine and Vance Trust Fund, which is $10 million of storm assistance provided in 1999 to apply to individuals, businesses and other communities. Basically, the amendments ensure that no amount of money received as business assistance from the trust fund may be included in income or that no capital gains tax consequences may arise from any assistance from the trust fund. This is a good thing for those businesses which are still rebuilding after the devastating effects of those cyclones on Exmouth, Onslow and Moora in Western Australia.I would also like to turn briefly to the provisions relating to the petroleum resource rent tax. The PRRT is presently imposed on offshore petroleum projects and levied at a rate of 40 per cent of a project's taxable profits. The amendments work to amend the Petroleum Resource Rent Tax Assessment Act 1987 to enable deductions to be allowed to the person who incurred the expenditure when a site is abandoned, rather than to the new operator of the site. Under the amendments the deductions will only be transferred where consideration is received for the change in the lease for the relevant site. This is a very straightforward and reasonable change.I now turn to the essence of the amendments. I am seriously concerned about the issues raised yesterday in the House by my colleagues the member for Wills, the member for Rankin and the member for Griffith. My colleague the member for Wills is right when he says the Australian Taxation Office is completely overloaded. The tax office, since the election of the Howard government, has been burdened with the implementation of the GST, the changes to the pay-as-you-go tax and the Ralph business tax changes, as well as taking over responsibility for collecting excises from Customs. One of the problems is that the tax office did not receive more resources from the government to employ more staff to properly carry out these extra duties.The member for Wills is completely right when he says that basic tax office tasks such as fighting tax avoidance and ensuring the integrity of the system have fallen by the wayside. His example yesterday was of the petrol and diesel companies that were conducting fuel substitution rackets to reduce the amount of excise on fuel. This is appalling. The fact that up to $100 million may have been lost in the 12-month period prior to 15 November 1999 is an absolute disgrace. In fact, this figure may be grossly underestimated, according to industry sources. My constituents in Lowe are very angry that they have to foot part of the tax bill of unscrupulous tax evaders such as these.I also wish to talk about the fact that the tax office has not released information as to what schemes may be affected by being deemed unlawful. In 1998 the tax office advised all taxation practitioners that schemes such as employee benefit trusts, offshore superannuation schemes and employee share schemes—which are designed to avoid a mix of income tax, fringe benefits tax, superannuation contributions tax and the superannuation surcharge tax—were improper. The questions that were raised yesterday by the member for Wills are questions that Australian taxpayers are entitled to receive answers to. I will repeat them here for the benefit of this chamber. Firstly, what action did the tax office take to enforce its announcement in 1998 that it was cracking down on those schemes? Secondly, if it did crack down on those schemes, why are they still being peddled? These are questions of great importance to ordinary Australians who do pay their fair share of tax.I would like to say something about the GST and the amendments moved by the member for Wills. The government's fixation on implementing the GST no doubt bears some responsibility for these taxation cheats which I have already mentioned being able to get away with the schemes they devised for the loss of over $100 million on fuel excise. It is hypocritical in the extreme that the government has focused on implementing a tax scheme which I believe will fail to ensure that tax cheats will be caught and will pay their fair share of tax. This is because the majority of tax cheats are wealthy people who are able to reduce their income to very small amounts. As I said this week in the House, the GST is going to mean that these people will be getting their pearls, their spa baths and their fur coats cheaper. With regard to our amendments, the tax office is under great pressure at the moment and this is having an enormous impact on the government's commitment that business can contact the tax office and have a reply to an inquiry within five days. Clearly, from the reports that are around in the press at the moment, this is not being met as the tax office is consumed with GST inquiries and problems from both individuals and business. As I said in the House in the MPI debate on Tuesday, small business people in my electorate of Lowe hate the GST. They hate the idea of having to act as tax collectors for the Taxation Office. They hate the implementation costs of the GST. They hate the amount of time they have had to lose from running their businesses to understand the obligations imposed on them by the Howard government. They hate the unfairness of the GST. Everywhere I go in my electorate people express their concerns about this regressive tax. They know it is not a fair tax. As I said in the House on Tuesday: how can a flat tax be fair?When people realise that many luxury items currently contain a wholesale sales tax rate of 32 per cent, which will drop to 10 per cent after 1 July, they are outraged. I have referred to some of those—for example, cultured pearls, fur coats and spa baths. Quite plainly, these items should always be heavily taxed because most of the battlers, particularly ones in my electorate of Lowe, cannot afford to buy these items. Effectively, what we are doing is making it easier for the rich to buy such luxury items.But it gets worse. When the GST is introduced on 1 July, the ordinary person will have to pay 10 per cent more for a lot of food items, like cakes, slices and pastries, soft drinks, most milk and fruit flavoured drinks, pies, pasties and sausage rolls, biscuits, chocolates and lollies, prepared supermarket meals, potato chips, corn chips and nuts, doughnuts, croissants and scones, McDonald's, Sizzlers, Hungry Jacks, Burger King, KFC and Red Rooster meals, fish and chips, Chinese takeaway meals, ice-cream and iceblocks, pizzas, frozen and takeaway Asian foods. These are things that ordinary Australians consume on a daily basis.In the area of housing—and we all wish to own a home and we certainly have maintenance costs in our homes—the GST is going to apply to house extensions, furniture, carpets, curtains, light fittings, kitchenware, linen and gardening equipment. There are other items which are used every day by a family, particularly where there are young children. The GST is going to apply to prams and cots, second-hand cars, tampons and sanitary pads, bicycle helmets, wedding dresses, wedding rings, coffins; and, in the area of clothing and education, to babies clothes, school uniforms, skirts, shirts, shorts and trousers, all other clothing, shoes, stockings and socks; and to books—except some textbooks which are exempt—most stationery, newspapers and magazines. But the big killer with the GST for most people is in the services area, and that tends to get lost in the GST debate. When people get their electricity and gas bills they will be subject to a GST, and also on their telephone bills and postage costs. When a lady goes and has her hair done there will be an extra 10 per cent on the perm. It will apply when you get public transport—buses, trains and taxis—and to membership of local clubs, RSL clubs and other sporting memberships, home and contents insurance, car insurance, plumbing, swimming pools, swimming lessons for the kids, lawn mowing and gardening, painting and home repairs, wedding receptions, investment advice and when you take the cat or dog to the vet. Another 10 per cent will apply to video hire and movie tickets, dry-cleaning, travel costs—for example, when you take the family to a hotel, motel or caravan park and for air fares—and car repairs, TV and electrical repairs, funerals, all sporting tickets, legal services, home delivery, fast food, second-hand dealers, weight loss courses and hiring a community hall. So there are many areas in services which people are not aware of which are going to be subject to the GST after 1 July. The government often says that education is GST free. We know it is not when it comes to items such as school uniforms, school shoes, stockings and socks, some books, stationery, public transport and some excursions. They are relevant for kids travelling to and from school. One of the other things about the GST is the fact that people will not know what they are paying because, in most cases, the GST will not appear on dockets. So what we have here is a hidden tax. The Treasurer has been asked many times in the House why the GST will not appear on a docket. Obviously, the government wants the GST to be a hidden tax.7K6Entsch, Warren, MPMr Entsch—What about the wholesale sales tax?83DMurphy, John, MPMr MURPHY—We know the wholesale sales tax is in there at the moment. I am glad the member for Leichhardt raised that. 7K6Entsch, Warren, MP83DMurphy, John, MPMr MURPHY—You listen. You know that what I am saying is correct. Many times in the chamber I have referred to some luxury items in the 32 per cent rate which are going to be reduced to 10 per cent, but there are many other items which are subject to a wholesale sales tax at 22 per cent, 20 per cent, 17½ per cent and 15 per cent. We hear many times from your side that it is a wonderful thing that the wholesale sales tax is going to disappear and that we are going to reduce the higher levels to 10 per cent. The point that you are not making—and this is where the dishonesty comes into it; the member for Leichhardt is a businessman and he knows that what I am saying is true—is that the wholesale sales tax applies at the wholesale point of sale and the GST applies at the retail point of sale. There are cases where the mark-up is much higher and a GST at 10 per cent at the time of retail in some cases can be higher than a 17½, 20 or 22 per cent wholesale sales tax. The member for Leichhardt knows that. I am not saying that happens in all cases. We get this dishonesty on a day-to-day basis from the government. It says that the wholesale sales tax is going to be reduced from 25 per cent and 22 per cent down to 10 per cent without telling the full story. It certainly does not get any better. The Senate committee, which inquired into whether the GST will be good for the economy, revealed that `the inflationary impact of the GST will not be 1.9 per cent as claimed by the government but more than four per cent; the federal Treasury did no economic modelling of the economic impacts of the GST before the government made its election claims about the economic benefits of the GST'—and that is on record—`the GST will be job destroying in our view, especially in the labour intensive areas of tourism, education, entertainment and retailing industries; the GST is likely to slightly reduce average Australian living standards and might, under optimistic assumptions, raise living standards by the equivalent of 60c per person after 10 years; and the GST will not improve national savings.' That was the expert evidence given to the Senate GST inquiry. The claim that the GST will replace all existing taxes is not true either. We are still going to have income tax and payroll tax; alcohol, cigarette, petrol, and diesel excise; stamp duty on buying a house, hire purchase, insurance, cheques, mortgages and bank accounts; debits tax, customs duty, gambling taxes, other state fees and charges and local council rates fees and charges. How can the GST be a fair tax? Let us look at some of the local government areas where fees and charges apply: fire levies contained in insurance policies are going to be subject to a GST, 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. They are all subject to a GST. When you talk to small businesses—and I do particularly in the Five Dock and Burwood area—you find that they are absolutely outraged at the complexity of the GST because, as we know, the explanatory memorandum for the legislation is thousands of pages long, is thicker than three telephone books, weighs in excess of 5.1 kilograms and there are over 1,000 amendments. How can you expect the ordinary person to come to grips with that? The GST is really going to affect self-funded retirees and pensioners. The government claimed before the election that 10 per cent GST would increase the cost of living by only 1.9 per cent. With some food taken out, the figures should have fallen. However, the government now says it will be 50 per cent higher. In fact, the Treasurer has agreed with bank economists who have predicted that inflation will exceed five per cent when the GST comes in. Already some prices—for example, insurance—have gone up by almost the full 10 per cent, much higher than the government predicted. The Senate GST inquiry which, I should have said earlier, Labor insisted on, proved that this higher inflationary impact would occur. Pensioners and self-funded retirees are really going to be slugged when the GST comes in on 1 July. The age pension will go up from 1 July by four per cent, or about $7.25 a week for single pensioners and around $6 a week for each member of a pensioner couple, but from March 2001, when the pension is automatically adjusted for inflation, half of the initial four per cent pension increase will be taken back. The real increase in the pension will therefore be two per cent, rather than the four per cent claimed by the government and the Democrats. The pension will continue to be linked to Labor's benchmark—I should make that point—of 25 per cent of average weekly earnings. Other allowances and rent assistance will also go up on 1 July 2000, but I can imagine that, with the effluxion of time, that compensation is going to evaporate.Quite plainly, these are the people we should be most concerned about when the GST comes in, because, as we say so often in the House, this is a regressive tax: it impacts on those in our community who are most vulnerable. As a result, the GST permanently reduces the purchasing power of any meagre savings that pensioners and self-funded retirees have in their bank accounts. The small amount of compensation that the government is offering pensioners and self-funded retirees is not going to help them, other than for a very short period. We are all living longer and are going to be needing every possible bit of assistance and help from the government. It just galls people when they read in the papers every day that the rich and powerful, through the employment of discretionary trusts and moving their money offshore, in effect pay little or no income tax, yet ordinary people—the battlers that the Prime Minister said that he was elected to govern for—continue to be slugged. (Time expired)11:07:0016012O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—I rise to support the amendment that has been moved by the honourable member for Wills to the Taxation Laws Amendment Bill (No. 10) 1999. I congratulate the honourable member for Wills and the previous speaker in this debate, the honourable member for Lowe, for the comments that they have made about the current state of the Australian taxation system and the proposal of the government to introduce the GST. The honourable member for Lowe has just explained the far-reaching implications of this taxation change. They are so substantial that they are going to impact very heavily on low income earners. I would suggest that people read the speech that has just been delivered, because the honourable member for Lowe is known around this place for his integrity in these matters and his genuine concern for the impacts that this type of change in government legislation is going to have on the Australian public.I turn my attention now not to GST matters but to one particular element of the Taxation Laws Amendment Bill (No. 10) 1999 . It relates to the provision to afford tax deductibility for donations made by the public of Victoria, especially the public of Geelong and the community I represent in this parliament, to the Linton Fire Trust. Members may recall that on 2 December 1998 a tragedy occurred near Linton, a rural town in Victoria, when five Geelong firefighters perished in a bushfire. Those firefighters were Gary Vredeveldt, aged 47; Jason Thomas, aged 25; Stuart Davidson, aged 28; Chris Evans, aged 27; and a very young man, Matthew Armstrong, who perished at the tender age of 17. This was a tragedy of significant dimensions for the families concerned, for the firefighters from the Geelong West fire station and for the Geelong community. Many of these firefighters had come from families with very long histories of dedicated voluntary service in country firefighting. In the case of Matthew Armstrong and his family, he only ever wanted to be a firefighter and he perished at an early age in pursuit of that ambition. The death of those firefighters had an enormous impact, as members would appreciate, on family members. It also had a tremendous impact on other firefighters in that very small station at Geelong West in my electorate. The response of the Geelong community at the time was one of extreme shock. The community rallied around in a variety of ways to support the next of kin, friends and comrades from that Geelong West fire station who knew the firefighters who perished.Part of that community response was to donate a significant amount of money to the Linton Fire Trust, which was set up with the assistance of the City of Greater Geelong and the firefighting authorities in the state of Victoria. That fund received tremendous support and donations from individuals, the corporate sector and various community groups right throughout the Geelong region and also Victoria. This was a tragedy that bit very deeply into all regional communities because it was a tragedy that could have happened to any number of communities around the state of Victoria, where volunteer firefighters gather to train, to give their time and effort in defence of their communities in the case of these disasters. In this tragedy, it was five Geelong firefighters from my electorate.I paid tribute on the floor of the parliament at the time to those firefighters. It was in that general upsurge of support and sympathy for the next of kin that many people donated very generously to the trust that had been set up, so that the surviving families could be taken care of, and the families who had been seriously affected by the tragedy could plan their future with the assistance of those donations that were made.The issue of tax deductibility for the donations that had been made was the topic of conversation from the time of the fire and the time of setting up the trust, when in May 1999 the government announced, in response to community representations, that it would allow tax deductibility for those donations. Money continued to flow into the trust during 1999. The government introduced the bill into the parliament in October 1999 to give legislative effect to the commitment that it had made in May to allow tax deductibility for those donations to the Linton Fire Trust.I must put on the public record my disappointment that it has taken so long for us to consider Taxation Laws Amendment Bill (No. 10) 1999 and this particular item in it. I have drawn the minister's attention to the delay that has taken place. Let me put on the public record my disappointment that he has not replied to the letter that I sent, which urged him to bring this bill into the parliament, to have it debated and to have it passed through parliament. The problem is this: the trustees of the fund have disbursed roughly half of the moneys that were collected. On legal advice, they have not been able to disburse the remainder of the fund to the families. They have had to legally protect themselves against potential claims by members of the public should, for some reason, this legislation not pass the parliament.I know that the honourable member for Corangamite and other honourable members would not, for any reason, in any shape or form, prevent this legislation from being passed. Our collective minds would find a way for this legislation to be passed by the parliament. So there is bipartisan support for its passage. The point of angst has had to do with timing. This legislation has been on the Notice Paper for many months; it was first introduced in October 1999 and it has fallen off the back of the legislative truck on too many occasions. We know why that is so: there have been so many amendments to the government's general taxation package on the introduction of the GST that this minor, tidying-up piece of legislation has fallen off the back of the truck. I drew that matter to the attention of the minister and made a plea to him some time ago to bring this legislation into the House, have it passed, let it go to the Senate and have it passed there so that the donations that were made to the Linton Fire Trust could be made legally tax deductible. On the basis of the legal advice that the trustees had received, they could then proceed to disburse the remaining amounts to the families, who really want to get on with their lives after this tragedy. We are now well over a year down the line as far as the restructuring of their lives and planning for their future are concerned. They could have done with this assistance many months earlier. My plea now, on the floor of this chamber, is for the government to expedite this bill quickly through the Senate. As their local member, I want a speedy passage of this bill from now on. I do not want to see it remain on the Senate Notice Paper and then fall off, with the matter being dragged on for many more months. I want this matter dealt with by the government very quickly. I am sure that members opposite will agree that it needs to be done. It is a provision in a larger bill; I understand that. It might not have the priority given to other taxation bills that the government has on its legislative agenda, but my plea today is to the minister, to the Leader of the House and to government members: make sure this bill gets a speedy passage. In that way, the tax deductibility for those donations can be assured and the trustees will then be in a position, consistent with their legal advice, to disburse the remainder of the trust fund to the family members. I assure the House that those family members will be eternally grateful to us if we proceed along that path.I have been bitterly disappointed to this point with the performance of the minister and the government in this matter. I have drawn the issue gently, given the sensitivities concerned, to the attention of the government without making a song and dance about it and without pulling stunts on the floor of the House. I have tried to handle this matter in a sensitive way and I will continue to do so. But I want an assurance from the minister that this legislation will receive a speedy passage through the Senate.11:19:0016014Snowdon, Warren, MPMr SNOWDONIJ4Northern TerritoryALP00—At the outset, I want to commend the member for Corio for again raising in the chamber a very important matter in relation to a sacrifice made by a community and the inability of this parliament to respond appropriately and in time to the special needs of that community. We, as parliamentarians, have a responsibility to ensure that issues such as that raised by my friend the member for Corio are addressed expeditiously by this parliament and not allowed to drag on in a way which provides a community with a view that the parliament is not able to respond quickly to crises or to respond appropriately when there is a special need.It is very important that we accept the spirit in which the member for Corio made his contribution. As he said, he has not sought to smack the government around the ears with this. He has seen that there are members on the other side of the parliament who have an interest, and he has tried to work constructively to ensure that this matter is properly dealt with. But to date it has not been. In support of the member for Corio—I might say that I have a vested interest: not only are we both Geelong supporters, but I also have a number of relatives who live in his electorate and vote for him—I know that this parliament will treat the Taxation Laws Amendment Bill (No. 10) 1999 expeditiously in the context of his concerns and understand and hear the message that it is not appropriate for them to stall this legislation any further. Once this legislation is passed through the House it should be passed through the Senate immediately or as quickly as possible thereafter. I just want to repeat that the amendments moved by the Labor Party deal with the recent revelations about the administration of the Australian Taxation Office which are, of course, on the public record; the misleading claims by the government concerning taxation proposals which are, again, a matter of the public record; the flawed implementation process of the various new taxation arrangements which are also a matter of the public record; the role of the Taxation Office in the transition to the new taxation arrangements; and the fundamental unfairness and complexity of so much of the new tax arrangements.In this place during the last sitting week—in fact, in this chamber—I was addressing an issue to do with a report to this parliament on a committee which had held an inquiry into regional Australia. I said at that time that I thought a real issue for this parliament was coming to terms with the particular needs of the various regions across Australia and not to have a view that one size fits all. Unfortunately, despite maps which have emerged over the last couple of days to do with fuel, my view is that the government, in developing this tax package, has not properly understood the needs and concerns of regional Australia.I made the point in a previous contribution that when people discuss regional Australia generally in this place—and I note the member for Leichhardt is in the chamber—they are not referring to northern Australia; they are not referring to the Northern Territory, the Kimberley, the northern part of South Australia, far western Queensland or, dare I say, Cape York. They are dealing with and are concerned about Gippsland, the Mallee and the south-west of Western Australia. When they have a picture in their minds of regional Australia, that is what they see. They have little experience or understanding of regional Australia in the way that I see it.What I see when I discuss regional Australia in the Northern Territory is a relatively small number of pastoral holdings—something in excess of 250 throughout the Northern Territory; a number of mine sites scattered around the Northern Territory; and a large number of discrete Aboriginal communities scattered around the Northern Territory, some hundreds of them. Yet when I sit in this place and I hear the government dealing with this tax package, what they talk about are the farmers. They do not talk about the large number of small communities scattered around vast areas of northern Australia, not only in the Northern Territory but also in the electorates of the member for Leichhardt, the member for Kennedy, the member for Kalgoorlie and the member for Grey.In the tax proposals which have been put forward by the government, nothing is done to address their particular needs, nor is there any understanding of the nature of those communities. In my own experience, all of the communities in the Northern Territory, including towns like Alice Springs and Tennant Creek, rely to a greater extent than other communities in Australia on government transfers—in other words, CDEP, Work for the Dole equivalent, or other allowances for the unemployed, the disabled or those who are otherwise unable to be in the work force.The cost structures that these people confront in these communities are the highest in Australia. The member for Leichhardt ought to be aware of surveys which have been done by the Queensland Department of Health and the Northern Territory Department of Health about the cost of living that confronts people in these communities. I have mentioned previously in this place that there are many communities in Northern Australia where people are paying, for an average basket of goods as applied to all capital cities, 150 per cent compared with the cost of those goods in a place like Sydney.Understand what I am saying here. We are talking about people who, if they are on CDEP, might have a weekly income of $180. The majority of the goods, apart from fresh fruit and vegetables, are GSTable. We are led by this government to believe that the panacea for these people will be reduced freight costs as a result of the change in the treatment of fuel excise. I have a bit of a thing about this. I do not believe they fully comprehend the cost of running vehicles in remote Australia. Let me just make a point that I have made before in this parliament. To run a road train across the Tanami Road—roughly a 500-kilometre stretch between Alice Springs and the Granites Mine to the north-west of Alice Springs—from the Stuart Highway to the Granites is roughly twice the cost of running the same vehicle up and down the Stuart Highway. While fuel is an important component of the cost of running that vehicle, a more important component is the depreciation that occurs as a result of running this vehicle along roads which are grossly unsuitable and which require a great deal of work and maintenance. These roads are not funded in an appropriate way by this government or by state and territory governments. This tax package is grossly unfair because it does not address the needs of these communities. In the last couple of days we have seen in the parliament the way in which the Prime Minister and the Treasurer have fudged issues. They have come out with a new proposal to spend the resources they would otherwise have had available to them for other purposes to compensate individuals in communities. What is the government proposing to do? I say to the Member for Leichhardt, as he walks out of the chamber, given that a large number of people in his electorate are directly affected by what I am saying, what is the government going to do to provide appropriate compensation for the impact of this inequitable and cruel tax on people who live in the many remote communities around Northern Australia? We are not talking about the wheat belt. Dare I say to my friend that we are not talking about the Latrobe Valley or Gippsland. What we are talking about here are very small widely dispersed rural communities.Understand, Madam Deputy Speaker, something which is totally beyond the comprehension of most members of this parliament. My electorate is 1.4 million square kilometres. I have 110,000 voters. Thirty per cent of those voters are indigenous Australians. The bulk of those indigenous Australians live in remote communities well away from metropolitan areas. Nothing in this GST package deals with their needs. We saw the Prime Minister dining with the members of the ATSIC board the night before last. I wonder whether the Prime Minister had the guts and gumption to tell those people, honestly and unequivocally, how their communities will be affected by this GST package. Forget the bull that we hear in this place and understand the reality: there is not sufficient compensation being provided which will enable these people in these communities to wear the cost of this GST package.I will relate a small incident. You would know, Madam Deputy Speaker—or you may not know—that for a store which turns over about $1½ million in a community of, say, 400 or 500 people, such as Nooka in the Gulf country, the compliance cost, the start-up cost so that they can meet their obligations under the GST package, is in excess of $50,000. What are they offered? Two hundred bucks. `Here son, take a couple of hundred and buy a new cash register.' You do not have to be Einstein, or Milton Friedman for that matter, to understand what that means. This is true of communities right across northern Australia. When I sit in this place and hear people talking about `regional Australia', I know what I hear and it ain't what I know. What I know about remote and regional Australia is nowhere near the understanding of the esteemed Deputy Prime Minister, who parades around this place as if he is somehow the friend of the people of the bush. He does not understand the bush; he has got no idea of the bush. What I would do is say to these people, `Come and sit in the creek with me. Get in the back of the Toyoto. We'll go for a bit of a drive. It'll take a couple of days, so bring your swag.' We will have a starlight motel, and we will sit down and talk to people about the impact of the GST. You sit down and explain how this tax package is going to benefit these Australians. The fact is that there is nothing in this package that will be of any benefit to these people. Remember, most of them do not pay tax, so tax cuts are not going to be of any help to them. Those who do pay tax pay a very small amount of tax. Yet they are going to be whacked with higher second-hand car prices—much higher second-hand car prices—because most of them drive second-hand cars. What was made evident in question time yesterday was the cost of fuel in many of these remote communities. We have not had an explanation yet, but I am looking forward to seeing it; the Prime Minister did not explain it, that is for certain. The cost of fuel at Nooka yesterday was $1.15 a litre. The cost of fuel at Jervois is $1.20 a litre. In sundry other places it is $1.30 a litre. These are people who earn an income of $180 a week. They are paying $1.30 a litre for fuel; they are paying 150 per cent on a basket of goods. So their cost of living is extraordinarily high. It is going to increase as a result of the GST. What compensation is being made available to these people? What compensation is being provided through this GST package that will make their life bearable? The fact is that nothing in this package is sufficient to compensate for the way in which this tax will impact on these communities.Later this afternoon I will address a particular issue about these communities, something which I am sure will be a cause of concern to everyone. If it is not, then it explains yet again the lack of appreciation and the lack of understanding about what is happening in this part of Australia. I do not expect the Deputy Secretary of the Department of the Treasury or the Deputy Commissioner of the Taxation Office to understand the detailed taxation arrangements of every individual Australian, but I sure as hell expect Public Service departments and ministers' officers—officers who are responsible for introducing these policies and passing them through this parliament—to understand the impact of those policies on those people, and I do not think they do.It is about time that we heard from members of the National Party, who were so vocal prior to the last election and for a little while subsequently, about the impact of the GST on their communities. They should stand up honestly and say how this GST proposal is going to impact upon their supporters—not only members of the National Party but the people who vote for them in the remote areas of Australia. As I said, it is not about sheep stations, it is not about big farms in the wheat belt, it is not about vineyards in the Barossa Valley; it is about intense poverty. It is about something which this House ought to be aware of: the entrenched racism that is in our bureaucracy. They just do not understand. They do things which are about their perceptions of what is actually happening but which bear no relation to the facts. Institutionalised racism—which is what it is—ought to be understood for what it is. People do not necessarily deliberately set out to hurt people, but because of their lack of understanding, because of the culture of public administration in this country, because of the culture of government in this country—and we have heard about it over recent days in relation to the stolen generation—these people have been suffering under institutionalised racism for the best part of a century, at least since the welfare acts were passed to remove children from their families, and a lot earlier, of course, by deliberate acts of racism.The fact is that, unless you understand the difference, unless you appreciate diversity, unless you comprehend the way in which people live, then you cannot make good public policy. The problem with these new tax arrangements is that they do not appreciate difference, they do not comprehend diversity, and it ain't good public policy. I would say to the government that if you are aware, at least partially aware, of what I am talking about then you will do something to address the needs. We will expect another compensation package to emerge out of the next party meeting some time in the next fortnight. I do not know how much it will cost—$100 million or $200 million—but it does not seem to matter to the Treasurer. If a little problem emerges, flick the switch, go into vaudeville, give them some money and all things will be sweet. Well, they are not sweet! I say to members of the government: if you are really serious about understanding the nature of the impact of this tax on communities around Australia you would appreciate what I have been saying. 11:39:0016018O'Keefe, Neil, MPMr O'KEEFECE4BurkeALP00—It is a great privilege in this debate on the Taxation Laws Amendment Bill (No. 10) 1999 to follow the member for the Northern Territory. Before he leaves the chamber to go and undertake some of his other activities I would like to assure him that there are a number of us who share his views and who understand what it is like to live in country areas. I live in a town of 2,000 people—which is probably smaller than the town he lives in, actually—and have for 20 years, and I have spent at least six years of my life living in a town of only 400 people.What I want to reiterate—the member for the Northern Territory has this absolutely right—is that the people who are making these policies and who claim to be acting on behalf of country people do not understand two fundamental precepts. One is that most people who live in country Australia live in country towns, not on properties, not on sheep stations. That is exactly the point that the member for the Northern Territory makes, and he has a particular experience of an even broader problem—the problem of remote indigenous Australia, on which he has spoken so eloquently and passionately. But the key and fundamental point is this: most people who live in country Australia live in country towns, most of them are small towns, and these people who are making these policies do not have the slightest idea of the drivel they have been talking in this whole GST package. Let me give one classic example about the claimed reduction in the cost of goods in country towns coming from the reduction in the diesel fuel price.In the lead-up to the last election, the then transport minister, Mr Vaile, was running around promoting this as the great saviour, the reduction in the cost of living in country Australia, because transport companies were going to be able to buy their fuel about 20c a litre cheaper. I sat down and actually did the sums—admittedly, not on a remote Northern Territory example, but more like a Latrobe Valley example; this was a Goulburn Valley example. I worked it out for a company like SPC in the Goulburn Valley that sends a truckload of tinned peaches, tinned tomatoes or whatever, down to the Safeway warehouse in Melbourne, a trip of 200 kilometres. A saving of 20c a litre over 200 kilometres is the grand saving for that transport operator of $40. What is he carting on that truck? He is carting 20 tonnes of tinned tomatoes, tinned peaches or whatever it might be, in 500-gram cans. That is 40,000 cans. And the saving is $40 on the trip. We are talking about one-tenth of 1c per can.Madam Deputy Speaker, I ask you, what farmer is ever going to get paid one-tenth of 1c more for the peaches or the tomatoes that went into that can, and what consumer is ever going to get a reduction in the price of one-tenth of 1c per can when it hits the supermarket shelves? That $40 is going to be absorbed in the wholesale structure along the way. The farmer who has been told he is going to get the benefits of more payment from the savings in the system has not got a chance. The consumers who have been told that they are going to get a cheaper good on the supermarket shelf have not got a chance; in fact, they are going to pay a loaded-up price, and we all know that.I could go on for the rest of my contribution to this debate just pointing out those examples where people in country Australia have been fed this drivel that they are in for all these benefits. I tell you what they are going to get to pay that is a certainty—they are going to get to pay the tax. And it is going to be loaded-up prices. We are all of a sudden going to find that this whole drivel about transport costs being the reason the cost of living in country areas is higher is going to be exposed because, in principle, transport costs are going to be reduced, but prices are going to go up. Once that becomes seen for what it is, these fellows are going to hit full-scale panic because the regional package is absolutely going nowhere because the one great myth is going to be exposed. I just make that contribution to follow up the member for the Northern Territory to assure him that members like me and the member for McMillan, Christian Zahra, who is here with us in the chamber, both live in country areas and understand these issues as well. I am sure that the member for Gellibrand, who is also here in the chamber and who is a city based member—0V5Slipper, Peter, MPMr Slipper—She went to a country area once.CE4O'Keefe, Neil, MPMr O'KEEFE—Absolutely. She will do a lot of travelling. I think she is going to be on the Prime Minister's country task force when we win government. She will pick these things up and be a good country policy maker as well. But this is the fundamental point: I would say that 95 per cent of people who live outside the capital cities of Australia live in country towns, and these policies are not focused on country towns. They are focused on the agenda that the National Farmers Federation and the peak primary industry bodies have run and they are the very people who are now screaming, `Hang on, this is not going to work for us in our towns.' Of course, it is not going to work for them in their towns. The member for the Northern Territory started to look at what the offsets are. `You get a big tax cut.' Hang on! No farmer pays any tax, so he does not get a tax cut. `You get the reduced diesel fuel.' Hang on! We already get the diesel fuel rebate, so there is no fuel rebate. `You get a wholesale sales tax rebate.' Hang on! We do not pay wholesale sales tax. What is in this for us? `You are going to get paid more for your product because all the built-in taxes are pulled out.' But the built-in taxes have already been pulled out for farmers, so you are not going to get the one-tenth of a cent for the tomatoes that went in the can. What you are going to be able to do is to jump into your ute, drive into town, buy your newspaper and goods and pay the GST on everything. So the very people they think that this package is built for are the ones who are going to wake up first. This is all going to unfold after July 1. If you think they are in panic mode now with their proposed billion dollar rural rescue package in the budget over five years, remember what that is when it comes to hit the deck. It is a billion dollars over five years. That is $200 million a year in a budget of $140 billion. Do they seriously think that anyone in country Australia is going to take that as a serious application to these problems? Let us wait and see anyway.The contribution I specifically want to make in relation to this legislation goes to general observations about the tax changes and a couple of specific points I would like to make that draw directly out of my own electorate. Why are we having this omnibus bill that has got these five different provisions to fix up problems in investment policy in Australia as it relates to tax legislation? I will tell you why. It is beautifully presented in this article yesterday in the Australian by Robert Gottliebsen when he talks about the seven deadly sins which consign our dollar to the pits. He says:Sin number one: Our share market is still dominated by established companies, only a few of which understand the magnitude of the technology changes ahead of them.Why do they not understand the magnitude of the technology changes ahead of them? From the very first budget of this government in 1996 when they started slashing the government budget and contribution, where did they go first? Listen to Gottliebsen:Sin number two: Discouragement of high-technology research. In what was probably one of the worst government decisions in decades, during the first year of the Howard Government, the tax deduction for research was cut from 150 per cent to 125 per cent and the rules were tightened. At the same time, syndicated research was abandoned.Both of these initiatives had greatly stimulated research in Australia ...This is not some Labor Party fan club writing here. This is Robert Gottliebsen who had consistently, during the 13 years of the Hawke-Keating Labor governments, been pretty heavy on us about our policies for business Australia. Here he is saying that this is the worst government decision in decades and that `by making the change when other countries were offering better deals, Australia signalled to the world that research was a low priority. The money went elsewhere'. Here we are now, trying to play catch-up. It does not matter whether it is film and television, which is covered in this bill; it does not matter whether it is investment syndicates, which is covered in the bill; it does not matter whether it is mining and encouraging business out into remote Australia—the fact is that this is all five years of catch-up from a disastrous decision which every sensible person, whether they are an academic or a business investor, understands is the most stupid thing the Australian government has done in decades. You cannot catch up on this stuff. I have just come back from a fascinating two-week visit to South America as part of a trade subcommittee. Each country we visited told us enthusiastically about the government measures they are putting in place to encourage research and development in high technology. These are supposed to be banana republics, yet they are leaping ahead of us because their governments understand what to do—the exact opposite of our government, which did not do it. Now Australia is playing catch-up with countries like Argentina, Brazil, Chile, Peru and so on. It just about makes you ashamed to be an Australian, when we had done so well and gone so far.Further, this bill is to encourage development in rural and regional Australia, particularly in the heavy industries. One of the things that all these industries will tell you is that they must have infrastructure. They have got to have roads, airports, train lines—they have got to have infrastructure. Infrastructure bonds are another part of the tax package which has been wound back, the very element that was driving these things. About the last big infrastructure bond in Australia was to help Jeff Kennett build a freeway, the toll road in Melbourne. I predict now that on the biggest investment project that could actually change perception of this country—the first stage of the very fast train, from Sydney to Canberra, building the backbone for Melbourne-Canberra-Sydney-Brisbane—which needs an infrastructure bond to make it happen, this government will not get there because it just does not understand this.Let us take a minor example in my own electorate, the Calder Highway. For the last 15 years we have been building the Calder Highway as the main link between Melbourne and Bendigo, and then Mildura. There are councils all the way to Darwin which have a long-term vision of building this road right out through Central Australia, building the direct route from Melbourne to Darwin. They see a future in it—the very same people who are talking about a train line to do the same thing. What has happened to the Calder Highway?Before 1994, the Calder Highway was a jointly state and federally funded road project. In 1994 the federal Labor government made a deal with the Victorian state Liberal government, under Jeff Kennett. I was involved in negotiating the deal with the Victorian transport minister that we would step back from funding the state major highways and trying to tell the states what their priorities should be; in return, we would up the ante dramatically on the major national highway structures and, in particular, the Western Ring Road. The member for Gellibrand knows for herself that the impact of completing that Western Ring Road on the future and investment in that region is dramatic. We stuck to our deal. We accelerated that funding and the road was built. What has happened to the Calder Highway? The project has fallen so far behind that there is no chance of reaching the objective of Melbourne to Bendigo by 2000. But this is how loopy it is: we have now got dual highway up to a certain point, and dual highway coming down to a certain point, but for the Carlsruhe section in the middle—the last six kilometres—there is no funding in the system and there is no planned acquisition. They have just let it fall to pieces.So what we are going to have now is cars travelling in freeway conditions from the north at 100 to 110 kilometres an hour and cars travelling in freeway conditions from the south at 100 to 110 kilometres an hour, and then everybody suddenly will have to get used to slowing down for six kilometres on a quite dangerous section of the road, a two-lane highway. We all know what that is going to mean. It is going to turn into a serious black spot simply because these Liberals have just let this go. I have to say that, it does not matter whether it is the research and development decision of 1996, or the way they have negotiated road funding packages, or what, the government have let these things go because they have not understood what they are doing or they have been driven by their own rhetoric and drivel. I now call on the federal transport minister, Mr Anderson, to look specifically at this Carlsruhe section of the Calder Highway and get his department into action. I call on him to get into an immediate joint negotiation with the Victorian transport minister, Mr Batchelor, because they have now revisited where we were six years ago. We are back to joint funding of these roads. I want to see them get their act together and get this section funded. While I am talking about roads in my electorate, I would also just like to draw the federal minister's attention to a problem which is now developing. It has been brought to my attention by the Bacchus Marsh branch of the Australian Labor Party.0V5Slipper, Peter, MPMr Slipper—They would be reliable.CE4O'Keefe, Neil, MPMr O'KEEFE—They are very reliable, and they have hit this right on the head. The main national highway from Melbourne to Adelaide, the Ballarat freeway as it goes out through Melbourne, now has so much traffic on it that traffic is banking back at the Gisborne Road exit ramp of the freeway. It is banking back so far in peak hours that it is now stationary on the freeway. People are coming along the freeway out of Anthony's Cutting—anyone who has been in Victoria knows the territory—and up they go to their 110 kilometres. They are belting along and then all of a sudden there is a quarry truck sitting there stationary in the left-hand lane. He cannot get off the freeway because he is on the end of a queue. We know what is going to happen. So I am signalling to the minister that—it is a federal issue; it is a federal national highway—this is a logistical problem that has developed and it needs to be very quickly solved. There needs to be a solution for the exit ramp at Gisborne Road at Bacchus Marsh.Going back to where I started, the opposition are supporting this legislation. We are proposing in the Senate that an amendment should be approved to allow a broader discussion of tax matters than those that are specifically covered in this bill. I am pleased to note that you, Madam Deputy Speaker Crosio, have allowed a fairly broad ranging discussion under the premise of the bill. I appreciate the chance to talk on those other issues, but I want to go right back to Robert Gottliebsen's point. The decision in 1996 to wind back the tax concession for R&D has sent such an appalling signal across the nation and to others in the world. The flow-on from that means that it does not matter whether it is mining investment, a film and television investment or R&D investment, the signal is out there that this mob are not interested in that in Australia, and that is just such stupid policy.11:59:0016021Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—I would like to thank all the participants in this debate on the Taxation Laws Amendment Bill (No. 10) 1999, both here in the Main Committee and in the main chamber—the members for Wills, Barker, Rankin, Mitchell, Griffith, Lowe, Corio, the Northern Territory and Burke. Obviously, the contributions made by government members were very much more positive than the usual bursts of negativity that we hear from those opposite.It is interesting that, with respect to all of this taxation legislation, because of the way that the titles of the bills are worded, with the addition in many cases of the words `and for related purposes', we do tend, rather than to have debates concerning the specific items before the chamber, to have a rehash of the entire debate over the importance of Australia's new tax system. This takes a lot of time and it means that the parliament has not been able to process all of the legislation as quickly as would otherwise be the case. In particular, I was greatly disturbed when listening to the contribution made by the honourable member for Wills. He used his speech as an opportunity to bag the Australian Taxation Office, the commissioner and the operation of the tax office generally. I place on the record that the Senate Economics References Committee report on the Australian Taxation Office was tabled in the Senate on 10 March. Members of that committee were Senator Murphy, Senator Conroy, Senator Sherry, Senator Gibson, Senator Chapman and Senator Murray. Participating senators were Senators Cook, Stott Despoja, Tchen and Watson. I want to quote from the report, because if one listened to the member for Wills, one would think that there was widespread concern about the Australian Taxation Office and its administration. The committee said:The Committee is of the view that no organisation can be fully protected from individuals with criminal intent, and it would be unrealistic to suggest that future examples of criminal activities within the office will not arise. However, the Committee notes that the ATO has developed and implemented a comprehensive range of fraud prevention and control procedures and has subjected these procedures to external review.Senator Murphy, the chair of the committee, said:The committee's overall assessment of the ATO is that it is a highly professional organisation committed to treating taxpayers fairly and appropriately.That puts in context the wild and baseless allegations made by the member for Wills. The member for Wills also, in his criticism of the tax office, made it necessary for me to clarify certain matters. There has been a joint statement issued by the Australian Taxation Office and the Australian Federal Police, dated 12 April and based in Canberra. I quote from that statement:I take great exception at any suggestion that the progress of the joint AFP/ATO investigation into the issues associated with Mr Nick Petroulias was in any way influenced by non-operational considerations, Tax Commissioner Michael Carmody said today. This joint investigation commenced approximately 12 months ago, after the matter was referred to the AFP. The investigation has been complex and time-consuming and has involved gathering and careful assessment of information and material. The setting of timeframes was intended to ensure that there was a proper basis for the execution of search warrants and other action. Decisions made in relation to this matter were based solely on operational considerations. The AFP determined the date of execution of the search warrants. As is normal in such matters, relevant ministers' offices were informed on the day warrants were issued.That is a statement made by the Commissioner for Taxation, Mr Carmody. I wanted to place that on the record. Also, there has been speculation, fuelled by the honourable member for Wills, that the ATO is not in some way able to cope with implementing Australia's new tax system. The Commissioner for Taxation, Michael Carmody, responded to these claims in the Australian of 31 March this year as follows: “I can assure the community that the ATO is in excellent shape and is on target to implement the vast changes to our tax system with which the Government has entrusted us.” “We have in place a comprehensive community education program and are delivering new standards of service in answering people's inquiries.” “We have established close working partnerships with a wide range of industry groups.”That clarifies the fact that the Australian Taxation Office is a professional organisation. It received praise from the Senate Economics References Committee. In the report of 10 March, Senator Murphy said that the ATO was highly professional and committed to treating taxpayers fairly and appropriately. The Taxation Commissioner himself has pointed out that the ATO is in excellent shape and doing its job. It is fairly sad when we find people on the other side of parliament criticising the Australian Taxation Office and seeking to undermine public confidence in that very important organisation. The honourable member for O'Connor claimed that the government had taken a long time to have this bill debated. When I initially rose to address the chamber I pointed out that, because of the wide-ranging title of the bill, opposition members have used every chance available to them to re-debate Australia's new tax system. If this legislation—Opposition members interjecting— 10000Crosio, Janice (Madam DEPUTY SPEAKER)Madam DEPUTY SPEAKER (Hon. J.A. Crosio)—Order! The parliamentary secretary has the floor.84HZahra, Christian, MPMr Zahra—Who is the member for O'Connor?0V5Slipper, Peter, MPMr SLIPPER—Mr Gavan O'Connor is the honourable member for Corio. I stand corrected. If honourable members opposite are criticising this government for taking a while to have this bill debated then they ought to take into account the fact that, by re-debating Australia's new tax system every time a tax bill comes before the parliament, they are extending the time it takes to have this legislation passed through the parliament. The bill we are currently debating would have been through the House yesterday if opposition members had not been windbags and had not been re-debating the importance of Australia's new tax system. This particular bill was introduced into the parliament on 14 October 1999. It has been set down for debate on a number of occasions but, because of the number of tax reform measures currently before the parliament, it simply has not been possible, given the legislative schedule, for this matter to be disposed of prior to the present time. The honourable member for Burke referred to cutting R&D syndication and removing infrastructure bonds. The fact is that the government has made certain changes because they were not encouraging R&D or infrastructure. They were putting dollars into the pockets of high-wealth individuals because these had become the basis of the standard year-end tax planning schemes. It seems that honourable members opposite want to support tax evasion and tax avoidance.The honourable member for Burke also said that the new tax system will hurt regional Australia. That is really a most bizarre statement—a quotable but bizarre statement—given that the Labor Party neglected rural and regional Australia for 13 years. How on earth could a Sydney-Canberra-Melbourne based government criticise this government, which has done more for rural and regional Australia than any other government in Australia's history? The Labor Party completely ignored country Australia when in office, and it has taken this government quite a lot of money to bring to rural Australia the services that people in rural and regional Australia deserve, as indeed do people in the cities.Returning to the actual text of the bill and the amendment before the chamber, it will not be a matter of any surprise to you, Madam Deputy Speaker, that the government strongly rejects the amendment being moved by the honourable member for Wills. We simply cannot accept that this amendment has any truth, veracity or accuracy. We certainly are opposing it, and it is regrettable that the member for Wills comes into the chamber to play politics at every opportunity.This bill contains six technical amendments and minor policy measures. The measure relating to restructuring of certain managed investment schemes will correct an oversight in Taxation Laws Amendment Act (No. 7) to provide tax relief for managed investment scheme restructures where there is more than one change to the structure. The measure relating to film licensed investment companies will prevent double taxation on returns of concessional capital by making these returns frankable dividends. The tax deductibility measure allows tax deductions for donations of $2 or more to the Linton Trust for victims of the Linton bushfires and extends for four months the tax deductibility of donations to the National Nurses Memorial Trust. Some might ask why the government has introduced legislation that will specifically list the Linton Trust in the gift provisions of the income tax law. The response to that is that the trust will be specifically listed in the gift provisions as it does not fit into the category of a necessitous circumstances fund. One of the requirements of a necessitous circumstances fund is that trustees inquire into the financial circumstances of potential beneficiaries prior to benefits being paid from the fund. In the case of the Linton Trust, there may not have been any potential beneficiaries in necessitous circumstances. The government decided to specifically list the Linton Trust in the gift provisions in order to assist the families of the victims of the Linton bushfires. Gifts made to the Linton Trust will be tax deductible if they were made after 2 December 1998 and before 3 December this year.The tax exemption measure exempts from income tax both business recovery grants which have been paid as part of a business recovery package for cyclones Elaine and Vance and nonprofit organisations which promote the development of fishing and/or agricultural resources to afford them the same exemptions as other groups which promote the development of primary and secondary resources of Australia. The measure relating to petroleum projects ensures that the Petroleum Resources Rent Tax Assessment Act 1997 acts as intended to allow a taxpayer who leaves a project to take with them their share of any undeducted exploration expenditures.The final measure is a revenue protection measure following the Esso court decision which had the effect of providing a significant and unintended benefit to certain taxpayers. It ensures that the disposal of mining property provisions continue to operate as intended. It prevents mining taxpayers from being able to claim deductions for expenditure which would not otherwise be deductible by disposing of mining property. In accordance with the Treasurer's press release of 3 December 1998, this measure will apply to disposals of mining property which occur after 4 p.m. Eastern Standard Time on 3 December 1998. I confirm we reject the amendment and I commend the bill to the chamber.Amendment negatived.Original question resolved in the affirmative. Bill read a second time.Ordered that the bill be reported to the House without amendment.Committees160241602416024Debate resumed from 10 April, on motion by Mr Prosser: That the House take note of the report.12:13:0016024Roxon, Nicola, MPMs ROXON83KGellibrandALP00—I wish to speak today on the report from the Standing Committee on Industry, Science and Resources tabled in the parliament on Monday called Of material value? Inquiry into increasing the value added to Australian raw materials. What we are looking into is the capacity of Australian industry to add value to the raw materials that we have in such abundance in this country. We are only tabling the first stage of our report that deals with an overview of where the different industries are at in Australia, some comparisons between industries and also some international comparisons. We have tried to set out a framework of questions that we hope to have answered when we take our second step of this inquiry. That is to look at a number of case studies and try to go beyond what unfortunately is so often dealt with when we talk about value adding in industry in Australia which is some of our very general positions. Whilst I compliment the other committee members as well as the secretariat for preparing this report as a starting point for us, I must say it is actually a relatively bureaucratic report.It is helpful because it sets out some parameters and it certainly gives us an overview of the different departments' perspectives. However, it does not go underneath some of the general statements that people like to make when they talk about the importance of value adding in this country, and this is what we hope to do in the second stage of our report. The reason we want to go beyond the normal glib assertions that can be made is that this is of great importance to every member of this House and potentially of great importance to all of our electorates.This government is looking at whether there are things it can do to encourage industry to develop in this country and, as a natural consequence of that, to employ more people. The member for McMillan is in the House today. We both represent electorates that have been at the absolute industrial base—they are the industrial backbone, if you like—of industry in Victoria, let alone Australia. There has been a downturn in a lot of the major industries that have operated in our areas and we are extremely concerned, as are other members. We need to improve the unemployment statistics in our area and, particularly in the second stage of this report, we need to look at ways to provide more employment opportunities for people in our electorates and elsewhere. By doing that, we can improve Australia's industrial base.It is intentional—I know other committee members and the secretariat share this view—that we have a question mark here. We want to know whether there are ways to do things better in this country. We will always have debates about whether it is appropriate for a national parliament to intervene or to have an interventionist industry policy. Some people want to totally nationalise industry; others think that we should have a completely free market. Most people in this House know that there is a lot of sense between those two positions and not much sense at either extreme. By setting some parameters, we are hoping to identify a proper role for the federal parliament to play—not necessarily in investing directly in particular industries but in making sure that we have an environment which is conducive to industries investing more money in our country and providing further jobs. That could be done through processing our raw materials further down the track rather than exporting them directly or dealing with better marketing programs so that the things that we already process have growing markets in our neighbouring regions. There are a lot of questions that need to be addressed. This report provides a starting point for these issues.I am particularly interested in looking at what has worked in creating and growing markets. The marketing of particular products is not generally regarded as something that we should consider when we talk about value adding to a product. People normally think of further processing. It is clear that you can add value to a product by improving its market value. That can be done by building on the strengths that we already have, particularly in our food industries. There are enormous markets in the South-East Asian region that we probably have not captured to the extent that we should. I am hopeful that in the second stage of the inquiry we will look closely at some of the things that do not fall within the traditional areas, which is what everyone wants to talk about with value adding.For the information of the House, the industries that have been picked for us to examine in great detail in the next inquiries are the aluminium-magnesium industry and the wine, dairy and grain industries. We have chosen five areas. Some have been very successful; others have not been as successful as we might have expected. We hope to draw some specific conclusions from studying these industries in great detail and to apply them at a more general level. Given the nature of the electorate that I represent, which is in the inner western suburbs of Melbourne, the particular interest of the businesses in my area is focused primarily far down the end of the chain of processing. I do not represent an area which is concerned particularly with the initial production of raw materials or mining interests, for example, or agricultural interests, but I do have a large number of industries in my electorate that are involved in food processing and in warehousing and distribution. I have firms like Bonlac, which has one of its major cold stores there, and dairy processing and marketing has been one of our success stories. George Weston has its glucose and starch plant in my electorate. Pampas deals with a number of bakery products. There is also a major wine distributor. The Davids cold store deals with the distribution of processed dairy materials. The old Grain Elevator Board has silo storage for bulk handling of grain materials, and there is also a range of light metal manufacturing industries, which I am certain in some parts would deal with materials at the end of the stream in the aluminium industry.I would like today to encourage those industries in my electorate to be involved in stage 2 of our inquiry. I think the committee process is one opportunity where our community can more generally be engaged with the parliament. We go outside Canberra. We seek in this inquiry to go down to the grassroots level, if you like. We do not necessarily want to talk to only the industry representatives; we want to know what individual companies have found successful, what barriers they experience, and ways that we may be able to make recommendations that would improve and develop their businesses in the future. I would like to encourage my local industries to be involved in stage 2, and I know that other members who speak after me would also be keen to encourage as many people as possible to be involved in this inquiry.I know that a number of other members want to speak so I will limit myself to those brief comments. I commend the report to the House. To any members who are interested in industry policy, let me say that I think the report sets some parameters for further discussion. I urge committee members who are here, and others, that we do not want to limit our second stage inquiry to the parameters that we have already identified because we know that there are some things out there that we have not yet identified. That is the very purpose of us going into great detail with these five industries. I commend this report to the House and I encourage businesses in my electorate and elsewhere to be involved in the second stage of our inquiry into the aluminium-magnesium, wine, dairy and grain industries.12:22:0016026Washer, Dr Mal, MPDr WASHER84FMooreLP10—I am very pleased to speak today on the tabling of the first report by the House of Representatives Standing Committee on Industry, Science and Resources into the value adding of Australia's raw materials—a report entitled Of material value? This report represents a prologue to this issue, with the terms of reference directing the committee to evaluate the current state of affairs in this country as well as how we compare on a global level in respect of value adding. We were directed by the Minister for Industry, Science and Resources to look at value adding in Australia, mainly as a response to the common perception that as a nation we miss out on gaining the maximum economic benefit from our vast resource of raw materials. Value adding is a concept that can be applied to an individual business or on a national level through our GDP. The Department of Agriculture, Fisheries and Forestry submitted that although there is no single definition of what value adding is, it can be seen as any activity that adds to or enhances the value of products to consumers, but it is not solely related to additional processing. As a committee we are interested in national economic advancement so our focus was on the concept of value adding from a broad national perspective, rather than on a micro-economic level. Australia has always enjoyed an enviable wealth of natural resources that we have successfully produced and exported to the rest of the world. This is mainly because of an accident of geography, but also due to factors like a stable political environment and the fact that we have always had such a small manufacturing base to rely on. This is still true today, but this inquiry recognises that the world is changing and we can no longer bank solely on the sheep's back, so to speak.There are many more employment opportunities in my state of Western Australia in the processing section of the mining industry where we process bauxite and mineral sands, for example, than there are in actual mining operations. If we do not take advantage of these opportunities then we are only gaining a fraction of the benefit from our natural resources and throwing away potential revenue and real jobs for many Australians.On a global level, we have recorded a strong performance in exporting unprocessed and processed raw materials, particularly compared with some of the fast growing export orientated economies in East Asia. However, when we compare the total contribution of elaborately transformed manufactures, or ETMs, to Australia's overall export performance, we do have a long way to go.The inquiry found that the level of value adding varied considerably from commodity to commodity. While we are global leaders in the local processing of bauxite, mined lead and process gold, we lag behind in value adding in many agricultural, fisheries and forestry industries. For example, the Aluminium Council states that Australia is a major player in the upstream sector of bauxite, alumina and aluminium and a significant producer of semifabricated and fabricated products. Iluka Resources claim they are one of the world's major titanium minerals production and processing companies, and their downstream processing operations generate major community economic and employment benefits. At the other end of the pendulum, 80 per cent of Australia's wheat crop is exported in bulk form, despite significant advances over the past decade that have the potential to considerably add to this industry's worth. The other staple on Australia's export agenda, wool, also suffers a similar fate. We are the world's largest producer of wool used for clothing, but less than half is processed within Australia to any greater level.As a committee we wanted to look at several issues around value adding. For a start, we need to know how industries can be encouraged to increase value adding in their respective fields, while at the same time acknowledging that every industry is different and face their own challenges. What I mean by that is that it may not be commercially sound to pursue value adding for every industry at any cost. This is why the committee believes that any action to encourage further raw materials processing in Australia should be directed to industries that are in the best position to take advantage of value adding. Part of this process includes the removal of obstacles that we have been told exist when dealing with value adding. The main impediments identified during the inquiry included: our business tax system; the environmental regulations placed on business; resource security and land access concerns; some impacts of globalisation; inefficient government regulations; and inadequate access, particularly in rural areas, to efficient infrastructure. Any serious attempt to increase value adding in Australia must address these concerns in order to be successful.During the next stage inquiry we will look at five different industries to see how they are performing on a value adding level. If they are successful, then we want to know what factors contribute to that success and, if they have little or no additional processing, what barriers have been identified as a cause of this. The Chair of the House of Representatives Industry, Science and Resources Committee, the Hon. Geoff Prosser, announced this week that Australia's aluminium, dairy, grains, magnesium and wine industries have been selected for a series of case studies for value adding. I believe these industries will provide us with a valuable snapshot as to the challenges faced in the area of value adding in Australia, and I look forward to working with the committee to provide positive and constructive outcomes for Australian industry. As the first report states, the inquiry into value adding in Australia is timely in that it offers significant potential for increasing national income and general welfare. We have a real opportunity here to provide the benchmark for Australian industries and exports in the next century. I commend this report to the Main Committee. 12:29:0016028Zahra, Christian, MPMr ZAHRA84HMcMillanALP00—The report we are talking about today—the House of Representatives Standing Committee on Industry, Science and Resources report Of material value?—is an important report. It is something which I and the other members on the committee feel very passionately about. We all passionately believe that Australia can do more in terms of value adding and thus create jobs and wealth for all Australians in the process. Australians are fed up with the lack of value adding in Australia and they are fed up with the old Menzies cargo cult mentality. Those were the years of torpor; those were the years when Australia slept and did nothing to improve the value of Australia's raw material processing. We are seeing a very good example of government intervention to assist value adding in the Latrobe Valley with the development of the energy park, which I support.Adjournment1602810000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—Order! It being 12.30 p.m. I propose the question:The the House do now adjourn.1602812:30:0016028Jenkins, Harry, MPMr JENKINSHH4ScullinALP00—Today I wish to return to a subject that has concerned me over the past couple of weeks: the government's implementation of Job Network 2. In previous opportunities that I have had to speak in the parliament, I have raised my concerns about the co-location of Job Network sites. That is in the context of the minister crowing about an increase in the number of sites. In my electorate, in two suburbs, a number of these sites are in the same location—under the same roof. Another concern that I have already raised is about the operating hours of the Job Network sites. In Greensborough there is a site that is only open from 9 a.m. to 11 a.m., and people are then referred to another site of this provider organisation which is some 11 kilometres away. I know that, in the case of the honourable member for the Northern Territory, 11 kilometres might not seem a very long way but, in the context of urban Melbourne, it takes something like two or three different versions of public transport to get to the other site.My real concern, which I wish to raise today, is about the use of commercial-in-confidence provisions for the first round of Job Network 1 to stop proper scrutiny of Job Network's effectiveness. When Labor went into opposition I raised a number of questions to try to get in context what the picture was at the time of the change of government on a number of things to do with my electorate. One of those was employment assistance programs. I asked about the performance of Skillshare and other employment assistance programs. In that instance, Dr Kemp—as the then Minister for Employment, Education, Training and Youth Affairs—provided me with information to show the number of people that achieved outcomes under Skillshare and the cost of those outcomes for all the different providers of the Skillshare program. This year I raised the question of the performance of the different provider sites under Job Network Employment Services Contract 1. In the answer I received, Minister Abbott said: This information is bound by the confidentiality and commercial-in-confidence provisions described in the Employment Services Request for Tender 1997. I am therefore not in a position to release details on these numbers. I maintain that this brings into question the ability of the government to look at those tenders in a proper light and to then look at the renewed tenders for some and the new tenders for others under Job Network 2. As I have stated, my concern about the use of commercial-in-confidence provisions is that, for a Victorian, this smacks of the things that Premier Kennett hid behind. That has given great concern to the Victorian community. It is interesting that the Victorian parliament has just released a report critical of the use of commercial-in-confidence as a defence for preventing the proper parliamentary scrutiny of outsourced activities. Without the full disclosure of information about the performance of providers under Job Network, we cannot have confidence in the way in which the program is being administered. Another element of concern for me about Job Network 2 is that the government is using the so-called 90-minute rule for job seekers. That is where, under a so-called 90-minute rule, they are expected to travel up to 90 minutes to a Job Network provider. Failure to do so can be regarded as a breach of the Centrelink activity test. Unfortunately, when Job Network 2 started late in February, this 90-minute rule was applied arbitrarily. We then had the incongruous position that one of the providers at two different sites in two different suburbs in the electorate of Scullin found that 50 people that lived in one location were sent to one site and 30 from the other site were sent to the former site. Right from the initial point in time, people were being allocated to Job Network sites out of their local neighbourhood and community. This provider has raised this with the minister and wants it changed because they know that it is in the best interests of the unemployed people to whom they are trying to provide services to have them more appropriately allocated to their local network site. I call upon the minister to redress this problem. It is unfair, especially on the unemployed people—people that he calls `job snobs' and decries and criticises when in fact he is not giving them the opportunity of taking any advantage of the only thing that is available to them, Job Network. (Time expired)1602912:35:0016029Schultz, Alby, MPMr SCHULTZ83QHumeLP10— On Sunday, 19 March, my wife, Gloria, and I attended the launch of a drug awareness video by the Department of Corrective Services, South West Region. The video, titled The Big Trip, was a true story about a former drug addict and was designed to send a strong message to our youth about drug addiction and drug abuse. The video was supported by Goulburn City Council, Oasis Youth Support Network and the Regional Consultative Committee. It was refreshing for Gloria and me to be part of the launch of that video, as it showed us that there are individuals and organisations committed to warning our youth about the impact of drug addiction. It was particularly heartening to see that the young woman depicted in the video had volunteered her time, put aside her discomfiture and talked about her personal experiences while addicted to illicit drugs. Equally enlightening was the safety book I launched on 27 March, titled the Child Safety Handbook. The book, which was designed in conjunction with New South Wales Police Legacy, Safety House Australia and Millbank Publications, has devoted various chapters to all types of safety. A significant proportion of the book is devoted to drug awareness. The important thing about this book is that it constantly reminds parents that they are responsible, just as children are, for trying to reverse the horrible impact that illicit drug use has made on communities around Australia. It was great to see that organisations like Police Legacy and Safety House Australia are making sure that both parents and children are contributing to safer communities in Australia.My point in talking about the wonderful efforts and achievements by some organisations in educating us about drugs is that alcohol and drug abuse is an increasing problem for Australian communities. It is estimated that drug addiction is responsible for 80 per cent of the legal, judicial, imprisonment and criminal costs of crime in Australia. Equally disturbing is that in 1979 there was a heroin death every five days; now there is one every 10 minutes.So what has happened in the New South Wales government, whereby legislation that effectively encourages drug abuse in Australia has been passed—regrettably, supported by the New South Wales opposition? An article appearing in the Sydney Morning Herald on Saturday, 1 April explained that young people caught with small quantities of hard drugs, including heroin, cocaine, ecstasy and LSD, will be given the chance of a caution or counselling rather than court. This option will be available to young people possessing 30 grams of cannabis, 0.25 grams of heroin, cocaine and amphetamines or 0.0008 grams of LSD. The New South Wales Special Minister of State, John Della Bosca, has supported the move, stating: Counselling or cautioning has the outcome—and there's a huge amount of evidence to support this—of assisting those offenders to change their ways.Says who? How can going soft on young offenders discourage them from continued and more serious drug related crime in the future?Major Brian Walters, a Salvation Army spokesman and adviser to the Prime Minister on drug policy, seems to be one of a few individuals with a real understanding of the extent of drug abuse in Australia. He has publicly described the laws as a slap on the wrist—and he is absolutely right—later stating to a Daily Telegraph reporter that they are `torpedoing any clear and unambiguous message to young people that they should not be involved in drug use.' The federal government cannot let this embarrassing whitewash of the real problems centred around drug issues go on any longer. We have to continue to take a tough approach to drugs and we have to encourage all states in the country to do the same. Education, together with rehabilitation and detoxification, is the answer, not the sorts of politically correct exercises that are being introduced by the New South Wales government. I make these comments because I have been involved for over 11 years, on a regular basis, in trying to raise the issues and to convince people about the dangers of drugs. I intend visiting a detoxification unit in Perth next week to have a look at some of the outstanding work being done in that clinic to get heroin addicts off their addiction. That is what we should be on about. We are going down the same path with this sort of nonsense that we went down with regard to the methadone program. It was introduced in the best interests of the people and now it is out of control. We are going down the same path as the needle syringe exchange program which I warned people about in 1988—and I have been proven right—as being a program supplying implements to inject heroin. (Time expired)1603012:40:0016030Albanese, Anthony, MPMr ALBANESER36GrayndlerALP00—I am pleased to have the opportunity to place in a broader context the current display of hard-heartedness by the Minister for Immigration and Multicultural Affairs over the Kosovar refugees. The minister's decision to refuse to allow the Kosovars to stay in Australia any longer is unnecessarily harsh, especially given the fact that they are returning to a region that remains unstable. The minister would be well advised to take heed of Mr Bernard Kouchner, head of the UN's mission in Kosovo, who has urged the Australian government not to force the Kosovars to return home against their will. This would also be consistent with the actions of the governments of the United States, Canada and New Zealand. On AM this morning it was reported:There is growing concern in Kosovo about the return of refugees and the strain a large uncontrolled influx this year could cause to efforts to establish stability.Mr Kouchner has stated:... to force people to come back ... is not the normal international procedure at all. But then this is not a government that shows any respect for international obligations or procedures. In fact, the Minister for Immigration and Multicultural Affairs has recently called for the UN to toughen its convention on refugees. This should come as no surprise to anyone who has followed Mr Ruddock's actions since he came to office in March 1996. In the last six months the minister has embarked on a crusade against asylum seekers in Australia. Twelve months ago we were opening our hearts to refugees escaping the violence and tragedy of Kosovo. A few months later an increased number of asylum seekers began arriving by boat in northern Australia and suddenly these refugees are being branded as illegals and queue jumpers who have criminal associations.News has also come that a boat carrying some 220 people that left Indonesia in late March has gone missing with those on board feared drowned. A spokesman for the minister is reported as stating that no search has been mounted. He said:Where do you look ... it's a big ocean, and after two days the boat could have been anywhere.The minister would have the Australian people believe that asylum seekers boarding such boats have made a lifestyle choice and have decided that Australia sounds like a nice place to live. This could not be further from the truth. These boats are not luxury cruise liners. Peter McGovern, whose job it is to blow up these boats upon arrival, has described them as `atrocious'.Last year, 24 people drowned and there were several rescues. These are desperate people. I have no sympathy whatsoever for the people smugglers but the government's rhetoric has targeted the people who are seeking asylum. Now the tables have turned on the Kosovars as well. They are being referred to as illegals when only days ago they were refugees. They should at least have their cases considered on a case-by-case basis.The issue of how Australia should deal with onshore asylum seekers is a complex one. It is a fact that there has been an increase in the numbers of genuine asylum seekers who arrived on our shores over the last 12 months. However, this is not a phenomenon unique to Australia. Unfortunately the minister seems hell-bent on whipping up hysteria about asylum seekers in Australia instead of contributing to a durable solution to the problem.Make no mistake about it, more than 90 per cent of those people who have applied have been recognised as genuine refugees as laid down in the UN convention. As immigration minister, Mr Ruddock wields enormous power over people's lives. He has presided over great changes to the direction and composition of the migration and humanitarian programs. The latest change was in February of this year with the freezing of all the processing of offshore humanitarian visas until further notice. This was a knee-jerk reaction to the increased numbers of onshore asylum seekers.Rather than promote harmony, this extraordinary move has the potential to create tension in the community between onshore asylum seekers and the relatives of offshore applicants. At the same time it is contrary to the minister's rhetoric because people who have applied onshore are still having their applications processed while people who are waiting in an orderly queue, applying according to procedures either through the UNHCR or at embassies, are being told, `No, your visas will not even be considered until some time in the future.'But the minister's actions have not taken place in a vacuum. They should be viewed within the context of a government that cares little for international obligations. Its unwillingness to put a stop to the mandatory sentencing of juveniles in the Northern Territory, which contravenes the UN Convention on the Rights of the Child, is a disgrace. It is little wonder that our humanitarian program is in disarray.1603112:45:0016031May, Margaret, MPMrs MAY83BMcPhersonLP10—I rise today to inform the House of a very successful program that is helping both employers and young people seeking training and apprenticeships on the Gold Coast. Last month I had the pleasure of officially opening the Workforce Options New Apprenticeships training centre in Broadbeach on the Gold Coast, following the centre's successful tender as part of this government's second round of contracts. The Workforce Options New Apprenticeships Centre is part of the Howard government's commitment to providing a high quality, streamlined service to employers and new apprentices. The centre is a one-stop shop designed to assist employers to choose the new apprenticeship they need to develop the skill base of their business, because this government recognises that business, and particularly small business, is what creates jobs in this country. This government recognises that by helping employers we are helping the unemployed. This government recognises that wealth creates wealth. When businesses are profitable and are not being strangled by red tape, they will hire more workers, the unemployment rate will drop, our economy will become stronger and everyone will benefit from a better quality of life.Although the centre on the Gold Coast has only recently opened, Workforce Options is an established employment agency that is recognised as a leading performer in the industry. The centre is now delivering throughout the south-east Queensland region, from the Sunshine Coast to the Gold Coast. It is the professional, experienced staff at Workforce Options who are at the coalface. My thanks and congratulations go to Workforce Options manager Greg Davy and coordinators Brooke Peachey and Peter Hutton for their hard work and dedication. Thanks to these people, Gold Coasters can now join the 425,000 other Australians who are benefiting from this government's network of over 300 centres across the country.But this is not the end of the opportunities for the unemployed on the Gold Coast. Last month the Minister for Employment Services and I launched another fantastic Work for the Dole project. The project is being run by the Phantast Suburban Centre Improvement Pilots and gives Work for the Dole participants the chance to join in the Olympic spirit and create Olympic history. The Olympic art pole project involves utilising the jobless to paint colourful artwork depicting Gold Coast imagery on telegraph poles to mark the Olympic torch relay route. The entire Gold Coast community has the chance to play their part by designing the artwork that will spruce up telegraph poles along the length of the Gold Coast. The Olympic art pole project would not have made it off the ground without the enthusiasm of Phantast director June Hintz and the tireless energy of president Calvin Pybus. The project is the first of its kind in Australia and it is a unique way to involve the unemployed in creating a permanent Olympic memorial for the local community that will last for generations. It is truly an example of the great and inspiring things that can be achieved through the Work for the Dole schemes. The Gold Coast is often thought of as a holiday destination or as an ideal retirement spot, but organisations like Phantast and Workforce Options are out in the community demonstrating that the Gold Coast offers a wealth of services to assist businesses and give young people unprecedented opportunities. It is programs like these that have resulted in Australia's unemployment rate dropping. I once again congratulate the Workforce Options New Apprenticeships Centre and the Phantast Suburban Centre Improvement Pilots for their hard work and dedication in helping the jobless to acquire the skills they need to enter the work force.1603212:49:0016032Latham, Mark, MPMr LATHAMK26WerriwaALP00—From time to time one has cause for concern about the quality of scholarship in Australia's universities. Based on their new book A Place in the Sun, it is difficult to apply the term `scholarly' to Mary Kalantzis and Bill Cope. Their book is a crude commentary on the migration debate dressed up as academic research. It is a rambling dialogue broken only by the authors' unbalanced views. Worse still, it is full of errors and misrepresentations. At page 284, for instance, the quotes from Barry Jones and me are hopelessly confused. At page 253, the book falsely claims that `Martin Ferguson is well known as an opponent of immigration'. In fact, the member for Batman is a strong supporter of highly skilled migration. This policy is bound to feature prominently in his policy for regional Australia. At page 257, it is claimed—and I quote: No Australian universities have quotas. Many universities have highly generalised equity policies and specialist student support programs, but never entry quotas.Obviously the authors have never seen or researched the 1998 DEETYA report entitled Higher education access and equity for low SES school leavers. The department's own study shows that quotas for non-English speaking background students are quite common in our universities. The report's conclusion states:The quota system has been widely accepted and tends to be the system to be used by more established programs, InpUTS at the University of Technology, Sydney, ACCESS at the University of New South Wales and the Special Access Scheme at Monash University.The report goes on to outline the NESB quotas at the University of South Australia. The book also presents an incorrect interpretation of my views on citizenship issues. In summary, I believe that people need to practise multiple-identity citizenship. They need to salute a number of flags, stretching from the local to the national to the international. They need to be comfortable with a range of personal identities relating to gender, sexuality, ethnicity and nationality. Policies which promote a single-identity focus, such as parochialism, positive discrimination, feminism and some aspects of multiculturalism, are contrary to this approach. While well-intentioned, these policies encourage people to see their identity and citizenship in just a single dimension. This can cause more harm than good. It is the modern equivalent of tribalism: encouraging people to judge each other by their differences rather than by the things they hold in common, the things that should be part of common purpose and common cause in a good society.Modern citizenship relies on the coexistence of a range of identities. People need to learn the habits of boundary crossing, of moving easily across racial, gender, geographic and other social boundaries. This is the key to a tolerant and inclusive form of citizenship. It is what I mean by the term `multiple-identity citizenship'. Obviously this is not something that governments can mandate or control. Attempts to disperse or legislate tolerance are bound to fail. They have never worked in the past and they will not work in the future. People work out these things for themselves in civil society, basing their personal identity and values on a dense web of personal experience and social contact.The best role for government is to try to influence the inputs to this process such as the level of education in society and the facilitation of social capital and good community practice. Attempts to manipulate social outcomes are likely to be counterproductive. Positive discrimination programs, for instance, build up resentment in society, pitting single identity groups and issues against each other. I made these points in my interview with Cope and Kalantzis. Obviously the penny did not drop, so I have repeated them here in the Main Committee of the House of Representatives. Unfortunately, the authors of this new book remain glued to their single-identity view of the world. They give a primacy to ethnic issues, which is inconsistent with an enlightened and more progressive view of modern citizenship. Regrettably, the authors of A Place in the Sun are among the new tribalists of our time.1603312:54:0016033Neville, Paul, MPMr NEVILLEKV5HinklerNP10—Before returning for this current sitting fortnight, on Sunday, 2 April I had the pleasure of attending the 40th anniversary of St John's Lutheran Church in Bundaberg. St John's Lutheran Church is a truly remarkable building and has a truly remarkable congregation. The church was designed by one of the early architects and town planners in Australia, Dr Karl Langer, who, with his wife Dr Gertrude Langer, was a great contributor to art and culture in the state of Queensland. But one of Karl Langer's proudest boasts was this church. In the front of the church is a huge open book, and on the book is the famous text of St John: `God so loved the world that he gave his only begotten son,' and so on. That sets a very interesting and dramatic front to this church, which is very popular with the local community and with tourists. It is one of the things you see on the tourist trail when you come to Bundaberg. The Lutheran community has been in Bundaberg since 1873, just six years after the town was established. It has had services in Bundaberg since 1877, only 10 years after the community was established. It is a very interesting community and congregation. I was met by Pastor Rodney Beh who leads the parish. He was assisted on that day by many visiting clergy and three past ministers, John Biar, Lloyd John and Marcus Schultz, attended the anniversary service. The occasional sermon for the day was given by the Queensland Lutheran Church President, Pastor John Vitale, who gave a very inspiring address. I suppose Christians are encouraged to be children of the light and not just in a physical atmosphere, as this building conveys. It is a beautiful, spacious and generous building and is full of light. It is not like the old churches of Europe that sometimes are a bit dark and dingy. This is reflected in the people. Over time they have bought up the whole block around this church and turned it into quite a well-respected primary school. On the occasion of this anniversary, they were moving the manse to make even more room for the school. Sadly, I could not attend, but there was a turning of the sod for the new manse immediately behind the church. When I talk about `children of the light', they were very much so in the quality of their worship. They are not one of those sort of holy Joe communities; they are people who express their Christianity in the things that they do, such as in their education services. In services to the aged they have quite a remarkable nursing home, hostel and units in Bundaberg known as Gracehaven, administered by the Lutheran Church. Outreach has also now extended into grief ministry.It was very moving to see these people, the Bundaberg Lutherans, who have been great leaders in the community. The deputy chairman of our cane growers, Alwyn Heidke, is just one example. In the church that day were Ron and Marion Steinhardt. They were the first couple to be married in the church on 21 May, 40 years ago. A number of people who were in the first confirmation class and baptised in that year were also present, including Kaye Wogandt who was one of the 32 children baptised back in 1960. I place on record my appreciation at being involved in such a moving event. It is another landmark in the service of this community to the people of Bundaberg and district. On behalf of my wife and me, I would like to salute them.1603412:58:0016034Snowdon, Warren, MPMr SNOWDONIJ4Northern TerritoryALP00—In the short time available to me, I just want to raise the issue of the stolen generation, a subject which has been at the forefront of the public's mind over the last few weeks. I am aware that the government and the Prime Minister in particular have a view about these things, but what they need to do is examine the reality, the experience of these Australians. I am fortunate that very many of my friends, and members of an extended family of which I was part, were members of that stolen generation.Once you understand the reality of the entrenched racism that these people suffered as children—their parents and families also suffered—we as a community have to accept that this parliament has an obligation. This happened as a result of decisions by parliament. Whether or not you or I accept any personal obligation, the fact is that this parliament has an obligation on behalf of the people of Australia to apologise for this past treatment and to try and set things right. We can do that very simply by the Prime Minister accepting his obligation, as the Prime Minister, as the leader of this country, to apologise on behalf of the nation and this parliament. Main Committee adjourned at 1.00 p.m.Answers to Questions in Writing16036The following answers to questions were circulated:16036(Question No. 1217)121716036Jenkins, Harry, MPMr JenkinsHH4ScullinALP00 asked the Minister for Employment Services, upon notice, on 6 March 2000:How many contracted places for Intensive Assistance did the Employment National (EN) sites at (a) Greensborough and (b) Preston hand back as a consequence of EN board's decision not to continue with its Job Network ESC1 Intensive Assistance contracts.16036Abbott, Tony, MPMr AbbottEZ5WarringahLPMinister for Employment Services10—The answer to the honourable member's question is as follows:Contracted numbers for Job Network members or their sites are not publicly released as this information is confidential.Employment National ceased providing FLEX 3 (Intensive Assistance) services to clients at the Greensborough and Preston sites on 27 February 2000. Employment National clients that were receiving FLEX 3 services from these sites were transferred to other providers who are delivering Intensive Assistance under the new contract.16036(Question No. 1232)123216036Albanese, Anthony, MPMr Albanese R36GrayndlerALP00asked the Minister for Employment Services, upon notice, on 8 March 2000:(1) Were four employment agencies in Sydney which were successful in providing specialist services for people with a disability, particularly mental health problems, not awarded contracts in the second round allocation of Jobs Network 2 contracts.(2) Is it a fact that as a result of this decision, there is no specialist Jobs Network provider in Sydney for people with mental health problems.(3) Are specialist Job Network providers required in Sydney to assist people with a mental health problems.(4) Does the Government accept the recognition by the World Health Organisation that mental health problems constitute a disability.16036Abbott, Tony, MPMr AbbottEZ5WarringahLPMinister for Employment Services10—The answer to the honourable member's question is as follows:(1) In the first Job Network contract, all Job Network members providing Intensive Assistance were required to assist all job seekers who chose their services. Some Job Network members did advertise their particular expertise in order to attract specific client groups including job seekers with a mental health problem.In the second employment services tender, tenderers bidding to provide specialist Intensive Assistance services were required to demonstrate the need for that specialist service in the local labour market. The onus was then on the tenderer to prove their capacity to provide high quality employment services to people from the specific client group through the quality assessment process, including through proven past performance. In addition, tenderers were required to demonstrate to the Commonwealth their value for money in the allocation of Intensive Assistance business.As a result of the second employment services tender, there are 10 specialist Job Network Intensive Assistance providers in the Sydney region, operating from 34 sites. These Intensive Assistance providers have successfully made a case for specialist provision for the following client groups:• Indigenous job seekers,• Job seekers who are HIV positive or who have AIDS,• Job seekers from a non-English speaking background,• Young job seekers, and• Job seekers with a disability.Four specialist Job Network Intensive Assistance providers have been contracted to assist job seekers with a disability, operating from 1 0 sites in the Sydney region. Of these specialist disability Intensive Assistance providers:• one provider will assist job seekers with a hearing impairment, • one provider will assist job seekers with a vision impairment or blindness,• one provider will assist all job seekers with a disability, and• one provider will assist job seekers with a disability other than a psychiatric disability.In addition, Job Network members can provide special services to job seekers including people with mental health problems as part of their general contract.(2) No. In the second Job Network contract, one specialist Intensive Assistance provider has been contracted to provide employment services to job seekers with a disability including job seekers with a mental health problem in the Sydney region. The provider is Break Thru Personnel with 5 sites in the Sydney region.(3) Of the 4 specialist Job Network Intensive Assistance providers that have been contracted to assist job seekers with a disability, one provider (Break Thru Personnel) will be assisting job seekers with a mental health problem. In addition, employment services to assist job seekers with mental health problems in the Sydney region are available through:• specialist disability employment services funded through the Family and Community Services portfolio,• Community Support Programs which provides for referral to assist in addressing job seeker client's personal barriers to employment, and• general Intensive Assistance Job Network providers assisting members of this group who choose their service.(4) My colleague, Senator the Hon. Jocelyn Newman, Minister for Family and Community Services, has provided me with the following response:The Government accepts that mental health problems can constitute a disability. People with a mental illness are eligible for, and constitute a major client group of, disability services provided under the Commonwealth/State Disability Agreement, and for the range of income support payments available for people with a disability.16037(Question No. 1251)125116037Jenkins, Harry, MPMr JenkinsHH4ScullinALP00 asked the Minister for Employment Services, upon notice, on 13 March 2000:(1) Was 28 February 2000 the first day of the Job Network Employment Services Contract 2.(2) What was the physical location of each of the Job Network sites in (a)Epping, (b) Lalor, (c) Thomastown, (d) Greensborough and (e) Bundoora in Victoria on 28 February 2000.16037Abbott, Tony, MPMr AbbottEZ5WarringahLPMinister for Employment Services10—The answer to the honourable member's question is as follows:(1) Yes.(2) The following Job Network sites were operating on 28 February 2000 in these locations:(a) Job Network MemberSite AddressLnteract AustraliaSuite 4, 763 High StreetEppingIPA Vic Pty LtdSuite 3, Dalton Village Shopping Centre, 351-371 Dalton RoadEppingJOB Futures LtdShop 3, 772 High StreetEppingJobPower Pty LtdShop 111 /Room 7, 571-583 High StreetEppingLeonie Green & Associates Pty Ltd763 High StreetEppingNMIT/DECLCnr Cooper Street & Dalton RoadEppingThe Office Business Academy Pty Ltd763 High StreetEppingThe Salvation Army (VIC) Property Trust748B High StreetEpping(b) Job Network MemberSite AddressHolmesglen AMES NEIS ProgramLalor Park Primary School, Lindak AvenueLalor(c) Job Network MemberSite AddressJOB Futures Ltd141 High StreetThomastown(d) Job Network MemberSite AddressEmployment National Limited16-18 Main StreetGreensboroughGeorge AH Lang's Business College Limited9-13 Flintoff StreetGreensboroughInteract AustraliaLevel 1, 2-4 Main StreetGreensboroughLeonie Green & Associates Pty Ltd9-13 Flintoff StreetGreensboroughNMlT/DECLCivic DriveGreensboroughThe Office Business Academy Pty Ltd9-13 Flintoff StreetGreensborough(e) Job Network MemberSite AddressRMIT Training Pty LtdRMIT Bundoora West Campus, Plenty RoadBundoora