2000-06-083916REPS1736902000-06-08—————Mr SPEAKER (Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Bills17369R107817369Debate resumed from 8 June, on motion by Mr Slipper: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 condemns the Government for: (1) its use of $410 million to sell the GST to Australians whilst it could only spend $200 per small business to provide real help in meeting the onerous compliance costs of small business; and(2) its continual amendment and complication of the tax system”.09:31:0017369Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—On behalf of the government, I would like to thank all participants in this debate. The Taxation Laws Amendment Bill (No. 6) 2000 has a number of measures. Firstly, the tax law will be amended so that the Community Development Employment Project scheme supplement will be treated in the same way as equivalent payments under Newstart and Youth Allowance labour market programs. This means that the supplement will be covered by pay-as-you-earn and pay-as-you-go and that recipients will be eligible for the beneficiary rebate. This will provide consistent treatment for similar payments. Secondly, the law will be amended to make sure that no-one becomes liable to tax in relation to a GST direct assistance certificate. There was a concern that the certificates could have represented income under the Income Tax Assessment Act or that redemption of the certificates might have given rise to a capital gain. This provision should alleviate that concern. The exemption will cost the revenue $70 million over the next two years.A little later, I will be moving an amendment with respect to the bill seeking to amend the Medicare levy surcharge provisions to ensure that high income earners are subject to the surcharge where their insurance is not adequate. The bill will target policies with what is known as high front-end deductibles—that is, large excesses. The rule will be that, if a single person takes out a policy after 24 May this year with an excess of more than $500 per annum or if anyone else takes out a policy after 24 May 2000 with an excess of more than $1,000 per annum, the policy will not exempt the person from the Medicare levy surcharge after 1 July 2000. High income earners are buying cheap health insurance because of a large excess and are, therefore, not liable for the surcharge but may still use public health facilities because they want to avoid the excess. This is clearly contrary to the policy of the government which seeks to encourage Australians to take out adequate private health insurance to relieve some of the burden on the public health system.As is the habit of the honourable member for Wills, he has moved a second reading amendment which is not accepted by the government. While not declining to give the bill a second reading, the member for Wills sought to have the House condemn the government for our advertising campaign. He also mentioned that there was continual amendment and complication of the tax system.I just want to place some facts on the record. Nothing compares to the ramshackle tax legislation that Labor presided over for 13 years. They made a couple of half-hearted attempts to reform the taxation system. We found that they said one thing but, at the end of the day, we found that a tax system which was indeed outdated, unfair and inequitable was left on the statute books. This government was prepared at the last election to stand up and seek a mandate from the Australian people, a mandate that was comprehensively given to us. Instead of accepting that mandate, we find that the Labor Party have sought in so many ways to undermine and subvert the will of the Australian people, as determined in the October 1998 federal election. The changes with respect to our new tax system, which commences on 1 July, are very beneficial and they will produce a much fairer system than we have today. We, as a government, reject outright the innuendo that we ought not to educate the Australian people about the law of Australia, as has been legislated by the parliament of the Commonwealth of Australia. We have a clear responsibility to explain important changes which will be very beneficial for all parts of the Australian community. In fact, the Labor Party have even said that we ought to be educating the community, that we ought to tell people what is happening, yet we find that they have the audacity to come into the chamber and move this second reading amendment which seeks to criticise the government for carrying out its responsibility to keep the Australian people informed about the important and beneficial changes of Australia's new tax system.The member for Wills has also overlooked the fact that small business are also real beneficiaries of the government's tax changes. So we are not going to apologise for carrying out our mandate and carrying out our responsibility to explain the most fundamental and beneficial tax changes ever to occur in our Australian community. Would Labor prefer the community was kept in the dark? They did that for 13 years. We certainly do not believe that that is the appropriate way to go.Also, the member for Boothby, Dr Southcott, delivered what I thought was one of the best speeches that he has delivered. He referred to the contribution of the honourable member for Wills as being harping and whining. I suppose that really sums up the efforts of the honourable member for Wills. The honourable member for Rankin, Dr Emerson, mentioned in his criticism of the government that he thought that what we were doing was not appropriate. Again, he is very narrow-minded and has selective hearing. Our new tax system is pro small business, and Australian investors and exporters will benefit. So this is a new tax system, an important change, a system which the Australian people ought to be advised about. We are certainly not going to apologise for making sure that people are well and truly aware of Australia's new tax system, which will see personal income taxes totalling $12 billion and, as a result, 80 per cent of Australians having a marginal tax rate no higher than 30 cents in the dollar. These are the largest income tax cuts in Australian history. There will also be a substantial increase in pensions, benefits and family assistance. There will be major reductions in business costs, particularly for exporters. There will be significant reductions in transport costs for rural and regional Australia. There will be the abolition of a range of complex, inefficient and distorting taxes, including Labor's wholesale sales tax, and there will be reform of the Commonwealth-state financial relations. It is worth noting that all GST revenue will be paid to the states and territories providing a more realistic basis for the future provision of essential services such as schools, public hospitals, police and roads. We have also streamlined business registration and reporting, and the fairer tax system will bring those currently operating in the cash economy into the tax net. So this is a wonderful new tax system. It is a tax system for which we have received a mandate. It is about time the Labor Party got on board and respected the mandate of the Australian people given to the government of Australia and backed the new tax system which will come into effect on 1 July. I commend the bill to the House.Amendment negatived.Original question resolved in the affirmative.Bill read a second time.17370Bill—by leave—taken as a whole.09:41:0017370Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—I move:(1) Page 6 (after line 1), at the end of the Bill, add:Schedule 3—Medicare levy and surcharge for health insurance policy with high excessA New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 19991 Subsection 3(1)Insert:covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4. Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.2 Subsection 3(1) (definition of provides)Repeal the definition.3 Section 4Repeal the section, substitute:4 When does a person have private patient hospital cover? (1) For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if the policy is an applicable benefits arrangement, within the meaning of section 5A of the National Health Act 1953, to which paragraph 5A(1)(a) of that Act applies. (2) However, for the purposes of this Act a person is not covered by an insurance policy that provides private patient hospital cover if: (a) the insurance policy that covers the person is an applicable benefits arrangement that: (i) is modified in accordance with an election described in paragraph (ba) of Schedule 1 to the National Health Act 1953; and (ii) is associated with a health benefits fund conducted by a registered organization under that Act; and (b) the difference between the lesser benefits mentioned in that paragraph and the benefits payable in accordance with a corresponding applicable benefits arrangement not modified in accordance with such an election is more than: (i) $1,000; or (ii) $500, if there is only one contributor (as defined in that Act) to the health benefits fund for the applicable benefits arrangement mentioned in paragraph (a) of this subsection and benefits are not payable under the arrangement in respect of the contributor's dependants (as defined in that Act), if any. (3) Subsection (2) does not prevent a person from being covered by an insurance policy that provides private patient hospital cover if: (a) the person has been covered by the policy continuously since the end of 24 May 2000; and (b) the election mentioned in subparagraph (2)(a)(i) was made before the end of 24 May 2000. (4) For the purposes of this Act, a person is also covered by an insurance policy that provides private patient hospital cover if: (a) the policy is issued by a person to whom subsection 67(3) of the National Health Act 1953 applies; and (b) if the person referred to in paragraph (a) were a registered organization within the meaning of that Act—the policy would be an applicable benefits arrangement, within the meaning of section 5A of that Act, to which paragraph 5A(1)(a) of that Act would apply. (5) However, for the purposes of this Act a person is not covered by an insurance policy that provides private patient hospital cover if: (a) the person is covered by an insurance policy described in subsection (4); and (b) under subsection (2), the person would not be covered by an insurance policy that provides private patient hospital cover for the purposes of this Act, assuming that: (i) the policy mentioned in paragraph (a) of this subsection were a policy described in subsection (1); and (ii) the person issuing the policy were a registered organization conducting a health benefits fund under the National Health Act 1953; and (iii) the policy were associated with the fund. (6) Subsections (2) and (5) do not limit the circumstances in which, for the purposes of this Act, a person is not covered by an insurance policy that provides private patient hospital cover. Example: For the purposes of this Act, a person is also not covered by an insurance policy that provides private patient hospital cover if the person is not covered by an insurance policy described in subsection (1) or (4).Medicare Levy Act 19864 After subsection 3(5)Insert: (5A) However, for the purposes of this Act a person is not covered by an insurance policy that provides private patient hospital cover if: (a) the insurance policy that covers the person is an applicable benefits arrangement that: (i) is modified in accordance with an election described in paragraph (ba) of Schedule 1 to the National Health Act 1953; and (ii) is associated with a health benefits fund conducted by a registered organization under that Act; and (b) the difference between the lesser benefits mentioned in that paragraph and the benefits payable in accordance with a corresponding applicable benefits arrangement not modified in accordance with such an election is more than: (i) $1,000; or (ii) $500, if there is only one contributor (as defined in that Act) to the health benefits fund for the applicable benefits arrangement mentioned in paragraph (a) of this subsection and benefits are not payable under the arrangement in respect of the contributor's dependants (as defined in that Act), if any. (5B) Subsection (5A) does not prevent a person from being covered by an insurance policy that provides private patient hospital cover if: (a) the person has been covered by the policy continuously since the end of 24 May 2000; and (b) the election mentioned in subparagraph (5A)(a)(i) was made before the end of 24 May 2000.5 At the end of section 3Add: (7) However, for the purposes of this Act a person is not covered by an insurance policy that provides private patient hospital cover if: (a) the person is covered by an insurance policy described in subsection (6); and (b) under subsection (5A), the person would not be covered by an insurance policy that provides private patient hospital cover for the purposes of this Act, assuming that: (i) the policy mentioned in paragraph (a) of this subsection were a policy described in subsection (5); and (ii) the person issuing the policy were a registered organization conducting a health benefits fund under the National Health Act 1953; and (iii) the policy were associated with the fund. (8) Subsections (5A) and (7) do not limit the circumstances in which, for the purposes of this Act, a person is not covered by an insurance policy that provides private patient hospital cover.Example: For the purposes of this Act, a person is also not covered by an insurance policy that provides private patient hospital cover if the person is not covered by an insurance policy described in subsection (5) or (6).6 Application of amendmentsThe amendments made by this Schedule apply for the purposes of working out Medicare levy and surcharge (as defined in Part VIIB of the Income Tax Assessment Act 1936) for financial years starting on or after 1 July 2000.[sections 3 & 4 of Medicare-related Acts: excess for private health insurance]This amendment to the Taxation Laws Amendment Bill (No. 6) 2000 proposes to give effect to the announcement by the Minister for Health and Aged Care on 24 May 2000 that high income earners will be subject to the Medicare levy surcharge from 1 July 2000 if they purchase private health cover on or after 25 May with excesses greater than $500 for singles or $1,000 for families. Those with these high excess policies purchased on or before 24 May 2000 are not affected. The amendment addresses concerns that high income earners have been purchasing inadequate health insurance to avoid the Medicare levy surcharge. It will encourage those who can afford to do so to purchase comprehensive hospital insurance and use the private health system when hospital treatment is required. I present a supplementary explanatory memorandum. Amendment agreed to.Bill, as amended, agreed to.17373Bill (on motion by Mr Slipper)—by leave—read a third time.Bills17373R100017373Consideration resumed from 7 June.Senate's amendments—(1) Page 2 (after line 5), after clause 3, insert:4 Review of operation of Act (1) The Minister must cause an independent review of the operation of gap cover schemes to be undertaken as soon as practicable after 1 July 2002. (2) A person who undertakes such a review must give the Minister a written report of the review. (3) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament not later than 31 December 2002. (4) In this section:independent review means a review undertaken by persons who: (a) in the Minister's opinion possess appropriate qualifications to undertake the review; and (b) include one or more persons who are not employed by a registered organization, the Commonwealth or a Commonwealth authority and have not, since the commencement of this Act, provided services to a registered organization, the Commonwealth or a Commonwealth authority under or in connection with a contract. (2) Schedule 1, item 6, page 4 (after line 19), before section 73BDD, insert:73BDDA Purpose of gap cover schemes The purpose of a gap cover scheme is to enable a registered organization to offer insurance coverage for the cost of particular hospital treatment and associated professional attention for the person or persons insured where: (a) the cost of the treatment or attention is greater than the Schedule fee (within the meaning of Part II of the Health Insurance Act 1973) for the treatment or attention; and (b) there is not a hospital purchaser-provider agreement, a medical purchaser-provider agreement or a practitioner agreement between the registered organization and the service provider concerned; and (c) the person insured pays a specified amount or percentage under a known gap policy or the full cost of the treatment or attention is covered under a no gap policy.(3) Schedule 1, item 6, page 5 (line 12), at the end of subsection (5), add: ; or (d) an index or method for measuring the inflationary impact of gap cover schemes on the total cost of treatment and the rise in private health insurance premiums.(4) Schedule 1, item 6, page 5 (lines 13 to 18), omit subsection (6), substitute: (6) Without limiting the criteria to be specified in regulations made for the purposes of paragraph (5)(b), criteria must include the following: (a) the provision of particulars sufficient to demonstrate, to the satisfaction of the Minister, that the operation of the gap cover scheme for which approval is sought will not have an inflationary impact; (b) the requirement that a person providing hospital treatment or associated professional attention under a gap cover scheme for which approval is sought must disclose to the insured person any financial interest that the first-mentioned person has in any products or services recommended or given to the insured person. (5) Schedule 1, item 6, page 5 (after line 18), at the end of section 73BDD, add: (7) The Minister must not approve a gap cover scheme unless the scheme provides for insured persons to be informed in writing, where the circumstances make it appropriate, of any amounts that the person can reasonably be expected to pay for treatment and the insured person acknowledges receipt of the advice.(6) Schedule 1, item 6, page 6 (after line 22), after section 73BDE, insert:73BDEA Regulations Subject to section 73BDE, the regulations may make provision relating to the operation and regulation of gap cover schemes approved by the Minister.(7) Schedule 1, item 6, page 5 (line 19) to page 6 (line 22), omit section 73BDE, substitute:73BDE Review and revocation of gap cover schemes (1) Subject to regulations made for the purposes of this subsection, each registered organization must provide an annual report to the Minister and the Council in respect of any gap cover scheme that it operates. (2) Regulations made for the purposes of subsection (1): (a) must provide for the form and content of each report; and (b) must provide for the date by which each report is to be provided to the Minister and to the Council; and (c) may provide for the Minister to permit the provision of a report after the date provided for under paragraph (b) in specified circumstances; and (d) may provide for the initial report in respect of a gap cover scheme to be provided in respect of a period of more or less than a year in circumstances specified in the regulations; and (e) may provide for reporting on the proportion of cases in which advice about the expected costs of treatment was provided to insured persons in advance. (3) Where a scheme fails to perform in accordance with: (a) the requirements of paragraph 73BDD(6)(b); or (b) any prescribed criteria for approval; or (c) any condition imposed by the Minister;the Minister must establish a review of the operation of the scheme to determine whether it should continue to operate, or continue to operate subject to further conditions. (4) The Minister may revoke a scheme if: (a) the Minister has established a review of the scheme under subsection (3); and (b) a period of 12 months has elapsed since the review was completed; and (c) the scheme has failed to rectify any faults identified by the review. (5) A registered organization may seek variation or revocation of a scheme in prescribed circumstances and the Minister may: (a) approve such variations subject to any additional conditions that he or she thinks necessary to achieve the objects of gap free schemes; or (b) revoke the scheme.(8) Schedule 1, item 7, page 6 (after line 30), after paragraph (bc), insert: (bd) to publish on the Internet, and make available for inspection at its offices, details of all gap cover schemes approved by the Minister under section 73BDD, including details of any terms and conditions that apply to the relationship between a registered organization and individual medical providers;Motion (by Mr McGauran) agreed to:That the amendments be agreed to.Bills17374R106117374Debate resumed from 13 April, on motion by Mr Costello:That the bill be now read a second time.09:44:0017375Kerr, Duncan, MPMr KERRRH4DenisonALP00—The opposition will not be opposing the New Business Tax System (Integrity Measures) Bill 2000, but we will be moving a second reading amendment that identifies a number of significant concerns. Those concerns, which we will be addressing in the public debate regarding the implementation of this measure and at a later stage in the Senate, relate to the following: firstly, the lack of integrity in the legislation in failing to tackle tax avoidance through the use of family trusts; secondly, the unfair approach in the legislation to taxation policy, including the proposal in this bill to discriminate against artists; thirdly, the flawed implementation of the various new taxation arrangements; fourthly, the scandalous waste of taxpayers' money that the government is spending on its $431 million, and rising, GST information and promotion campaign; and, lastly, the fundamental unfairness and complexity of so much of the new taxation arrangements. I should firstly address some of the very significant concerns that have been expressed in relation to this bill by the arts community because they, of all amongst the community, have had their voice ignored. The vast majority of professional artists in Australia earn less than $40,000. The Australia Council estimates that the average income for artists is in fact less than $20,000, and they are not the tax avoiders that the Ralph measures were aimed at. Most of those who work within the arts profession are struggling with little or no profit and their practices will be hit disproportionately hard by the GST changes. Those GST changes will increase their costs and reduce their already meagre income and returns. So the double hit of the GST and the Ralph measures is likely to force many individual artists out of that industry. The tragedy is that artists do make a vital contribution to Australia's quality of life. What they do and how they thrive or fail to thrive shapes our cultural identity. There is no justification to deny to individual artists who, on average, are earning less than $20,000 a year the right to claim the losses of their art practices against their non-art income when farmers are given equivalent exemption from the government's tax crackdown on non-commercial losses. Last year when the Ralph measures were announced the opposition indicated to the government that we would support their tough no exemption position in relation to the anti-tax avoidance measures. We did so knowing that there would be a number of cases made for exemptions and that our position would no doubt subject us to considerable political pressure which we would have to resist. But the government, without any consultation with the opposition, proposed an exemption allowing farmers to claim tax losses against non-farm incomes of less than $40,000 in the New Business Tax System (Integrity Measures) Bill 2000. That is not without its very substantial costs to revenue. The differences between the Treasurer's announcement of the Ralph measures and that contained in the bill indicate that over a four-year period of time there is a total watering down of the non-commercial losses provision because of the exemption the government has agreed to in respect of farm income of some $230 million over four years. That is very substantial. For example, in the year 2000-01 the Treasurer's initial announcement predicted additional revenue receipts to the Commonwealth of some $50 million; the bill indicates that revenue to be $30 million—a shortfall of $20 million. In the year 2001-02 the initial prediction was for revenue increases of $310 million; the bill indicates that revenue to be $230 million—a shortfall of $80 million. In 2002-03 the announcement predicted additional revenue of $240 million; the bill indicates that the revenue will be $170 million—a shortfall of $70 million. And for the fourth year the announcement predicted a revenue gain of $200 million; the bill indicates that the revenue will be $140 million—a shortfall of $60 million. So the government, without any consultation with the opposition, indicated that it would allow a continuation of the right of farmers to offset farm losses against non-farm incomes of less than $40,000. In that context it seems perverse that the government thus far has not accepted the case of artists who are in a very difficult position, a uniquely difficult position, as a result of the combined impact of the GST changes and the Ralph measures. The Australia Council has advised the government about the impact that the GST changes will have. They will increase the costs to artists. There is a tendency when we speak of artists to think of visual artists, but I am using the term in a very broad sense, covering all the performing arts, the visual arts and the crafts—the range of different activities which enrich our culture. All those activities are going to be burdened significantly by the new GST. There are few offsets that can be had. So the modelling that the government has done and the modelling that the Australia Council has done each show that the arts is a sector, second only to gambling, which will be most adversely impacted by price rises. There are significant expectations that audiences in the performing arts will face very high increased charges. There will be reduced audiences. The prices of visual arts will increase, and many people who have been working within the industry will have to consider whether they can continue to do so. This group of people particularly resent the implication that is in this legislation that they are properly described as hobbyists, because the measures that have been proposed by the government are intended to set up a series of tests which exclude them from the capacity to write off non-commercial losses from business enterprises which are not viewed objectively as serious commercial operations. The tests that have been proposed and the description of those who fall outside those tests as hobbyists seem to artists to be singularly ill judged. They may well be appropriate for a raft of other activities, but we do know that those who seek to enter the arts as a profession often face years and years of impecunious struggle before they succeed.There is a cliche about the struggling artist, starving in the garret. Cliches contain more than a grain of truth. The truth is that many of those whom we now laud as premier amongst our artists spent years and years struggling, supporting themselves on second incomes. They washed dishes, worked in restaurants, tutored part time and undertook a range of other activities so that they could buy the materials they required—leotards if they are dancers, canvasses if they are visual artists and musical instruments if they are musicians—and do all the sorts of things inherent in building a practice, before they were recognised and able to market their product to an Australian and international audience which would then support them as full-time successful commercial artists.The sad truth is that, for every success that we have, there are many failures. This bill will make it that much harder for people to undertake those kinds of activities. I will give an example. I received a letter from E.M. Christensen—an artist, writer and illustrator—who lives in Lindisfarne in Tasmania—not in my electorate but Harry Quick's. The letter says:Mr Kerr,PLEASE, PLEASE, PLEASE will you support Senator Bob Brown's amendment to The New Business Tax (Integrity Measures) Bill 2000.The government should heed this. E.M. Christensen goes on to say:While I in principle support the GST—one of the few Australians who thus far remain true believers—it will be impossible for me to continue to work as an artist if I have to comply with the new requirements for tax deductibility. My income from all sources averages approximately $13,000 per annum; expenses vary depending on the type of work I am doing, but are more often than not greater than the income I receive from my art. Checking my tax returns for the past couple of years reveals:art income 97/98 $5,453.56art expenses 97/98 $2,852.28art income 98/99 $3,799.95art expenses 98/99 $9,103.52.The variation in expenses is due partly to the fact that I began painting a large series of oil paintings for a solo exhibition (having spent the previous year planning them) and partly to more aggressive advertizing/exhibiting last year, entering more paintings in major exhibitions. Being able to claim these expenses against my other income from all sources including Newstart and payments for part-time tuition brought my income below the taxable threshold (and meant the provisional tax I paid the previous year was refunded). Had I not being able to do this, my taxable income would have been:income from all sources 98/99 $14,534.71less art income (offset by costs) $3,799.95$10,734.76 (and taxed accordingly) Under the present system my taxable income last year was $5,431.19.Here is the sting:This is not a “rubbery figure” obtained by offsetting one business against another and claiming some dubious deductions. This is the REAL AMOUNT I had left to pay for food, rent, heating, clothing and entertainment for the year 1998-99. Increase my expenses by 10%— i.e. $900, then deduct tax on the money I earn to pay them—I'm not good at arithmetic, but I don't think it will leave me very much at all for me to live on. So I will have to give up the luxury of trying to sell my art work ...There we have it. I find it extraordinary that the government has got itself into a position where a group in the Australian community that matter so much to us in terms of our national identity, and who are not the tax avoiders targeted by the Ralph measures, are being hurt and damaged by this legislation.I received an email yesterday which has also been sent to the minister at the table, the Minister for the Arts and the Centenary of Federation. The email said:Dear PoliticiansThis legislation and how it effects working artists is a joke—if only it was funny! As working artists what the government is proposing will only make the arts even more difficult than what it is at present. Visual arts in particular will be hard hit.The typical artist does not spend a minimum of $100 000 on plant and equipment and show me an artist that makes a profit 3 out of every five years!!!The legislation is ridiculous and does not endear this govt to me or many of my friends. Not all artists are anti-liberal but it would appear that this govt doesn't give a rats.Lost our vote Johnny.S & R HefferonThese are two pieces of correspondence out of thousands that I have received and that I am certain the minister has also received.XH4McGauran, Peter, MPMr McGauran—Thousands? I think that is a slight exaggeration.RH4Kerr, Duncan, MPMr KERR—The minister at the table, who is responsible for the arts, sits there diminishing the case that has been made on behalf of the constituency that he wishes to represent. He sneers at those who are in the position that his government has placed them in.XH4McGauran, Peter, MPMr McGauran—Mr Speaker, I rise on a point of order. The shadow minister is putting words in my mouth. He is verballing me and misrepresenting me. I simply asked him to do more than send one copy of a protest that he has received. He has failed to do so.10000SPEAKER, MrMr SPEAKER—The minister will resume his seat. He does not have a valid point of order. I invite the minister and the member for Denison to cease their cross-table exchange, and for the member for Denison to return to the debate that he was addressing.RH4Kerr, Duncan, MPMr KERR—Thank you, Mr Speaker. I will help the minister—seeing that he obviously does not note the volume of correspondence that has been addressed to him and me—by referring him to another—XH4McGauran, Peter, MPMr McGauran—Mr Speaker, I raise a point of order. I believe the shadow minister is defying your advice. He continues to misrepresent me.10000SPEAKER, MrMr SPEAKER—The minister will resume his seat. The shadow minister's comment, while it may not have been charitable, was not out of character with comments normally made in debate.RH4Kerr, Duncan, MPMr KERR—I received an email on 29 May from Shelley James. It is important to see that the case being made in this instance is not confined simply to the visual arts. Shelley James writes saying:Having never ever met an artist (or writer in my own profession) who has earned over $5,000 annually from their artistic work the above—this is in relation to the arrangements the government has proposed—seems to be very shortsighted and nonthinking.She continues:Actually this present government almost puts me beyond words in the exasperation I feel in their attitude to the arts and artists. In future history texts looking back on this time 1996-2001 the headlines will probably include words like—bleak, backward, regressive, cultural wasteland.Yet as writers we're still out there doing it though it may be underground, it may not be given the credit it deserves, it may be one of the worst decades to contemplate trying to get a novel published.That is correspondence from the literary profession. I have a letter from the music profession. Brooke Green writes saying: However, it appears that now, poor musicians or musicians supporting themselves by other means, along with other artists have been caught in the net along with the rich “hobbyists”. And by the way, we really resent being called hobbyists!!!! I might add that all of us have been in training since the age of 8 or so, attained post-graduate qualifications in Australia, funded our overseas education largely on our own, worked overseas for several years in prestigious London and European orchestras, but on returning to Australia find there are no full-time jobs in our field of (early) music. Thus the necessity for our day jobs. But at the same time we have not sacrificed or let slip, our professional standards.That is the musicians. I have a media release from the Australian Screen Directors Association saying:“The legislation would be a disaster for filmmakers earning less than $20,000 per year, because they would not be allowed to consider themselves in business and would therefore be ineligible to claim tax deductions for their work,” said Richard Harris, Executive Director of ASDA. “ASDA's recent survey of its members indicated that almost half of its membership earn less than $20K from their filmmaking activities. If these filmmakers are unable to claim legitimate expenses, they will become increasingly unviable and this country will face a huge loss in its creative capital. At a time when filmmakers are struggling to come to terms with the GST, this would be a double blow.Those sentiments plainly are not sentiments that are heard by the Minister for the Arts and the Centenary of Federation. I find that a matter of great regret.The opposition has indicated that if the Senate passes the provisions that have been introduced by the government in relation to allowing farmers to claim their farm losses against non-farm incomes, the opposition will support equivalent measures for individual artists to offset their genuine art practice losses against non-art related income of less than $40,000. That provides a balanced response and a proper and ethical solution to a circumstance where artists have been caught in a trap that was not intended to catch them. It is certain that the revenue that will be involved in that very minor change in relation to artists will be nowhere near the revenue loss the government has indicated will flow from its own unilateral decision to include an exemption for non-commercial losses of farm income where the offset will be in the order of $230 million over those four years.I should make some general remarks regarding the other issues that the legislation canvasses. The first point I want to make is that there still is an outstanding gap in the government's response to tax avoidance, that is, the issue of family trusts. It stuns the opposition that the government has failed to bite the bullet in this key area. We believe that the government has been too much the victim of the voices of those of its own immediate constituency, including perhaps some of its own members in this parliament, who have related trust vehicles designed to minimise tax. Secondly, we are offended by the way in which taxpayers' money has been squandered on the blatant political advertising of the goods and services tax. Even if one excludes what could possibly be construed as genuine provision of public information—and much of that has been marketed as PR fluff—about $190 million now has been identified as simple political partisan advertising. An amount which would completely fund the advertising campaign of the US presidential election is being spent to promote the interests of a government in office and measures that it seeks to introduce against the will of its own community. This is a disgrace. Where the legislative, constitutional and administrative legitimacy for this is to be found, damned if I know.I have put another question to the Attorney-General drawing his attention to a British case where the High Court in Britain entertained an argument against a politically partisan expenditure of money to promote a tax that was then being canvassed by the Thatcher government. The only reason the court did not hear and entertain that case is that they found on the facts that it contained balanced and factual material. But how could a court find that in relation to the present campaign that the government is putting forward? There would, as the shadow Attorney-General has indicated, be the gravest of doubts about both its legality and why it has not been drawn to the attention of the government by its first law officer. When I put on notice a question regarding this matter he said, `Well, it's not a matter of public importance. I do not see why I should ask the Australian Government Solicitor to prepare a legal practice note because I do not see this issue as being a matter of sufficient public importance.' How the Attorney can maintain that case in the light of this massive abuse of the public interest is beyond me. So I have asked the question again, because I believe that any proper, straightforward expression of law would say that this is an invalid, unlawful and unauthorised expenditure of public moneys. It is a matter on which, in due course, I am certain, the Auditor-General will report. But we should not have to wait for the Auditor-General; we should have a government with a little moral spine and an Attorney with a commitment to uphold the laws of the Commonwealth and not to duck away from those responsibilities when they are drawn squarely to his attention.The next point I want to make is on the other issues in relation to this legislation. As far as the measures go in relation to alienation of personal services income, these tests that the government has put forward represent, in the opposition's view, a reasonable attempt to come to grips with what is a very difficult question—namely, what is the difference between an employee and someone genuinely conducting a business. But the bill introduces two sets of provisions which override the general tests. They include grounds upon which the commissioner may override the new rules, and transitional arrangements. The further grounds test—the commissioner's discretion—introduces a provision which has the potential to allow dodgy contractors in major industries not to be caught by the system once the two-year transitional period is over. This represents a potentially significant problem which should be carefully examined, and we will be looking to have that matter examined before assenting to it.Secondly, as relates to prepayments under tax shelter arrangements, there has been a very generous transitional rule for the scheme during the current financial year. Plainly, that is a matter now which has passed and it would be churlish for the opposition to seek to review those matters in any Senate examination. But they should be inquired into. They should be looked at in the Senate inquiry process, because there is a shortfall for the year 2000-01 of nearly $30 million simply as a result of those more generous transitional arrangements than those which were proposed in the original Ralph recommendations.Finally, I go to the non-commercial losses. The matter is not without its complexity. The government has obviously recognised that by itself, moving to exclude farm income from those changes proposed by Ralph. Of course, the reason for the Ralph recommendations was, it reported, that non-commercial losses—that is, losses which occur from business enterprises which when viewed objectively are not serious commercial operations—if allowed to continue would be a serious drain on the revenue.Insofar as this bill proceeds it has cut out a very large element of the proposed revenue from the Ralph reforms but, as I have indicated previously, without looking at the equity implications for another group in the community—that is, artists—which has not been dealt fair treatment in relation to the way in which the tax system will be operating. So we have indicated that we will be looking at the proposals the government has introduced outside the Ralph recommendations in relation to farm income. Those issues will be examined to make certain that they are suitable for adoption by this parliament. But it does appear that they have the support of the Democrats; they will pass. Given that these exemptions are going to occur in relation to farm income, it does seem perverse that the government is not willing to acknowledge the case that artists, who were never intended to be the beneficiaries of anti-tax avoidance—and, remember, we do hear loosely the expression of `Pitt Street farmers', who may have been the intended—2V5Swan, Wayne, MPMr Swan—You're not talking about the minister.RH4Kerr, Duncan, MPMr KERR—I do not know whether Minister McGauran is a Pitt Street farmer. He is certainly a farmer, and he is in the parliament, and he may be claiming certain tax advantages. These are not matters which I would want to canvass. It may well be that the Pitt Street farmer was the actual intended target of the Ralph reform measures. Farmers have been excluded. That artists—who could not have conceivably been the target of those measures, because of the nature of their income, the way they are positioned in the economy, the circumstance of their practice, the fact that they need years and years, often working at other jobs to support themselves, before they are able to earn commercial income—are not being addressed is a matter of shame. All of us know stories of people who were never recognised for the talent that subsequent generations recognised them as having in the art profession—the clearest example we all know is Van Gogh—who sold one painting in their lifetime. How could we have a system that we endorse in this community that would say such a person is regarded as a hobbyist? It is offensive. I move the following amendment to the motion for the second reading and commend it to the House: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 condemns the Government for:(1) its lack of integrity for failing to tackle tax avoidance through the use of family trusts;(2) its unfair approach to taxation policy including the proposal in this bill to discriminate against artists;(3) the flawed implementation process of the various new taxation arrangements;(4) the scandalous waste of taxpayers money on the promotion of new taxation arrangements; and (5) the fundamental unfairness and complexity of so much of the new tax arrangements”.10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—Is the amendment seconded?83VEmerson, Craig, MPMr Emerson—I second the amendment and reserve my right to speak at a later time.10:14:0017380Baird, Bruce, MPMr BAIRDMP6CookLP10—I rise today to support the New Business Tax System (Integrity Measures) Bill 2000 and commend the Treasurer for the changes that have been made. These are part of the Ralph report recommendations. It was certainly disappointing that the member for Denison, who spent most of his speech talking about some of the artists who I am sure live in his electorate—and good on him if he is looking after that group—did not recognise that the government, through these measures, is aiming directly at those people who have been hiding behind tax shelters for many years, especially during the 13 years that the Labor Party was in power. There it was protecting these people who had their own lifestyles in their country retreats—the Pitt Street and Collins Street farmers—and the Labor Party has now set itself up as the great doyen of integrity. But where was it for 13 years when this practice was going on? It took this government to take measures through this House in order to stop some of the practices of the past. I certainly believe that the attack on the Minister for the Arts and the Centenary of Federation, who is at the table, was unfair. He has provided considerable incentives for artists. Even in my electorate, $1 million was allocated to the provision of an art gallery the funding for which has been extremely well received by the people who live in my electorate. In fact, the Labor council is one of the biggest users. It is always having functions in the gallery, much of the funding for which has been provided by Commonwealth funds, and there are very little thanks to the minister who provided it. It is the minister at the table whom we can thank for this initiative.A significant colony of artists live in Bundeena, which is currently in the area of the member for Hughes but at the next election will be coming into the electorate of Cook. This is a significant colony of artists, and I look forward to working with them on this issue. It is also interesting that the old rhetoric is again brought out by the member for Denison about the television ads, exaggerating the true picture as the advertisements cost a little over $20 million and not the figure of $180 million he quoted here at length. The organisation I belonged to previously, the Tourism Council, was one of the recipients of several million dollars to enable its members to be informed as to how to prepare for the GST. This has gone right across the board with all types of organisations so they can provide the information that is necessary. To simply label that as political promotion is a total nonsense. It is a practical guide, and when we consider what the Labor government did with the superannuation measures when they were in power these pale in comparison. I think this bill is an important measure. It brings together some of the anti-tax avoidance measures and lines up with the other integrity measures bill which was brought before the House relating to the contracting out of services where again criteria were established for whether someone was a genuine service provider or simply an employee in another guise. They were effective measures, and so are these measures presently before the House. They form part of stage 2 of the government's response to the Ralph report on business taxation announced by the Treasurer late last year and demonstrate the government's clear intention to move on tax avoidance. The first section of the bill limits the extent to which non-commercial losses can be written off by the taxpayer against their income tax. This should increase the revenue by around $30 million in the next financial year, increasing it to $230 million and then $170 million in the following two financial years. This is the type of thing I would have expected the member for Denison to have commented on. This is revenue that can be spent on other things, this is revenue that was ignored by the previous Labor government, and it takes this government to move in this area.The second section of the bill changes current arrangements to limit the tax deductibility of a prepayment to the period where the goods or services being paid for are actually being provided. This should increase the revenue by an average of $80 million over the next financial year. As I mentioned, this bill deals with losses that are made as part of a non-commercial venture. At present, Australia loses millions of dollars of taxation revenue annually to losses made by unprofitable non-commercial ventures. A typical arrangement is that a businessman, a professional, from Sydney, Melbourne, Adelaide, Perth or Brisbane will buy a property in the country for lifestyle reasons. They run a few cattle or a few sheep or maybe have a small vineyard. It is not commercially viable and the losses are written off their tax. This has gone on for many years, and it is interesting that it has taken this government to take the tough decisions in a number of areas to put a stop to it. If people want to buy farms, good luck to them. It is part of the Australian way of life that people should enjoy a country lifestyle, but not to the extent that it is subsidised by the taxpayers of Australia. If they want to have that lifestyle and it is not a genuine business, they should pay for it themselves and not be subsidised by people who are working in the factories, schools and offices across the country. There is a test to determine whether these are genuine businesses or not, and it is one point on which the member for Denison was a little bipartisan as he outlined it. He said it was a reasonably fair test and difficult to establish in terms of the Taxation Office. The test takes into account a number of things: the level of turnover of the venture; whether the venture produced a profit in at least three out of the previous five years, including the current year; the value of real property used by the business, which must be in excess of $½ million; and the value of other assets used, which must be at least $500,000. Only one of these criteria needs to be passed in order for the tax exemption to be given. I believe they are quite fair and generous. In addition, discretion will be allowed in the case of fledgling businesses that are just starting off and in the case of natural disasters, such as drought or flood, which can have devastating effects on primary producers, where primary producers would not be able to meet the criteria that are set out in this legislation.Another provision in this bill relates to primary producers. Provision has been made for small ventures in this area whose non-primary production is less than $40,000. In times of hardship, it is not unusual for farmers to go into the town to earn some extra income. This is provided for in this bill if the overall off-farm income is less than $40,000. I think that is well worth while. It recognises some of the hardship that exists in the rural population and indicates that the government is listening to country issues.The result of these changes is a clear encouragement and an incentive for people to direct their investment into areas which are going to provide effective returns, good economic returns, for the country which are not simply about lifestyle but about productive activities. Previously, the difference between carrying on a viable enterprise and enjoying a hobby or other pursuit of personal interest has not been clear. It has now been made clear. This bill provides a systematic solution to these problems This situation has taken up a great deal of the Australian Taxation Office's time. These changes are welcome. The second part of the bill relates to prepayments. It is an amendment to the current act, the Income Tax Assessment Act 1936, which allows an immediate tax deduction for small businesses and individuals if the goods and services for an activity are provided within 13 months of a prepayment. These were known as end-of-the-year schemes, where people would simply buy up a whole range of products. As the Financial Review said on 26 February:... a crop of at least 100 will be promoted to city investors in the period between now and June 30 for such diverse agricultural ventures as blue gum, paulownia and pine plantations, vineyards, olive groves, cotton farms, orchards, nuts, coffee and tea-tree plantations.There were unscrupulously developed schemes out there. You simply bought something, had it developed and delivered later, and that was all you needed to do to provide for tax deductions. Again, it was not about providing a productive environment like a working farm but rather about looking for tax deductions.This bill is making a change so that the deduction is aligned to the period when the goods and services being prepaid are actually provided. That is going to provide an additional $80 million annually. The practice has obviously been quite widespread. The rorts are going to stop. Again, it has taken this government to stop the rorts. Some prepayments are excluded, and they relate to insurance premiums for buildings, interest on borrowings to purchase real property, interest on infrastructure bonds and non-negotiable commitments. Also, a transitional arrangement has been provided so that arrangements involving an ATO product ruling where the application for the ruling was made before the Treasurer's announcement are also excluded. I believe it is a fair bill. It provides appropriate criteria. It will stop the rorting. While it will not stop people deciding to have country retreats for lifestyle reasons, it means that the taxpayers of Australia will not be subsidising them. It is about fairness, it is about equity and it is about directing appropriate resources into productive areas of activity rather than doing what has been done in the past. The prepayments exclusion will certainly do much to avoid the problems of the past. I commend the bill to the House.10:26:0017382Emerson, Craig, MPMr EMERSON83VRankinALP00—This legislation is entitled the New Business Tax System (Integrity Measures) Bill 2000. It is something of an Orwellian title, because the government lacks integrity when it comes to tackling tax avoidance. We have seen a lot of Orwellian expressions in the last couple of months, with the $421 million GST publicity campaign and repeated claims by the Treasurer and the Prime Minister that everyone is going to be better off under the GST. But this is just another example of it. Back in the mid-1980s, the present Prime Minister boasted about how he smashed the tax avoidance industry. He has got form on this. In this parliament on 29 May 1986, he said:That is why the former Government was the one that smashed the tax avoidance industry in this country. It is interesting that there has been virtually no tax avoidance legislation introduced by the present Treasurer. The reason he has not introduced any tax avoidance legislation is that all tax avoidance of substance in the 1970s was destroyed by legislation that I introduced as Treasurer. I will match my record in smashing the tax avoidance industry in this country with the record of any Treasurer, present or past, because it was our legislation, particularly new Part IVa, that did more to annihilate the tax avoidance industry than any other measure taken by any other Treasurer in Australian history.The fact is that the Treasurer at that time, the current Prime Minister, was dragged kicking and screaming to the table and into this parliament by three telephone books worth of advice from the Australian Taxation Office, which was begging him to do something about the tax avoidance industry. He did not want to, but it became such a huge public scandal that finally he was forced, by the weight of public opinion and by the then Labor opposition, into acting against tax avoidance, into acting against the bottom-of-the-harbour schemes, the Slutzkin schemes and so on. I find it incredibly ironic that he made this speech, with these claims that it was he who smashed the tax avoidance industry, as part of his contribution on the Income Tax Assessment Amendment (Capital Gains) Bill 1986. He went on to say:The Opposition—because he was in opposition in 1986—opposes this capital gains tax measure. We have said repeatedly that we will repeal it when we are elected to government.That was the current Prime Minister in this parliament saying, `We smashed the tax avoidance industry, but we are opposed to the capital gains tax.' The capital gains tax was introduced with the express purpose of tackling tax avoidance in this country, and it was very effective in doing so. The Prime Minister said, `We smashed the tax avoidance industry, and we oppose the capital gains tax.' Yet the capital gains tax was directly targeted at tax avoidance. But the Prime Minister is the opportunist, because he went on to say about the honourable member for Hunter: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.That is the current Prime Minister saying, `We're going to have fun trying to get a political advantage out of the fact that it was the Labor government which tackled tax avoidance through the 1985 tax summit process and the implementation of a capital gains tax and a fringe benefits tax. We're going to have great fun taking advantage of the fact that you, Labor, have actually tackled tax avoidance, and we're going to take every political opportunity we can from that.' He then went on to say:I think it is a great shame for the future of this country's investment in South East Asia that the Government is going ahead with this stupid foreign tax credit system.So not only did the current Prime Minister lead the charge in opposing Labor's initiatives in tackling tax avoidance in respect of the capital gains tax and the fringe benefits tax; the coalition also opposed Labor in respect of the foreign tax credit system. Those measures were critical to repairing the income tax base. This Prime Minister took great delight in, and sought to achieve the greatest political opportunity from, opposing those measures. Then, ironically in an Orwellian sense, we have this legislation talking about new business tax system integrity measures.The form of the current Prime Minister and the current Treasurer on their weakness in dealing with tax avoidance has been carried right through to the present day. On the change of government, the present government said in relation to the scandalous tax avoidance schemes through employee share ownership arrangements, `We will do nothing about those.' In the 1994-95 budget, then Treasurer Ralph Willis announced that there would be new legislation dealing with avoidance of fringe benefits tax through employee share ownership schemes. Not only did he announce it in the budget; the then Treasurer legislated it. That legislation was drawn up, introduced into this House, passed by this House and blocked by the coalition in the Senate.It is a scandal. Partly as a result of the present government's unwillingness to do anything about that, there is $1.5 billion of taxpayers' money sitting out there at risk. The then shadow Treasurer, just before the government changed, brought a submission to shadow cabinet saying, `Effectively, what the Treasurer is proposing is a good thing, but we're going to oppose it.' Why did they oppose it? Purely for political, base opportunity. Now there is $1.5 billion sitting out there, exposed and at risk—to use the words of Australian Taxation Office officials—because of the government's unwillingness to deal with tax avoidance through employee share ownership schemes. Those Taxation Office officials appeared before our House of Representatives Standing Committee on Employment, Education and Workplace Relations inquiry into employee share ownership schemes because I asked them to, and I thank the members of the committee for agreeing that the Taxation Office be recalled. The Taxation Office said that that $1.5 billion was at risk. Not only is it at risk but they wish to pursue it through the courts. If they are unsuccessful in pursuing it through the courts, the Taxation Office said to us that they would recommend to this government retrospective legislation to recover the $1.5 billion. In fact, the Taxation Office do not believe it is avoidance; they believe it is evasion. But I say to the Taxation Office: don't hold your breath. If you ultimately recommend to this government retrospective legislation to capture $1.5 billion of taxpayers' money that has been skimmed off not by employees but by company executives through these scams then don't hold your breath. This government has an appalling record when it comes to tax avoidance and has an incredible reluctance to do anything of a retrospective nature.LS4Ferguson, Martin, MPMr Martin Ferguson—You've got to protect your front bench!83VEmerson, Craig, MPMr EMERSON—Indeed. I will have a lot to say about that in relation to family trusts, because I have a number of pecuniary interest declaration forms here. The timing of the member for Batman is excellent; I do want to go on to the issue of family trusts. This government have now had five budgets to deal with tax avoidance through family trusts. They have said on numerous occasions that they are going to do it. On this, they are the great `gunnas' in Australian history—they are gunna do this and they are gunna do that on tax avoidance, and they are gunna tackle family trusts. But what have they done? Diddly-squat. Absolutely nothing. There is a very good reason for this, and it is called conflict of interest. I do not know whether members of cabinet declared their conflict of interest, but they certainly were guided by their interest in their weakness in dealing with tax avoidance through family trusts. Former Deputy Prime Minister Tim Fischer is reported in a newspaper as saying to the National Party party room, `We will kill this in cabinet.' And it appears they have. Why wouldn't they seek to kill it in cabinet?I have here the pecuniary interest register. It is a very large document, and I simply need to relate to the House some of the members of the coalition front bench who have family trusts. The first one, in alphabetical order, is Mr Tony Abbott. I seem to recall he is the same minister who describes anyone who is unemployed and struggling to find work as a `job snob'. That is pretty good sitting in his electorate with his family trust. Go and ask poor and struggling people in the electorate of Rankin, in Logan City, and constituents of the member for Batman. Mr Abbott is calling them job snobs while he is sitting in an electorate with virtually no unemployment and he is presiding over a family trust.The next one on the list, in alphabetical order, is John Duncan Anderson, the Deputy Prime Minister of Australia. He has a family trust. Who else has a family trust? I will flick past a whole range of backbenchers and go to Alexander John Gosse Downer. I wonder what his interest in this was in the cabinet room. I wonder what his interest was when they were discussing whether they were going to crack down on tax avoidance through family trusts. We have another one: Timothy Andrew Fischer. He was the one reported in the media as saying, `We'll kill this in cabinet.' No surprises there, because he has a family trust too. Here is another one: Peter John McGauran. I do not think it would be any surprise to the parliament that he has a family trust.There are a few others here who have family trusts. Bruce Craig Scott—he has a nice middle name—has a family trust; Peter Neil Slipper, the parliamentary secretary who is responsible for carrying a lot of this legislation through the House; and Charles Wilson Tuckey. In the Senate is Christopher Martin Ellison, the Special Minister of State; John Joseph Herron; and, finally, Ian Douglas Macdonald, the Minister for Regional Services, Territories and Local Government. It would be fascinating to tune into the cabinet debate on family trusts, because in five budgets they have done nothing about this problem at all. When it comes to the alienation of personal services income, the government said, `We need to crack down on that because it's a growing problem of tax avoidance in this country.' In fact, it threatens to completely destroy the PAYE income tax system in this country. The Treasurer signed an agreement with the shadow Treasurer that they would implement those measures in full, but of course they did not do that. Why? Because of the industrial relations agenda of the Prime Minister and the Minister for Employment, Workplace Relations and Small Business. That is the reason they did not implement it—because the Prime Minister and the minister for workplace relations said, `We want to smash the building unions, and to smash the building unions we are prepared to tolerate very large levels of tax avoidance in this country to blow a hole in the revenue base so that we can pursue our ideological industrial relations agenda.' There is no price they would not be prepared to pay to smash the union movement in this country, but I personally consider it a disgrace that the Prime Minister and the minister for workplace relations would be happy to water down very substantially measures designed to address tax avoidance through the alienation of personal services income in order to achieve that agenda. It is driven by ideology—nothing more, nothing less.Altogether, through the backsliding of this government on tax avoidance, compared with the position that they announced last year and the position that they agreed on with the shadow Treasurer, there has been in the order of $700 million squandered because of their weakness, their lily-liveredness, on tax avoidance. Where is that $700 million going to have to be found? It is going to be found by taxing the poor. This government, as the member for Lilley has said on a number of occasions, are weak in taxing the strong and very strong in taxing the weak. That is their ideology. That is their approach.I see the acting Minister for Family and Community Services at the table. He has just announced an extension of a compensation scheme for several extra months to compensate people who the government have said are going to be better off under the new tax arrangements, under this risky tax scheme. The government said, `They're going to be better off, but we're going to provide extended compensation.' What hypocrisy. This is another Orwellian example of this government saying one thing and knowing another. They say that everyone is going to be better off under the GST and know that they will not. They know it and they are implementing measures to try to make some sort of repairs to the lives of people who are going to definitely be worse off under the GST. But they will not admit it; they will not admit that these people will be worse off under the GST.This legislation in relation to so-called integrity measures is also a backdown. Page 19 of Budget Paper No. 2: Budget Measures 2000-2001 refers to the revenue implications of `Changes to the non-commercial losses measure'—that is, the extent of the government's backdown on this—as being $20 million lost in 2000-01, followed in the next year by $80 million, then $70 million and then $60 million. In another measure, `Changes to the tightening of the 13-month rule for advanced expenditure under tax shelters', there is a $30 million loss in this year compared with what they announced. There is this repetition of the government saying, `We're going to do something about tax avoidance,' but when they stare the people in the face they back down, they capitulate. Why wouldn't they? Because their front bench is full of people who have got family trusts. The people who are involved in tax avoidance in this country are people who go to church on Sundays and who occupy extremely high positions of respect in the community. They do that, yet they engage in these aggressive tax minimisation schemes. They parade themselves as respectable people and pillars of society, yet they go around and say that it is all right to steal tens of thousands of dollars, hundreds of thousands of dollars, millions of dollars from ordinary taxpayers through aggressive tax avoidance schemes. They go to cocktail parties with the members of this front bench and they really enjoy them because they have a lot in common: they have family trusts and they have a very strong disposition to avoid tax. They have a very strong disposition to tax the weak and let high income earners get away with tax avoidance. They cloak this with some sort of respectability by saying, `See you in church on Sunday. See you at the cocktail party.' These people parade themselves as respectable members of society, but there is nothing respectable about tax cheating. The Minister for Employment Services calls people `job snobs' and the government calls them `welfare cheats', but what about tax cheating? Tax cheating is going on on a grand scale in this country, and this government is doing very little about it. It puts one timid foot forward and takes two giant steps backwards whenever it comes to tax avoidance. Another example of that is on page 9 of today's Australian Financial Review, where the headline states `Ralph softens stance on lending to business'. The article states:Business tax reformer Mr John Ralph has flagged the watering down of a tax-avoidance measure aimed at stopping business owners from lending money to their private entities.He has recommended the finetuning of tax reforms that would have stopped business owners lending to their business by taxing the repayment of such advances as dividends.“The operation of that as set out in the [Ralph] report is extra tough and I have recommended to the Treasurer and Prime Minister since then that this should be implemented in a more pragmatic way, recognising that people put money into business for many reasons,” Mr Ralph said yesterday, suggesting that a year-end reckoning would be fairer.The Treasurer of this country signed an agreement in an exchange of letters with the shadow Treasurer saying, `We are fair dinkum about tax avoidance.' That was late last year, and it was the basis upon which the Labor opposition supported the business tax measures. You would think the Treasurer would be concerned about his own integrity, but he is obviously not, because from that day on he began the backsliding. He began the backsliding on the alienation of personal services income. He began the backsliding on family trusts. He began the backsliding on the measures that are here before us today.At least $700 million has been squandered which will have to be found somewhere else. We know where the government will find it. It will find it through the GST. This government has members of parliament coming into this place, now on a daily basis, saying, `Oh, isn't it terrible that we had to exempt food from the GST; isn't it terrible because a really good GST is one that applies to everything.' The member for Barker has said that. The member for Boothby has said that. In doing so, they have revealed the government's agenda. If this nation were ever so unfortunate that this government were to be re-elected, there is no doubt that the GST would be rolled forward on food and that the GST rate would be increased.We had government members in here yesterday saying, `The New Zealand GST is great'—and it is great for them, because the 10 per cent GST in New Zealand was increased to 12½ per cent within four years; it was increased by 25 per cent. That is this government's agenda. On tax avoidance this government is weak; on tax avoidance it is gutless. It is very strong in taxing the weak, but very weak in taxing the strong.10:46:0017386Macfarlane, Ian, MPMr IAN MACFARLANEWN6GroomLP10—The member for Rankin in his speech did say one thing which is true: there is nothing respectable about tax avoidance. This New Business Tax System (Integrity Measures) Bill 2000 is about limiting the opportunity for tax avoidance.LS4Ferguson, Martin, MPWN6Macfarlane, Ian, MPMr IAN MACFARLANE—The member for Batman interrupts. Perhaps, to be fair, the member for Rankin should have produced a list of all people with trusts, because I think he may find some on his side of the chamber as well. There is a reason for those opposite going on with the theatrics. When we talk about what the members of the Labor Party have contributed to this debate about reducing tax avoidance, they bring pyjamas into the chamber, and they bring in pink blouses—girls' blouses. Very strange. That is their contribution. They talk about an agenda that we supposedly have on the GST. They obviously do not understand the extreme difficulty and the safety mechanism that is built into the new tax system in terms of increasing the GST. They keep quoting other examples from overseas. They continue with their scaremongering tactics that are just so basic in terms of their addressing of this issue. If we talk about an agenda on the GST, their agenda on the GST is to keep it, because they do not have a tax policy. In fact, their tax policy could fit onto the back of a postage stamp. There is nothing respectable about tax avoidance, but that seems to be the only positive statement that we hear from the other side of the House. When we are working on legislation, we hear no suggestions of practical assistance from that side of the chamber. We have to rely on practical people from outside this chamber, people of Labor leanings who are in business, if we want to get an alternative view on tax legislation. Those opposite talk about us backsliding. My goodness gracious me, if there is any backsliding around, it is certainly not on this side of the chamber. We are always on the lookout to make tax legislation more practical, more effective and to ensure that business not only understands it but also has a fair opportunity to have input into it.The member for Rankin said that we are not prepared to address the issue of trusts. Let me just say that that is in complete contradiction to the reality and in complete contradiction to what people who have rung my office have said—that we are making the trust legislation too tough. But the member for Rankin goes on from there to say that the changes we have introduced in terms of alienation of personal income have been driven by ideology. That is just complete rot.I happen to have been involved in some of the discussions on the legislation, and the reality is that we were keen to make sure that that we did not disadvantage people with a bit of motivation, a bit of initiative, who want to get out there and earn an income, who want to make sure that they can provide jobs for people in the future—small business people who are starting out—in this legislation that was being put together. We did that finetuning, which we are not ashamed of at all—in fact, we see it as a practical part of forming legislation—to ensure that those people were not disadvantaged. To suggest that, where we have finetuned this legislation as we have gone through it this year, and where we have introduced amendments to make sure that the legislation works, is any form of backsliding—or I think the member for Rankin used the words `lily-livered'—is completely incorrect. The last thing that this government is is lily-livered, and to suggest that this government is either of those things is completely incorrect.It is this government, this Howard-led government, that has shown all the courage on tax reform. It is this government that has done the hard yards. Those people who sit on that side of the chamber, who try to take political advantage of this—who have tried to launch a campaign out in the general populace based on scaremongering, based on targeting the negative effects that they see in the GST while completely ignoring all the positives that the introduction of a GST will bring—completely ignore the fact that they did not have the guts to do it when it was put in front of them. They did not even have the guts to take it to their cabinet. When the Labor Party looked at a GST, knowing full well that every other Western economy in the world was moving in this direction, they backed out because they just did not have the guts to go ahead with it.I now move to the New Business Tax System (Integrity Measures) Bill 2000. These amendments go to the Income Tax Assessment Act 1997 and stem from the Ralph report, which identified significant areas of tax avoidance in this area of non-commercial business activities. This bill prevents individuals from reducing taxable income and tax payable by offsetting losses from non-commercial business activities and by doing that against other income. I do not have a problem with people having hobbies. I would love to have the time for hobbies. Mr Deputy Speaker, perhaps you would even love to have the time for hobbies. This profession does not often allow that. But those people out there in the community who indulge in hobbies, whether hobby farming or various other non-commercial activities, should not expect to see those activities supported by the rest of the taxpayers of Australia.The tests that we have put in place to discern whether a business activity is non-commercial, and therefore more likely to be a hobby, or commercial are fairly straightforward. They relate to assessable income. We need to see one of the following criteria achieved by a business in order for it to qualify as a business and not be deemed a non-commercial activity. We need to see a gross income of some $20,000 per annum. We need to see a profit in at least three of the last five years. We need to see a significant investment in property of $500,000. We need to see an asset base of plant, machinery and equipment used in that business of at least $100,000. We have made a provision for primary producers—we need to see some more investment in the bush and we want to ensure there are provisions for those battlers who set out in life to build up a primary production base and buy a property realising that they have to work off-farm—that each individual can earn up to $40,000 a year off-farm before the tax deductibility of his or her losses on-farm are excluded. That is an extraordinarily generous provision which the Treasurer has included in this legislation. The member for Rankin might call it backsliding, but out there in the bush the real people and the people who understand the taxation system are applauding it because it is a practical way for them to go out and buy a property, work off-farm while they build that property up and then buy another property, build their own enterprise, stand on their own two feet and eventually make a future out of primary industry. Where it is a husband and wife in partnership each partner can earn $40,000 a year off-farm. We are talking about a situation where off-farm an income of $80,000 can be earned. The costs associated with the property while the property is being developed, while the yards are being built, while the paddocks are being worked up and contoured and while extra fertilisers are being put on, can all be deducted. You only have to satisfy one of those criteria. In doing so, we will hopefully stamp out the tax avoidance that has been going on through people trying to deduct their out of business income from their non-commercial activities.This new measure will significantly reduce the opportunity for tax avoidance and significantly contribute to fairness. It is only fair that people pay the right amount of tax. I am sure that the member for Rankin, with his one meaningful statement, would agree with me. It is only fair that people pay the right amount of tax. It introduces integrity and equity into the tax system. Better still, it produces a significant simplification of the current tax laws and removes a number of areas of uncertainty. It will promote more productive investment activity, without excluding the opportunity for those people, particularly from the more commercially viable income areas, to invest some of their money in the bush, to ensure that the property markets out there are maintained and to ensure that people who want to sell their properties can do so at the real market value. This is excellent legislation and I commend it to the House. 10:56:0017388Andren, Peter, MPMr ANDRENKL6CalareIND00—There are two separate measures in the New Business Tax System (Integrity Measures) Bill 2000—one making changes to the tax deductibility treatment of losses from certain business activities and the other amending the 13-month prepayment rules which have apparently been abused by taxpayers in year end tax shelter schemes. I will restrict my comments on the bill to the changes proposed in schedule 1 because I have no problems with the reforms to the prepayment rules. They are reasonable measures. However, I cannot say the same about aspects of the non-commercial losses provisions contained in schedule 1. I would ask the members for Cook and Groom and others on the government side to note my comments. My record shows that I am certainly not a supporter of tax avoiders. The purpose of schedule 1, to quote the Treasurer, is:To 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 wages. The regulatory impact statement of the bill's explanatory memorandum says:Potential compliance, administrative and economic impacts of the measures contained in this Bill have been carefully considered by the Review and the Business sector. Substantial consultation with the business sector was an important part of the Review. It goes on to say: The measures will contribute significantly to the fairness, integrity and equity of the tax system by reducing the opportunities to avoid tax which arise from complexities and certain anomalies in the current tax legislation.I want to test these assertions. I want to test how well they achieve their stated purpose. I want to test the fairness, integrity and equity of the measures and to assess whether their economic impact has, as the explanatory memorandum states, been given careful enough consideration. In doing this, I particularly want to examine the likely impact of these changes on individuals and communities in Calare. I want the House to consider how the measures might apply to a range of different individuals. All in all, by the end of the financial year 2003-04, these two measures are predicted to return to the government $890 million in additional revenue. The non-economic loss provisions will increase the government's coffers by $570 million over the next four years. The prepayment deduction changes will return revenue of $320 million. These are significant measures requiring fuller scrutiny by this place and by the Senate. Schedule 1 of the bill inserts a new division 35 into the Income Tax Assessment Act. This new division will ensure losses incurred by individual taxpayers from certain business activities deemed as non-commercial according to a set of objective criteria will no longer be able to be offset against other assessable income in the year the losses are incurred. The division sets out a series of tests that will determine whether a business activity is commercial or non-commercial. There is also provision for discretion to be exercised by the commissioner in certain circumstances. If the activity is deemed non-commercial, no tax deductibility will be allowed in that year against income earned from unrelated activities, but the losses will be able to be carried forward to be offset against the future income of the activity or against other income if one of the objective tests is satisfied. According to the Ralph report at page 295, this type of change is necessary due to:... a significant revenue leakage from unprofitable activities carried out by individual taxpayers, either acting alone or in partnership ...It goes on:Many of these activities are no more than hobbies and/or lifestyle choices but even those that have business like characteristics (according to existing law) are often unlikely to ever make a profit and do not have a significant commercial purpose or character. They continue in a net loss position year after year, offsetting so-called business losses against other income ... On average they make little or no contribution to the revenue raising task but gain a significant tax advantage.The Ralph report recommended that a number of tests should be used to determine whether a genuine business was being carried out. Ralph proposed that, if any one of the following were satisfied, the business activity would be deemed commercial: the annual turnover from the activity—`turnover', I stress—is greater than $20,000; where the assets used in the activity are real property, if their value exceeds $500,000; where other assets are used in the activity, if their value exceeds $100,000; or where the activity has shown a profit in at least three out of the last seven years. The Ralph report also recommended that, if there were special circumstances outside the control of the taxpayer, such as drought, flood, bushfire or other natural disasters, the commissioner should have the power to authorise the deduction in that tax year, although none of the tests were satisfied. While no reason whatsoever was given, the Ralph report also recommended that losses from negative gearing on rental property should be exempted from the measures. I note the Ralph report made no similar recommendation with regard to shares or other passive investments currently utilised by negative gearing investors.The bill, as presented, reflects, but does not duplicate, the Ralph proposals. The $500,000 real property and $100,000 other property limits have been kept. The $20,000 turnover threshold has been rejected, and the bill now makes it much tougher by requiring the activity to earn $20,000 in assessable income—something the member for Cook, for one, overlooked. Obviously $20,000 in turnover would have been far easier to satisfy than $20,000 in assessable income. The test that a profit be made in three out of the last seven years has been tightened to three out of the last five years. In addition, where an individual is trying to claim deductions for a primary production activity, the measure will not apply where his or her non-primary production assessable income, excluding net capital gains, is less than $40,000. Notably, while the bill exempts negatively geared rental property from the changes as proposed by Ralph, it goes further. The bill will not affect the current treatment of losses incurred in the receipt of income derived, for example, from shares, bonds or other investments the Treasurer and the bill refer to as `passive' investments. So how will these measures apply to different types of taxpayers? Let me give as examples the following individuals possibly affected by these measures. There is a stockbroker on a salary of $150,000, plus bonuses, who has a property of 250 acres in Bowral valued at $1 million but at only $550,000 when the home is excluded. He runs a small deer stud on the property and, according to his accountant, is preparing to get into venison and velvet production. He commutes to Sydney daily for work. There is a merchant banker who has borrowed $500,000 under a marginal loan scheme to gear into the share market on IT stocks. There are two public servants negatively gearing into rental units in Canberra. There is a 22-year-old IT graduate working in IT but wanting to set up his own consulting business, doing the work in his own time after hours trying to get ahead. There is a fourth generation mixed farmer on a small property of 450 acres—typical of those found around Bathurst, Blayney, Oberon, Orange or Lithgow—who, due to declining prices for his produce and his property being ovine Johne's disease suspect, has been forced to seek income off-farm working the night shift in a local factory. He earns $45,000 per annum in the factory and pumps a large amount of that back into his farm to keep it going. There is a farming couple who also run a property of 450 acres outside Orange as a partnership and both work off-farm and earn $35,000—the wife is a nurse and the husband does contract harvesting. There is a potter who is trying to set up a potting business while teaching art at university and earning $45,000 a year.Let us look at the stockbroking deer farmer first. If he makes a loss from his farm because he earns in excess of $40,000, he will have to satisfy one of the objective tests to determine whether his enterprise is commercial or non-commercial. As the value of the real property exceeds $500,000, an objective test is satisfied and he will be allowed to continue deducting losses his deer farm makes from his stockbroking income—something the member for Cook obviously also does not understand. With the merchant banker gearing into shares and the couple gearing into rental properties together, these activities are treated as passive investments and will not constitute the carrying on of a business. They are specifically excluded from the measures, so these people will be able to continue deducting losses incurred through their investments from other sources of income. Let us look at the young IT entrepreneur. He is working full time on contract, using much of the money he makes to buy equipment and software and other things he needs to get his private consultancy up and running. He works this business in his own time, sourcing programming work from Europe and Asia. He is not a primary producer, so the $40,000 income rule will not apply. This means that, unless he can satisfy one of the objective tests or if the commissioner is to exercise his discretion, according to my understanding he will not be able to deduct from his other income losses incurred from setting up his IT business.There are safeguard provisions in the legislation that allow the commissioner to exercise his discretion to allow a taxpayer to offset amounts which are deductible against their other income, even if the business activity does not satisfy an objective test. Basically, the commissioner will be able to exercise his discretion if he is satisfied that it would be unreasonable not to allow the losses to be offset either because of special circumstances outside the control of the taxpayer such as drought, flood and bushfire or because the commissioner has an objective expectation, where the business activity has started, that it will pass a test or produce a profit within a reasonable time. According to the explanatory memorandum, such a taxpayer would need to establish the objective expectation based on information from industry bodies or scientific research. But it goes on to say: The Commissioner must not exercise this arm of the discretion after the time that it is reasonable to expect the activity to first produce a profit or pass one of the tests.I am not able to say whether our young IT professional would satisfy the commissioner's objective criteria. It may be that he does, but the way way section 35-55 is drafted leaves big question marks about how this discretion will be exercised. On the one hand, the section requires the commissioner to make his decision on an objective expectation based on information from independent sources. On the other, it stipulates such discretion may not be exercised beyond a period in which it would be reasonable to expect the activity to first produce a profit. With the countless types of business activities conceivable, and new ones evolving all the time, I sincerely doubt the capacity for such discretion to be exercised consistently and objectively. What is a reasonable time for a part-time IT business to start to return a profit? I suggest this type of enterprise is exactly what we should be trying to support in the new economy and as communications improve, one would hope, in rural and regional areas. I am not convinced that the legislation as drafted will allow these types of cases through, and it may simply put up barriers that will deter people from having a go. And what about the fourth generation farmer from around Bathurst, Blayney or Manildra working at Uncle Ben's, Email, Friskies, Edgells or doing contract carting or fencing or harvesting off-farm from which he makes around $45,000? On my reading of the bill, such a farmer will not be permitted to deduct farm losses from their off-farm income unless they satisfy one of the four objective tests or if the commissioner exercises discretion. A property of 450 acres with the value of the house taken off it is highly unlikely to be worth more than $500,000 across most areas of the central west of New South Wales, so that test is failed. On the basis of discussions with farmers likely to be affected and of my knowledge of profitability levels on small farms in my area, I think it can accurately be assumed that many such farmers are also likely to fail the other three objective tests. That is why last week I asked the Minister for Agriculture, Fisheries and Forestry, among other things, what analysis had been done of the likely impacts of the bill on rural communities. Unfortunately the minister declined to answer, and the Treasurer in his answer failed to answer that question as well and told me my question was based on a false premise. With respect, I cannot see how this understanding of how the provisions will apply is based on a false premise.I turn to the farming couple from the same area with a property of the same size and value which they run in partnership and who both work off-farm making $35,000 per annum each, she as a nurse, he from contract harvesting—a total of $70,000. According to the explanatory memorandum, the $40,000 exception for small primary producers `will be considered separately for each individual carrying on the primary production business activity'. So for this couple, although they run a farm of exactly the same size as the fourth generation farmer up the road, and although their combined assessable income exceeds his by $25,000, the provisions will not apply. They are free to continue deducting their shared farm losses from their off-farm income. I have no problem with that, but I am worrying about the other bloke. What is the equity in that outcome?Finally, we come to the potter teaching at university who is running a potting business in her own time. I have included her to represent all of those people involved in artistic ventures. On my analysis, the potter will find herself in exactly the same situation as the IT entrepreneur.As I stated at the beginning of my contribution, the explanatory memorandum claims that the `economic impacts of the measures contained in this Bill have been carefully considered by the Review and the Business sector'. If that is the case, why was it not included in the Ralph report? All we know is that the government estimates this measure will return around $570 million over the next four years. In reaching that sort of estimate the ATO must have had available to it detailed information about the likely impact of the measures on different categories of taxpayers. This parliament deserves to have that information available to it so it can make a properly informed decision. How much of these savings will be ripped out of regional communities as small farmers reduce the amount they spend on local goods and services? How much will be removed from the arts sector? How much will be removed from people trying to grow businesses into the new economy? All of this should be on the table and subject to the consideration of a parliamentary inquiry. The bill mocks the government's rhetoric about being the friend of small business and entrepreneurs. Coming on top of the halving of the tax rate on capital gains, it shows that the government does have a preference for investment that I believe is not as productive as this country should have. Go and gear up to the hilt, speculate in shares or the property market and we will support you; go and get your hands dirty and do something productive, go and produce something, and you will be punished. Be rich enough to have a property over $500,000 regardless of its size and you are okay. But try to keep the fourth generation family farm going, pumping off-farm income back into your farm and into the local community, and you are involved in nothing more than a hobby, a so-called lifestyle choice. Be able to have accumulated over $100,000 in plant in running the business and you are safe; but if you are running 30-year-old plant because you cannot afford new gear, look out. If you both earn under $40,000 off-farm you are okay but, if only one of you earns over that amount, too bad—you are caught. As it stands, this legislation is full of anomalies. It introduces distortions and preferences. It will have serious impacts on regional communities, I predict, and particularly on farm supply businesses. It will not catch many it is designed to and will penalise many who should not be so penalised.In concluding, I note that this measure will return $570 million to the government over four years. I also note the government's rural health package will commit $562 million over the same period. What a coincidence! What I want to know is how much of this $570 million will be ripped out of electorates such as mine. If it is $500 million, then it is not hard to see how that rural health package has been paid for. I also note with interest there is not one National Party member speaking to these measures, although their electorates, like mine, stand to suffer from these changes. When I raised this issue in question time last week there were muted calls of agreement from members of the National Party. Where are they now?There are difficulties in framing legislation such as this. I recognise that, but I think I have demonstrated that as they stand the provisions are poorly targeted. Surely we can make these laws fairer. As I said, I am no supporter of tax avoidance. Any study of my contributions in Hansard and my public statements will show that. The types of amendments I will be looking for from the Senate—because I do not suppose it is of any use introducing them here—will be to remove the arbitrary $500,000 asset test which bears no link with the genuineness of the enterprise. This will catch our deer farmers and other so-called Pitt Street farmers. We should reduce the positive taxable income test from three out of five to two out of five years, as called for by the National Farmers Federation.For partnerships, look at combined income, not individuals. This will deal with the potential unfairness I have highlighted and more accurately reflect the reality of what is happening out there in rural Australia—keeping family farms afloat under all the challenges of globalisation and the rhetoric about get big or get out. I think the fabric of our rural societies needs smaller family farms and they need—unfortunately, as many things stand, in many circumstances—the combined income and individual incomes of farmers who work their butt off during the week; and they do not have a weekend or a hobby or anything else: they have the farm to look after at the end of their four of five days of other work. For genuine farmers, I would suggest increasing the threshold to $60,000. As the Treasurer has indicated and as the Prime Minister so often says, $50,000 is not a high income these days. I wonder though what people on lower and fixed incomes and pensioners think of that. The fact is that in the marketplace $50,000 is not an exceptional income. For the artist and young IT professional and all other businesses, apply the same $60,000 limit or clarify the commissioner's discretionary powers. We should not be stifling enterprise. I call on the National Party to support the National Farmers Federation's call for a parliamentary inquiry into this bill to look in detail at the impact of this bill on the regions and to nut out appropriate amendments. 11:16:0017393Cadman, Alan, MPMr CADMANSD4MitchellLP10—There is one thing on which I can agree with the previous speaker—that is, the difficulty of definitional processes for tax law in this area. It is a vexing area that has been of concern to the commissioner and to thinking and fair-minded Australians for a long time. Representing an area of New South Wales which fringes on the city of Sydney, I have many genuine farmers in my electorate—highly productive, highly intense production, technologically advanced farms on small areas of land. They earn modest incomes, but they are successful full-time genuine farmers. Alongside them, there may be somebody growing a few flowers and using it as a capacity to assist them in their tax returns or in their rate assessments from their local government authority. So to delineate between the genuine and the non-genuine is extremely difficult.The New Business Tax System (Integrity Measures) Bill 2000 is an attempt to codify the process. Some of the factors taken into consideration by the courts and the Australian Taxation Office include the scale of the operations, because that is a basic test. Whether the land is wholly or mainly used is one of the local government provisions. Whether the income is wholly or mainly derived from the activity is another test. Whether there are employees involved on the farm is another test that is used by the courts. The frequency of acts of transactions is another test. Is a person in the genuine process of building up a stud farm? Are the progeny of stud animals available for sale at regular intervals or are they occasionally coming on to the market because there is such a tiny number of stock involved? If there are a tiny number of stock, are they highly valued? Are they racehorses of great value, which means that great care is needed in the production of progeny? The process has a number of complicating factors. Is there a view to profit or is the activity a hobby? Is it just supplementing income on a casual basis or is there a genuine reliance on the income generated from a farming activity? The previous speaker mentioned the example of a person seeking to build up a business—whether it be an IT business or an artistic endeavour. I understand both of those and the point he was making. It seems to me that the most difficult test of all is the one that applies to the primary producer and how an assessment is made on whether or not there is a genuine activity going on. Whether the conduct of the business is continuous or sporadic is another test which is applied. The amount of capital involved is a raw measure and one that is not particularly relevant these days because, for a fairly modest capital outlay in land and with sophisticated techniques, it is possible to build a very successful business provided there is ongoing input into the business. That is where off-farm income is involved. Whether business records are kept and the nature of any records kept is also a test and whether there is advertising or market research, which really does not apply so strongly to the areas of primary production, is another test. As one looks around Australia, one would have to say that the six most difficult electorates, the electorates with the greatest amount of poverty, are all rural seats. So these measures are particularly relevant to people on the land. I think the government has worked hard to listen to people and to modify these measures in accordance with the consultations that have taken place. The contribution from the member for Calare was a thoughtful one, one that may raise resentment in some of my colleagues but may raise some degree of interest in others because the degree of empathy, thought and understanding he has applied to this legislation indicates that he is concerned for the future of genuine primary producers, be they large or small, who are suffering hard circumstances and lack of capital or are forced by season or other conditions to earn income off their property. It is my view that this bill goes close to meeting the requirements of the Australian community and goes close to providing measures that can be relied upon to sort out the wheat from the chaff. Personally, I would like to see some adjustments made to it. But, as the previous member and other speakers in this debate have indicated, the way in which one measure plays against another—for instance, the way in which the annual turnover activity, the asset value and the profitability of the enterprise is weighed up against the off-farm income—can have a wide variety of results. Great care is needed when dealing with these definitions and the changes that are contemplated here. From my own perspective, I think the Ralph report did make prescriptive recommendations that were somewhat impractical and showed some lack of understanding of the way in which modern agriculture operates, particularly in areas close to Sydney and in marginal areas of Australia. The government has modified that process by listening to the community—by taking consultative actions with various farmer groups and with members of this House and the Senate.This is an area of great interest to me because, in my electorate, there are flower growers, peach growers, some livestock producers, strawberry and intensive nursery production, and the mushroom industry, which are very important to the economy. It is vital that the government gets this right. It is legislation that I certainly intend to follow closely—the way in which it works on the ground, whether or not the process of review is applied strictly and the way in which the commissioner may apply his discretion. I want to see the retention of family farms. They are productive economic units and make a valuable contribution to our economy. They have produced a `race'—if I may use that term—of independently minded, active Australians whose last thought in the world is to rely on welfare provisions and the taxpayer for support. They are probably epitomised best in the Sydney area by the Association of New South Wales Free Growers, who are a group of farmers who grow vegetables and other crops, and who do not wish to rely on the government for subsidies and do not want the government to charge them levies. They are opposed to levies, but they do not wish to receive subsidies either. They want a free market situation to apply to the sale of their produce. They are independent, as I have said, free-spirited, determined, hardworking Australians—the very type of Australians that founded and built this nation. It is not the government's intention that such individuals should be harmed by this legislation. It will certainly be the role of members not only to support the legislation but to see that it is applied with care and thoughtfulness.11:25:0017394McClelland, Robert, MPMr McCLELLANDJK6BartonALP00—The position of the Australian Labor Party on the New Business Tax System (Integrity Measures) Bill 2000 has been addressed in some previous speeches. The Australian Labor Party has also moved an amendment to the second reading motion, and it is primarily that second reading amendment that I want to focus on in my contribution today, and in particular the paragraph in our amendment that seeks to condemn the government for the scandalous waste of taxpayers' money on the promotion of new taxation arrangements. The figure that we have been able to extract from the Senate estimates process—a process, I must say, like that of extracting teeth—seems to be in the vicinity of $431 million. Just to put that in context, I heard the other day that about $260 million is being spent on a new nuclear reactor in the electorate of Hughes, which is beside my electorate. Therefore, we are looking at an amount almost equivalent to two nuclear reactors. Other matters which could be addressed by such an amount of money include paying for 1,500 primary and secondary school teachers, 100 new primary schools, about 1,200 extra beds in public hospitals, about 90,000 apprenticeships over four years, upgrading of about 90 kilometres of single-carriage highway—with additional savings from a reduced road toll and a reduced number of injuries—about 2,600 nursing home beds for each year of this campaign, pensions for 9,000 older Australians for a period of four years, and nearly 16,000 child-care places for children from low income families. We have lost the opportunity to fund all of those as a result of the massive amount that has gone into the GST campaign. I will highlight to the House the legislative underpinning of all expenditures made by the Commonwealth or, specifically, by the executive. 10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Order! I am loath to interrupt the member for Barton, but are you sure that you are speaking to the right bill? We are talking to the New Business Tax System (Integrity Measures) Bill 2000, which does not include any of the matters that you have been talking about.JK6McClelland, Robert, MPMr McCLELLAND—Yes, thank you. I am speaking to the second reading amendment which has been moved, and specifically paragraph (4) of that amendment which seeks to condemn the government for the scandalous waste of taxpayers' money on the promotion of a new taxation arrangement.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—I apologise to the member.JK6McClelland, Robert, MPMr McCLELLAND—The reason I say it is scandalous is that the expenditure is totally inconsistent with the obligations cast on chief executives of government departments by section 44 of the Financial Management and Accountability Act. That specifically provides that:Chief Executives must manage the affairs of the Agency in a way that promotes proper use of Commonwealth resources ...Proper use of Commonwealth resources is defined as:... efficient, effective and ethical use.In that context we see the massive wave of this government's GST advertising campaign, commencing one Sunday evening when it sponsored the Sunday night movie Austin Powers: International Man of Mystery.But in the context of that expenditure, I think the normal charge for an advertisement during that peak timeslot is about $80,000. There is about a 100 per cent loading if the movie itself is sponsored, and that is what the government chose to do with taxpayers' money. So we are looking at about $160,000, on our estimates. The government have not confirmed these figures, nor have they denied them. They have not provided us with the accurate figures but we are looking at about $160,000 a pop. My recollection is that there were three 30-second ads during the course of that movie costing about $480,000. So the Australian taxpayers paid about $480,000 to see the government's `in chains' advertisements. Of course, those ads and similar ads have been repeated since that time. But the really sinister part, aside from the massive waste of taxpayers' money on Austin Powers—albeit that it is a movie considerably liked by my young son—is the fact that the sponsorship seems to have been accompanied by an exclusivity arrangement between the government and at least one of the broadcasting stations. We have that information from the Australian Associated Brewers Association. They made a statement that they were notified on Friday, 26 May that the `Beer drinkers, it's your shout' advertisement would not be broadcast during the 8.30 p.m. movie on Sunday, 28 May due to an exclusivity arrangement that the Australian Taxation Office had entered into with Channel 9 with respect to the GST advertisements. Apparently the brewers' commercial, which raised the issue of increased taxes on beer when the GST is introduced, was judged to be in conflict with the ATO message and therefore contrary to that exclusivity clause.That raises very significant issues indeed because there is a principle in this country of the right to free speech in a political context. That of course comes from a decision of the High Court of Australia in the case of Langey v. the ABC. The High Court there held that the freedom is implied from the text and structure of the Commonwealth Constitution because it is seen as essential to the operation of our system of representative and responsible government. So the government used its massive market power—this $431 million of Australian taxpayers' money available for expenditure on a massive advertising campaign—to shut out or shut down opposition. That raises a very significant issue from the point of view of the Australian public. It raises an issue as to the Australian public's own funds being used to suppress debate against the government. That is something that has never happened in Australia's history. This government's campaign is so wanton it has come to the point of obscenity. One constituent noted to me that he likened it, with some amusement, to the acts of Hitler in the bunker. When Hitler was under siege in Berlin and while the bombs were falling all around he was printing out flyers claiming that the Third Reich was close to victory. He pumped out massive amounts of propaganda. The analogy struck me as being quite apt: with the bombs of the GST exploding all around, this government wantonly is pumping out reams of material. It is, quite frankly, getting my constituents offside because of the opportunity cost, that is, those things that I mentioned earlier in my speech as having been sacrificed because of this massive waste of money. Even the material itself is misleading—indeed, it is both false and misleading. In that context, I note that yesterday afternoon this parliament rejected amendments—which had actually passed through the Senate—to the New Tax System (Trade Practices Amendment) Bill 2000 which would have imposed the same strict standards which the government has imposed on the private sector regarding false and misleading statements in respect of the GST on the government. That is significant because last night I received a letter from the ACCC. It is curious that the letter arrived when the debate on that bill had all but concluded. One must immediately question the timing of the ACCC's letter to me indicating that it considered that it could not act to restrain false and misleading government advertisements because the Trade Practices Act did not extend that far. I received the letter from the ACCC at 3.51 p.m. yesterday, and a question is raised in my mind as to whether it was deferred until the debate on that bill was all but over. If that is the case, then the ACCC is, quite frankly, to be condemned. I note that my first representations regarding false and misleading material were as early as 18 April. I made further representations more recently, by way of a second letter of 24 May. Be that as it may, the ACCC confirmed to me, in a letter signed by Professor Allan Fels, that the prohibitions contained in sections 52 and 53 of the act—that is, the prohibitions against false and misleading advertising or false and misleading representations and conduct:... do not, in the Commission's view, bind the instrumentalities or agents of the Crown in right of the Commonwealth except in so far as they carry on a business. The Commission takes the view that the Commonwealth Government is not engaging in a business when it disseminates information about the laws which have been enacted by Parliament.For the reasons set out above, the Commission maintains its view that the Act does not, therefore, apply to conduct by the Commonwealth Government in relation to the advertisements that you complain about.That would have been a very material fact to put before the parliament when the parliament was considering the amendments to the A New Tax System (Trade Practices Amendment) Act. I must say I think that in their interpretation of that particular issue the ACCC was correct and, indeed, in my earlier correspondence to the ACCC I expressly acknowledged that there was a question as to the extent to which the ACCC could intervene in respect of false and misleading conduct on behalf of the government. But the important thing is that the government prevented that being remedied in the amendments we moved to the A New Tax System (Trade Practices Amendment) Bill, to which I have referred.But more concerning is that the ACCC rejected our request that as a matter of pure public policy the ACCC use the prestige of its office to make representations to the government as to the effect that its advertising material would have. Specifically, the effect that it will have is that it will lower the bar for the private sector. How can the ACCC claim moral authority in respect of enforcing the price exploitation guidelines in the private sector in circumstances where it is not prepared to enforce the same standards against its master—or, rather, its funder—namely, the government? I notice with some disappointment that the ACCC did not follow its previous precedent where it had in fact used the prestige of its office to so intervene in respect of material published by the government.On 6 April 1999—I have the letter in front of me—Professor Allan Fels wrote to Kelvin Thomson, the Labor member for Wills, and responded to Mr Thomson's representations concerning government material sent out in respect of the government's 30 per cent rebate on private health insurance. In the context of this letter the ACCC again doubts that they have statutory authority to intervene and compel the government to act. Nonetheless, the commission made representations to the government, because, as the letter states: The Commission was also concerned that the Government advertising may have had a “flow on” effect upon the advertising of the rebate by private health funds.Here we have a specific precedent for the ACCC using the prestige and influence of its office to intervene by at least making representations to the government to get them to pull off their advertisements and modify them. It is regrettable that the ACCC decided not to do that on this occasion. In my view it would have been eminently reasonable and appropriate for it to have done so, given the enhanced role that it has been given in enforcing these price exploitation guidelines. I note in the correspondence which I received from the ACCC that despite obtaining senior counsel's advice, which I respect, the letter did not traverse any of the arguments which we had raised regarding the falsity of the material contained in the government's advertisements. I think the ACCC's silence on that issue sounds loudly.There is no doubt that the material which has been put out has been, by any standards, misleading and deceptive. At a basic level there is no way that private sector companies could have made these broad generalisations without clarification. Indeed, in many instances the material itself has been both false and misleading. The earliest representations were with respect to the John and Wendy ads. Quite clearly, the claim that average families were going to be $40 to $50 better off under the GST was disproved, on any analysis. More recently, our correspondence went through a number of issues where false statements have been made as part of this massive propaganda campaign. The first one is that income taxes have just kept going up and up. That clearly is not the case. Since 1983 there have in fact been seven instances where rates have come down.The other statement which we attack is the assertion that the tax arrangements would immediately put extra money in the pay packet of every Australian worker. Clearly, that is false, because there are some 80,000 Australians who do not pay income tax because their annual income is less than $5,400. We also attack the assertion that exports would be GST free. Clearly, one of our major, if not the major, export earners—namely, tourism—for the first time is going to be subject to a tax. Perhaps the greatest furphy contained in these ads is that the GST is going to be frozen at 10 per cent. The Treasurer knows this is a furphy. In fairness to the Treasurer, he was not incompetent as a lawyer and, indeed, had a substantial practice. He would be aware of these crucial High Court cases. As recently as April 1998 in Kartinyeri v. the Commonwealth the High Court said:One Parliament cannot deny or qualify the power of itself or of a later Parliament to exercise that power. The Parliament cannot bind itself or its successor parliaments not to amend the laws it makes.This parliament today cannot bind a future parliament to freeze—not increase or reduce—the GST. It just cannot. Each parliament in its own time is omnipotent. It is all-powerful to itself, save insofar as it is restricted by the Constitution. But it can amend at will previous legislation. Indeed, in terms of the arrangements with the states, quite clearly on the basis of a number of authorities—more recently in Ansett Transport Industries v. The Commonwealth and Attorney-General v. Quinn—any proposed contract arrangement or understanding between the current federal government and state governments which purports to restrict or limit the federal government's power to amend income tax legislation, or regulations made thereunder, would simply be invalid. So it is rubbish for this government to assert that the GST is in any way, shape or form locked in. You could go on for a day. But this is to the point of outrage. Spending $431 million of taxpayers' money—all of the things that have been sacrificed as a result of a program not to inform Australians but to promote the electoral prospects of the Liberal and National parties—is, quite frankly, a disgrace. It has to be the most disgraceful act of any government since Federation, to waste such an obscene amount of Australians' money on this propaganda. (Time expired)11:45:0017398Thompson, Cameron, MPMr CAMERON THOMPSON84CBlairLP10—I rose to speak here on the New Business Tax System (Integrity Measures) Bill 2000; instead I find myself following the most glib, opportunistic and irresponsible contribution that I could possibly imagine when we are discussing something as important as integrity measures. We have been subject to the introduction by the opposition of a ridiculous amendment that is not designed to do anything more than accommodate that light on the wall that says that parliament is being broadcast. There are people in my electorate who need to know about these integrity measures, and what we are hearing from the opposition is not about that. It is not about what they would do in deciding what is a hobby and what is a genuine farming activity or any other sort of business activity. We are not hearing that. Those opposite are criticising the government for political advertising, but what we have from them is the most glib form of base political nonsense that you could possibly imagine. We are here to debate integrity measures; instead we are getting this talk of Goebbels and bombs and all sorts of measures—designed to accommodate the broadcasting light on the wall.We are here to provide good legislation for the people of Australia. This amendment about the cost of political advertising is purely to suit members opposite who want to parade through the community, in the short time that remains before the introduction of the government's new tax system, as much misinformation, misapprehension and false and confected concern as they can possibly gather together. But what we have is the need for people to have real and correct information about important measures like integrity measures—not all this false stuff, not all this discussion about peripheral issues, not all this cobbling onto a very important bill before the House a purely opportunistic, political jibe at the government of the day. Anyone who is a lawyer loves to argue on this kind of self-indulgent campaign, but we need to think about the importance of ensuring that the transfer to the A New Tax System is done in an orderly manner and that the people of Australia recognise the nature of this new tax system for which they voted at the last election. People out there are asking us for information. The government is providing information, and it is providing it in the most effective and timely manner possible. They do not want disinformation, but that is what they get from the opposition. The continuing carping and the continuing disinformation campaign merely serve to create added concern in the minds of people. It adds to their alarm at all the opposition continues to present as fact when it is nothing more than fiction.Of course, as precedent, under the Labor Party we had Bill Hunter selling us superannuation and we had money growing on trees on our television sets every night. But now we have got a law that has been passed by the parliament here in Canberra to implement a new tax system. It is important for all members, if they take into account the needs of this great country, to make sure that the transfer to the new tax system is smooth and appropriate. But, for their political purposes, Labor are prepared to sidetrack that. They are prepared to throw as many diversions and roadblocks in the way of that smooth transition as they possibly can. That is what that speech by the previous speaker, the member for Barton, was all about. They are acting against the national interest; they are acting in the face of what is now law—the introduction of a new tax system for Australia. I do not want to be sidetracked any more on that, but we are discussing integrity measures here today and, going by their performance in the speech immediately preceding this one, members opposite have demonstrated that they completely lack integrity when it comes to the important business of this House. I would like to refer to something that was of some consideration when the Labor Party was in government. There was a draft white paper on the reform of the Australian tax system, and I would like to quote from that. That white paper basically set out the essential criteria for assessing a tax system. It said that the criteria for reform of the tax system were equity, efficiency and simplicity, and stated: ... an equitable tax system is critical, not only to the attainment of economic and social objectives, but also to the maintenance of a basic respect for the tax system from which a high degree of voluntary compliance derives. A more efficient tax system is necessary in order to improve Australia's economic performance. A simpler tax system is essential so that the law can be understood by the people to whom it applies.In that white paper, quotes were included from the report of the Royal Commission of Taxation in Canada. I would like to quote something there. When looking at their tax system, according to this report of the Royal Commission on Taxation, the people of Canada wanted:... equity, more goods and services, full employment without inflation, a free society and a strong, independent federation. Evaluating an existing tax system or designing a new tax system is complicated because we seek to realise all these objectives simultaneously, and they are frequently in conflict. In trying to achieve one objective more fully, another is less adequately realised. For example, adopting a particular tax provision might increase the rate of economic growth. However, the same provision might also reduce the fairness of the system by providing some groups of individuals with a tax advantage relative to others in the same circumstances.Those are the nuts and bolts of tax reform, the basic difficult issues we are confronting here. The Canadian royal commission statement goes on to say something that I think is very relevant to what the previous speaker had to say. It says:Unless the allocation of the burden of taxation is generally accepted as fair, the social and political fabric of a country is weakened and can be destroyed.The royal commission says that happens unless taxation is accepted as fair. We have here the opposition deliberately toying with the notion of the fairness of the new system that is so far ahead of what this country has had for so many years that it is in another galaxy. We are talking about fairness and the ability of the government to tax services as well as goods to make sure that our manufacturing industries are not carrying an undue burden in the tax network. All these sorts of things come to the very basic understanding of what people think about fairness in our tax system.They are not getting that from the current system. There have been so many complaints raised about it that that system is a joke. It is the subject of ridicule across the world, and yet here we have an irresponsible opposition continually endeavouring to undermine the basic fairness of the new system, not through any real rigour in their argument but because of their perception of our TV ads and because of what some pollster in a basement somewhere has told them. Unless the transition to the new tax system occurs smoothly and unless we all work to reiterate the fairness of the tax system that we are implementing, the consequences will be, according to the royal commission that I was quoting, that the social and political fabric of the country will be weakened. Those people over there are endeavouring to make sure that they weaken our social and political fabric. They are endeavouring to undermine what is in the best interests of Australian people. It is shameful. We are discussing integrity measures today, not this kind of low-grade political attack on the Australian community.Motion (by Mr Hockey) agreed to:That the question be now put.Amendment negatived.Original question resolved in the affirmative.Bill read a second time.17399Bill—by leave—taken as a whole.11:56:0017399Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—I move:(1) Schedule 2, item 3, page 14 (lines 31 to 34), omit subsection (6), substitute: (6) The expenditure must not be an allowable deduction because of section 159GZZZZF in respect of an infrastructure borrowing as defined in subsection 93D(1) of the Development Allowance Authority Act 1992.[section 82KZME—deducting prepayments]Before I speak specifically regarding the amendment, I would like to thank all honourable members who participated in this debate on the important New Business Tax System (Integrity Measures) Bill 2000 today. This bill is one of the business tax bills that the government has introduced into parliament to implement its broad-ranging business tax reforms. The government is implementing these reforms following a 12-month review of business taxation headed by John Ralph and extensive consultation since then. Many of the government's measures have already been legislated, including of course cuts to company tax and capital gains tax. The government has also introduced important integrity measures which prevent loss, duplication and value shifting through debt forgiveness. The government has also recently introduced bills into the parliament dealing with the alienation of personal services income and now legislation dealing with non-commercial losses and prepayments. The measures in the bill being considered today limit the extent to which individuals can use non-commercial losses to reduce the tax paid on other income, such as wages and salaries. The bill also provides that payments in respect of tax shelter arrangements are deductible over the period during which services are provided. They are based on the recommendations of the Ralph review and will improve the integrity and fairness of the tax system. If I can take this opportunity to respond to some of the issues raised by the member for Calare during the debate with the advice that I have been provided with—and I will go through those issues one by one—the member for Calare raised the issue that using assessable income rather than turnover is a bit tougher than the recommendations in the Ralph report. I am advised that using assessable income for the first test is not tougher. Assessable income equates to gross income—that is, before deductions—and is therefore very similar to turnover. This is an existing concept under the current law and is used because it is readily available from existing taxation records.There is a second issue. The member for Calare referred to taxpayers investing in negatively geared property—so-called passive investments. I am advised that this measure will impact on business losses only. It was never intended to apply to non-business activities such as passive investments. The member for Calare also raised the issue of when the provisions in the bill might be applied to partnerships. The income tests should look at the combined income of the partnership. I am advised that proposed sections 35-25 and 35-30 of the bill provide that, where the partnership consists only of individuals, it is the partnership income which is considered for the purpose of the assessable income test. A husband and wife partnership, for example, earning $30,000 in assessable income would pass the test and be able to offset any losses against other incomes. That should be welcomed by the member for Calare.The third point raised by the honourable member was the expression of concern about young information technology entrepreneurs in start-up phases not being able to claim losses against other income. I am advised that the discretion provided to the commissioner in section 35-55 of the bill allows flexibility to deal with new types of businesses. (Extension of time granted) The bill refers to objective expectation based on evidence from independent sources, and that will be taken into account where available.Contrary to the speeches of a number of opposition members, the government has committed to introduce entity taxation on the basis of the recommendations of the Ralph review. The announcement was made in September of 1999. I would also note that entity taxation was first foreshadowed by the government in the ANTS package—together with other reforms the government has progressed, such as the refunding of the imputation credit to benefit, which is significant to lower income Australians such as self-funded retirees.Moving to the amendments to the bill, proposed section 82KZME(6) in schedule 2 to the bill provides an exclusion from the operation of the prepayments tax shelters measure for interest expenditure in respect of investments and infrastructure borrowings. The subsection is amended to exclude all expenditure in respect of these investments. The amendment ensures a continuation of the tax treatment which applied prior to the government's announcement of the new tax arrangements on 11 November 1999. I commend the bill to the House. Amendment agreed to.Bill, as amended, agreed to.17401Bill (on motion by Mr Hockey)—by leave—read a third time.Bills17401R107717401Debate resumed from 11 May, on motion by Mr Hockey:That the bill be now read a second time.12:05:0017401Crean, Simon, MPMr CREANDT4HothamALP00—The way in which the Indirect Tax Legislation Amendment Bill 2000 comes before the House demonstrates the government's shambolic approach to its GST legislation. Here we are with about two weeks before the GST is implemented, and the government is introducing another 145 amendments. We are told—at short notice, just before I came into the House—that it will introduce another 66 today. The government said it was introducing a simple new tax in the Australian tax system, and yet we are dealing today with something like 211 amendments, and the government is ramming those amendments through in less than one hour of debate. This is typical of the way in which the government has botched the implementation of the GST. The amendments do not end here. We have to keep in mind that, before this little piece of jiggery-pokery, there were already 1,026 amendments to the government's simple GST system. The government beat the millennium in the number of amendments to its own new tax system even before the millennium occurred: these 1,026 were introduced before the end of last year.We understand from their party room meeting earlier this week and at a briefing of journalists subsequently that there are something like another 24 categories of amendments that they still have to introduce. How many amendments will that involve? We do not know. But, just to give you an example, the 211 amendments that we are dealing with here today are broken down into something like 11 categories. So, if in fact this same shambolic pattern continues with the other 24 categories, we could be looking at anything up to another 500 amendments. We will get to the second millennium long before even the tax is introduced. Some simplicity!If this government does not understand its own tax system, how does it expect ordinary Australians to understand it? If we have the Minister for Financial Services and Regulation, who is sitting over there like a beached whale at the moment, trying to comprehend all of this and he cannot get out and explain how his own tax system applies, how can he expect ordinary Australians and businesses to cope with it? This is a minister who would not have a clue about his tax system. We saw it in January when he was floundering around out there in the media when he was left in charge by Peter Costello, who was maybe somewhere in a region, because he never gets out to a region in any other circumstance. In fact, his view of the regions is that you cut their wages and you put limits on the price rebate for petrol such that petrol will end up going up in the regions.This is a government that has not got a clue about its own tax. Here we are, restricted to one hour of debate on 211 amendments. No wonder Minister Hockey is walking out. This is a minister who not only cannot comprehend his own tax system but cannot explain it when he is put on the spot. If there were any people actually watching parliament on Tuesday, they would have seen how hopeless this minister was in trying to explain the position on GST prices. This, after all, was a minister who in January said, `No price can be rounded up beyond 10 per cent.' We had a Treasurer who said, `No price will go up by 10 per cent.' Peter Costello said that he knows of no circumstance in which a price will go up by the 10 per cent, and this minister was saying that you cannot get it over 10 per cent. Yet we demonstrated in example after example in eight questions to this minister cases where prices were going up either the full 10 per cent or beyond 10 per cent. Everyone in this audience today knows that prices are going up already ahead of this GST. The Parliamentary Secretary to the Minister for Education, Training and Youth Affairs, the member for Adelaide, who is at the table, can shake her head, but she has a marginal seat and she knows that this is going to hurt her. They already know that prices are going up at the moment and they will go up further when this GST has come in. This is a ticket for inflation, and we all know that, if inflation is driven up, that will put pressure on interest rates. We know that when interest rates go up that will whittle away the compensation package that the government says is being given. Let us understand the dimensions of what this government is trying to foist upon the nation. Let us be reminded each time we have these amendments coming forward of just how hopeless this government has been at implementation but, more importantly, how deceitful it has been in explaining to the Australian public what the full impact will be. The minister who has just scurried out of this chamber told us in January that it was the law and that he had issued instructions to the ACCC to ensure that no prices went up over 10 per cent, but we have not seen the instructions and the ACCC in evidence in the Senate estimates committee said that there is no law.I ask you, Madam Deputy Speaker, who would you believe? Do you believe Mr Hockey—the minister responsible for the GST who does not know how these prices will be affected—when he says it is the law or do you believe the ACCC in evidence saying that there is no such law? We have challenged the minister to show us where that law is. All he does is refer to the section in the Trade Practices Act that talks about general price exploitation. That law has been around for ages, but it does not say that you cannot increase prices by more than 10 per cent. It simply says that they cannot go up if you are going to exploit. But if in fact the prices are justified as going up more than 10 per cent then of course you can do it and there is no power to prevent it.We saw this the other day when workers compensation premiums went up in New South Wales, approved by the ACCC, to the tune of 12.4 per cent. We asked about this in the chamber the other day, and the minister's defence was to point out that, of that 12.4 per cent, only 10 per cent was due to the GST directly and the other 2.4 per cent was due to other matters, including supplier costs. As we understand it, the supplier costs in question relate to the fact that the liabilities that the insurer—in other words, the supplier—is up for in the future will increase because of the broader tax package in terms of payouts. In other words, that 2.4 per cent is due to the government's tax package. Whether it is due specifically to the GST or not does not matter. If it is due to the tax package, it has gone up more than 10 per cent. The ACCC said that, if these future liability circumstances are taken into account, their going up more than 10 per cent can be justified—in other words, to 12.4 per cent. This is something the government said could not happen. This is something the minister said was the law to ensure it would not happen. But it has happened.We saw the example the other day—and we have not heard back from the government on this—about the pink cardigan that had attached to it a dual price tag. People might remember another dual price tag because the last time we referred to it was when one was attached to some Hockey Bear pyjamas—named after the minister and testimony to his failed law. Joe `Hockey Bear Pyjamas' says, `Nothing can go up by 10 per cent,' but here is the tag, Minister, that puts it up 10 per cent.We saw the decisive action that the ACCC took in relation to the Hockey bear pyjamas: it withdrew the tags. But it did not stop the price; it just hid it. The ACCC said, `This is embarrassing. No dual tags will be allowed until the month before the GST comes in and the month after.' We have no problem with the dual tags. In fact, we have been moving amendments in this chamber time and time again to get this government to require, by law, the inclusion on receipts of the GST amount. The government has opposed that amendment every time we have moved it.Just understand this. This is supposed to be a simple new tax. This is a government that wants consumers around the country to be its price watchdogs, yet it wants to hide the tax from them. How can you be a watchdog if you are blindfolded? But that is what this government is doing. I ask the parliamentary secretary at the table: how is she going to justify in her electorate circumstances where people are complaining from day one, July 1, onwards about the price impact of the GST but they cannot see it when they go to a supermarket, or they cannot see it identified when they get a receipt? 8V5Worth, Trish, MPDT4Crean, Simon, MPMr CREAN—Why will you not include it on the receipts? What have you got to hide? We have heard all your unction about the hidden wholesale sales tax, but where is the disclosure of your tax, your simple new tax? You are trying to hide the impact of that tax because, come July 1, every time you have your hand in your pocket to pay any bill, whether it is for a good or a service, Peter Costello and John Howard will have their hand in your pocket taking their bit out too—their 10 per cent, their cut. This is a government that shows no shame at its assertion that this is simple, that it is acceptable. But, when those opposite cannot explain it and when they do not want to disclose it, I think it highlights their concern about what the real impact on the community will be.I might also say this. We hear much from the government about Labor's position on this tax and why, if we hate it so much, we are not going to get rid of it. We have made it clear from the beginning and in fighting the last election that we would ensure, whether we were elected or not, that we would fight tooth and nail to try to stop this thing coming in—and we have. We have been consistent in our opposition to this GST. We almost succeeded in the Senate when Brian Harradine said on that day, `Can I support this GST? I cannot.' There was a sigh of relief over the whole Australian community when he said those words `I cannot'. But, thanks to the Democrats, who did the dirty deal—a dirty deal done cheap to save the government's hide—we have ended up with the GST. But we have said that, once this tax comes in, you cannot unravel it because it has attached to it issues of compensation, which we were prepared to support if the tax came in. There are also circumstances in which there are a lot of sunk costs so far as businesses are concerned. So we have never made any pretence about the fact that, once it is in, you cannot unscramble the eggs. But we have fought consistently to try to stop it coming in.What we have said though is that, if it comes in—and it will come in on 1 July—we are committed to going to the next election with the commitment that, if we are re-elected, we will roll it back to make it fairer and simpler. But the detail of what that roll-back involves we will not be able to announce until closer to the election. Why? Because we will not know what fiscal capacity we have to implement the roll-back. And, most importantly, if this government still does not even know how its tax is going to apply by virtue of the fact that we are here today—what is the date today?8V5Worth, Trish, MPMs Worth—The eighth.DT4Crean, Simon, MPMr CREAN—The eighth, thank you. We are 22 days away from implementation, and they are only now introducing another 211 amendments into this parliament. How can we indicate the extent to which we have to roll it back if they have not identified what it is that has to be rolled back? If they cannot clarify how their tax will apply, why should we be expected to nominate the extent of our roll-back now? First of all, we have to know what the tax applies to; and secondly, we have to know what fiscal flexibility we have to do the roll-back.But we are committed to the roll-back. We have heard many circumstances of, firstly, the government saying, `There will be no more amendments to our tax; we've got it right,' and, secondly, ridiculing Labor whenever we talk roll-back. But what do we have in these 211 amendments today? We have roll-back—that is what we have—something that they criticise us for and say will cost a fortune. But they do it and then say it costs nothing. What hypocrisy.Let me remind the House of what the Prime Minister said back on 25 January, when he was talking about any more exemptions. At that time, you might recall, issues had arisen about tampons and issues had arisen about charities, for example. Labor was campaigning very actively for the government to honour its promises on those things. The government had said that health products would be GST free, yet tampons were taxed. It said that charities would not have to pay the GST, yet they did when the legislation came forward. As part of these 211 measures today, we are dealing with significant concessions and roll-back for charities—something that the government said should not be done because it would cost too much, something it said should not be done because it would add more complexity to the system. And now it is doing it. Do you understand this? This is a government that tries to weather the storm in that it thinks it has got its deal done with the Democrats, but it is so inept when it comes to implementation that it is in here with bandaids patching it up every other day. As I said before, today we are considering 211 amendments—that is, 66 added to the 145. The number of amendments is rising faster than the money being spent on the Joe Cocker ads. With the revelations of amendments here and with the cost of that scandalous advertising campaign on which, the other night when the Austin Powers movie was on, the government were prepared to squander close to half a million dollars, in our assessment, not only to promote a deceitful message—because, quite frankly, the Joe Cocker ads are wrong; they say everyone gets a tax cut and they do not—DK6Hockey, Joe, MPDT4Crean, Simon, MPMr CREAN—That is what they say, Minister. They say John and Wendy will be better off. We have demonstrated in this House, through the member for Lilley, that John and Wendy will not be better off. These are the sorts of ads that they are putting on. Joe Cocker did not know his name was being used on your ads. That just continues the deceit. At least he has made some money out of your GST—something like $290,000 worth. You have the gall to come in here and talk about institutions and organisations that are being helped out to the tune of something like $30,000 to cope with their membership across the whole of Australia. They get $30,000, but Joe gets his $275,000. He must be laughing all the way to bank. And he has not had too many laughs since he did the `Mad Dogs and Englishmen' tour. The Prime Minister will be the mad dog going off to England on 1 July. As people in this country have to deal with the complexities of the GST, he will be off visiting the Queen. What for? To recognise Australia's coming of age as a federation. Where does the Prime Minister choose to recognise that? Not in Australia, but in London. On the day that his GST comes in, where will he be attending to the mess? He will be off entertaining and enjoying himself. He will be made aware of that duplicity. Postcards from London, Prime Minister, to his loving constituents—the people he said would be thanking him once this GST came in. Once they were clear about how this great new tax was going to take them forward, he said that they would be thanking him. They will not be thanking him come 1 July. They will not, because they will understand that they have been deceived by this government in terms of what this tax stands for.The Prime Minister has consistently said that there should be no more exemptions to this tax. He said on 25 January:The more exemptions you have, the more pressure there is to have still more exemptions ...Correct. That is why we have 211 today on top of the 1,026. There will be more to come. He is absolutely right on that, so keep up the pressure. Anyone who has the exemption they are seeking: keep the pressure up on this government because, if you keep the pressure up long enough, they will fold. He goes on to say:...and the still more exemptions you have, you then start to threaten the existence of the whole system. Now that, of course, is what our political opponents want, but I remind them and I remind your listeners that we took this to the election in 1998, we won that election, we've got it through the parliament. It is now the law and I am opposed to any further exemptions If they were so opposed to any further exemptions on 25 January, why have we got 211 more amendments? The reason is that, as we disclose day by day how this tax is unfair and how it breaches promises that the government made in respect of it when they introduced it, of course, the government are going to have to make further exemptions. Of course they are going to have to roll back. Let me hear none of the hypocrisy from the other side criticising Labor for advocating roll-back when they are rolling into this House doing their own roll-back. What do they want to do? They do not want to draw attention to it because to draw too much attention to it would expose the fact that their tax is flawed. It would expose the fact that those campaigns which they said would have no impact upon them have had an impact upon them. What is the latest campaign that will have an impact upon them? It is what they are doing to the price of beer. During the last election campaign, the Prime Minister not once but three times went on radio and said that the price of ordinary beer under the GST would rise by only 1.9 per cent. How is it that this government have introduced, through an excise measure, a price increase for beer of eight to nine per cent? Of course the Treasurer said, `We only ever promised it'—that is, the 1.9 per cent rise—`in relation to packaged beer.' That is what their ANTS document says. That is true; I acknowledge that point. But it is not what the Prime Minister says or said. Three times he said the price of ordinary beer would go up by only 1.9 per cent. Hands up anyone in this place who does not think draught beer is ordinary beer. Do you think draught beer is not ordinary beer, Minister? You might even get this one right. You have not had too much right in terms of the way in which this tax applies. Is not draught beer ordinary beer? During the election campaign the Prime Minister said that ordinary beer would not go up more than 1.9 per cent and then he duds the Australian drinking public and brewers in terms of that promise. They were entitled to believe he meant what he said in terms of the 1.9 per cent commitment. There should be no qualifications around it. The Prime Minister tries to say that this answer of his on the John Laws program was made in relation to a Kempsey bottle shop owner. It is true that, as one part of that interview with John Laws, he refers to the Kempsey bottle shop and assures the owner of the 1.9 per cent price rise. At another point in that same interview he says that ordinary beer will rise by 1.9 per cent. He did an interview on the Alan Jones program some six weeks before the John Laws interview. He must have been a clairvoyant if he knew he was going to get a question about the Kempsey bottle shop six weeks later. I did not know this Prime Minister had this talent. He does not demonstrate it much. But, six weeks before the Kempsey bottle shop owner incident, he made this promise: the price of beer will not go up more than 1.9 per cent. And yet it has, and that is why you have this massive advertising campaign going on. It is another broken promise. Again, the Parliamentary Secretary to the Minister for Education, Training and Youth Affairs, who is at the table and who has a marginal seat, needs to understand the impact of this in her electorate. People do not like being dudded. They do not have a high regard for politicians' promises, but they do expect them to be honoured when they are made so categorically—1.9 per cent was the promise, and you have broken it. You have broken it because you have realised that you have had to pay so much to try to buy this tax and you are going to try to hold the line on any further exemptions.All those people out there seeking to get change from this government should take heart from this bill because today we have 211 amendments worth of roll-back. There are 211 amendments that involve exemptions and roll-back. Let us just look at the categories that are contained in this particular piece of legislation. The areas of roll-back contained in the 211 amendments include charities and other not-for-profit bodies, at least some of them. They include expanding the range of GST supplies in areas such as water, health and education. Another category is supplies involving non-residents. Another is the simplifying of the way in which the GST applies between principals and agents. Another is the financial supplies for entities which are not financial institutions. Another is the precise rules for calculating GST—for example, rounding. This must be one that had to be put in for the minister because he did not know how you did rounding. He simply said it would not happen. Now they have had to amend the rules to show how it will happen. I hope he takes note. Then there are technical matters concerning joint ventures and various technical insurance issues, the administration of the GST between the tax office and taxpayers and an anti-avoidance provision concerning the stockpiling of alcoholic beverages. The final group covers other subjects such as livestock, housing and second-hand goods. That is a pretty massive sweep of issues covered by this roll-back—something the government want to criticise Labor for but are in here doing. Every time they say there can be no more exemptions or you cannot have roll-back, do not believe them, because they are in here doing it. There are 211 amendments today, and there are more to come, on top of the 1,026 already. Some simple new tax! I remember the Treasurer saying, `This is the most significant piece of tax reform. We won't have to touch tax reform for another 50 years.' The tax has not even been implemented and he is up to the 1,500th amendment. Give us a break!This is a government that believed all they had to do was to get a deal with the Democrats for their GST; all they had to do was to pass the legislation. They were wrong. This shambolic approach to tax reform is typical of this government. They are not across the detail, they do not develop a proper process and they get themselves into an awful mess. Today, we are seeing an example of it. So proud are they of this great new simple tax that they have already had to amend it almost 1,500 times, and so much debate do they want on it that they are gagging this through the parliament in less than an hour. Here we have important areas of change, important areas of exemption and significant issues that we have drawn their attention to. The member for Lilley, amongst others, has been campaigning very hard in terms of the charities. This is a government that said there were to be no more exemptions when we were out there saying, `Do the right thing by charities.' We have a suite of amendments in here for charities, and just wait for the ones for caravan parks to come—but they will need a better advocate than Larry Anthony. This is a person, like everyone else in the National Party, who goes and tells his electorate that he stands up to the Liberal Party; but, every time it comes to the crunch, he gets rolled. So anyone looking for an exemption should forget about the National Party helping them. But, if they are after the exemptions, they should get Labor to support them. We will be here to hold this government accountable to its promise, and we will be using those approaches to determine our position on roll-back. This is a government that wants to increase the rate of GST once it comes in. It wants to roll the tax forward. Labor is committed to rolling it back. This is a government hypocritically caught out because it is into its own roll-back—but only Labor will deliver genuine fairness because this is a government that has no concern for ordinary Australians. It wants to slug them with a new 10 per cent tax. (Time expired)Motion (by Mr Hockey) agreed to:That the question be put.Bill read a second time.Message from the Governor-General recommending appropriation for the bill and proposed amendments announced.17406Bill—by leave—taken as a whole.12:37:0017406Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—by leave—I move government amendments Nos 1 to 66:(1) Clause 2, page 2 (lines 1 and 2), omit “Schedule 10 (other than item 1 of Schedule 10)”, substitute “Schedules 10 and 10A (other than item 5 of Schedule 10A),”. [trading periods spanning midnight on 30 June 2000](2) Clause 2, page 2 (line 4), after “10,”, insert “10A,”.[GST religious groups](3) Clause 2, page 2 (line 10), omit “14, 15 and 16”, substitute “13A to 16E”.[phasing in of input tax credits on motor vehicles etc.](4) Clause 2, page 2 (after line 17), at the end of the clause, add: (6) Schedule 9A and item 5 of Schedule 10A commence immediately after the commencement of Part 3 of Schedule 1 to the A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999. (7) Item 16F of Schedule 11 commences immediately after the commencement of Part 2 of Schedule 11 to the A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999.[producer rebates; trading periods spanning midnight on 30 June 2000; motor homes and campervans](5) Schedule 1, page 3 (after line 18), after item 1, insert:1A Section 9-39 (after table item 5)Insert: 5AGST religious groupsDivision 49[section 9-39—GST religious groups](6) Schedule 1, page 3, after proposed new item 1A, insert:1B Section 11-99 (after table item 6)Insert: 6AGST religious groupsDivision 49[section 11-99—GST religious groups](7) Schedule 1, page 3, after proposed new item 1B, insert:1C Section 17-99 (after table item 8)Insert: 8AGST religious groupsDivision 49[section 17-99—GST religious groups](8) Schedule 1, page 3, after proposed new item 1C, insert:1D Section 19-99 (before table item 1)Insert: 1AGST religious groupsDivision 49[section 19-99—GST religious groups](9) Schedule 1, page 3 (after line 24), after item 2, insert:2A Subsection 29-40(2)Omit “or any *gift-deductible entity”, substitute “, any *gift-deductible entity or any *government school”.[section 29-40—government schools](10) Schedule 1, page 3, after proposed new item 2A, insert:2B Section 37-1 (after table item 15)Insert: 15AGST religious groupsDivision 49[section 37-1—GST religious groups](11) Schedule 1, page 3, after proposed new item 2B, insert:2C Paragraphs 38-250(1)(a) and (2)(a)Omit “or a *gift-deductible entity”, substitute “, a *gift-deductible entity or a *government school”. [section 38-250—government schools](12) Schedule 1, page 3, after proposed new item 2C, insert:2D Paragraph 38-255(a)Omit “or a *gift-deductible entity”, substitute “, a *gift-deductible entity or a *government school”.2E Section 38-255Omit “or gift-deductible entity” (wherever occurring), substitute “, gift-deductible entity or government school”.[section 38-255—government schools](13) Schedule 1, page 3, after proposed new item 2E, insert:2F Paragraph 38-270(a)Omit “or a *gift-deductible entity”, substitute “, a *gift-deductible entity or a *government school”.[section 38-270—government schools](14) Schedule 1, page 3, after proposed new item 2F, insert:2G Paragraph 40-130(2)(a)Repeal the paragraph.[section 40-130—school tuckshops and canteens](15) Schedule 1, item 3, page 4 (line 2), omit “or a *gift-deductible entity”, substitute “, a *gift-deductible entity or a *government school”.[section 40-160—government schools](16) Schedule 1, page 5 (after line 6), after item 4, insert:4A After Division 48Insert:Division 49—GST religious groupsTable of Subdivisions49-A Approval of GST religious groups49-B Consequences of approval of GST religious groups49-C Administrative matters49-1 What this Division is aboutSome registered charitable bodies can be approved as a GST religious group. Transactions between members of the group are then excluded from the GST.Subdivision 49-A—Approval of GST religious groups49-5 Approval of GST religious groups The Commissioner must approve 2 or more entities as a *GST religious group if: (a) the entities jointly apply, in the *approved form, for approval as a GST religious group; and (b) each of the entities *satisfies the membership requirements for that GST religious group; and (c) the application nominates one of the entities to be the *principal member for the group; and (d) the entity so nominated is an *Australian resident.A group of entities that is so approved is a GST religious group.Note: Refusing an application for approval under this section is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).49-10 Membership requirements of a GST religious group An entity satisfies the membershiprequirements of a *GST religious group, or a proposed GST religious group, if: (a) the entity is *registered; and (b) the entity is endorsed as exempt from income tax under Subdivision 50-B of the *ITAA 1997; and (c) all the other members of the GST religious group or proposed GST religious group are so endorsed; and (d) the entity and all those other members are part of the same religious organisation; and (e) the entity is not a member of any other GST religious group.Subdivision 49-B—Consequences of approval of GST religious groups49-30 Supplies between members of GST religious groups (1) A supply that a *member of a *GST religious group makes to another member of the same GST religious group is treated as if it were not a *taxable supply. (2) This section has effect despite section 9-5 (which is about what are taxable supplies).49-35 Acquisitions between members of GST religious groups (1) An acquisition that a *member of a *GST religious group makes from another member of the same GST religious group is treated as if it were not a *creditable acquisition. (2) This section has effect despite section 11-5 (which is about what are creditable acquisitions).49-40 Adjustment events (1) An *adjustment event cannot arise in relation to: (a) a supply that a *member of a *GST religious group makes to another member of the same GST religious group; or (b) an acquisition that a member of a GST religious group makes from another member of the same GST religious group. (2) This section has effect despite section 19-10 (which is about what are adjustment events).49-45 Changes in the extent of creditable purpose (1) An *adjustment cannot arise under Division 129 in relation to an acquisition that a *member of a *GST religious group makes from another member of the same GST religious group. (2) This section has effect despite section 129-5 (which is about when adjustments can arise under Division 129).49-50 GST religious groups treated as single entities for certain purposes (1) Despite sections 49-35, 49-40 and 49-45, a *GST religious group is treated as a single entity, and not as a number of entities corresponding to the *members of the GST religious group, for the purposes of working out: (a) whether acquisitions or importations by a member are for a *creditable purpose; and (b) the amounts of any input tax credits to which the member is entitled; and (c) whether the member has any *adjustments; and (d) the amounts of any such adjustments. (2) This section has effect despite section 11-25 (which is about the amount of input tax credits) and section 17-10 (which is about the effect of adjustments on net amounts).Subdivision 49-C—Administrative matters49-70 Changing the membership etc. of GST religious groupsChanges made on application (1) The Commissioner must, if the *principal member of a *GST religious group applies to the Commissioner in the *approved form, do one or more of these (as requested in the application): (a) approve, as an additional *member of the GST religious group, another entity that *satisfies the membership requirements for the GST religious group; (b) revoke the approval of one of the members of the GST religious group as a member of the group; (c) approve another member of the GST religious group to replace the applicant as the principal member of the group.Note: Refusing an application for approval or revocation under this subsection is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).Changes made without application (2) The Commissioner must revoke the approval of one of the *members of a *GST religious group if satisfied that the member does not *satisfy the membership requirements for the GST religious group.Note: Revoking under this subsection an approval under this Division is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).49-75 Revoking the approval of GST religious groupsRevoking on application (1) The Commissioner must, if the principal member of a *GST religious group applies to the Commissioner in the *approved form, revoke the approval of the group as a GST religious group.Note: Refusing an application for revocation under this subsection is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).Revoking without application (2) The Commissioner must revoke the approval of the *GST religious group if satisfied that none of its members, or only one of its members, *satisfies the membership requirements for that GST religious group.Note: Revoking under this subsection the approval of a GST group is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).49-80 Notification by principal members The principal member of a *GST religious group must notify the Commissioner of any circumstances under which the Commissioner must: (a) revoke the approval of one of the *members of the group under subsection 49-70(2); or (b) revoke the approval of the group under subsection 49-75(2).The notification may (in appropriate cases) be in the form of an application under subsection 49-70(1) or 49-75(1). The notification, or application, must be given to the Commissioner within 21 days after the circumstances occurred.49-85 Date of effect of approvals and revocations (1) The Commissioner must decide the date of effect of any approval, or any revocation of an approval, under this Division. (2) The date of effect may be the day of the decision, or a day before or after that day. However, it must be a day on which, for all the *members of the *GST religious group in question, a tax period begins.Note: Deciding under this section the date of effect of any approval, or any revocation of an approval, under this Division is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).49-90 Notification by the Commissioner The Commissioner must give notice of any decision that he or she makes under this Division: (a) if the decision relates to the approval of 2 or more entities as a *GST religious group—to the entity nominated in the application for approval to be the *principal member of the group; or (b) otherwise—to the principal member of the *GST religious group to which the decision relates. [sections 49-1 to 49-90—GST religious groups](17) Schedule 1, page 5, after proposed new item 4A, insert:4B Paragraph 63-5(2)(a)Omit “or a *gift-deductible entity”, substitute “, a *gift-deductible entity or a *government school”.[section 63-5—government schools](18) Schedule 1, item 6, page 5 (line 25), after “charitable bodies”, insert “and government schools”.[section 111-1—government schools](19) Schedule 1, item 7, page 6 (lines 1 and 2), omit “or a *gift-deductible entity”, substitute “, a *gift-deductible entity or a *government school”.[section 111-18—government schools](20) Schedule 1, item 7, page 6 (line 5), omit “or gift-deductible entity”, substitute “, gift-deductible entity or government school”.[section 111-18—government schools](21) Schedule 1, item 7, page 6 (lines 6 and 7), omit “or gift-deductible entity”, substitute “, gift-deductible entity or government school”.[section 111-18—government schools](22) Schedule 1, item 7, page 6 (lines 8 and 9), omit “or gift-deductible entity”, substitute “, gift-deductible entity or government school”.[section 111-18—government schools](23) Schedule 1, page 6 (after line 11), after item 7, insert:7A Section 195-1 (note at the end of the definition of creditable acquisition)After “sections”, insert “49-35,”.[section 195-1—GST religious groups](24) Schedule 1, page 6 (after line 14), after item 8, insert:8A Section 195-1Insert:government school means a *school that: (a) supplies any of these kinds of *education courses: (i) *pre-school courses; (ii) full-time *primary courses; (iii) full-time *secondary courses; (whether or not the school supplies any other education courses); and (b) is conducted by or on behalf of an *Australian government agency;and includes a proposed school that will meet the requirements of paragraphs (a) and (b) once it starts operation.8B Section 195-1Insert:GST religious group has the meaning given by section 49-5.8C Section 195-1 (definition of member)Repeal the definition, substitute:member means: (a) in relation to a *GST group—an entity, a *non-profit sub-entity or a *government related entity currently approved as one of the members of the group under section 48-5 or paragraph 48-70(1)(a); or (b) in relation to a *GST religious group—an entity currently approved as one of the members of the group under section 49-5 or paragraph 49-70(1)(a).8D Section 195-1Insert:principal member, for a *GST religious group, is the *member of the group nominated as mentioned in paragraph 49-5(c), or approved as a replacement principal member for the group under paragraph 49-70(1)(c).8E Section 195-1 (definition of satisfies the membership requirements)Repeal the definition, substitute:satisfies the membership requirements: (a) in relation to a *GST group—has the meaning given by section 48-10 or 149-25; or (b) in relation to a *GST religious group—has the meaning given by section 49-10.8F Section 195-1 (note at the end of the definition of taxable supply)After “sections”, insert “49-30,”.[section 195-1—government schools; GST religious groups](25) Schedule 1, page 6 (after line 20), after item 10, insert:10A Subsection 62(2) (after table item 24)Insert: 24Arefusing an application for approvalsection 49-524Brefusing an application for approval or revocationsubsection 49-70(1)24Crevoking an approval under Division 49subsection 49-70(2)24Drefusing an application for revocationsubsection 49-75(1)24Erevoking the approval of a GST religious groupsubsection 49-75(2)24Fdeciding the date of effect of any approval, or any revocation of an approval, under Division 49section 49-85[section 62—GST religious groups](26) Schedule 2, page 8 (after line 5), after item 4, insert:4A Section 38-415Repeal the section, substitute:38-415 Supplies through inwards duty free shops A supply is GST-free if the supply is a sale of *airport shop goods through an *inwards duty free shop to a *relevant traveller.[section 38-415—inwards duty free shops](27) Schedule 2, page 8 (after line 21), at the end of the Schedule, add:8 Section 195-1 (paragraph (b) of the definition of relevant traveller)Omit “imported or *excisable goods”, substitute “*airport shop goods”.[section 195-1—inwards duty free shops](28) Schedule 3, item 7, page 10 (lines 4 to 7), omit the item.[section 38-190—GST-free exports](29) Schedule 3, item 11, page 10 (line 19), omit “not”.[technical correction](30) Schedule 5, page 20 (after line 16), after item 2, insert:2A Section 11-99 (after table item 3)Insert: 3AFinancial supplies (acquisitions and importations to provide fringe benefits)Division 71[section 11-99—interaction with fringe benefits tax](31) Schedule 5, item 4, page 20 (line 22), omit “acquisition”, substitute “importation”.[section 15-10—financial supplies](32) Schedule 5, item 4, page 20 (line 25), omit “acquisition”, substitute “importation”.[section 15-10—financial supplies](33) Schedule 5, page 20 (after line 28), after item 4, insert:4A Section 15-99 (before table item 1)Insert: 1AFinancial supplies (acquisitions and importations to provide fringe benefits)Division 71[section 15-99—interaction with fringe benefits tax](34) Schedule 5, page 20, after proposed new item 4A, insert:4B Section 37-1 (before table item 11)Insert: 10BFinancial supplies (acquisitions and importations to provide fringe benefits)Division 71[section 37-1—interaction with fringe benefits tax](35) Schedule 5, page 21 (after line 5), after item 5, insert:5A After Division 70Insert:Division 71—Financial supplies (acquisitions and importations to provide fringe benefits)71-1 What this Division is aboutFinancial suppliers may not be entitled to input tax credits for acquisitions or importations they make to provide fringe benefits to their employees.Note: Under the Fringe Benefits Tax Assessment Act 1986, a lower rate of fringe benefits tax is payable for providing fringe benefits without entitlement to input tax credits.71-5 Acquisitions by financial suppliers to provide fringe benefits (1) An acquisition that solely or partly relates to making *financial supplies is not a *creditable acquisition to the extent that you make the acquisition for the purpose of providing *fringe benefits. (2) However, this section applies only if you *exceed the financial acquisitions threshold. (3) This section has effect despite section 11-5 (which is about what is a creditable acquisition).71-10 Importations by financial suppliers to provide fringe benefits (1) An importation that solely or partly relates to making *financial supplies is not a *creditable importation to the extent that you make the importation for the purpose of providing *fringe benefits. (2) However, this section applies only if you *exceed the financial acquisitions threshold. (3) This section has effect despite section 15-5 (which is about what is a creditable importation).[sections 71-1 to 71-10—interaction with fringe benefits tax](36) Page 42 (after line 6), after Schedule 9, insert:Schedule 9A—Producer rebates under the wine equalisation taxA New Tax System (Wine Euqalisation Tax) Act 19991 At the end of section 17-1Add “Producer rebates under Division 19 are a form of wine tax credit.”.2 Section 17-5 (after table item CR8)Insert: CR9*Producer rebateYou make an *assessable dealing in circumstances that entitle you to a *producer rebate under Division 19.the amount of the *producer rebate under Division 19immediately before the end of the financial year in which the *assessable dealing occurs3 After Division 17Insert:Division 19—Producer rebates19-1 What this Division is aboutWine producers are entitled to a rebate for certain retail sales and AOUs of wine. The rebate tapers off when these sales and AOUs exceed a particular value. The rebate is provided in the form of a wine tax credit.Note: Credit ground CR9 is producer rebates.19-5 Entitlement to producer rebatesRetail sales (1) You are entitled to a *producer rebate for *rebatable wine in respect of a *financial year if: (a) you are the *producer of the wine; and (b) you are liable to wine tax for a *retail sale of the wine during the financial year; and (c) the sale is from premises to which your *producer's licence relates; and (d) the sale does not contravene the *State law or *Territory law under which the licence was issued, or any conditions to which the licence is subject. (2) A sale of wine by mail order or on the Internet is taken to be a sale from particular premises for the purposes of paragraph (1)(c) if the wine is sold under the *producer's licence to which those premises relate.AOUs (3) You are also entitled to a *producer rebate for *rebatable wine in respect of a *financial year if: (a) you are the *producer of the wine; and (b) you are liable to wine tax for an *AOU of the wine during the financial year.Exceptions (4) However, you are not entitled to the rebate for the wine if: (a) in the case of a *retail sale—you sell the wine in the course of providing, to the purchaser of the wine, other *food that is for consumption on the *premises from which it is supplied; or (b) in the case of a retail sale—the sale is by mail order or on the Internet and a commission is payable to a third party for the sale, or a third party deducts an amount as commission from the proceeds of the sale; or (c) in any case—in the *financial year in which the sale or *AOU occurs, your *annual rebatable turnover for the *producer's licence under which the sale or AOU took place is more than $580,000.19-10 Amount of producer rebates (1) If the *annual rebatable turnover of a *producer of *rebatable wine for a particular *producer's licence in a *financial year is $300,000 or less, the amount of the *producer rebates to which you are entitled in respect of that licence for that financial year is 14% of that turnover. (2) If the *annual rebatable turnover of a *producer of *rebatable wine for a particular *producer's licence in a *financial year is more than $300,000, the amount of the *producer rebates to which you are entitled in respect of that licence for that financial year is:19-15 Estimating amounts of producer rebates for each tax period (1) The Commissioner may determine in writing how a *producer of *rebatable wine may work out estimates of amounts of *producer rebates that the producer may claim for the producer's *tax periods during a *financial year (other than the last tax period of a financial year). (2) An amount worked out in accordance with the determination, for one of the *tax periods applying to you, is treated as an amount of a *wine tax credit: (a) to which you are entitled; and (b) that arises during that tax period (even though under section 17-5 it would arise at a later time). (3) The amount of the *producer rebate to which you are entitled in respect of the *financial year is taken to be reduced by the sum of the amounts worked out under subsection (2) that you claim for *tax periods during the financial year. (4) However, if the sum of the amounts worked out under subsection (2) that you claim for *tax periods during the *financial year exceeds the amount of the *producer rebate to which you are entitled in respect of the financial year: (a) you are liable to pay an amount equal to that excess; and (b) the amount is to be treated as if it were wine tax payable by you at the end of the financial year, and, for the purposes of Part 5, were attributable to the last tax period of the financial year.19-20 Annual rebatable turnover The *annual rebatable turnover of a *producer of *rebatable wine for a particular *producer's licence in a *financial year is the sum of: (a) the *notional wholesale selling prices of all *retail sales of rebatable wine the producer makes in that financial year that are sales: (i) made under the licence; and (ii) to which subsection 19-5(1) applies; and (b) the notional wholesale selling prices of all *AOUs of rebatable wine the producer makes in that financial year that are AOUs: (i) made under the licence; and (ii) to which subsection 19-5(3) applies.4 Section 33-1Insert:annual rebatable turnover has the meaning given by section 19-20.5 Section 33-1Insert:financial year means a period of 12 months beginning on 1 July.6 Section 33-1Insert:food has the meaning given by section 38-4 of the *GST Act.7 Section 33-1Insert:ITAA 1997 means the Income Tax Assessment Act 1997.8 Section 33-1Insert:premises, in relation to a supply of *food (other than wine), has the meaning given by section 38-5 of the *GST Act.9 Section 33-1Insert:producer, of *rebatable wine, means an entity that: (a) *manufactures the wine, or supplies to another entity the grapes, other fruit, vegetables or honey from which the wine is manufactured; and (b) holds a *producer's licence.10 Section 33-1Insert:producer rebate means a rebate to which a *producer of *rebatable wine is entitled under Division 19.11 Section 33-1Insert:producer's licence means a licence, issued under a *State law or a *Territory law, to make *retail sales of wine from particular premises: (a) as a wine producer or a vigneron; or (b) in a similar capacity determined in writing by the Commissioner.12 Section 33-1Insert:rebatable wine means *grape wine, *grape wine products, *fruit or vegetable wine or *mead.13 Section 33-1Insert:State lawhas the meaning given by section 995-1 of the *ITAA 1997.14 Section 33-1Insert:Territory lawhas the meaning given by section 995-1 of the *ITAA 1997.[sections 17-1 to 33-1—producer rebates](37) Schedule 10, heading to the Schedule, page 43 (lines 2 and 3), omit the heading, substitute:Schedule 10—Alcoholic beverages [alcoholic beverages](38) Schedule 10, page 43 (before line 5), before item 1, insert:A New Tax System (Goods and Services Tax Transition) Act 19991A After section 16AInsert:16AB Special GST credit for certain alcoholic beverages on which duty has decreased (1) This section applies to goods if: (a) you are entitled to a special credit under section 16 in respect of the goods; and (b) they are goods mentioned in subsection 15A(1) (alcoholic beverages) of the Sales Tax (Exemptions and Classifications) Act 1992; and (c) either: (i) an amount of excise duty or customs duty (the old duty amount) in respect of the goods was paid before 1 July 2000; or (ii) the goods were delivered into home consumption before 1 July 2000 under a permission given under subsection 61C(1) of the Excise Act 1901 or granted under subsection 69(3) of the Customs Act 1901, and an amount of excise duty or customs duty (the old duty amount) was or is payable in respect of the goods; and (d) were excise duty or customs duty (whichever is applicable) instead to become payable on the goods immediately after 1 July 2000, the amount of that duty (the new duty amount) would be less than the old duty amount. (2) The amount of the special credit in respect of the goods is increased by an amount equal to the difference between the old duty amount and the new duty amount.[section 16AB—alcoholic beverages](39) Schedule 10, page 43, after proposed new item 1A, insert:1B Paragraph 16B(1)(d)Omit “immediately after”, substitute “at the start of”.[section 16B—alcoholic beverages](40) Page 45, after Schedule 10, insert:Schedule 10A—Trading periods spanning midnight on 30 June 2000A New Tax System (End of Sales Tax) Act 19991 After subsection 3(1)Insert: (1A) However, if the assessable dealing is in respect of a supply to which section 6A of the A New Tax System (Goods and Services Tax Transition) Act 1999 applies, this section does not apply unless the time of dealing is after the end of the transition trading period (within the meaning of that section).A New Tax System (Goods and Services Tax Transition) Act 19992 At the end of Part 1Add:6A Trading periods spanning midnight on 30 June 2000 (1) Despite section 6, if: (a) an entity has chosen to apply this section; and (b) the entity makes a supply that, under section 6, would be taken to be made on 1 July 2000 but before: (i) 6 am on that day; or (ii) if the entity has chosen to stop the application of this section at an earlier time on that day—the time so chosen; and (c) the part of the entity's enterprise through which the supply is made was open for business both immediately before 1 July 2000 and immediately after 30 June 2000; and (d) that part of the entity's enterprise remains open for business during 1 July 2000 until at least the time at which, under section 6, the supply would be taken to be made;the supply, and the acquisition made by the recipient of the supply, is taken, for the purposes of this Act, to be made immediately before 1 July 2000. (2) If an entity makes a supply to which subsection (1) applies, then, in relation to that supply: (a) section 12 has effect as if the reference in paragraph 12(1)(b) to a period that begins before 1 July 2000 and ends on or after 1 July 2000 were a reference to a period that begins before the end of the transition trading period and ends on or after the end of the transition trading period; and (b) Part 4 has effect as if references to having goods on hand at the start of 1 July 2000 were references to having goods on hand immediately after the end of the transition trading period; and (c) subsection 16(3A) has effect as if the reference to the amount of sales tax borne changing after 1 July 2000 were a reference to that amount changing after the end of the transition trading period; and (d) paragraph 17(1)(b) has effect as if the reference to applying the goods on or after 1 July 2000 were a reference to applying the goods after the end of the transition trading period; and (e) paragraph 17(3)(b) has effect as if the reference to ceasing to be registered on or after 1 July 2000 were a reference to ceasing to be registered after the end of the transition trading period; and (f) section 24 has effect as if: (i) the reference to making gambling supplies before 1 July 2000 were a reference to making gambling supplies before the end of the transition trading period; and (ii) the reference to a gambling event happening on or after 1 July 2000 were a reference to a gambling event happening on or after the end of the transition trading period; and (iii) the references to gambling events that happened before 1 July 2000 were references to gambling events that happened before the end of the transition trading period; and (g) section 24A has effect as if the references to vouchers supplied before, not redeemed before, or supplied after, 1 July 2000 were references to vouchers supplied before, not redeemed before, or supplied after, the end of the transition trading period (as the case requires). (3) This section does not apply if, but for this section, the supply would be input taxed. (4) In this section:transition trading period means the period ending: (a) at the first time after 30 June 2000 that the part of the entity's enterprise through which the supply in question was made was not open for business; or (b) at: (i) 6 am on 1 July 2000; or (ii) if the entity has chosen to stop the application of this section at an earlier time on that day—the time so chosen;whichever occurs sooner.3 At the end of subsection 7(1)Add:Note: GST may not apply to supplies during trading periods spanning midnight on 30 June 2000: see section 6A.4 At the end of subsection 8(1)Add:Note 3: Sales tax may still apply to supplies during trading periods spanning midnight on 30 June 2000: see section 6A.A New Tax System (Wine Equalisation Tax and Luxury Car Tax Transition) Act 19995 After subsection 3(2)Insert: (2A) This section applies to wine that is the subject of a supply to which section 6A of the A New Tax System (Goods and Services Tax Transition) Act 1999 applies as if the reference in paragraph (1)(b) of this section to having wine on hand at the start of 1 July 2000 were a reference to having wine on hand immediately after the end of the transition trading period (within the meaning of that section).[section 3, sections 6A to 8 and section 3—trading periods spanning midnight on 30 June 2000](41) Schedule 11, page 46 (after line 11), after item 2, insert:2A Paragraph 38(2)(c)After “all”, insert “or most of”.2B Subsection 38(3) (added by the A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999)Repeal the subsection, insert (after subsection (2)): (2A) For the avoidance of doubt, the fact that activities of an entity are limited to making supplies to members of the entity does not prevent those activities: (a) being in the form of a *business within the meaning of paragraph (1)(a); or (b) being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b).Note: In addition to making other changes, item 2B corrects the incorrect numbering and location of this subsection by the A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999.[section 38—partnerships; mutual organisations](42) Schedule 11, page 46 (after line 22), after item 3, insert:3A Subsection 9-15(2B)Omit “a body” (wherever occurring), substitute “an entity”.[section 9-15—mutual organisations](43) Schedule 11, page 46, after proposed new item 3A, insert:3B After paragraph 9-20(1)(d)Insert: (da) by a trustee of a *complying superannuation fund or, if there is no trustee of the fund, by a person who manages the fund; or3C Paragraph 9-20(2)(c)After “all”, insert “or most of”.3D Subsection 9-20(3)Repeal the subsection, insert (after subsection (2)): (3) For the avoidance of doubt, the fact that activities of an entity are limited to making supplies to members of the entity does not prevent those activities: (a) being in the form of a *business within the meaning of paragraph (1)(a); or (b) being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b).Note: In addition to making other changes, item 3D corrects the incorrect location of this subsection by the A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999.[section 9-20—complying superannuation funds; partnerships; mutual organisations](44) Schedule 11, page 46 (after line 24), after item 4, insert:4A Section 9-80Omit “(worked out as if it were solely a taxable supply)”.4B At the end of section 9-80Add: (2) The value of the actual supply, for the purposes of subsection (1), is as follows:where:taxable proportion is the proportion of the value of the actual supply that represents the value of the *taxable supply (expressed as a number between 0 and 1).[section 9-80—valuing mixed supplies](45) Schedule 11, page 46, after proposed new item 4B, insert:4C Section 15-99 (after table item 2)Insert: 2AAImportations without entry for home consumptionDivision 114[section 15-99—imported goods supplied in bond](46) Schedule 11, page 46, after proposed new item 4C, insert:4D Section 17-99 (after table item 4)Insert: 4ADistributions from deceased estatesDivision 139[section 17-99—deceased estates](47) Schedule 11, page 46, after proposed new item 4D, insert:4E Section 29-39 (after table item 8)Insert: 8ADistributions from deceased estatesDivision 139[section 29-39—deceased estates](48) Schedule 11, page 47 (after line 5), after item 6, insert:6A Section 37-1 (after table item 10)Insert: 10ADistributions from deceased estatesDivision 139[section 37-1—deceased estates](49) Schedule 11, item 8, page 47 (line 15), omit “sale”, substitute “supply”.[technical correction](50) Schedule 11, page 47 (after line 19), after item 8, insert:8A Subsection 42-5(1B)Repeal the subsection.[section 42-5—reimported goods](51) Schedule 11, page 47, after proposed new item 8A, insert:8B At the end of Division 42Add:42-10 Goods returned to Australia in an unaltered condition An importation of goods is a non-taxable importation if: (a) the goods were exported from Australia and are returned to Australia, without having been subject to any treatment, industrial processing, repair, renovation, alteration or any other process since their export; and (b) the importer was not entitled to, and did not claim, a payment under Division 168 (about the tourist refund scheme) related to the export of the goods; and(c) the importer: (i) is the manufacturer of the goods; or (ii) has previously acquired the goods, and the supply by means of which the importer acquired the goods was a *taxable supply (or would have been a taxable supply but for section 66-45); or (iii) has previously imported the goods, and the previous importation was a *taxable importation in respect of which the GST was paid.Note: An importation covered by this section may also be duty-free under item 17 of Schedule 4 to the Customs Tariff Act 1995.[section 42-10—reimported goods](52) Schedule 11, page 49, (after line 13), after item 11, insert:11A After subsection 111-5(3)Insert: (3A) If you are a *partnership, this section does not apply to your reimbursement of a partner for an expense he or she incurs if, even without this Division applying, you are entitled to an input tax credit arising from the incurring of the expense.[section 111-5—reimbursement of partners](53) Schedule 11, page 49, after proposed new item 11A, insert:11B At the end of Division 111Add:111-25 Employers paying work-related expenses of employees If you make, or are liable to make, a payment on behalf of your employee for an expense that he or she incurs that is related directly to his or her activities as your employee, this Division applies to you as if you reimbursed your employee for the expense.[section 111-25—employers paying work-related expenses of employees](54) Schedule 11, page 49, after proposed new item 11B, insert:11C At the end of section 114-1Add “An entity that enters for home consumption warehoused goods imported by someone else is entitled to any input tax credit for the importation.”.[section 114-1—imported goods supplied in bond](55) Schedule 11, page 49, after proposed new item 11C, insert:11D At the end of Division 114Add:114-25 Warehoused goods entered for home consumption by an entity other than the importer (1) If you enter for home consumption (within the meaning of the Customs Act 1901) goods that are warehoused goods (within the meaning of that Act) and that were imported by another person: (a) you are treated, for the purposes of Division 15, as having imported the goods; and (b) the extent (if any) to which you entered the goods for home consumption for a *creditable purpose is treated as the extent (if any) to which you imported the goods for a creditable purpose. (2) This section has effect despite Division 15 (which is about creditable importations).[section 114-25—imported goods supplied in bond](56) Schedule 11, page 49, after proposed new item 11D, insert:11E At the end of section 129-25Add: (3) This section does not apply to a disposal if this Division continues to apply to the acquisition or importation of the thing because of subsection 138-17(2).[section 129-25—deceased estates](57) Schedule 11, page 49, after proposed new item 11E, insert:11F After section 138-15Insert:138-17 Situations to which this Division does not apply (1) This Division does not apply to anything included in the assets of an entity whose *registration is cancelled, to the extent that the thing relates to an *enterprise that the entity *carried on before the cancellation, if: (a) the cancellation arises as a result of the death of the entity, and the executor or trustee of the deceased estate: (i) is registered or is *required to be registered; and (ii) continues, immediately after the cancellation, to carry on that enterprise; or (b) the cancellation arises as a result of the executor or trustee of a deceased estate ceasing to carry on any enterprise, and one or more beneficiaries of the deceased estate: (i) are registered or is *required to be registered; and (ii) continue, immediately after the cancellation, to carry on the enterprise that the deceased had carried on. (2) Division 129 (which is about changes in the extent of creditable purpose) continues to apply to the acquisition or importation of the thing immediately after the cancellation if: (a) Subdivision 129-A does not prevent an adjustment arising under that Division for the acquisition or importation; and (b) the cancellation occurs during an *adjustment period for the acquisition or importation. (3) For the purposes of applying Division 129 to the acquisition or importation after the cancellation: (a) the entity *carrying on the *enterprise in question immediately after the cancellation is taken to have made the acquisition or importation at the time it was originally made; and (b) the extent (if any) to which the thing was originally acquired or imported for a *creditable purpose is taken to be the extent (if any) to which the entity acquired or imported the thing for a creditable purpose; and (c) any *application of the thing since the original acquisition or importation is taken to be an application of the thing by the entity.[section 138-17—deceased estates](58) Schedule 11, page 49, after proposed new item 11F, insert:11G Section 138-20After “This Division”, insert “(except subsections 138-17(2)and (3))”.[section 138-20—deceased estates](59) Schedule 11, page 49, after proposed new item 11G, insert:11H After Division 138 of Part 2Insert:Division 139—Distributions from deceased estates139-1 What this Division is aboutDistributions from deceased estates, for private consumption, that are not taxable supplies may involve disposing of assets that were acquired or imported in circumstances giving rise to entitlements to input tax credits. This Division provides for an increasing adjustment to cancel those input tax credits.139-5 Adjustments for distributions from deceased estates (1) You have an increasing adjustment if: (a) you are the executor or trustee of a deceased estate; and (b) you are *registered or *required to be registered; and (c) you supply an asset of the deceased estate to a beneficiary of the deceased estate; and (d) the supply is not a *taxable supply and is not a supply that is *GST-free or *input taxed; and (e) you were, or are, or the deceased person was, entitled to an input tax credit for the deceased person's acquisition or importation of the asset.Note: Increasing adjustments increase your net amounts. (2) The amount of the adjustment, for the asset, is as follows:where:applicable value is: (a) the *GST inclusive market value of the asset immediately before it is supplied; or (b) if you were, or are, or the deceased person was, entitled to an input tax credit for the deceased person acquiring the thing—the amount of the *consideration that you or the deceased person provided, or was liable to provide, for the acquisition of the thing, but only if the amount is less than that value; or (c) if you were, or are, or the deceased person was, entitled to an input tax credit for the deceased person importing the thing—the cost to you or the deceased person of acquiring or producing the thing (plus the GST paid on its importation), but only if the amount is less than that value. (3) However, an *adjustment does not arise under this section in respect of the asset if: (a) the asset related to an *enterprise that the deceased person *carried on, and the beneficiary intends to continue to carry on that enterprise; or (b) there were one or more *adjustment periods for the deceased person's acquisition or importation of the asset, and the last of those adjustment periods has ended before the cancellation of your *registration takes effect.139-10 Attributing adjustments for distributions from deceased estates (1) An *adjustment that you have under this Division is attributable to the tax period in which it arises. (2) This section has effect despite section 29-20 (which is about attributing your adjustments).139-15 Application of Division 129 This Division does not affect the operation of Division 129 (which is about changes in the extent of creditable purpose).[sections 139-1 to 139-15—deceased estates](60) Schedule 11, page 49 (after line 23), after item 12, insert:12A Section 195-1Insert:complying superannuation fund has the meaning given by section 995-1 of the *ITAA 1997.12B Section 195-1 (after table item 8 of the definition of increasing adjustment)Insert: 8ASection 139-5Distributions from deceased estates[section 195-1—complying superannuation funds; deceased estates](61) Schedule 11, page 49 (after line 28), before item 14, insert:13A Section 5 (after table item 3)Insert: 3AAeligible short-term leaseSales Tax Assessment Act 1992[section 5—phasing in of input tax credits on motor vehicles etc.](62) Schedule 11, page 50 (after line 10), after item 16, insert:16A Subsection 20(1)Omit “or importation”, substitute “by way of purchase (including hire purchase), or importation,”.16B Paragraph 20(3A)(c)Omit “subsection (2) or (3)”, substitute “subsection (2), (3) or (4B)”.16C After subsection 20(4)Insert: (4A) Paragraph (4)(c) does not apply to a dealing in respect of the acquisition or importation if the acquisition or importation is made with the intention of granting an eligible short-term lease in respect of the motor vehicle, trailer or body. (4B) Neither subsection (2) nor subsection (3) applies if you make the acquisition or importation before 1 July 2002 with the intention of granting an eligible short-term lease. However, the amount of any input tax credit you are entitled to on the acquisition or importation is reduced by an amount equal to:where:exempt percentage is the exempt percentage specified in the agreement under subsection 15A(2) of the Sales Tax Assessment Act 1992 that applies to the eligible short-term lease in question.original input tax credit is: (a) if you make the acquisition or importation before 1 July 2001—the amount that would (but for this section) be the amount of the input tax credit on the acquisition or importation; or (b) if you make the acquisition or importation on or after 1 July 2001 but before 1 July 2002—half that amount. (4C) Agreements may be made under subsection 15A(2) of the Sales Tax Assessment Act 1992, on or after 1 July 2000 but before 1 July 2002, as if: (a) sales tax had not been ended by the A New Tax System (End of Sales Tax) Act 1999 and by section 8 of this Act; and (b) the reference in subsection 15A(2) of the Sales Tax Assessment Act 1992 to a use of goods to satisfy one or more exemption Items were a reference to a use of goods that would have satisfied one or more exemption Items.16D Subsection 20(6)Omit “this section”, substitute “subsection (3)”.16E At the end of section 20Add: (7) If an input tax credit to which you are entitled is reduced under subsection (4B), then, for the purposes of applying section 21-15 or 21-20 of the GST Act (where relevant), the amount of any adjustment under that section is reduced by the same proportion (before any application of Division 136 of that Act).[section 20—phasing in of input tax credits on motor vehicles etc.](63) Schedule 11, page 50, after proposed new item 16E, insert:A New Tax System (Luxury Car Tax) Act 199916F Section 27-1 (at the end of the definition of car)Add: ; or (c) a motor home, campervan or similar motor vehicle.[section 27-1—motor homes and campervans](64) Schedule 11, page 50, after proposed new item 16F, insert:Customs Act 190116G Subsection 71(2)Omit “subsection (1)”, substitute “paragraph 68(1)(d), (e), (f) or (i)”.[section 71—low value importations](65) Schedule 11, page 50, after proposed new item 16G, insert:16H At the end of section 132Add: (5) The rate of any import duty on goods: (a) that are goods of a kind referred to in paragraph 68(1)(e); and (b) whose owner is not required by section 71 to provide information about them;is the rate of duty in force at the time when the goods arrive in Australia.[section 132—low value importations](66) Schedule 11, page 50, after proposed new item 16H, insert:16I Subsection 132AA(1) (at the end of the table)Add: 4Goods of a kind referred to in paragraph 68(1)(e) that are not covered by item 3Time of delivery of the goods into home consumption[section 132AA—low value importations]The government is moving amendments which have a very positive impact for the broader community in relation to the transition to the new tax system. In the first place the amendments deal with nonprofit bodies; provide government schools with the same GST concessions as charities, including non-government schools; remove the requirement that all supplies made through a school tuckshop or canteen must be supplies of food in order for a nonprofit body to be able to choose to treat all of its supplies of food as input taxed; and provide charitable bodies that belong to the same religious organisation with the ability to eliminate the internal transactions within their religious organisation; for GST purposes. They also put in place producer rebates under the WET scheme which has been previously announced. They deal with alcoholic beverages, amending the GST transition act to allow an additional GST special credit for certain alcoholic beverages held for resale at the start-up date, 1 July, where the rate of duty on the product will decrease. Other amendments include clarifying the GST treatment of goods sold through inwards duty-free shops; making some technical corrections to the bill relating to supplies involving non-residents; denying input tax credits for goods and services acquired or imported for the purpose of providing fringe benefits to employees of a financial supplier that is wholly or partially denied input tax credits on its acquisitions; technical corrections to the bill for borrowing related importations; further clarifying the application of the GST to supplies made by entities to their members; providing that partnerships the members of which are principally individuals are not carrying on an enterprise if they do not have a reasonable expectation of profit or gain; ensuring that complying superannuation funds are carrying on an enterprise for GST purposes; clarifying the calculation of GST for a mixed supply; technical correction to the bills relating to the supply of real property by way of long-term lease; ensuring that goods that have entered Australia under temporary importation provisions are subject to GST if reimported; ensuring that input tax credits can only be claimed once by a partnership in respect of partner reimbursements; enabling employers to claim input tax credits where they pay an expense on behalf of an employee and that expense is related to that person's activities as an employee; ensuring that an entity that enters goods for home consumption but is not the importer of the goods can claim input tax credits in respect of the taxable importation; and ensuring that the rules which provide for an increasing adjustment where things are taken out of the GST system will not disadvantage executors and beneficiaries of deceased estates who continue to carry on an enterprise of the deceased. In addition, there are amendments to the ABN act, the GST transition act and the LCT act that provide further clarification. There is also an amendment to the Customs Act to clarify the position in relation to customs duty on non-commercial, low value postal importations to ensure that GST will be payable on importations. There is a provision that deals with the transition to the new tax system after midnight on 30 June, which I understand is a very warmly welcomed provision, that allows those businesses which trade overnight on 30 June—and 30 June from memory is a Friday night so it will apply to bars and clubs and various other organisations that trade through midnight—to continue to trade on a pre-GST basis until the earlier of 6 a.m. on Saturday or the close of business or an earlier time if the business chooses. I might say that perhaps only the member for Ballarat would still be going at six in the morning. These transitional measures are important, the amendments generally providing further clarification for business in the transition to the new tax system. I will also respond to the comments made by the member for Hotham. In the last moments of his speech he revealed all his cards when he said that basically the opposition will be supporting the amendments even though they do not want any amendments. If that is not a great example of what the Labor Party are about—(Time expired)12:42:0017427Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—What an absolute shambles this government's implementation of the goods and services tax is in, and what a mockery of parliamentary process we are witnessing today! In the first place we have the government proposing more than 100 new amendments to the GST—145 amendments over the course of 11 schedules, on a major change to the taxation system scheduled to come in on 1 July. But I will return to that. Today we had the government come in here and gag debate on this Indirect Tax Legislation Amendment Bill 2000, moving `that the question be put' after just one opposition speaker, in an absolute travesty of proper parliamentary process and not giving this parliament the opportunity to consider this legislation in the detail it requires. Not content with that, they walk in here and hit us with a further 66 amendments during the committee stage of this legislation. They are being circulated now. What consultation with the community? What opportunity for proper parliamentary scrutiny? What consultation with the electorate? It is simply treating the rest of us with contempt, hitting us with amendment after amendment after amendment. Let me refer to the Treasurer's declaration earlier this year that no more amendments would be needed to the legislation. We have in fact seen over 1,000 amendments—I think 1,026—to the goods and services tax legislation which was carried last year, and hundreds of other amendments to other new tax system legislation relating to the Australian business number and pay-as-you-go. For the government to come before us now with 145 amendments to its original legislation and 66 amendments being circulated is a contempt on the parliament. It is treating both the opposition and the wider community with contempt, and it just indicates what a complete shambles the implementation of the GST has turned out to be.Frankly, I can do nothing more damaging to the government concerning this legislation than to go through it, and I intend to because it shows only too clearly what an impossibly complex tax system they are foisting on us and how absolutely impossible it is for small business and those who have to deal with the introduction of this system to cope with this procession of amendment after amendment after amendment. So let me turn to each of those schedules.2K6Brough, Mal, MPMr Brough—This is the one you are keeping, isn't it? Just correct me if I am wrong, but this is the one you are keeping. UK6Thomson, Kelvin, MPMr KELVIN THOMSON—The member for Longman talks about keeping legislation. This government has sent—2K6Brough, Mal, MPMr Brough—Are you going to keep the GST or not? Are you keeping the GST, Kelvin? UK6Thomson, Kelvin, MPMr KELVIN THOMSON—I am responding to the member's interjection and he might allow me to do so. This government has sent small business through the flames of implementation of a new GST with a costly compliance burden. For that, small business will not thank this government, and this government will get an appropriate reward at the next election. But small business does not say to us, `We want you to send us back through the flames the other way,' now that they have gone through the kind of compliance burden you foisted on them. So that is the situation. Let me turn to this legislation and the schedules in it.Schedule 1 contains amendments to provide charities with the choice to treat certain fundraising events as input taxed; to enable certain non-profit bodies to lodge GST returns quarterly, regardless of the date on which they balance their accounts; to allow charities to claim input tax credits when reimbursing volunteers for expenses they incur for their charitable activities; and to ensure that a non-profit subentity can be a member of a GST group. Schedule 2 amends the GST to make the lease or hire of education goods GST free, to expand sewerage services to include like services, to ensure that short-term leases of farm land are GST free when they are akin to long-term leases, and to ensure that certain medical services such as medical reports are GST free.Schedule 3 amends the GST act in relation to certain supplies made by non-residents. It also amends the provisions related to certain services provided to non-residents. (Extension of time granted) Schedule 4 amends the GST act and contains one consequential amendment to another piece of legislation. Most of those amendments are of a technical nature. They allow entities involved in transactions on the basis of principal and agent to enter into arrangements that simplify the way they account for GST on supplies and acquisitions and to grant the commissioner a discretion to apply these arrangements to certain industries subject to an `opting out' provision. Schedule 5 enables registered businesses to claim input tax credits for borrowing related expenses unless the borrowing relates to making other input taxed supplies. It changes the de minimis test so that a registered entity can obtain input tax credits for acquisitions that relate to making financial supplies if the total amount of the credits that would be denied does not exceed $50,000 or 10 per cent of the total input tax credits of the entity. It excludes borrowing related expenses from the de minimis test and it clarifies that an entity is not entitled to both a reduced input tax credit and an input tax credit for the same acquisition. Schedule 6 contains amendments to provide rounding rules for GST liability, to allow the commissioner to determine a transitional rounding rule for entities and to allow the net amount for a tax period to be worked out from a method provided in a GST return.Schedule 7 contains amendments to enable entities other than companies to be part of a GST joint venture, to provide that the joint venture operator may choose to prepare a single GST return on behalf of all the joint ventures for which it is responsible, to insert a definition of `minerals' in the dictionary in the GST act, and to clarify that a joint venture that does not involve the establishment of a joint venture entity is not a company or any other entity for taxation purposes. Schedule 8 includes amendments to ensure that the insurance of certain domestic components of international transport is GST free, to allow the notification of extent of input tax credit entitlement for a policy to be made at any time at or before a relevant insurance claim is made, to correct the calculation of decreasing adjustment on settlement, to ensure that the correct entitlement to input tax credits is taken into account in calculating the decreasing adjustment for claims under statutory compensation schemes where the premium an entity was liable to pay has not been paid, and to provide that tax invoices do not have to be issued in relation to compulsory third party schemes to which section 23 of the goods and services tax transition act applies.Schedule 9 amends the law to allow credits of representative members of GST groups to be offset against debts of other members of the group, to clarify that a GST credit entitlement arises upon notification of the credit in the GST return, to allow interest to be paid to entities where an amendment of an assessment gives rise to a refund of GST, and to make consequential amendments to GST provisions as a result of the introduction of the new uniform penalty regime in the A New Tax System (Tax Administration) Bill (No. 2) 2000. Schedule 10 deals with alcoholic beverages. The stockpiling of alcoholic beverages could provide an unintended tax windfall to certain entities and at the same time distort the normal manufacturing schedules. The amendment will impose a sales tax liability on certain alcoholic beverages which are held sales tax free but excise paid at 30 June. Amendments in schedule 11 relate to the sale of livestock and the supplies of existing housing stock and alters the requirement to issue adjustment notes to limit that requirement in relation to small value adjustments. It contains many more amendments which I do not really have time to go through. The whole point is: this is not part of some opposition scare campaign in relation to the GST. This is the legislation before this parliament for a tax system that the Treasurer said he was going to make simpler but in fact he has complicated beyond measure. This is the sort of legislation that small business, accountants and tax practitioners are being expected to deal with just weeks before the GST comes into operation. This government has botched the implementation of the GST, and the Treasurer, as I have said in the House before, has done for the cause of tax reform what Mike Tyson did for the gentle art of dating. It is a disgrace that we are called before the parliament to deal with these amendments without the opportunity to consider them properly as a parliament should be able to do. 12:52:0017429Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—I will just bring the focus of this debate back to the most far-reaching and biggest reform of the Australian taxation system ever. That reform does not come without enormous complexity. How the Australian Taxation Office has handled the myriad issues that have arisen from such a major change to the Australian taxation system is to its very great credit. There were always going to be amendments. There was always going to be assistance for businesses and other members of the community to help them with the new tax system and to make sure that the principles that we first embarked on were applied. One of those principles was that there should be special consideration for those deserving special consideration, and some of these amendments before the House today are certainly very much in that area.I will use a few minutes to draw the House's attention to one of the ways that the Queensland government are approaching this particular situation, particularly in relation to not-for-profit organisations and, indeed, charities that are dealt with in these amendments. Where governments make grants to not-for-profit organisations, some of those organisations are required to pay GST on those grants. The understanding always was that the GST would then be paid back to those organisations so there would be no net change in grants to them. The Queensland government claimed yesterday that an initiative of theirs, by which they claim they will be easing the impact of the GST on particular organisations, is going to cost them $5.3 million by 2004. That was doublespeak by the Queensland government, simply meaning that they will match GST payments on those particular grants with grants back to organisations. Indeed, there is no net cost to the Queensland government whatsoever. Yet they make this false claim and try to build up some kind of expectation that they are giving $5.3 million back to these not-for-profit organisations when, in fact, all it is is a book entry. That is the way that the Labor Party have approached the very great issue of tax reform in this country. I am very disappointed to see those misleading comments by the Queensland government, and certainly I think the parliament and Australia should be aware of the Labor Party's attitude to that.I noticed also that all the amendments being put are supported by the Australian Labor Party. They are supported by the Australian Labor Party because they are in the national interest. They are in the interest of the people in business and communities that they are targeting and they are an appropriate response to make sure that the system is fair. Yet we hear all this thunder from the Australian Labor Party, trying to say that the government have been incompetent in some way, but there were always going to be these particular transitional issues. I certainly support the government's position in this regard, and the sooner the system comes in the better for all Australians.12:56:0017429Emerson, Craig, MPMr EMERSON83VRankinALP00—Earlier this year, journalists asked the Treasurer: does that mean there will be no more changes to the GST legislation? His answer was unequivocal. He said, `It means that we are not changing the legislation and that what we have is right. As you implement these things, there have to be further rulings—they are just rulings as to how the tax office applies the concepts—but we are not changing the legislation.'Last year, I actually weighed the legislation—the so-called streamlined A New Tax System for a new century. It weighed in at 5.1 kilograms—thicker than three telephone books—and at that stage it contained 1,026 amendments. The initial legislation that came into this chamber contained a further 145 amendments, and 66 extra amendments have been circulated today. So that is 211 amendments on top of the 1,026 amendments, coming to a grand total of 1,237 amendments. I will refer to my trusty scales here. The legislation before us today and the other legislation that was brought in earlier this year—the streamlined A New Tax System for a new century—weighs just over one kilo. That is one kilo to be added to the pile of legislation that has been brought in over the last few years. I will weigh that as well. The needle on the scales has gone all the way around—in fact I think I have busted these scales—and this legislation weighs 6.1 kilograms. DK6Hockey, Joe, MPMr Hockey—I rise on a point of order. Mr Deputy Speaker, I ask that you ask the member to return to parliamentary convention. I note that, if he added his intellect to that pile, it would make no change at all to the scales!10000Hawker, David (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Hawker)—The first part of that point of order is upheld.UU5Horne, Bob, MPMr Horne—I rise on a point of order, Mr Speaker. I think that the last comment that the minister made should be withdrawn. That is unparliamentary.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—Does the member for Rankin seek that that comment be withdrawn?83VEmerson, Craig, MPMr EMERSON—I request that it be withdrawn.DK6Hockey, Joe, MPMr Hockey—I withdraw it.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—Will the member for Rankin please remove the impediment so that we can see him.83VEmerson, Craig, MPMr EMERSON—Of course, Mr Deputy Speaker, and I will cast no aspersions on the weight of the minister. This legislation is unbelievably complex. One of the provisions in the legislation relates to livestock. The Treasurer is the Rowdy Yates of the Australian parliament because the Treasurer keeps going, `Rollin', rollin', rollin', Rawhide!' One of the amendments is a `Rawhide' amendment. It is an amendment about meat off the hook; it is an amendment that does not get the Treasurer off the hook. It does not get the Treasurer off the hook at all because it is designed to make sure that the abattoirs suffer further pain from the goods and services tax. It provides extra benefits to farmers, that is fine, but the Treasurer is the Rowdy Yates of the federal parliament because he said that there would be no roll-back, that we cannot have any roll-back. It has been `Rollin', rollin', rollin', Rawhide' and now we have 211 roll-back amendments, such is this streamlined new tax system for a new century. I am sure the Australian people will be sighing a great collective breath of relief that the wholesale sales tax is going to be repealed and replaced with this streamlined new tax system for a new century! It is nothing like streamlined; it is a fiasco. It is going to be a heavy imposition on Australian people and it is going to be an incredibly heavy burden on the small business community of this country.13:01:0017430Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—I remind the member for Rankin that, if you looked at the amendments in electronic form, they would not weigh anything, so I do not know what his point is. Look at some of the amendments. Look at the amendment that helps newsagents, for example, where we allow them to, where they are acting as agents for publishers, assume that a product is just sold at the point that it is delivered. Would the Labor Party face the newsagents and say, `We are opposed to that'? Of course they would not, because all of the newsagents in this country think it is an entirely appropriate amendment. Look at the one in relation to non-residents where, if Australians provide a service for a non-resident, normally it would be charged as GST but it is actually an export. Of course, one of these amendments today in the Indirect Tax Legislation Amendment Bill 2000 is tidying that matter up—and why shouldn't it? Why should our exports not be GST free? Do the Labor Party oppose that? Look at the rebate for small wine producers, where the mail order or cellar door sales will result in no WET being paid on sales under $300,000 per annum. Would the Labor Party oppose that? Would they say to the small vineyards, `We are opposed to that'? Of course they would support it. Why don't they say so, for heaven's sake? Look at the amendments being proposed for charities. I certainly know that in Townsville and Thuringowa St Vincent de Paul, the Salvation Army, Anglicare and so on strongly support the government in what it is trying to do through these amendments. We have the amendment with the fundraising events to enable charities to treat fundraisers as input tax so they do not have to charge GST. That means fetes, balls, dinners, auctions and sales of badges in certain circumstances. Would the Labor Party oppose that? Of course not. There are the amendments which enable religious groups to get benefits of grouping. Surely that eliminates all the effects of transactions between groups. Religious groups did not want to have that complexity. The amendments make it very easy. I know that the religious groups in my electorate are extraordinarily happy that the government is putting these amendments through the parliament today. Would the Labor Party oppose those? No, of course they would not. Another very important amendment is on government schools. Initially private schools were treated as charities and they were subject to certain concessions. Of course the amendments today will allow government schools to be treated in exactly the same way. Would the Labor Party oppose that? No, of course they would not. An amendment is going through in relation to school tuckshops, where there were some technical problems with tuckshops that sold more than food. They would have suffered an impediment under the original legislation. This fixes up that impediment, and I know that is very welcomed by the school tuckshops in Townsville and Thuringowa. Of course, in the non-profit area, where we can now have sub-entities as a member of a GST group, the bill allows the activity of that particular sub-entity to opt out if its turnover is less than $100,000. That, too, is a very welcome amendment. And so it is with all the other amendments that are before the House today. Why is the Labor Party making such a noise about this? Why is it not helping the government get on with getting these absolutely proper amendments through the parliament and into the system so that all businesses, consumer groups and community groups take the benefits of the new tax system? I very much support the amendments before the House today.13:05:0017431Rudd, Kevin, MPMr RUDD83TGriffithALP00—One of the stunning things about being a member of this House for the last 18 months and participating in the various debates on taxation law reform in this House over the last 18 months is to witness first-hand the monumental double standards of the Treasurer of the Commonwealth, the self-proclaimed master blaster of national taxation reform. On the one hand, we have this Treasurer displaying the full stage craft of the Carey Grammar School debating society, day after day criticising the Australian Labor Party for having the audacity to be committed to a policy of GST roll-back. On the other hand, what do we have in this House today? What do we have in the Indirect Tax Legislation Amendment Bill 2000 before the House today? We have 145 amendments-worth of government roll-back. Not just this 145; we are now told we have a further 66 items of roll-back to come—and this is on top of the existing 1,026 roll-back items which have so far gone through this place; in other words, 1,237 amendments altogether, 1,237 items of roll-back. So what we have in this Treasurer is the very embodiment of the roll-back kid—Peter Costello, minister for roll-back, minister for policy backflip. Here we have Peter Costello, man of steel, lantern-jawed aspirant for the keys to Kirribilli, this person whose ambition knows no bound, perpetrator of hard-edged policy leadership, as he would have it described in this House day after day, this same man, this same Treasurer, responsible for executing 1,237 items of backflip, roll-back and compromise. When we say on this side of the House, 18 months in advance of the next election, that the ALP is committed to a policy of rolling back the GST, in an exercise of monumental double standards the Treasurer accuses Labor of policy weakness. I say to those opposite: hypocrisy, thy name is Liberal and thy place of residence is Higgins. What is the policy basis of this Treasurer's roll-back strategy? What is the policy logic underpinning all this? The policy logic is this: it is called blind political panic. That is what the policy logic is. The new treatment of charities, for example, contained in the legislation before the House at the moment is just the icing on the cake. It is a direct response to massive backbench unrest. The Treasurer's office at this time must be a complete sight for all to behold. In one door you would have Mark Textor, the Liberal Party pollster, racing in and saying, `Oops, the numbers aren't too flash this week.' In the other door you would have the advertising agency coming and saying, `Unfortunately, the chains ads aren't going down all that well.' Unfortunately, the people of Australia do not seem to share the Liberal Party's somewhat unhealthy preoccupation with being tied up—apparently an interest which they have inherited from their British Conservative cousins. The bottom line with all of this is that you have polling saying that it is not going down well, with the ads going terribly on television and those responsible for the Peter Costello leadership push in order to get the keys to Kirribilli saying, `This isn't doing your aspirations for the leadership any good.' So what is the policy response to all of this? The policy response to all of this is, `Let's roll out another roll-back,' and that is precisely what we have before the House at this moment. What we have here is a situation where the government, through the Treasurer, says to us on a daily basis, `Well, if the Labor Party do not like this piece of legislation, if they're not committed to a fundamental change, why don't they commit themselves, as a consequence of winning the next election, to the repeal of the GST?' The first thing I would say to that is that those most interested in the repeal of the GST at the moment would probably be those 25 to 30 coalition backbenchers currently sitting on a margin of less than five per cent. When I walk around the various marginal seats of Australia and in south-east Queensland, I do not see signs on their electorate offices saying, `GST Welcome Party—come for a cup of tea on 1 July' or, for example in the seat of Moreton, in the seat next to my own seat of Griffith, `Gary Hardgrave, member for Moreton, welcomes the GST.' I do not see any evidence of that at all. I see quite the reverse. I see them running at a thousand paces in the reverse direction.Post 1 July the situation will change fundamentally. This government have committed Australian business to paying a $24 billion compliance cost in order for them to introduce this tax. What would they have us do subsequent to the next election? Would they have Australian business turn around and expend a further $24 billion—a $50 billion compliance impost on Australian business? That is approaching 10 per cent of this nation's entire GDP. Under those circumstances that is the reason why we could not repeal the tax. We on this side of the House are unapologetically committed to a roll-back to make it fairer and simpler for Australian consumers. (Time expired)13:11:0017432Horne, Bob, MPMr HORNEUU5PatersonALP00—All I can say is: thank goodness it is simple. How well we remember the Treasurer standing there, undoing his folder and saying, `This is the simplest tax system we're ever going to have.' Now we have had over 1,000 amendments and expenditure of $430 million—and still counting—all from a government that claims it is the champion of small business and regional Australia. I particularly want to refer to the GST treatment of the sale of livestock. I think I have indicated in this place before that I am a beef producer. I do understand a little about this. There was an article in the Land only a couple of weeks ago saying that Coonamble abattoir was to close—our first GST casualty. Why is it going to close? Because it cannot stand the GST that it will have to pay to the producers. It cannot extend that credit to the producers. So it has decided to shut its doors.It was interesting to come in here and be advised by the Parliamentary Secretary to the Minister for Employment, Workplace Relations and Small Business that the legislation has been changed. I only got this explanatory memorandum from the Table Office the other day. I came into the House today and was presented with another 66 amendments and told, `They're the latest; they slot in there somewhere.' But no-one could not tell me whether what occurs on page 68 is correct or not. The shame is that small business people out there in the real world are making decisions, and have been making decisions for months, about whether they can survive with this tax. To this day the government cannot tell them how they will be treated tomorrow. People whose whole life depends on the decisions that are being made here today cannot be advised what this tax system means to them, even after $430 million of expenditure. I will tell honourable members what it means to a lot of beef producers. The producers of prime cattle elect to sell their cattle over the hook—you know that, Mr Deputy Speaker Hawker—because they get a premium. They choose to deliver prime beef to an abattoir rather than sell them per head in a store cattle sale or sell them live weight. They know they get a premium. They get a benefit and they have elected to do that for a long time. The legislation says that livestock or game is not food; we know that. Paragraph 11.6 says ... make it clear that under these arrangements, the delivery of livestock is a supply under the GST Act. The supply takes place when delivery is made and not when title passes. In other words—I will use an expression of the minister—we are not comparing apples with apples; we are comparing apples with oranges. We are comparing a live beast with a carcass. That is what these sellers of meat over the hook want to do. They are proudly producing prime beef; they are producing Australia's best beef. The best beef will be sold this way. It will be sold over the hook. Yet the government is saying under this legislation that title transfers when sellers deliver the beast, not when they deliver the carcass. That is the difference: they want the right to deliver a carcass, because they will be paid a premium for it. The industry has worked on that system for many years. The government is out there creating difficulties and it indicates that the people who have put this legislation together have not bothered to go out to the industry. They do not understand how the industry works. That is the most important thing. As I said, in the Land only a fortnight ago we learnt that one abattoir is already out of business. How many will follow?13:15:0017433Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—I wish to add some further clarification in relation to two matters. One was the matter raised by the member for Paterson. I am advised that the amendment that we put forward today ensures that the delivery of livestock to a meat processor will be a taxable supply. The amendment is a direct response to concerns of farmers that abattoirs were gaining a cash flow advantage at the expense of farmers. That should address the concerns of the member for Paterson but, most importantly, it also addresses the concerns of farmers.In response to an informal request from a member of the opposition, the second amendment raised with me relates to allowing an enterprise that trades past midnight on 30 June 2000 to choose to trade on a pre-GST basis until the earlier of their normal close of business or 6 a.m. on 1 July 2000. They may also choose an earlier time occurring after 30 June 2000 if that is more convenient.In my earlier enunciation, I referred to hotels and clubs. This provision also obviously extends to supermarkets, taxis and a range of other service providers. It could even include abattoirs that are involved in trading past midnight. I know my black humour does not necessarily translate well into Hansard at times. 7T4Crosio, Janice, MPMrs Crosio—You can say that again!DK6Hockey, Joe, MPMr HOCKEY—But I know that the member for Ballarat, the member for Longman and all of us on this side of the House will be working hard throughout the night to help businesses with the important transition to the new taxation system. That is the constructive approach that certainly people on this side of the House are trying to take. We are trying to assist businesses, particularly small businesses, whether they be based in North Sydney, Caboolture or Ballarat, with the transition to the new taxation system. People like the member for Longman and the member for Ballarat have been working particularly hard. In fact, the member for Ballarat is constantly raising matters of concern with enthusiasm on behalf of the people of his electorate. More often than not, he certainly gets the results that they want. That is because on this side of the House in the coalition ranks we are working very hard to assist businesses with the transitions of the new taxation system. The amendments that we have put forward today are about addressing those issues. It is certainly no laughing matter, as some of the interjections made during the previous debate might have suggested. Unfortunately, they were probably not picked up by Hansard. But there is no way that people will be out celebrating during the transitional hours. I think everyone will be working hard during those hours. One of the most important points about the transition period is that businesses can choose an earlier time to turn over to the new tax system rather than the later time that they might close their business. We are leaving it to the discretion of businesses to help them with the transition over those important hours from 30 June to 1 July. 13:19:0017434Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—I want to highlight one particular issue in my contribution today. At one level it is only a small issue, but it highlights the extraordinarily inept way in which the government has implemented what we now know to be an extremely complex package of legislation. The matter I am raising is dealt with in item 7 of schedule 2 of the bill. It is just one of dozens of items in the Indirect Tax Legislation Amendment Bill 2000, one of the numerous amending bills the government has introduced as part of this GST tax package. We have seen all the afterthoughts, amending and patching up of the original package of bills that the government put through as the so-called simplifying tax reform package—which we now know to be anything other than that. Large and small businesses have discovered to their cost that this certainly is no simple tax system. We have seen so many bills, subsequent amendments, backflips, policy statements, tax rulings and, of course, mind-numbing confusion because in so many circumstances nobody knows what is happening. And nowhere is this more evident than in the field of health. The government continues to stick to its claim—as we have seen as part of the $400 million campaign that the government has out there unchaining us from this so-called horrifically complex tax system of the past—in those campaign ads that health will be GST free. Of course that is not the case. The government's definition of health services is so narrow that we will see many commonly used health services, many important goods that contribute to public health, taxed for the first time. We have had much debate about those in the House—things like tampons, over-the-counter medicines, bandages, vitamins, eczema creams and quit smoking courses. Do you think all of those are health related products? Of course they are, and all of those have been free of wholesale sales tax and will now jump in price because of the imposition of a new tax. DK6Hockey, Joe, MPMr Hockey—What about roll-back?PG6Macklin, Jenny, MPMs MACKLIN—The Minister asked about roll-back. We had a terrific contribution a few minutes ago about this government's attempt at roll-back. We are seeing time and time again the hypocrisy of this government on the whole question of roll-back. The government, of course, has abandoned its promise about health being GST free. We can now see it intends to impose a new tax on a wide range of health products. This amendment is a classic example of how the government is still thrashing around trying to diminish its political pain when it comes to health through this specific item in the bill. The original act contains an inaccurate definition of what constitutes a medical service. It excludes some things for which there is a Medicare rebate, which is in direct conflict with the promise the government made to the Australian people. I understand that there have been several health groups and doctors arguing at length with the ATO about the deficiencies in the original definition, and the result is the amendment we are talking about here.The new definition encompasses all services for which there is a Medicare rebate, including preparation of reports while the patient is in attendance. However, contrary to the paragraphs in the explanatory memorandum, this does not include most cases where a treating doctor report is required because a Medicare rebate is payable only if the patient is in attendance. There are several types of treating doctor reports, including those for the Department of Veterans' Affairs, which normally attract a payment to the doctor, and, in addition, there are those for assessment by Centrelink that go to eligibility for social security payments, like disability support pensions, carer payments and sickness allowance where, at the moment, a payment is not made because the patient is not in attendance. Doctors are currently—and I would have thought the government would be aware of this—conducting an industrial campaign against Centrelink to try to get payment for treating doctor reports where the patient is not present. If Centrelink eventually agrees to pay a fee for Centrelink reports, then the doctors will have to pay. Of course, this means in the end that people who seek these reports will have to pay the GST. (Extension of time granted) If Centrelink finally agrees to pay a fee for these Centrelink reports, then a GST will be attached to those treating doctor reports because they will be outside the definition we are talking about. The second leg of the definition of a medical service in this bill consists of a series of subjective terms which will still leave enormous potential for disputes over which services and products are included or excluded. It will be that continuous nightmare not just on main street but down into the doctor's surgery.UU5Horne, Bob, MPMr Horne—And the farmyard.PG6Macklin, Jenny, MPMs MACKLIN—And the farmyard. I note that this definition will mean that, in future, autopsies will attract a GST because the person on whom the procedure is being performed is not the person paying for the service and the service is of no further benefit in the medical treatment of the person subject to the autopsy. I hope the government hangs its head in shame at this shambles of a tax bill, which is just another example of a very confusing tax, demonstrating again and again that health certainly is not GST free.13:26:0017435Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—While we are in consideration in detail, I will provide clarification of an issue that has been raised in relation to school tuckshops and canteens. I will table the explanatory memorandum relating to these amendments a little later. Under subdivision 40(e) a non-profit body may choose to treat all of its supplies of food through a school tuckshop or canteen it operates as input tax, provided the shop operates on the grounds of the school and all the supplies made through the shop are food. Basically, that is an all-encompassing proposal. A non-profit body cannot apply this provision where other supplies such as stationery and uniforms are also made through the shop. That gives a broad definition of `food' for the purposes of a school tuckshop. Hopefully, that will continue to address the issues being informally raised. I urge members, instead of reading out their speeches prepared for the second reading debate, to actually talk about some of these amendments, which we are meant to do in consideration in detail. Reading out the old prepared speech does not assist while we are in consideration in detail. I urge you to address some of the issues in the bill rather than the general matter. I take the opportunity to table the supplementary explanatory memorandum for the information of members. 13:28:0017435Crosio, Janice, MPMrs CROSIO7T4ProspectALP00—I would like to inform you, Mr Deputy Speaker, that I took the time and trouble to take the supplementary memorandum off the table. So I am well aware of what the Minister for Financial Services and Regulation has just presented. More importantly, Minister—I am glad you are here at the moment—I also grabbed your second reading speech where you said, `In just over 50 days' and went on to explain why this wonderful set of 145 amendments have to come forward to the House to add to the 1,026 amendments that have already been moved on the GST. Here we are 22 days before the GST is implemented and in this parcel we have another 66 amendments. From 50 days in your speech on this bill, Minister, when you so proudly introduced the first wave of amendments that were needed to the amendments before the House, to 22 days today, we now have another 66 amendments. That is what I would like to touch on briefly. I want to put on the record of this parliament that this has to be the second or third time in a week—and I mean from the previous Thursday when the industrial relations bills were before the House—that we on this side of the House have been gagged. Repeatedly, when this government brings in legislation that they know the people out there in the community are objecting to, we as the opposition get gagged while presenting the feelings of our constituents and bringing their objections before the House. It happened last week on the very important industrial relations legislation, and it has happened again today on taxation. People say to us, `We want you to take this to the parliament. We want you to tell them what is happening to us. We want you, as our local member, to go and express the words we want expressed on our behalf.' And what do we find? Once again we are being gagged. This bill that we have before the House, as well as the amendments, is really the last chance the government will have of rolling the dice for their roll-back package. In the final hour—and I believe this really will be the final hour before the goods and services tax asserts itself on the finances of our nation—the government has now proposed, as I have stated, 145 amendments in the first lot and 66 amendments in the second lot, all on top of the 1,020 amendments that have already been moved to this piece of legislation.Going through the latest lot of amendments, I would like to show how dramatically underprepared the government are for the GST. It is obvious from this second lot of amendments that they do just not understand the effect the GST will have on the Australian community. Members of their front bench are privately praying that the GST will ride them safely into government at the next election, but they need to have a talk to their backbenchers because the backbenchers are starting to get that losing look. People have referred to curves: I talk about the very big S curve and the groove at the bottom of it where one cannot get all the way up. The backbench are starting to look as though they are not only losing but also going through the S curve. Not only will this tax have a very negative effect on the community at large, but it has now been revealed that we have been paying in excess of $430 million to be constantly reminded in propaganda from this government how good this tax is going to be for us. The government advertising on the GST is propaganda. It is not information; it is a propaganda campaign. It looks as if it has been taken straight out of Orwell's 1984. This $430 million of taxpayers' money, as many people have said, both in question time in this House over the past few weeks and in Senate estimates, could have been better spent by far on our schools and hospitals and even on compensation for pensioners if we want to bring in a GST. Give them fairer compensation. Give them better compensation. Look how much families now are going to start suffering from this particular piece of legislation.The bill and the amendments are really showing that the government are doing what we always said they would have to do when they first tried to get this legislation in, that is, they would have to pick up the anomalies in it and start rolling it back. This GST is not a fair tax. What we have before the House now in these amendments is merely a smokescreen. It shows how complicated the legislation is. Not even the government understands it. As, the minister said in his second reading speech, they go out and consult. They do not go out and consult; they go out and poll. When they feel that they are getting a negative reaction out in the community at large—because finally Australian people are understanding what the GST is going to do to them and how it is going to affect them—they come back in here and move another reel of amendments. I say to the minister that his time is running out. It is fast approaching. In 22 it will be 1 July and the law will come in. What is he going to do after that? Is he going to continue to bring pieces of legislation in here with amendment after amendment? Are we going to then see, despite the Treasurer telling us there will be no further amendments— (Time expired.)13:11:0017436Murphy, John, MPMr MURPHY83DLoweALP00—As we know there have previously been 1,026 amendments and now another 145. Here today we have a further 66 amendments, which makes a total of 1,337 amendments to date. The member for Rankin, who sits behind me and has had carriage of this for some time, has brought in 6.1 kilograms of legislation. How can that be easy? The government is telling us how easy it is. It is getting more complicated day in, day out. As for the government saying that cars are going to be cheaper under the GST, this morning I was interested to hear on ABC radio 702 AM, Mark Simpkin interview a Mr Michael Delaney, a senior executive officer of the Motor Trades Association, concerning his research on findings related to the impact of the GST on the price of motor vehicles. I heard Mr Delaney state that the Australian Consumer and Competition Commission may be misleading Australians that the future prices of vehicles would be lower because of the GST. The Motor Trades Association has made a submission to the federal Ombudsman over possible misrepresentation in the ACCC's guide which claims that automobiles will be cheaper. I have previously participated in a debate on a motion by the member for Boothby where he was extolling the virtues of the reduction in wholesale sales tax that will result from the GST in terms of new car sales. Those of us who participated in that debate were denigrated and criticised quite significantly by him but no evidence exists to suggest that Australian motorists will be better off because of the GST, and that is a fact. In my electorate of Lowe, the voters continue to reject the GST because the majority of my constituents understand its lack of fairness and equity. It will be an unfair and regressive GST for them and their children and they do not like it. They have given me a mandate to uphold their rights and represent them here in this parliament and to speak out against it so we can strive for the better Australia to which we all should be committed. As fair-minded people, we are not easily lured by the idea of the divide and conquer free market politics of the Howard government.Let us not forget the broken promises of the Prime Minister in relation to airport noise. I wish there had been an amendment on that. I am sure the member for North Sydney would appreciate it if they had put some more money forward for a second airport at Badgerys Creek. 7T4Crosio, Janice, MPMrs Crosio—No Badgerys Creek.83DMurphy, John, MPMr MURPHY—Yes, Badgerys Creek. I have been asking question after question of the minister for transport, the Deputy Prime Minister, to get a decision on a second airport for Sydney.DK6Hockey, Joe, MP83DMurphy, John, MPMr MURPHY—There should be money and there should be an amendment here. The member for North Sydney, who is interjecting, knows this. He understands it well because he used to chair the Sydney Airport Community Forum. He knows that we need a second airport for Sydney. He is nodding. He knows in his heart that we need a decision. I have asked the Deputy Prime Minister to give an answer before 1 September. Will he make a decision in respect of Badgerys Creek? He knows we need it, and you know it too, because we want to take the pressure off the residents of Lowe, and the residents of your electorate, too, Member for North Sydney, because they are copping it in North Sydney.We want Badgerys Creek. On this side of the House, our policy is a second airport for Sydney at Badgerys Creek. There should be more money and an amendment in this legislation to provide more money for my constituents and the constitutents of the honourable member for North Sydney, the member for Grayndler, the member for Sydney, the member for Blaxland and the member for Watson. We need a second airport. It is madness to continue the expansion of Sydney airport because we are now looking at the prospect of getting a fourth runway under your government. I want Mr Hockey to speak to Mr Anderson, who is quite a decent chap, and ask for an answer to the questions that I have put on the Notice Paper as to when we are going to hear about Badgerys Creek and about providing funding so we can get a second airport for the residents of Sydney. 7T4Crosio, Janice, MPMrs Crosio—We do not want Badgerys Creek.83DMurphy, John, MPMr MURPHY—We want Badgerys Creek and you want Badgerys Creek. I like the member for North Sydney. I remember that when I first came to parliament I was walking down the corridor one day and he was waving his arms in the manner of a big 747 aircraft. He understands it as well as I do. The electorate of Lowe has been bombarded with aircraft noise and the government has broken its promises. The member for North Sydney, to his great credit, did a very good job for Sydney residents when he was on the Sydney Airport Community Forum to try to get a decision out of the government to build Badgerys Creek—but that was not forthcoming—and, of course, to also get some equity and fairness into the long-term operating plan. I just wish there were money to provide for a second airport. (Time expired)13:38:0017438Horne, Bob, MPMr HORNEUU5PatersonALP00—I want to return to the vexed question of livestock sales. I would like to remind the Minister for Financial Services and Regulation, who is at the table, of how beef producers are paid for their livestock. If I sell cattle at a sale next Monday, the agent is obliged to pay me within seven days. That of course is part of the problem. If livestock is sold to an abattoir, they pay the vendor within seven days but with the GST payment, they will not be reimbursed for at least one month. I think they put in their claim at the end of a month and then they will get the reimbursement of the GST payment one month later. That is precisely why the Coonamble abattoir has gone out of business, or is going to go out of business. The managing director, Bill Scott, said an extra $200,000 plus interest would be needed to cover GST on purchases in the first month of the reporting period and then $400,000 over the following two months. So the provision of credit by the slaughterhouses is a major problem under these regulations. The other thing I would remind the minister is that in your amendments it says—and I will selectively quote from four paragraphs of the explanatory memorandum:11.4 ... the supply of livestock or game is a taxable supply.... ... ... ...11.6 ... the delivery of livestock is a supply under the GST Act. The supply takes place when delivery is made and not when title passes.The problem here in the case of selling over the hook is that the supply takes place when the delivery is made but the value is not determined until the dressed weight is known. So you have a problem in determining the GST on the value of the commodity. The commodity is not the beast; in the case of selling over the hook, the commodity is the carcass. So that is what I envisage as a problem: who will determine the value and therefore the amount of GST payable? That is something that seriously needs to be looked at; otherwise I can see that down the track the slaughterhouses are going to say to the producers, `We will deny you access to selling over the hook,' and that is something that a lot of producers have preferred to do, historically. They do it, as I said, because there is a premium. There is another problem, too, that I see with the sale of livestock, and that is that through a stock sale—a normal live weight sale or store sale—it is the vendor or the agent who can determine when the GST is determined. As a beef producer, I can say to the agent, `I want the GST added on after the fall of the hammer,' or I can say, `I want the GST included in the sale price,' and he has to comply with that wish. For the first few months after 1 July, we will have chaos, because we may have identical cattle being sold by different vendors under a different system. Then take the hobby farmer; if he does not have an ABN and 48.5 per cent is going to be retained and no GST charge, you could have three pens of identical cattle all being sold under a different system. The purchasers cannot possibly take that into account, and there will be moves against the producer. They will all be reduced to the common denominator, which will be the price that would be paid to the hobby farmer with no GST. So there will be a definite move against the bona fide beef producer under this GST system. The system that has been introduced is far from satisfactory. It will lead to chaos. I have no doubt that after 1 July, in 22 days time, it will lead to withdrawal of cattle from the marketplace, simply because vendors will want to hang back and say, `I want to see how this system works because there will be a movement against me by the purchasers.' (Time expired)13:43:0017438Rudd, Kevin, MPMr RUDD83TGriffithALP00—The bottom line with this legislation is that we are looking at a whole series of new compliance costs for Australian small businesses. I listened carefully to what the minister at the table said and he said that he was working hard over the transition period, together with his ministerial colleagues, in order to reduce the compliance impost on small business. I understand the comments that the minister made, but the reality, Minister, is that the system is simply not working. The ABNs are not being delivered in time. The replyin5 system is not working. The GST hotline is not working effectively. The ATO cannot deliver determinations in sufficient time. The result of all that—what you have—is simply administrative implosion. Policy innovation might be very interesting for this Treasurer, but part of his portfolio responsibility is the implementation of effective taxation reform as well, and that is where the problem is occurring. I just raise two examples from my own small business constituency. The first relates to the proprietor of a business called King Amusements, Mr Ken Corley, who has written to me about a letter that he sent to the Australian Taxation Office on 17 April. He says: I write to inform you of the plight of my Industry and the G.S.T. Sir, you may not be aware that the recovery of the G.S.T from the end user (the customer) is technologically and economically impossible. If it were possible, the cost involved would (or could) bankrupt the majority in the Amusement Machine Industry, as every machine would cost many hundreds of dollars. This is because the equipment in use today does not, and cannot dispense change. This is only achieved in the vending industry which is a separate industry to ours. We have been under severe economic pressure over the last 6 - 7 years with the explosion of gambling within this country. ... Our business has already diminished by 40% - 50%. These figures are easily accessed by the Taxation Department through our Annual returns. Our industry is regulated by high import duties. He goes on to say:... The G.S.T. will be the last straw.A favourable reply for relief to assist my industry maintain a reasonable subsistence level would keep food on my plate. I do not over exaggerate this effect that will befall this industry.That was correspondence sent to the ATO on 17 April by King Amusements at Mount Gravatt in Queensland. The reply from the Taxation Office came on 3 June and states: I refer to your e-mail of 17 April 2000 requesting goods and services tax (GST) advice on your Amusement Machine business. I apologise for the delay in replying to your request. Unfortunately, the Australian Taxation Office is unable to give you advice on a pricing issue. Therefore, I refer you to the Australian Competition and Consumer Commission (ACCC) for assistance and advice. The ACCC's hotline number is 1300 302 502 or alternatively you can visit their website ...What transpires is that there was also correspondence from the ACCC back to a company called Azure Amusement Machines, which is presumably part of the peak industry body to which King Amusements belongs, which states:Thank you for your letter dated 15 May 2000 in which you raised concerns about the practical application of the GST to the amusement machines industry. Essentially you were concerned that your business is not able to add the 10% GST to the price per play of your machines and as such sought an exemption for coin operated entertainment machines from the GST. By way of background, and as you may be aware, the Commission is responsible for ensuring compliance with the fair trading and competition provisions of the Trade Practices Act 1974. The Commission also has been given a role in ensuring that businesses do not seek to obtain an unfair advantage from the New Tax System changes. The Commission has been given no power under the Act to provide exemptions from the effects of the New Tax System changes and any such exemptions are a matter of policy for the Federal Government. I have enclosed a copy of the Commission's guidelines on Price Exploitation and the New Tax System.So effectively what we have there is the complete round robin. My constituent, the proprietor of King Amusements, has written to the Australian Taxation Office saying, `We have a problem, which is: how do you actually give effect to the new tax system given the particular nature of the machines which are the core part of my business?' The Australian Taxation Office says, `Go off to the ACCC and it will provide you with some advice.' The ACCC then says in reply, `I am sorry, we can't help you. This is a matter of government policy.' It is this specific type of local example, Minister, that we have a problem with right across this country, where people with detailed and specific questions about the particular operation of their businesses are not being accommodated by—Motion (by Mr Hockey) put:That the question be now put.13:52:00The House divided.(Mr Deputy Speaker—Mr G.B. Nehl) 71Abbott, A.J.Anderson, J.D.Andrews, K.J.Anthony, L.J.Bailey, F.E.Baird, B.G.Barresi, P.A.Bartlett, K.J.Billson, B.F.Bishop, B.K.Brough, M.T.Cadman, A.G.Cameron, R.A.Causley, I.R.Charles, R.E.Costello, P.H.Draper, P.Elson, K.S.Entsch, W.G.Fahey, J.J.Fischer, T.A.Forrest, J.A *Gallus, C.A.Gambaro, T.Gash, J.Georgiou, P.Haase, B.W.Hardgrave, G.D.Hawker, D.P.M.Hockey, J.B.Hull, K.E.Jull, D.F.Katter, R.C.Kelly, D.M.Kelly, J.M.Kemp, D.A.Lawler, A.J.Lieberman, L.S.Lindsay, P.J.Lloyd, J.E.Macfarlane, I.E.May, M.A.McArthur, S *McGauran, P.J.Moore, J.C.Moylan, J. E.Nairn, G. R.Nelson, B.J.Neville, P.C.Nugent, P.E.Prosser, G.D.Pyne, C.Reith, P.K.Ronaldson, M.J.C.Scott, B.C.Secker, P.D.Slipper, P.N.Somlyay, A.M.Southcott, A.J.St Clair, S.R.Stone, S.N.Sullivan, K.J.M.Thompson, C.P.Truss, W.E.Tuckey, C.W.Vale, D.S.Wakelin, B.H.Washer, M.J.Williams, D.R.Wooldridge, M.R.L.Worth, P.M.62Adams, D.G.H.Albanese, A.N.Bevis, A.R.Brereton, L.J.Burke, A.E.Byrne, A.M.Cox, D.A.Crean, S.F.Crosio, J.A.Danby, M.Edwards, G.J.Ellis, A.L.Emerson, C.A.Evans, M.J.Ferguson, L.D.T.Ferguson, M.J.Fitzgibbon, J.A.Gerick, J.F.Gibbons, S.W.Gillard, J.E.Griffin, A.P.Hall, J.G.Hatton, M.J.Hoare, K.J.Hollis, C.Horne, R.Irwin, J.Jenkins, H.A.Kernot, C.Kerr, D.J.C.Latham, M.W.Lawrence, C.M.Lee, M.J.Livermore, K.F.Macklin, J.L.McClelland, R.B.McFarlane, J.S.McLeay, L.B.McMullan, R.F.Melham, D.Morris, A.A.Mossfield, F.W.Murphy, J. P.O'Byrne, M.A.O'Connor, G.M.O'Keefe, N.P.Plibersek, T.Price, L.R.S.Quick, H.V.Ripoll, B.F.Roxon, N.L.Rudd, K.M.Sawford, R.W *Sciacca, C.A.Sercombe, R.C.G *Sidebottom, P.S.Smith, S.F.Swan, W.M.Tanner, L.Thomson, K.J.Wilkie, K.Zahra, C.J.Downer, A.J.G.Wilton, G.S.Howard, J.W.Beazley, K.C.* denotes tellerQuestion so resolved in the affirmative.Original question agreed to:That the amendments (Mr Hockey's) be agreed to.Bill, as amended, agreed to.1744013:56:0017440Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—by leave—I move:That the bill be now read a third time.In speaking to the third reading of the Indirect Tax Legislation Amendment Bill 2000 it is a good opportunity, just before question time, to remind the House of how significant the taxation reforms will be on 1 July. They are great reforms that will deliver benefits to families, pensioners and small business. Most importantly, they will deliver benefits to consumers as well. The benefits to consumers are significant. For the first time they will be able to contribute in a meaningful way to the substantial change in the taxation system. That will mean more money in their pockets and less money caught up in unfair taxes such as the bed tax, which has been a punitive tax affecting the tourism industry, particularly in New South Wales. It will mean the abolition of stamp duty on the transfer of shares, which obviously is very important for our bipartisan ambitions to become a global financial centre. It will also lead to the abolition of financial institutions duty and bank account debits tax. The abolition of those taxes would have started at a more reasonable date but for the efforts of the opposition to reject the mandate of the Australian people and vote against the original tax package in the Senate.There is no doubt that the most significant benefit that will come into play on 1 July will be the enormous taxation cuts for average working Australians. In real terms there will be around $12 billion in income tax cuts, the biggest taxation cuts in Australian history, and they will go directly into the pocket of average Australians, giving the average Australian family more choice about what they can spend their money on. We on this side of the House believe that individuals should have the right to choose how they spend their money. The government should not be taking the money out. Individuals should spend their money on what they want to spend it on rather than the government deciding what it wants to spend the money on. We on this side of the House rejoice at the changes that will come into effect on 1 July and look forward to the transition to the A New Tax System.Question resolved in the affirmative.Bill read a third time.Ministerial Arrangements1744114:00:0017441Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I inform the House that the Minister for Immigration and Multicultural Affairs, the Hon. Phillip Ruddock, will be absent from question time today. Mr Ruddock is representing the Commonwealth government at the commencement of the Olympic torch relay in Australia at Uluru. The Attorney-General, the Hon. Daryl Williams, will answer questions on Mr Ruddock's behalf. I also inform the House the Minister for Trade, the Hon. Mark Vaile, has unavoidably been detained due to aircraft delays. The minister expects to arrive shortly, so I suggest that, if it suits the convenience of the House, any questions be addressed to the minister when he does arrive.Ministerial Statements174411744114:01:0017441Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—Mr Speaker, with your indulgence I wish to make a brief statement to the House in relation to the evacuation of Australian nationals from Honiara. Today the government has decided to undertake the evacuation of Australian and other approved nationals from Honiara. The Minister for Defence a short while ago made a statement to the media to this effect.In light of further deterioration in the security situation in and around Honiara, the Australian High Commissioner, Dr Martin Sharpe, has requested the evacuation of Australian citizens and other nationals. The NSC met earlier this afternoon and has approved the request. As a result of that, HMAS Tobruk has been tasked with carrying out this evacuation. It will arrive in Honiara later today. The government had in fact despatched HMAS Tobruk from its transit from Bougainville to Vanuatu two days ago to take a position off the Solomon Islands to provide assistance in the evacuation of Australian nationals if required. The safety of Australians is of course a prime concern of the government in this action. The evacuation is intended to ensure that Australians are not caught up in the violence now occurring around that city. I would urge as many Australians and other nationals as possible—and I am sure all members of this House would join with me in this—to take this opportunity to evacuate from the Solomon Islands. HMAS Tobruk will be responsible only for the safe evacuation of people who are in danger. It will not be involved in any other security operation.The government remains very concerned about the security deterioration in Honiara. We urge all parties to negotiate a cease-fire without delay. This would be a necessary precursor to resumption of the ongoing peace process sponsored by the Commonwealth Secretariat. Australia's objective has always been to assist the Solomon Islands to deal with its own problems by peaceful and democratic means. In conclusion, I make the observation that the government will of course continue to monitor developments closely and make the appropriate response as required.14:03:0017441Crean, Simon, MPMr CREANDT4HothamALP00—Mr Speaker, with your indulgence I wish to indicate that, in relation to the announcement made by the Acting Prime Minister, the opposition supports the operation to evacuate Australians and other approved nationals from Honiara. I join the Acting Prime Minister in reaffirming the fact that the safety of Australians is paramount to all of us, and sincerely hope that the operation is successful and that whatever steps are necessary are taken to ensure the safety of all those involved—those being evacuated and those undertaking it. The opposition renews its call for all efforts to restore security and to ensure negotiations between the parties so that the peace process can be advanced. Questions Without Notice174421744214:04:0017442Swan, Wayne, MPMr SWAN2V5LilleyALP00— My question without notice is directed to the acting Minister for Family and Community Services. Minister, is it the case that your top-up mechanism for John and Wendy applies only to families receiving partnered parenting payment on 30 June? Minister, do you recall that John and Wendy, whom we first raised two months ago in this parliament, are having their child in December? Minister, isn't it the case that, after two months, you have managed the unlikely feat of leaving John and Wendy worse off?17442Anthony, Larry, MPMr ANTHONYXJ6RichmondNPMinister for Community Services10—The government announced yesterday that there has been an extension of the three months by nine months—making a total of 12 months—to ensure that, if there are adjustments that need to be made in that transition period for people who have been receiving payments through the new family tax benefit part B, there is this window of 12 months which we have provided. It is important because we believe that families should certainly not be disadvantaged through that transition period. At the end of that period they can, if they have a particular problem or inquiry, go through the Family Assistance Office. This government is absolutely committed to ensuring that all Australian families will be better off; and they will be better off because of the substantial reductions in personal income tax and the increase—$2.4 billion—in family assistance which will benefit all families.17442NaN:00:0017442May, Margaret, MPMrs MAY83BMcPhersonLP10—My question is addressed to the Attorney-General. Would the Attorney-General inform the House whether the Australian Electoral Commission was entitled to supply to the Commissioner of Taxation a tape or disk of the electoral roll?RH4Kerr, Duncan, MPMr Kerr—Mr Speaker, I raise a point of order. Plainly this is seeking a legal opinion. It may be of interest to the House, but plainly it is in breach of standing orders.WI4Reith, Peter, MPMr Reith—Mr Speaker, on the point of order: the question only asked whether or not the commission was entitled to supply it. It was not asking for a legal opinion.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The member for Deakin, the member for Banks! I thought the opinion was sought of the chair, and the chair's opinion is that the question is entirely within the responsibility of the Attorney-General. It can therefore stand.17442Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I thank the member for McPherson for her question. The government has received formal advice today from the Solicitor General about this issue.Opposition members interjecting—7V5Mr WILLIAMS—You might want to listen to this. The advice is that, while the Australian Electoral Commission was entitled to supply the Commissioner of Taxation with a tape or disk of the electoral roll, such tape or disk could only be used for a purpose prescribed under section 91A of the Commonwealth Electoral Act. I am advised that regulations pursuant to this section have not been made except in relation to medical research and public health screening programs. The Taxation Office previously sought legal advice on the issue from the Australian Government Solicitor. In advices dated 19 May and 2 June the AGS advised the Taxation Office that the provision of the electoral roll to the Commissioner of Taxation and the use of the electoral roll by the Commissioner of Taxation for a mail-out were authorised under the Electoral Act. Advice to the same effect was given by the AGS to the Australian Electoral Commission dated 2 June and the Department of the Prime Minister and Cabinet dated 6 June.This advice reflected a long-held view that the specific provision in the Electoral Act dealing with provision of information to prescribed authorities, such as the ATO, authorised provision to them and use by them of electoral information in electronic form. The Solicitor-General advised today that he disagreed with that advice. The Solicitor-General has indicated that a regulation as to the use of the electoral roll by authorised agencies should be made for the purposes of section 91A. I am advised that authorised federal government agencies—including the Australian Taxation Office, Customs, the National Crime Authority and the Passports Office—have been using electronic copies of the electoral roll since 1993 without the authority of prescribing regulations. In order to validate uses of the electoral roll already made in the past by federal government agencies, retrospective legislation dating from 1993 may be required. The government will rectify this as soon as possible through legislation, regulation or other appropriate action. On the basis of the Solicitor-General's advice the Commissioner of Taxation will not use the electoral roll for a mail-out to explain the benefits of the new tax system. Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—Members know that sort of action is regarded as disorderly.7V5Mr WILLIAMS—Instead, the Treasurer has advised me that the Australian Taxation Office will distribute information on the new taxation system on a household distribution basis, not using the electoral roll.1744314:10:0017443Swan, Wayne, MPMr SWAN2V5LilleyALP00—My question without notice is to the acting Minister for Family and Community Services. Minister, is it not the case that if John and Wendy ever decide to have another child in a future year they will still be worse off under your tax package than they would be under the current arrangements? Minister, why is the government placing extra financial burdens on families who have children? Is this just the government's version of a one-child policy?WI4Reith, Peter, MPMr Reith—Mr Speaker, I raise a point of order. That question should be ruled out.5I4McMullan, Bob, MPMr McMullan—Mr Speaker, I refer to your ruling with regard to the previous question. This is unequivocally a matter that is within the portfolio responsibility of the minister.4K6Causley, Ian, MPMr Causley—Mr Speaker, I know you are going to illuminate the chamber later on an explanation of standing order 144, but it clearly states that the question cannot be hypothetical and cannot be argumentative, and that question is clearly both.10000SPEAKER, MrMr SPEAKER—It is, of course, rare to have a question that is not argumentative, one might observe. I know the context in which the standing order is written. It is fair to say that the question put by the member for Lilley cites a hypothetical example. The member for Lilley could have rephrased the question so it was not as hypothetical, as I am sure he is aware. I will not allow questions as hypothetical to stand in future. I will allow the minister to respond to this one, consistent with the ruling given on the first question.17443Anthony, Larry, MPMr ANTHONYXJ6RichmondNPMinister for Community Services10—It is interesting that the member for Lilley should ask about a one-child policy, because the only country that has that is China and, it being a socialist country, I am sure the socialist Labor Party would have something in common with it. But, of course, the accusations that he makes are absolutely groundless.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The minister will resume his seat. The member for Grayndler! The member for Melbourne Ports knows that his behaviour is not acceptable. Member for Prospect! The member for Bruce!XJ6Mr ANTHONY—One thing you have got to understand is that you can never take anything from the Australian Labor Party for granted. The most important element that families will have going though the new tax system is substantial personal income tax cuts, which will benefit Australian families. There will also be substantial increases in family assistance for a child.VU5Griffin, Alan, MPMr Griffin—What's under your bed, Larry?10000SPEAKER, MrMr SPEAKER—Member for Bruce!XJ6Mr ANTHONY—In the new financial year under family tax benefit part B they will benefit from a $350 a year increase. Of course, there will also be substantial benefits that will go to young children under the age of five, because this government is very much family friendly—VU5Griffin, Alan, MP10000SPEAKER, MrMr SPEAKER—Member for Bruce!XJ6Mr ANTHONY—That is precisely why the taxation system is structured this way.VU5Griffin, Alan, MP10000SPEAKER, MrMr SPEAKER—Order! The member for Bruce will excuse himself from the House under the provisions of standing order 304A.The member for Bruce then left the chamber—1744414:15:0017444Cadman, Alan, MPMr CADMANSD4MitchellLP10—My question is addressed to the Treasurer. Will the Treasurer inform the House how economic reform has improved the living standards and prospects of Australia's wage and salary earners?17444Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for Mitchell for his question. I can advise him that one of the benefits of economic reform has been a lift in productivity growth in the Australian economy. Productivity growth over the last four years under the coalition government has averaged 2.6 per cent per annum compared with growth of only 1.5 per cent per annum under Labor. This has meant that Australian employees have been able to enjoy real wage increases. The policy of Labor was low productivity, real wage cuts and, as we know, high unemployment. But putting in place a new monetary policy, putting in place a surplus budgeting regime, putting in place labour market reform and increasing product competition in markets have given Australia a productivity lift. Today's labour force announcement illustrates some of the benefits that can come as a result. The labour force figures for May 2000 indicate that another 12,000 new jobs were created in Australia and that the unemployment rate fell to 6.7 per cent, the lowest since June 1990. That means that, since this government was elected, an additional 712,000 jobs have been created in Australia—people have got real, tangible benefits from the government's economic program.If we want to continue to make inroads into unemployment and if we want to give opportunities to young people to get jobs, we have to continue the reform process—we have to continue with tax reform and with labour market reform. It is Australia's role in pioneering these reforms which has brought it some respect from international organisations such as the IMF and the OECD. Indeed, Australia holds the chairmanship of the OECD this year and, on behalf of Australia, I will be chairing the annual ministerial meeting of the OECD in Paris commencing on Sunday, 25 June. This is in part a recognition of Australia's advances in competition reform, labour market reform, monetary reform, fiscal reform and institutional reform. The benefits that come from good economic management are real wage increases, more jobs, better opportunity and social benefits.1744414:18:0017444Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Acting Prime Minister. It is in relation to the answer previously given by the Attorney-General. Acting Prime Minister, will you now obtain advice from the Commonwealth Solicitor-General as to the legality of all other aspects of the government's GST promotion campaign, including the possible misuse of public funds under section 14 of the Financial Management and Accountability Act and the possible unethical use of Commonwealth resources, contrary to section 44 of the act, and will you table this advice?17444Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—As the Prime Minister indicated in this place only a couple of days ago, the government has always acted within the framework of propriety and appropriate behaviour. Your suggestion that he is wrong is, in fact, not right. We have done nothing illegal and nor has any government agency. You are making accusations that simply do not stand up. We have sought advice, a new point of concern has been raised and we have reacted in an appropriate way. That will be the case right through. There is no question that the government has or will act illegally in relation to the entirely defensible and very much needed explanation of these long overdue reforms to the Australian taxation system.1744414:19:0017444Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—My question is to the Minister for Employment, Workplace Relations and Small Business. Minister, what do today's employment figures released by the Australian Bureau of Statistics indicate about trends in employment? What impediments exist to future employment growth? 17445Reith, Peter, MPMr REITHWI4FlindersLPMinister for Employment, Workplace Relations and Small Business10—I thank the member for Parramatta for his question. I am delighted to be able to advise the House that today's unemployment rate, at 6.7 per cent, is the equal lowest since June 1990. I would guess that all Australians would be delighted, except for those sitting on the other side, who find this news entirely depressing. This is great news. It is one of the best months we have had in 10 years and that reflects the fact that, with a government that is prepared to fix problems, you get good results. The figures have some other aspects to them. There is very good news for young people, who were thrown onto the scrap heap by Labor's mismanagement. Under this government the figure today is the lowest since October 1990. Again, happy faces on this side and glum faces on that side. This continues the good figures for young people: teenage full-time employment continued to rise strongly, to 243,000, and teenage full-time employment has grown by 5.1 per cent over the last 12 months. They are really good figures. The other interesting figure is that the participation rate stayed steady this time, but it is at its equal highest since August 1996. Compared to Labor's average of 62.4 per cent, ours is a significantly higher figure. So more people are in the labour market and more people are able to obtain jobs.I am asked whether or not there is any impediment to our doing better. Well, the impediments sit on the other side, and the union controlled Senate is blocking reforms. I am very interested in Queensland, which has struggled with unemployment. It was in September 1997 that the Queensland Premier said, `I'm confident that with some help from the federal arena we can get the figure down to five per cent within a term or just over.' Not only has he dumped that promise but, more ominously, he has dumped support for small business, which has created so many of these jobs. If you do not look after small business, you will not get the jobs. One of the worst so-called reforms in Queensland was that the state government made it easier for solicitors to blackmail small business people over unfair dismissal, which discourages job creation in the small business sector. But this is a great figure, and this government is determined to get it lower.1744514:23:0017445Horne, Bob, MPMr HORNEUU5PatersonALP00—My question without notice is to the Acting Prime Minister and Leader of the National Party. Are you aware that the member for Herbert said last week that you and your National Party colleagues, Ministers Vaile and Truss, are being rolled in cabinet and that the cabinet basically comprises citycentric people? Is the member for Herbert right? Don't you get rolled consistently by your citycentric colleagues?17445Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—This is coming from a member of the opposition, an opposition which have opposed almost all of the extraordinary length and breadth of worthwhile initiatives that the government has introduced in rural and regional Australia. There was $1.5 billion for the Natural Heritage Trust. Where were the ALP? They opposed it. Under Networking the Nation, there was $1 billion worth of expanded capability and technology for telecommunications in rural and regional Australia. Where were the ALP? They opposed it. There was $800 million for Agriculture Advancing Australia—a far more sophisticated package than the old Rural Adjustment Scheme, far more effective and far better appreciated. Where were the ALP? They opposed it, although I did see the shadow minister for agriculture the other day describe it as a popular program. There is no doubt about it: they oppose it until they realise it has been well received and it is working—83TRudd, Kevin, MPMr Rudd—Mr Speaker, I raise a point of order which relates to standing order 145. Nothing that the Acting Prime Minister has said is in any way relevant to the question raised by the member for Paterson, which was: has he been rolled or not in cabinet?10000SPEAKER, MrMr SPEAKER—The Acting Prime Minister is answering the question as asked, and I invite him to continue.4K4Mr ANDERSON—The whole point of this is that an effective team in government are delivering very important outcomes for rural and regional Australia. The evidence is there that we are delivering as a government. It is as simple as that. Let me continue. With health, after the extraordinary neglect of the needs of the very large number of Australians who happen not to live in the major urban centres of this nation, the Minister for Health and Aged Care and the government have put together a program to turn that around substantially to ensure that people in rural and regional Australia have the same sort of access to health that their city counterparts take for granted. I come to education. We have recently seen initiatives for people living in isolated areas, like the discounting of the assets test to enable small businesses and farmers who are asset rich but income poor to educate their children properly. All of that was done in the context of us having to right the budgetary mess that you left us. We were able to correct that and drive interest rates and inflation down—the two great killers that you allowed to eat away at the wellbeing of rural and regional Australia like a cancer. The question really is so trite as to be utterly laughable. 17446NaN:00:0017446Elson, Kay, MPMrs ELSON6K6FordeLP10—My question is addressed to the Minister for Health and Aged Care. Would the minister inform the House how Australians are benefiting from the government's simplified billing initiative for private health patients?17446Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—I thank the honourable member for her question. Billing procedures in hospitals do not get much attention, but they are a great annoyance to the public. This came home to me last time my family had to be involved in hospital care. It was when my last son was born. He spent two days in intensive care as a private patient, and we proceeded to get 50 bills over the next six months relating to that two-day episode of hospital care. That was in 1995. I thought it was utterly ridiculous. There are very few industries that would have treated their customers the way people who used the private health sector were being treated. In an attempt to do something about this, we ran some trials in 1997 to see whether we could actually collate the different claims, streamline the claiming process and provide informed financial consent. The trials went very well, and well over 90 per cent of people who participated in them found them to be of great benefit. So, in 1998, we changed the regulations to allow for simplified billing.Like most things in health care, change in the medical profession happens very slowly, but I am pleased to inform honourable members that it has started to really take off in recent months. In December 1998, only five per cent of private in-hospital treatments involved simplified billing. I got the results only today, but in the month of May, just a couple of weeks ago, 22 per cent of all in-hospital treatments for private patients in Australia used simplified billing. In most cases, this involves a single bill to the patient, informed financial consent and few or no out-of-pocket expenses. There are nearly 3,500 doctors around Australia who are now participating in this. There are 56,000 people who have benefited from it. It is a small change and a very quiet change, but it is removing one of the greatest concerns that the public have about using the private health sector.1744614:29:0017446Kernot, Cheryl, MPMs KERNOTXW4DicksonALP00—My question is to the Acting Prime Minister and Leader of the National Party.WI4Reith, Peter, MPMr Reith—Come on!XW4Ms KERNOT—Sorry, guys. Minister, are you aware that the latest small area labour market survey released by the Department of Employment, Workplace Relations and Small Business on Friday shows that three-quarters of labour market areas experienced a rise in the unemployment rate? Are you aware that the number of areas experiencing above 10 per cent unemployment, many of which are in regional Australia, rose by a massive 34 per cent? Minister, why do you allow your government to constantly crow about the national unemployment rate falling when it is rising in many of the areas you and your party represent? Is this one of your most important outcomes?84HZahra, Christian, MPMr Zahra—11.9 per cent unemployment in McMillan. 10000SPEAKER, MrMr SPEAKER—Order! If the member for McMillan wishes to continue to represent the electors of McMillan in this chamber, he will exercise some more restraint.17447Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for her question. She must be relying on other people's work, because she has not spent much time out in rural and regional Australia.Honourable members interjecting—10000SPEAKER, MrMr SPEAKER—Order! This sort of interjection does occur in parliaments, but no-one expects the chair to have to rise in order for people to exercise the restraint that our constituents expect of us.4K4Mr ANDERSON—We have seen falls in unemployment rates right across Australia. In many statistical local areas, SLAs, the non-metropolitan areas, the falls have been quite significant and quite encouraging. For example, in the March quarter 2000, the unemployment rate in Coober Pedy fell from 20.5 per cent to 13.2 per cent. Come to Cootamundra: it went from 10 per cent to six per cent. Come to Geelong: 11.8 per cent to 8.9 per cent. Some 28 per cent of SLAs have an unemployment rate of less than five per cent, compared with 23 per cent in the March quarter a year ago. Employment grew in 16 of the 19 regions associated with Job Network 2. I think that is worth appreciating. The largest increase in employment was recorded from that fellow who was always criticising the government's policies but always benefiting from them in the Hunter and the North Coast region—up by 9.3 per cent. The largest decrease in unemployment was recorded in the Riverina—down by 35.6 per cent.Despite these figures, the government remains concerned about the need for further job development in rural and regional areas of this country. We have put in place a much more sound economic and other framework within which that can happen, whether it is lower interest rates, whether it is the lower inflation that I touched on earlier or whether it is industrial relations reform. I touched on that in this place yesterday. I do not know that anybody would care to speculate on the sorts of jobs that industrial relations inflexibility under the Labor Party/ACTU cost rural and regional Australia. How many jobs were exported from this country in the meat processing sector, for example, because you held our competitiveness back?1744714:34:0017447Causley, Ian, MPMr CAUSLEY4K6PageNP10—My question is addressed to the Minister for Agriculture, Fisheries and Forestry. Has the minister seen calls by some in the dairy industry for the preserving of a quota system based on legal opinion? Have some state governments also proposed a federal floor price scheme while refusing to compensate farmers for a property right in the form of a quota? What can be done to assist dairy farmers and communities in their states to adjust to the changes in circumstances?17447Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—I thank the honourable member for Page for his question and for his representations on behalf of dairy farmers. It is indeed a fact that many dairy farmers, particularly in Queensland and New South Wales, have concerns about the potential impact of dairy deregulation on them and their farming operations. I share some of those concerns. There is no doubt at all that dairy incomes will fall significantly in states like New South Wales and Queensland, and that is why the government has acted to put in place a $1.78 billion restructuring package to assist dairy farmers to adjust to these very difficult circumstances. It is important to recognise that the federal government has not been acting to deregulate the dairy industry. No-one in this parliament has voted for any legislation to deregulate dairying, nor will they. There are no federal regulations to be repealed.CE4O'Keefe, Neil, MP10000SPEAKER, MrMr SPEAKER—Order! The member for Burke! The minister has the call.GT4Mr TRUSS—I repeat, Mr Speaker, that all of the regulations in relation to dairying are state regulations, so it is a matter for the state parliaments as to whether or not any appropriate regulatory regime should be put in place. It is a matter for the states. Dairy farmers recognised that this week when they protested outside the parliaments in Brisbane and Sydney when regulations were under consideration by their state parliaments. So it is very important—and dairy farmers recognise this fact—that it is a decision for the states. It is a decision that they have in fact recommended to the states. The dairy industry have known now for eight or more years that the current regulatory regime was to expire, so they have been seeking to find ways in which the industry could appropriately trade and effectively meet the challenges of the future. They came to the federal government with a proposal that we should support by way of an adjustment package a move to total deregulation of the industry. That deregulation is not being driven by the federal government; it is not even essentially being driven by the national competition policy. The reality is that 63 per cent of Australia's dairy products are produced in Victoria, and Victorians have long eyed the more lucrative Sydney and Brisbane markets and have been keen to supply product into those states. They are protected by section 92 of the Constitution in having that right to trade freely into other states. Victorians ask, if products grown in New South Wales are allowed to be sold in Victoria, why can't Victorian products be sold in New South Wales?I appreciate that there are concerns in some of the industries, so at five minutes to midnight we have had a number of proposals around about schemes that might be able to, say, re-regulate the industry. There was a proposal, for instance, that maybe the quota scheme could somehow or other be extended if, in fact, other state dairy producers were able to buy those quotas. The Queensland Solicitor-General obtained a legal opinion that that would not be consistent with section 92. The New South Wales government's legal opinion was the same. That opinion was tabled in the Queensland parliament. I have to say that our own legal opinion supports that view.Lately, there has been a proposal that perhaps there could be some kind of floor price scheme. Minister Amery in New South Wales has promoted this idea. Mr Amery would know as well as anyone else that this is a cruel hoax on New South Wales dairy farmers. He knows that the Commonwealth has no powers to fix prices. That has been affirmed in referendums on a number of occasions over the years. For the federal government to regulate prices, it would require a referral from all of the states. I have never known states like Queensland or Western Australia to be too keen to refer powers to the Commonwealth, and in this particular case Victoria would have to do it as well. Victoria has already passed its legislation through both houses of parliament. I might add as well that Victoria has made it abundantly clear that it has no intention of backing away from dairy deregulation. Max Fehring, the President of the United Dairyfarmers of Victoria, said just a couple of days ago:Unfortunately, there are still some groups who believe that deregulation can be stopped. Lets be clear, deregulation will occur. He has been supported in those comments by Bonlac Foods, Murray Goulburn Cooperative and the major processors in that state. Let me add as well that the fact that the Commonwealth does not have powers to introduce a floor price scheme is also supported by legal opinion from the Commonwealth Solicitor-General and almost any other lawyer you would care to ask about those sorts of issues. Those sorts of things are cruel attempts by people like Minister Amery to distract attention from the failure of the New South Wales government and the Queensland government to do anything to support the dairy farmers of that state. Their behaviour has been shameful.4K4Anderson, John, MPMr Anderson—Country Labor.GT4Mr TRUSS—If Country Labor are serious about any kind of a floor price scheme, then they should be on the phone to Premier Bracks and Premier Beattie asking whether they are prepared to transfer any powers to the Commonwealth to deal with that issue—and you know what the answer will be. But that is not all of it. The real problem is that there are three states that have got dairy quotas, where farmers have bought the right to supply this high priced market milk—Western Australia, Queensland and New South Wales. The Western Australian government, a coalition government, has provided $38 million in additional support for the dairy farmers in that state. Queensland and New South Wales, who have more dairy farmers and whose dairy farmers are suffering more, have done absolutely nothing. They are prepared to provide nothing. They are appropriating the assets of these farmers—their quotas that they paid hundreds of thousands of dollars for and that they paid stamp duty on to the state governments in transferring these amounts—and the governments are prepared to give them absolutely nothing by way of compensation. It is high time that those state governments accepted their responsibilities, took up the challenge to look after the farmers in those states and delivered appropriate compensation for the assets they are proposing to appropriate. BV5Adams, Dick, MP10000SPEAKER, MrMr SPEAKER—The member for Lyons, as an occupier of this chair, along with some other members in this chamber, ought to know better. I warn him.1744914:43:0017449Sidebottom, Sid, MPMr SIDEBOTTOM849BraddonALP00—My question without notice is directed to the Acting Prime Minister. Minister, will you confirm that your government has contributed virtually nothing to the dairy industry package, which has been entirely funded by a new tax on milk drinkers? Isn't this complex new arrangement going to cost $600 million simply to administer? Minister, what does it say about your priorities when you provide only $45 million, just $15 million a year, to assist—10000SPEAKER, MrMr SPEAKER—The member for Braddon is advancing an argument. He will come to his question.849Mr SIDEBOTTOM—regional communities to adjust to these changes but spend $430 million on your GST propaganda campaign?10000SPEAKER, MrMr SPEAKER—The member for Braddon is now advancing an argument. 5I4McMullan, Bob, MPMr McMullan—Mr Speaker, I raise a point of order. I realise that I have raised previously with you the right of Prime Ministers to delegate questions to other ministers. But surely, when it is directly in the responsibility of the Acting Prime Minister as minister for regional services, he cannot delegate it to someone else. It is about regional adjustment programs, and he is the minister for regional services.10000SPEAKER, MrMr SPEAKER—The Manager of Opposition Business has raised a point of order. It is entirely within the prerogative of the Acting Prime Minister to nominate an appropriate minister to answer a question that is under his particular area of concern. It would be very difficult to find the dairy industry was not under the concern of the Minister for Agriculture, Fisheries and Forestry, and I call him.17449Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—Thank you, Mr Speaker.Mrs Crosio interjecting—10000SPEAKER, MrMr SPEAKER—The member for Prospect is in precisely the same position as the member for Lyons and ought to exercise just a little more courtesy.4K6Causley, Ian, MPMr Causley—Mr Speaker, I rise on a point of order. I draw your attention to standing order 146: a question fully answered cannot be renewed.10000SPEAKER, MrMr SPEAKER—I would remind the member for Page that, had I determined the question to be fully answered, I would have taken that action. In fact, the minister was asked a question about the level of federal government input into the legislation, and I did not consider that had been fully covered by the comprehensive answer given by the Acting Prime Minister. That is why I allowed the question to stand. Mr O'Keefe interjecting—10000SPEAKER, MrMr SPEAKER—The member for Burke is warned!GT4Mr TRUSS—I have to say that I am very surprised that a member of the opposition would ask a question critical of a $1.78 billion assistance package to Australian dairy farmers.Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The member for Braddon! The member for Hunter! As should be self-evident in the chamber, the current level of interjection will not be tolerated and the chair clearly has the power to deal with those who defy the chair. The minister has the call and will be heard in silence. GT4Mr TRUSS—This is the biggest adjustment package in the history of Australian agriculture. It is an extraordinary achievement for this federal government to have put together a proposal of this magnitude in response to the specific request of the dairy industry for aid through this difficult period. It is also interesting to note that members opposite who are now criticising it actually voted for it—they actually voted for it at the time. Are they going to wind back this $1.78 billion package? Are they opposed to it? Are they against providing this support to the dairy industry?In relation to the nature of the package and the assistance that is being provided, originally the industry asked us for a package of about $1.2 billion tax free. But, because it was not practical to provide it in a tax-free manner, the package was actually boosted so that at least as much, and in fact more, money will actually go to growers than otherwise would have occurred. There has always been some suggestion that somehow or other this is not the federal government's money, and I have heard certain members opposite say that in the past. No government has any money of its own. The only money that governments ever have is what they take from the taxpayers. Is the Deputy Leader of the Opposition actually suggesting that Labor's wholesale sales tax was not the government's money? It was the consumers' money. So the reality is, of course, that this is being funded by a tax. It is being funded by a tax on milk but it is being provided by the federal government, through its taxing powers, to provide a real benefit to the dairy farmers of Australia.Let me just add one further point, and I find it quite remarkable again that there should be criticism of a dairy regional communities package—something not, I might add, sought by the minister from Tasmania. He was not very keen to support these sorts of things, but he was grateful to receive it when the federal government offered it. He was very grateful to take it, like the premiers lining up for the GST who were happy to take their share of it and then seek to be provided with some credit for it. This will help dairy communities that are also affected by dairy industry deregulation. But it highlights once again the difference between what federal government is doing and what state government is doing. Ask the states. Ask your Labor agricultural minister in Tasmania or Mr Amery in New South Wales, or Mr Palaszczuk in Queensland? What are they doing to provide community support for dairy communities? Absolutely nothing. Not a thing is coming from the states that are actually doing the deregulation. It is the states that are passing this legislation. It is the states' regulation that is being repealed. They should be providing assistance, not just to dairy farmers but also to their communities.1745014:50:0017450Forrest, John, MPMr FORRESTNV5MalleeNP10—My question is addressed to the Minister for Trade. Would the minister inform the House of the outcome of the APEC meeting in Darwin this week, which is of vital interest to the constituents of Mallee? How did the meeting advance Australia's trade agenda in the Asia-Pacific region? I ask the minister: is he aware of any alternative policy views on this matter of trade? 17450Vaile, Mark, MPMr VAILESU5LyneNPMinister for Trade10—I thank the honourable member for Mallee for his question and I recognise the very active role that he plays in promoting the opportunities that are being provided to the constituents and the producers in his electorate of Mallee in opening up and improving market access across the world; he does a very good job. I thank him for the question. I am pleased to report to the House that the meeting of ministers responsible for trade in the APEC region that met in Darwin this week and concluded yesterday afternoon was, indeed, a successful meeting. Given the failure of the Seattle meeting at the end of last year to launch a round, the eyes of the world, in a trade sense, were on this meeting in Darwin to see what the 21 representatives of those member economies were going to decide with regard to their position on getting on with launching a round of multilateral trade negotiations. Of course, APEC is a significant forum. APEC represents almost 60 per cent of global GDP, and certainly about 70 per cent of the markets into which Australia exports are APEC economies. So it is an important forum, one that after 10 years of activity has produced some concrete results in terms of market openings and strengthening the regional economies within the APEC region. Australia produced a document that outlines the work in progress within APEC and presented that this week. It will be presented at the leaders meeting later this year in Brunei. It identified some very critical elements of what has been achieved by APEC in terms of strengthening and helping those economies to withstand the economic recession that has beset the region in recent years. All those economies are now starting to come out of that recession. Some of the activities and the focus of reforms within APEC have certainly helped those economies. Australia went along chairing the ministerial this week wanting to achieve a couple of outcomes. We wanted an Auckland plus outcome—that is, we wanted to reaffirm the commitment, made by our leaders in Auckland last year, to launch a new round of WTO trade negotiations. I am pleased to report that we did that and there was unanimous support for the statement our leaders made last year pushing the WTO to launch a broadly based round of trade negotiations as soon as possible. Over and above that, we also resolved that we should ask the WTO to start doing some preparatory work on industrial tariffs in advance of the launch of a round. This would mean more preparation would be done not only in the area of agriculture and services and the technical barriers to trade but also in the area of industrial tariffs. That was supported by representatives of the 21 economies. We agreed to establish a moratorium on the establishment of any customs duties on e-commerce between now and whenever a new round of trade negotiations is launched. Again, that is an APEC initiative which we believe should spread across the global trading area. That is a very important measure. The other thing looked at at the ministerial this week, and this was led by Australia, was the focus that we are giving to the use of e-commerce and information technology in facilitating more trade in the region. That was clearly accepted and applauded by our colleagues within the APEC group.The question also asked about alternative policies. I said in this House last week that the Australian Labor Party are going to be challenged by the union movement at their upcoming conference as to whether they stand by the credentials that they have established over the last decade or so. It remains to be seen. We have Doug Cameron still rattling the bushes wanting to roll things back. We have seen the Labor Party move away from a commitment to workplace agreements. We are going to see the Labor Party move away from the agenda of pursuing freer and open trade across the globe. It is going to be an interesting debate on this issue between Senator Cook, the member for Fraser, Doug and Shazza down there in Hobart. It will not just be exporters in Australia who will be watching this debate. A lot of people around the world who you used to do business with when you were in government are waiting to see whether you are going to change colours at this year's conference. We have achieved a very important outcome out of this week's APEC ministerial. It provides the impetus in terms of global trade to get on with the reform agenda. It gives a positive agenda after the failed meeting in Seattle last year. 1745114:55:0017451Crean, Simon, MPMr CREANDT4HothamALP00—My question is directed to the Acting Prime Minister. I refer to the Attorney-General's announcement during question time that the Solicitor-General has today provided legal advice to the effect that the proposed mail-out of GST propaganda using personal details from the Commonwealth electoral roll is unlawful and will not go ahead. Was this advice not provided after receipt of the letters of demand sent this morning by Senators Faulkner and Ray to the Electoral Commissioner and the Commissioner of Taxation demanding that they take this action? Didn't these letters state clearly that legal action would be commenced in the Federal Court tomorrow? Was it not the threat of legal action from the Labor Party that brought this to a head, and only the prospect of being found out by the court has led, belatedly, to the electors' privacy finally being protected? 17452Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—The Labor Party's grandstanding on this issue hides the simple reality that the Prime Minister announced yesterday that he was seeking further advice on the matter. The government has been acting in accordance with legal advice that it has received from the outset, as was done by agencies under Labor for a long time. When the advice changed so did the government's approach. The fact of the matter is that, at all times, proper and appropriate initiatives were used to explain the new tax system—much needed in this country; acknowledged by you in all of your unbelievable rhetoric by the mere fact that you are committed to retaining the tax system. The smoother its introduction, the more satisfactory from the point of view of the Australian economy. The government is, of course, keen to ensure that the transition is smooth. In this case, the Prime Minister made it very plain that we would, at all times, act in accordance with advice given to us. He indicated he was seeking further advice. We got that and we have reacted accordingly. It has nothing to do with the grandstanding of a couple of your senators on this matter. 1745214:58:0017452Baird, Bruce, MPMr BAIRDMP6CookLP10—My question is addressed to the Minister for Sport and Tourism. Can the minister inform the House of the tourism industry's expectations for growth in the coming months? GK6Miss JACKIE KELLY—I thank the member for Cook for his interest in tourism, which is well known in this House. This morning we saw the Olympic torch lit at Uluru. We saw wonderful footage, beamed into the households of Australians, of the rock in the background with Nova Peris-Kneebone running in front of some wonderful Australian scenery. That launches a $1 billion tourism exposure campaign for this country. Yesterday's ABS figures actually confirm that. Australia has recorded its biggest monthly growth in international visitor arrivals in four years—that is, 20 per cent growth in visitor arrivals. We are well on track to doubling our international visitors to this country by 2008. This comes on top of a tremendously successful trade show this year, the ATE, where over $2 billion worth of trade was sold by Australian businesses. We are looking at inbound tourism being worth in excess of $30 billion by 2008. These are the results of hard work and ingenuity shown by the industry and this government, including record funding of $360 million to the Australian Tourist Commission.4K4Anderson, John, MPMr Anderson—How much?GK6Miss JACKIE KELLY—Some $360 million, Deputy Prime Minister. Yet those opposite continue to malign this government for its initiative in reforming an ancient tax act. They have not really learnt from their mistakes. First, we see them scaremongering on newspapers in Bass, and then they start scaremongering on Home Ideas when they have no idea. In fact, survey figures just released by the peak tourism industry body, the Tourism Council of Australia, show that tourism businesses expect significantly stronger performances in sales, profits and employment in the second half of the year 2000, and this is immediately following the introduction of the GST. I am thoroughly optimistic that Australia is in good hands with this government.1745215:01:0017452Crean, Simon, MPMr CREANDT4HothamALP00—My question is again to the Acting Prime Minister. In light of the Solicitor-General's advice, will the Liberal and National parties, not the Australian taxpayers, be paying the costs of the mail-out material that has already been printed and is now about to be pulped, as well as the legal costs of the Commonwealth, as should be the case for this blatantly political action now found to be unlawful as well?17452Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—As per usual, the question is full of false assumptions and premised to be so. As the Attorney-General made clear earlier on, the Solicitor-General takes a view of the Commonwealth Electoral Act, which the government accepts, which indicates that, since 1993, Commonwealth government agencies on that view would have been in breach of the Electoral Act. Commonwealth agencies such as the Australian Taxation Office and the National Crime Authority, under Labor's administration, on that view of the act breached it. More than that, the government has now been advised that it will have to enact either legislation or regulation retrospectively to cure the breaching of the act under the Labor administration by those agencies. If I sound as though I am repudiating all of the assumptions in the question, I have very strong grounds on which to do so. What the government will be doing, as was announced by the Attorney-General on the advice of the Australian Taxation Office, is ensuring that there is a household delivery—that is, the brochure that was being printed will be used for a household delivery. The difference between using the electoral roll, which addresses by name, and a household delivery is that the household delivery is addressed to `Dear householder'. It will be done at a lower cost than the original—DT4Crean, Simon, MPMr Crean—Mr Speaker, I rise on point of order, and it goes to relevance.10000SPEAKER, MrMr SPEAKER—Has the Treasurer concluded his answer?CT4Mr COSTELLO—Yes.DT4Crean, Simon, MP10000SPEAKER, MrMr SPEAKER—Order! The Deputy Leader of the Opposition will resume his seat or be dealt with.1745315:04:0017453Macfarlane, Ian, MPMr IAN MACFARLANEWN6GroomLP10—My question is to the Minister for Forestry and Conservation. Can the minister advise the House of any recent advertising campaigns on matters associated with his portfolio? What is the history behind such advertising? What forest industry positive price movements and effects are expected to arise from the introduction of the new tax system?17453Tuckey, Wilson, MPMr TUCKEYSJ4O'ConnorLPMinister for Forestry and Conservation and Minister Assisting the Prime Minister10—The member for Griffith last night started to speak at some length on advertising in the state of Queensland. It reminded me of some negotiations I have had recently with the Queensland government relative to a regional forest agreement. As the House would know, there is considerable cost in researching the science, the social impact and all the aspects of a regional forest agreement. There was I, on behalf of the taxpayers of the Commonwealth, spending money funding those programs. While I was funding them, what were the Queensland government doing? While their officials were negotiating—themselves believing in good faith—Beattie and Elder were out there putting together a television advertisement and a media campaign to advertise an entirely different outcome from that arrangement.It would have been interesting if that TV and print media advertising contained some advice to the 100 sawmill workers in Cooroy who have been dismissed, as a result of the agreement they were publicising, as to how they might raise and look after their kids on the dole. They could have told them where the local jobs place was. They could have told them where Centrelink was. They could have done all that in the advertisement, but, no. Did they put anything in the advertisement to tell small business in Cooroy how they might handle the reduced turnover that will result from their activities? No, they just had blatant political advertising. Then Mr Beattie got criticised for his energy policy on greenhouse issues. So what did he do? He bought full-page advertisements in the Weekend Australian and the Courier-Mail—and I will table them—telling them all about how he is going to have a new policy based on a gas pipeline that has not even been approved for development yet. Is that giving any special advice to the community about power bills or anything of that nature? Oh, no.But there is another aspect of the costs of this industry and the benefits that will arise at an industry level and on a personal basis from the new tax system. Fuel and transport costs are very significant in the forest products industry, and they will clearly come down. Many of those forest operatives who own their own trucks will be direct beneficiaries. There is another aspect at the personal level. The budget for a typical sawmill family is heavily influenced by the type of work they undertake. As for mechanics and others, it is a dirty job, and they find themselves with their family budgets influenced by such products as washing powder, stain remover, detergents and household cleaners, all of which are now subject to Labor's 22 per cent WST. We never see the Leader of the Opposition or the Deputy Leader of the Opposition bring any household or personal cleaning products in here. In fact, I don't think they ever wash! 10000SPEAKER, MrMr SPEAKER—The Minister for Forestry and Conservation will come back to the question.SJ4Mr TUCKEY—They never talk about the 22 per cent stuff.1745415:08:0017454O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—My question is to the Acting Prime Minister. Acting Prime Minister, are you aware of reported comments by Mr Phillip Geoffrey, the GST Manager of Hassall and Associates, that the GST will have tremendous cash flow implications for farmers who purchase and lease farm machinery, requiring rural industry to pay millions of dollars up-front? Isn't it true that the GST will increase lease costs for farmers and increase their compliance burden? Will you give a guarantee that no farmer will face an increase of 10 per cent in their equipment lease fees because of the GST?17454Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—The entire premise upon which the question was asked makes it quite apparent that the shadow minister for agriculture in Australia does not understand how tax reform will work. He does not understand it. He parades himself around as the farmers' friend, alongside the member for Batman and the member for Hotham. He says that he is the farmers' friend, but he does not understand something as elementary as a rebatable indirect tax system. The reality is that no-one has pushed harder for tax reform in this country than the nation's farm leaders over a very long period of time. They have done so because the current indirect tax system loads up farmers, along with other exporters, with costs all the way along the train. In fact, some $4½ billion of embedded taxes on exporters will be removed under the new tax system. The average savings for an Australian farmer are estimated to be of the order of $8,000 to $10,000. When it comes to the specifics of this question—5I4McMullan, Bob, MPMr McMullan—Mr Speaker, I raise a point of order under standing order 145 on relevance. The question was directly about up-front costs and cash flow implications for farmers, and the Acting Prime Minister has not referred to it yet, probably because he does not understand it, but it is time he said something about it.10000SPEAKER, MrMr SPEAKER—The Manager of Opposition Business is right in that the question was about up-front costs, and I thought they were the issues being addressed by the Acting Prime Minister. 4K4Mr ANDERSON—They are the issues that are being addressed, and I am about to come to the particular matter that he raises. The fact of the matter is, as the Treasurer just said, any GST that might in the first instance be payable is refundable for business expenses. In relation to the issue of leases, quite frankly I think it is insulting to suggest that Australia's farmers, in common with their bankers and people who operate leases, will not be able to find—perfectly legally, perfectly respectably—financial packages that will in fact advantage them fully in terms of the changes to the taxation arrangements that are about to apply. It is as simple as that. Really, in terms of the timing of purchases and the construction of the lease, tailor-made financial packages are the order of the day for farmers today. They will have no problems with this whatsoever.1745415:13:0017454Wakelin, Barry, MPMr WAKELINHV5GreyLP10—My question is to the Minister for Employment Services. Is the minister aware of recent claims that the Job Network is failing at the local level? What is the government's response to these claims?17454Abbott, Tony, MPMr ABBOTTEZ5WarringahLPMinister for Employment Services10—I thank the member for Grey for his question. I am aware of such claims. This week the member for Prospect put out a press release attacking the government because an Employment National office in Fairfield in metropolitan Sydney had recently closed and because there had been a small rise in local unemployment.7T4Crosio, Janice, MPMrs Crosio—It is 11.3. I don't call that small!10000SPEAKER, MrMr SPEAKER—The member for Prospect!EZ5Mr ABBOTT—She said that the government had all but forgotten Fairfield. I want to assure the member for Prospect that Fairfield is very much in my thoughts. Let me tell the member for Prospect that, while there was just one CES office in Fairfield when she was in government, there are now no fewer than eight Job Network sites in Fairfield. There are five Job Network sites offering intensive assistance— Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The member for Prospect is warned.Government members interjecting—10000SPEAKER, MrMr SPEAKER—For the information of those on my right who want to question the Speaker's ruling, the member for Prospect has not as yet been warned. I have warned her now.EZ5Mr ABBOTT—There are five Job Network members in Fairfield offering intensive assistance as well as other services including the Adult Multicultural Education Service, Centacare, Mission Australia and Wesley Employment. If you take the Fairfield-Liverpool statistical region, unemployment peaked there at 22.2 per cent in October 1992 when the Leader of the Opposition was minister for employment. It was 20 per cent in December 1995 when the Deputy Leader of the Opposition was minister for employment. It was 16.4 per cent in March 1996 when the coalition took office, and it is currently 8.5 per cent. It is still far too high, but the member for Prospect should give credit where it is due. She says that Fairfield needs `jobs not words'. She is absolutely right and all it is getting from the local member is hot air and all it is getting from the local Labor Party is the union bloc vote, the socialisation clause and rampant ethnic branch stacking. I suggest to the member for Prospect that, while she has given worthy service to her community, if this is the best she can do she ought to go back to polishing her MBE and offer preselection to Jennie George so that yet another ACTU boss can treat the parliament as a retirement home.1745515:16:0017455Ferguson, Martin, MPMr MARTIN FERGUSONLS4BatmanALP00—My question is to the Acting Prime Minister and Minister for Transport and Regional Services. Minister, isn't it a fact that the number of single voyage permits issued to foreign ships in Australia has increased from 421 to 704 since 1996 and that, between March 1996 and April 1999, 263 foreign seafarers jumped ship in Australia of which only 148 were caught? Minister, why are foreign ship operators not financially accountable for these illegal entries whilst airlines are? Minister, why are you spending millions keeping illegal immigrants out of Australia in the north but running a coastal shipping industry policy which allows more and more of them in and around the rest of Australia?CT4Costello, Peter, MPMr Costello—MUA.17455Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—Not only friends of the bushies but friends of the MUA. I know it has escaped those opposite, but we are an exporting nation. A lot of Australian jobs, a lot of Australian prosperity depends upon our export performance. They were the masters at exporting Australian jobs, particularly in primary industries. But the fact is that we have been prepared to push ahead with sensible and meaningful reform on our waterfront, and we have also been prepared to pursue shipping reform. In accordance with the Navigation Act 1912, single voyage permits in this country are issued where there is no suitable licensed ship available and it is considered to be in the public interest that an unlicensed ship be allowed to engage in coastal movements of domestic freight. This represents a balance between providing a preference for licensed ships and the commercial needs of Australian shippers moving cargo interstate. There are a number of matters here that are currently before the courts which I do not intend to expound upon at this point in time.LS4Ferguson, Martin, MPMr Martin Ferguson—Mr Speaker, my point of order goes to relevance. The question is about this government fostering the illegal entry of seafarers and the ship owners not being accountable for the costs of removing them from Australia. 10000SPEAKER, MrMr SPEAKER—The member for Batman does not have a licence to repeat the question. The Acting Prime Minister will come to the question.4K4Mr ANDERSON—In relation to that particular point, I can only say that if there is some sort of suggestion here that you have evidence of illegal behaviour that I am not aware of I would like to see it. 1745615:19:0017456Draper, Trish, MPMrs DRAPER0L6MakinLP10—My question is to the Minister for Veterans' Affairs. Can the minister inform the House of initiatives taken by the government in response to the findings of the Vietnam Veterans Health Study? How will these initiatives assist Vietnam veterans and their families throughout Australia and in my own electorate of Makin? 17456Scott, Bruce, MPMr BRUCE SCOTTYT4MaranoaNPMinister for Veterans' Affairs and Minister Assisting the Minister for Defence10—Firstly, I thank the member for Makin for her question and I also thank her for the opportunity, on her invitation, to visit her electorate of Makin. Whilst I was there I saw the very close relationship that she has with the veteran community. I was also rather saddened to see where the Kokoda Walkway, which is an Australia Remembers program, has been vandalised for the second time. It saddened me to think there are people in our community who would vandalise walkways and memorials that have been put there for very good reasons. My Department of Veterans' Affairs has had a very long history of caring for our veterans. In fact, I think they do a superb job. However, the Vietnam Veterans Health Study, which was funded by this government, has found that the families of Vietnam veterans have suffered as a result of the veterans' war service. The government's response to this was to provide $32.3 million, which was set aside in the budget, to increase support for Vietnam veterans and their families through a range of health, lifestyle and counselling services and also other programs. Some of those initiatives are: the automatic access to treatment for Vietnam veterans diagnosed with clinical depression or severe anxiety disorders; also, for the very first time, there will now be lifetime care for Vietnam veterans' children with spina bifida and cleft palate—and $2.8 million over the next four years has been provided for that. Further to that there will be free psychiatric assessment of Vietnam veterans' partners and their adult children and also there will be the extension of counselling through the excellent service that is provided by the Vietnam Veterans Counselling Service and, importantly, that will be available to ex-partners of veterans who have lived with a veteran within the past five years, acknowledging that many families have split up because of the problems that the veterans suffer from. So we have acknowledged that in our response as well.There will be more than 100 additional Vietnam veterans counselling services, lifestyle and psycho-educational therapy group programs to veterans, partners and, importantly, their children. There will be an extension of access to the Veterans' Children Education Scheme for children assessed as being at risk of suicide. There will be new bursaries to assist financially disadvantaged students in making a transition into tertiary study. We will be providing some health information kits and additional funding for research. We will also be expanding the National Centre for War Related PTSD, which helps not only Vietnam veterans but all veterans of war and conflict, and it also helps their families.Subject to the successful passage of these measures, I hope that we can get these in place by 1 July this year. I certainly look forward to the opposition's support when those measures come forward prior to 30 June. I thank the member for Makin for her question because it was a very important one about a response to the health needs of Vietnam veterans and their children.4K4AndersonMr Anderson—Mr Speaker, I ask that further questions be placed on the Notice Paper.LS4Ferguson, Martin, MPMr Martin Ferguson—Mr Speaker, I raise a point of order. The acting Prime Minister asked me to bring to the attention of the parliament evidence relating to the illegal entry of seafarers. I seek leave to table the answer to Senate question No. 1177, which concerns this matter and clearly establishes the figures.Leave not granted.Questions to the Speaker174561745615:24:0017456McMullan, Bob, MPMr McMULLAN5I4FraserALP00—I would like to raise two questions concerning procedures during question time. I ask you to consider them and report back to the House with your response. I refer to page 505 of House of Representatives Practice. They both relate to questions which were asked of the acting Prime Minister and answered by other ministers. SE4Bishop, Bronwyn, MPMrs Bronwyn Bishop—Put that finger down!5I4Mr McMULLAN—Your fascination with my finger is quite unseemly! The first relates to the situation—and it is not covered by the standing orders—where the person in the chair is Acting Prime Minister and, therefore, also a minister with a portfolio responsibility. Can the Acting Prime Minister refer to another minister a question that is within their portfolio?Government members interjecting—5I4Mr McMULLAN—I am entitled to seek your ruling on this matter, surely Mr Speaker.10000SPEAKER, MrMr SPEAKER—Of course the Manager of Opposition Business is entitled to seek my ruling and I was giving him my undivided attention. WI4Reith, Peter, MPMr Reith—Mr Speaker, on a point of order: the standing orders do not provide an opportunity for the Manager of Opposition Business, under the guise of a question, to contest a matter which was the subject of your ruling during question time.10000SPEAKER, MrMr SPEAKER—I call the Manager of Opposition Business.5I4Mr McMULLAN—The second matter relates to a question that was asked by the Acting Leader of the Opposition of the Acting Prime Minister concerning the costs of material which had been printed and subsequently pulped. That was then answered by the Treasurer. This is also a matter which is not covered by the material on page 505. I ask for your interpretation of this and your subsequent advice to the House. You might need to check the videotape to ascertain the facts. Is it necessary for there to be some reference of the question by the Prime Minister or the Acting Prime Minister to another minister, or can that minister just assume that they have the right to answer the question? Today there was no sign to anybody that the Acting Prime Minister had asked the Treasurer to answer the question or that the Treasurer had in any way checked whether the Acting Prime Minister wanted him to do so. I ask you to check those two matters because they are not covered by House of Representatives Practice. I think this is the first time these matters have been raised, and I seek your advice on them to the House.SJ4Tuckey, Wilson, MPMr Tuckey—Mr Speaker, on a point of order: I wish to draw to your attention that, firstly, your ruling has already been given on this and, secondly, the of Opposition Business has drawn to the attention of the House and repeated a statement that something had been pulped—something that the Treasurer has already denied. I draw your attention to standing order 144:The following general rule shall apply to questions:Questions cannot be debated.Questions should not contain—(a) statements of facts or names of persons unless they are strictly necessary to render the question intelligible and can be authenticated.The reason I take this opportunity is to draw to your attention the number of times that the breach of that particular standing order creates circumstances which, in a Goebbelistic way, they are now trying to force to be the truth.17457SPEAKER, MrMr SPEAKER10000PON/A10—The Manager of Opposition Business has raised a point of order and is not now, as he must be aware, facilitating the chair, nor is he being assisted by his colleague the member for Melbourne. As the occupier of the chair, I thought the rulings given on both matters raised by the Manager of Opposition Business were entirely consistent with the standing orders. I will obviously check page 505 of House of Representatives Practice and view the videotape. If, in fact, the rulings are not consistent with what has been the practice of the House, I will in that instance report back to the House. I should add that I think it almost inconceivable that there would ever be an occasion where a minister has risen to answer a question without being invited to do so by the Prime Minister or Acting Prime Minister, as the case may be. I do not therefore believe that matter requires any further investigation.Privilege1745815:30:0017458Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—Mr Speaker, pursuant to standing order 95, I draw to your attention reports of polling in the Hume electorate by the New South Wales division of the Liberal Party. According to the member for Hume, questions are being asked of voters intended to besmirch his reputation and include whether voters would support Mr Schultz if he ran as an independent candidate should the Minister for Finance and Administration take over Liberal endorsement in Hume.10000SPEAKER, MrMr SPEAKER—Is the member for Wills raising a matter of privilege?UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Yes, Mr Speaker. I am aware that normal practice is that members raise their own privilege issues rather than have others do it for them, and I am also aware that this is not the first available opportunity to raise the matter. But the fact is that the member for Hume has not been in the chamber at question time—or, indeed, at any other time, to the best of my knowledge—since the report appeared, so I am concerned that Mr Schultz may be being impeded in the performance of his duties.10000SPEAKER, MrMr SPEAKER—The member for Wills will resume his seat! The member for Wills is treating one of the most serious platforms of this House—privilege—with contempt. Questions to the Speaker174581745815:31:0017458Zahra, Christian, MPMr ZAHRA84HMcMillanALP00—I have a question to you, Mr Speaker. It is a requirement of this place, Mr Speaker, that when a member raises a matter with you he raises a point of order. You have required this of the member for Griffith previously, and have been quite insistent about him stating clearly what point of order he is raising in order to get the call. Before, the Minister for Forestry and Conservation, after the Manager of Opposition Business had made a point, strode up to the microphone before he was given the call by you.17458SPEAKER, MrMr SPEAKER10000PON/A10—The member for McMillan raises a matter that was dealt with, if he checks the Hansard, in a comment that I made earlier this week following an appropriate, recognised interjection from the member for Griffith.Documents1745817458Reith, 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 paper:Government response to the Joint Select Committee on the Retailing Sector - Fair Market or Market Failure.Debate (on motion by Mr McMullan) adjourned.Adjournment17458Motion (by Mr Reith) agreed to:That the House, at its rising, adjourn until Monday, 19 June 2000, at 12.30 p.m., unless the Speaker or, in the event of the Speaker being unavailable, the Deputy Speaker, fixes an alternative day or hour of meeting.DT4Crean, Simon, MP10000SPEAKER, MrMr SPEAKER—I am not being assisted by the Acting Leader of the Opposition.YU5Tanner, Lindsay, MP10000SPEAKER, MrMr SPEAKER—The member for Melbourne is warned!Matters of Public Importance174581745810000SPEAKER, MrMr SPEAKER—I have received a letter from the honourable member for Corio proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the government to stand up for Australians living in rural and regional areasI 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—NaN:00:0017458O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—Doesn't this ramshackle government accept any responsibility for anything anymore? They will not accept responsibility for the GST. The Treasurer has been out in the public ether saying that this is a states' tax, and here today in the parliament we had the Minister for Agriculture, Fisheries and Forestry denying responsibility for the situation in the dairy industry and for dairy deregulation. Indeed, the government have given up on dairy deregulation and now they want country Labor in New South Wales to fix it. Over the past four years of this coalition government we have witnessed one of the most comprehensive betrayals and deceit of rural and regional Australia in our post-war history. First came the deceit over the sale of the first tranche of Telstra. The minister for agriculture will understand that the Prime Minister made a promise to rural and regional Australia that he would not sell Telstra, and he did. Then we had the great fuel hoax—the extravagant claims made by members opposite of the benefits to farmers of the proposed changes to fuel excise arrangements. Now we have the greatest betrayal of them all: the betrayal of the GST—Costello's curse on Australian farmers and their families. Never have we witnessed such arrogant and blatant deceit as we have with the introduction of the GST as far as farmers and their families are concerned. The saga of the GST's gestation and its eventual introduction is indeed one of betrayal and deceit—betrayal by a National Party leader and a Deputy Prime Minister who has long surrendered any claim to represent rural and regional Australia, and deceit by an arrogant, urban Liberal Treasurer who cleverly has put into the public ether that there will be enduring benefits for farmers in the GST. The first great deceit came from the Prime Minister, because he was the one who said to rural Australia that he would never ever introduce the GST. Prime Minister, there is one thing you do not do with farmers: you never break such a solemn promise made in such emphatic language. They never forgive, nor do they forget.But the grand deception is much more subtle than that: it resides in the inference that the economic benefits you claim for agricultural exporters will flow to every farmer, even though you know there are thousands of them who do not even export their produce; it resides in your demonisation of the wholesale sales tax, when you know that many farmers do not pay it, and never have, on many of their inputs; it resides in the way you have overstated the benefits of a compensation package to many farmers who will not benefit from it simply because they do not earn an income and they have negative incomes; it resides in the fact that you know the regressive nature of this tax, and that is why we have a compensation package, yet you foisted it on rural dwellers, who traditionally earn less than their city counterparts but pay more for their living essentials; and it resides in the exaggerated claims you have made on the effects of the fuel excise arrangements on prices in rural areas. This great economic reform—the one the Treasurer described as `snake oil' and said its introduction with exemptions would create a `nightmare on Main Street'—is now about to become Costello's curse on farmers and rural communities. It is now a nightmare down on the farm.No more apparent is this great betrayal and deceit of rural Australia than in the budget that has just been produced by the Treasurer. This budget brings home the GST for the government. But, as the shadow Treasurer has said, there are more fiddles in this one than there are fiddlers at the Tamworth Country Music Festival. The most insidious impact, and the one the government will not talk about, is the adverse impact that the GST is going to have on farm costs. Members will recall that the government came to the farming community of Australia and said that inflation was going to rise by 1.9 per cent, yet we know from the budget documents that in the September and December quarter, according to the government's own estimate, the inflation rate is going to be cranked up in the region of 6.75 per cent. It is a matter of history that the Liberal Party left Labor in 1983 with an inflation rate in excess of 10 per cent.84HZahra, Christian, MPMr Zahra—Who was the Treasurer?WU5O'Connor, Gavan, MPMr O'CONNOR—Double-digit inflation rate, compliments of the current Prime Minister. It took Labor 13 solid years to cut the inflation cancer right out of the Australian economic system. Now we have a budget—compliments of the Liberal and National parties—that is going to deliberately ramp up inflation and impact heavily on farm costs. Do not pretend that farmers do not know that those farm costs are there. But it is not the only cost in the farm sector that is going to occur as a result of the introduction of the GST. We have already seen interest rates rise by 1.25 per cent. According to the Deputy Prime Minister's own estimate in 1996 figures this has already added $112 million to farm costs. If we look at the compliance costs alone for farmers, we see that the 145,000 farm businesses throughout the length and breadth of Australia are going to have to front with the compliance costs, and that is going to cost the sector in the region of $500 million to $700 million. But it is not just the cost; it is the confusion that has been brought by this GST. The minister has published a guide to farmers on how they might cope with assessing the GST liability on sales. Members, I think you had better have a listen to this one, because it is really as clear as the mud at the bottom of the farm dam. This is what it has to say:Mostly it is not whether or not they are GST that is affected, but the timing of when you pay the GST, whether or not you or someone else pay it, who issues the invoice, how much GST you pay, whether it is added to the price, when it is added to the price, and similar issues.Minister, how do you expect a cane farmer who has suffered three cyclones, poor crops and depressed world prices and who is racing against time to complete a harvest to unravel the simplicity of your GST? This one is a real nightmare down on the farm. But let me tell you, Mr Deputy Speaker, the greatest obscenity of the GST lies in the $431 million in advertising that the government is pushing down the throats of farmers. For those farmers it is not a case of `unchain my heart'; it is a case of `unchain my arm', and `give me the political baseball bat and let me wait for the next election,' because in Australia's rural sector they are waiting out there for the National Party, and they are going to wreak a real vengeance on them. But what did honourable members opposite have to say about this extravagant waste of $431 million? The Liberal member for Kalgoorlie said this:That sort of money is not going to make a huge difference to my population living in the electorate of Kalgoorlie ...I can tell the honourable member we will have that statement in every household in Kalgoorlie by the time you call the next election. It could have been spent on 90,000 apprentices. It could have been spent on 1,200 extra public hospital beds. It could have been spent on a whole range of areas. I will give you the latest GST score. I will give it to you, because it is pretty simple: the city slickers, the advertising agents, get $431 million; Joe Cocker—`unchain my heart'—gets $270,000; and Australian farmers get $200. They get $200 to assist them to introduce the GST.The National Party is in disarray all over Australia. In the state of Victoria, now the jewel in Labor's crown, we see the National Party's vote down to about five per cent. Mr Deputy Speaker, I can tell you what the National Party's slogan will be at the next election: `We care for rural Australia'. I will tell you how much they care. I will tell you the location of the offices of Labor Party Senators: Senator Sue West—Bathurst, New South Wales; Kerry O'Brien—Launceston, Tasmania; Jan McLucas—Cairns, Queensland; Peter Cook—Kalgoorlie, WA; Nick Sherry—Davenport, Tasmania; Kay Denman—Ulverstone, Tasmania; and Shayne Murphy—Launceston, Tasmania. They are all in rural and regional areas. You might ask where the National Party situate their senatorial offices. Mr Deputy Speaker and comrades, I know you are waiting to hear this—they are there looking after the farmers. Senator McGauran has his office located at 17 Collins Street, Melbourne. He is looking after the Collins Street farmers. Of course, where is the office of that elder statesman of the National Party, Senator Boswell—what a wonderful fellow he is: he has a deep and abiding concern for farmers in Queensland—located? It is on the 36th floor of Waterfront Place in Brisbane. He has taken the 36th floor so he can get a bird's eye view of the cane harvesters moving around the inner city suburbs of Brisbane. That is the National Party's concern for rural and regional Australia.I can tell the Deputy Prime Minister—and I will give him some comfort here—he is not the only one on the nose out there in rural and regional Australia. The Treasurer is well and truly on the nose as well, so he has got good company. And there is a very good reason. It goes back to 1998 when the El Nino effect caused havoc for farmers across the length and breadth of Australia. He said there was no need to get too pessimistic about the El Nino effect—which can produce drought in Australia, reducing agricultural output— because it would have a minimal effect on GDP growth. He said, `Farm product, however, is not a huge part of GDP.' We all know what he had to say about farm workers, and I do not have to mention that here. This deep-seated contempt by the Liberal Party for rural and regional Australia does not just end there. You will be interested to know what the honourable member for Parramatta, a Liberal member, had to say. He said:... bushies with no future should be urged into something more productive.This is what he had to say on access to services:Well, I think they do get, in terms of world standard, they do get reasonable access. The question is, my point was, if you want to live 500 km from the nearest major city you will not have a 5-star teaching hospital on the corner.Yes, they demand it! Rural and regional Australians demand the same level of service that is available to people in urban environments. The National Party has betrayed farmers and rural communities. With the GST, the Liberal Party has perpetrated the greatest deceit we have seen on the farm sector of Australia. They are waiting out there for you with their baseball bats. They cannot wait for the next election when you will get your just deserts. (Time expired)15:49:0017461Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—I have to say right at the outset that I am overcome by the audacity and the hypocrisy of Labor coming into this place on a matter of public importance seeking to criticise this government on issues of regional development. The Labor Party, after all, cannot even find a regional spokesman. They cannot find anyone who even wants the job. It is too tough for the honourable member for Dickson, who is way out in the regions, in the suburbs of Brisbane, and now it has gone down to the honourable member for Batman—hardly the epitome of country Australia. When it came to probably the first matter of public importance on regional issues since this government came to office, he is nowhere to be seen either. He is sitting quietly on the back bench like a good union official, getting the troops to do the job by trying to find a spokesman for agriculture who could not run far enough away and therefore got lumbered with proposing this matter of public importance. There is no regional development spokesman, let alone anyone who is prepared to put forward a credible case. The hypocrisy of Labor to suggest that, somehow or other, this government has not performed well in comparison with their own record in government! They are going to remind us of their record on interest rates. The shadow minister for agriculture was very keen to raise interest rates. I would have thought that would be the last subject he would want to be talking about in the context of a matter of public importance. He is Mr Twenty-three Per Cent—23 per cent is what farmers were paying last time Labor was in office. In fact, interest rates are now the lowest they have been since man walked on the moon. There has been a real change—$204 a month in average savings to farmers just on interest rates because of a change of government. That is so typical of the contrast between the performance of Labor when they were last in government and what happens when there are parties that really care about all of Australia, who really care about areas outside the capital cities. I thought it was really quite extraordinary that the member for Corio, the spokesman for agriculture, whose office is no doubt within sight of the lights of central Melbourne, should be criticising—VH4McArthur, Stewart, MPMr McArthur—No. It looks over the bay at Geelong!GT4Truss, Warren, MPMr TRUSS—It looks over the bay at Geelong, but I think if you look across the bay you can see Melbourne without too much trouble. It is within sight of the lights of Melbourne. His regional affairs spokesman is even closer to the centre of Melbourne. Yet he criticises this side of the House for the location of offices. They could not find a backbench member with an office in a country town. All they could do was look around for a couple of senators, who in many cases have a shell of an office in a place outside a capital city but who are rarely seen there. They are like the former shadow minister for regional development, who is rarely seen in regional Brisbane, let alone in the rest of Australia. It just got too tough to get all the way out to the western suburbs of Brisbane, so she gave the job away, and we then got somebody with a real heart for country Australia, an ex-ACTU union boss. We were told the other day in this House that the real measure of a successful day, according to this ex-ACTU union boss, is how many workplaces are closed down, how many strikes are closing down development and how many strikes are closing down the movement of products from regional Australia to the cities. That is the objective of the ACTU. That is the objective of Labor. Their measure of success is how little is done in the country and how little is achieved for rural and regional Australia. This is the party with nothing to talk about and with no record of achievement in rural and regional Australia. This is the party who failed in 13 years in office to stand up for Australians living in rural and regional areas. There is indeed a party that deserves censure for its failure to stand up for Australians living in rural and regional Australia, and its name is Labor. Its name is Country Labor—or whatever Labor it might be. It might be New Labor. It does not make any difference. All of them have failed to stand up for Australians. Even though there is no-one in the party who could care in the least about rural and regional Australia, they have their own offshoot—somebody who calls themselves Country Labor. Whatever the difference may be from the rest of the mob, they certainly have no influence when it really counts. They are out there making press statements now about the dairy industry, but they are not able to persuade even the Minister for Agriculture in New South Wales about what the situation should be. They cannot do anything. They cannot even achieve results within their own state Labor government, and no-one expects them to deliver anything at the national level.The reality is that, under Labor, rural and regional affairs was something to be pushed aside, something to be forgotten about. You have only to look at Labor's record in government to know what sort of priority they gave to activities outside of the capital cities. Mr Deputy Speaker, you may be interested to know and perhaps the members opposite might also be interested to know—because they obviously have very short memories—that, in Labor's last four years in government, the average amount spent on regional affairs programs was just $40 million. Now let me think about how much there is for new programs for rural and regional Australia in this budget, the most significant budget for regional Australia in a generation. There is $1.8 billion of new initiatives for regional Australia.UU5Horne, Bob, MPMr Horne—Over how many years?GT4Truss, Warren, MPMr TRUSS—There is $1.8 million over four years in new programs—10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Order! The minister will resume his seat. The chair has two things to say. The level of conversation on the right of the chair is far too high, and if the member for Paterson wishes to be the second speaker for his side and stay in the chamber he will be silent.GT4Truss, Warren, MPMr TRUSS—Thank you, Mr Deputy Speaker. Now that I know who the second speaker is going to be, I note the fact that the shadow minister for regional affairs is not even going to second this MPI, which shows how little interest the frontbench of the Labor Party actually have in rural and regional affairs. It has been passed off to one of the backbenchers to make some kind of comment about a token commitment to rural and regional Australia. But I was trying to compare the miserable performance of Labor in government. It is very hard to do that because Labor's performance in government for rural and regional Australia was so close to non-existent that it was almost invisible. I contrast that with the $1.8 billion of new programs included in this budget to assist regional areas.There is a lot of work to be done in rural and regional Australia. There are a lot of things to be done. Thirteen years of Labor neglect and positive antagonism towards people who live outside the capital cities have paid a serious toll, with the closure of services in rural and regional Australia. There have been closed railway lines, schools and that sort of thing, as well as, at the federal level, Labor's determination to get rid of the kinds of services that country people take for granted—for example, 260 post offices gone. There is an unwillingness to address issues associated with rural infrastructure. That neglect has built up over time, and it is going to take a lot to return to the standards that country people expect. But a $1.8 billion commitment is a good start. There is more than $500 million in the field of health. If you ask country people about the area where they feel their services are most neglected, they will say that it is in the area of adequate health services. It is a tragedy the way in which Country Labor has been closing down country hospitals. In New South Wales, there has been a complete unwillingness to address the demands of regional people for adequate and appropriate hospital services. We now have $500 million worth of new programs, money to encourage GPs to stay in the country, money to encourage other medical professionals to locate and provide services outside of the capital cities, money to encourage young country people to study medicine, money to provide scholarships so that special places are provided to those who are prepared to commit to serving in a rural or regional area, the establishment of nine new clinical schools in country areas and 85 new regional health services—the sorts of thing Labor would never have thought of because they could never care about regional Australia. Now we have a $500 million initiative to do something about regional health.I call upon members opposite who have influence with the Labor governments of Queensland, New South Wales, Victoria and Tasmania to give an undertaking that they will not further cut back health services in regional areas because the Commonwealth is providing these new initiatives. It so often happens that, when the Commonwealth puts forward moneys, states withdraw their efforts, particularly when it comes to regional areas. When it comes to country areas, the New South Wales government, dominated by its expenditure on the Olympics and self-aggrandisement in the city of Sydney, quickly forgets about the needs of regional Australia.But it is not just there. There are significant new measures to support families. Over half of the $250 million programs for families will support people in the bush. There is $130 million for new education programs to get rid of something country people have protested about for decades—the fact that assets tests often preclude their children getting a proper education, particularly at university. The assets test denies country people the opportunity to a fair chance at a university education.We often hear members opposite claiming to be concerned about social justice, but in government they allowed a situation to develop where a country young person had only one-third the chance of getting a university degree that somebody who lived in the city had. All those warm inner-glow, hand-on-the-heart people opposite who think they care and who are into these sorts of social justice issues allowed that sort of injustice to arise. We in government are addressing that not only by providing support for regional universities but also by making it easier for country students to get a place in university and to then meet the costs where they have to move to a capital city or to a regional centre.From my own portfolio's perspective, another significant feature of this budget is over $340 million worth of new expenditure on agriculture—measures to support farmers in times of difficulty and the new farm health program. That is $340 million of new expenditure, and this is on top of continuing programs like the farm equalisation deposit scheme and on top of the regional programs. They are all being continued. There is another $340-plus million on these sorts of expenditures. There is a new farm innovation program to help farmers with good ideas to put them into practice to make sure that Australian agriculture keeps up with the pace.That is so important in this competitive environment, particularly since—as I mentioned in the House a few days ago—Labor tied the hands of Australian farmers when it comes to international trade. They signed up to a world trade agreement, a GATT agreement, that significantly disadvantaged Australian farmers. They signed up to a deal that enabled the US government to provide massive subsidies to American farmers without penalty. It allowed European farmers to receive massive subsidies without penalty, but the moment Australia provides a relatively small level of assistance to farmers it runs the risk of sanctions under the WTO. That is the way Labor looked after agriculture. That is the way Labor looked after rural Australia. When they closed post offices, when they showed a total disregard for infrastructure, when they slashed road funding and when, time after time, they assaulted the capacity of rural and regional Australia to participate effectively in the national economy, they were demonstrating how much they really cared about the bush and how much they really cared about people who live outside the capital cities. Now they are asking us to believe they have actually changed. Now they are asking us to believe that they are new Labor, Country Labor or something else and that the ex-president of the ACTU will lead a new revival for regional Australia—the man who does not want the job, who took it because somebody else threw it away and who does not even have the courage to stand up on an MPI motivated by Labor themselves and to come to the dispatch box to support this initiative. That is how sincere Labor are about rural and regional Australia. They cannot find a spokesman. When they find one, he will not show when the time occurs. It is too comfortable in the middle of Melbourne enjoying the sights to do anything about standing up for rural and regional Australia. The government's record stands in marked contrast with that of Labor, and we will do even more in years ahead.16:04:0017464Horne, Bob, MPMr HORNEUU5PatersonALP00—If that is the best the Minister for Agriculture, Fisheries and Forestry can do, there is no doubt—as his leader said—a leopard does not change its spots. The minister has just wasted a golden opportunity to tell the people of Australia exactly what the government have done. He could have been positive; he was not. He spent the vast majority of his speech attacking Labor and claiming that we have done nothing. Before I go on to look at his record, let me say that yesterday during question time I had an attack of deja vu when the Prime Minister said:If my memory serves me correctly, I was out of the country on that Sunday night two weeks ago, so I was denied the pleasure of seeing that particular program.Here is an alibi. I have a vision of next August. We are back in parliament two months after the GST's implementation. I know the Prime Minister is going to get some questions on the GST, and what is he going to say? `I'm sorry, I was out of the country. Don't blame me.' That is going to be the alibi of the Prime Minister. When anything major is implemented, the Prime Minister will be out of the country.Rumour has it that he will be promoting the GST while he is in London on his junket. I have heard—and from a pretty good source—that he will be wearing a T-shirt that says `GST', but when you have a look at the small print it says `great southern tourist'. He will be wearing it only if he can get them out of Fiji, because his brother transported the jobs to Fiji after he closed down National Textiles. George Speight is after them. He has heard there is a container of these T-shirts there, and he is after them because he wants them for the George Speight team.When we talk about the performance of this government, where do we start? Only today we were debating taxation legislation. On Monday, I went down to the bills office and I got the explanatory memorandum. I came in here to debate a few points today and what do we find? Another 66 amendments slapped on the table today. We were given an hour to debate them and then the government guillotined the debate. The shame of it is that all of those amendments relate to small business people. Farmers like me are small business people and we have to adjust to them. Three weeks and one day before this tax will be implemented, we are experiencing a government that is so heartless that it is putting amendments on the table that business has to respond to.I know the minister has left the chamber and that is a shame, because while the minister has been beating his chest and saying what he has done the unemployment figures in Hervey Bay, in his own electorate, have come to my notice. They have increased from 11.4 per cent to 16.5 per cent in the past year—I will repeat that: 11.4 per cent to 16.5 per cent in the last year—while in Maryborough they have increased from 7.7 per cent to 12.4 per cent in the same time. Who is the local member? The Hon. Warren Truss, the Minister for Agriculture, Fisheries and Forestry. The minister could have come in here and been honest with the people of Australia and talked about the record in his own electorate. But did he? Not one word, because he knew how it would condemn him. Let us talk about a few other issues. I do not want the House to take my word, because I realise that is not considered to be objective, so let us go to a newspaper that is not renowned for being a supporter of this side. This quote was taken out of The Land,from the J.B. Fairfax press:As I write this the Australian dollar is worth less than US60 cents. In June, 1996—and that is relevant because that is the first June that John Howard was Prime Minister of this country—it was worth $US79c.In four years of Coalition “management”, we have lost 25 per cent of our purchasing power on the international market. In the same time, we have increased our external debt from $175 billion to $250 billion.As a matter of fact, last week it rose even higher; it is now the highest we have ever seen. The article continued:In 1978, I wrote a letter to The Land suggesting the Fraser Government was the worst since Federation.Malcolm Fraser can now relax—his team has been surpassed in incompetence.That was from John Carter in The Land, hardly a friend of the unionised work force of Australia. I could go on to last week's Land where an article has the headline, `Our first GST “casualty”: Coonamble abattoir a costs victim'. I would just like to remind the House of where the town of Coonamble is. Guess who has the town of Coonamble in his electorate? The Deputy Prime Minister, the Hon. John Anderson, is the member who represents Coonamble. What is happening in Coonamble? An abattoir is going to close. Why? Is it an industrial relations problem? Is it a lack of cattle? I can tell you it is neither of those. The industry calculates it will need to raise more than $350 million to provide the revolving credit pool needed to meet GST requirements—all for no gain to it or even to the government. The GST to primary producers means that this pool of funding that is going to go around will cost 50 jobs in Coonamble and cause the closure of an abattoir. The tragedy of that to the beef producers of Coonamble is that that abattoir buys about 25 per cent of the stock at the weekly sale at Coonamble. You can imagine what taking out a major buyer in that market will do to the prices of livestock.Of course, you can come closer to home, to the Canberra Times. An article in yesterday's paper stated that a local grazier, Tom Allen, had attended a GST seminar and he was talking about the effect the GST will have on the price of his cattle, that it will force them down. Even today, during the taxation debate, the minister at the table could not tell me how the sale of cattle would be affected by the GST. He did not know that, at the fall of the hammer, the vendor could determine that the GST price was included or it had to be added on or, if you are a hobby farmer and you do not produce enough and you have not got an ABN, there will be no GST on your cattle. The whole point is that you can have three identical pens of cattle treated three separate ways by GST, and this government is saying, `We expect the people of rural Australia to understand that.'The piece de resistance of the National Party has been transport. It was always going to be the area that would deliver cheaper prices with the cheaper transport of goods—I think the minister said $1.4 billion. I have 1,300 signatures here from truck owner-operators and their families, friends and supporters calling for a four-point plan to make sure our transport industry survives. They know that they will get a 23c or 24c a litre rebate on their diesel. When they get that rebate, it will take prices back to those they were paying about 18 months ago—and they are supposed to be grateful. But the point is that they are being told by organisations like Toll and K&S that they have to drop their prices. They know that, if they drop their prices, they go out backwards. The Deputy Prime Minister stood in this House only last week and said, `I will talk to them, but I will not guarantee a minimum price for their services.' Unless this government is prepared to listen to that four-point plan, we will have no transport industry. I can tell you: this country will then get no goods into or out of rural or regional areas. We could go on and talk about the tourism industry and the fact that if you are holidaying in Australia you pay a GST. If you want to go to New York or Paris, it is GST free. We can talk about the $8.3 million. We hear about the roads and we hear about the bridges, but what is the government doing about that? Nothing. (Time expired)16:14:0017466Haase, Barry, MPMr HAASE84TKalgoorlieLP10—I appreciate the opportunity to stand today in defence of a government that in this situation needs absolutely no defence. I believe that one of the primary reasons for this MPI being brought on today—I am rather proud of the situation—is a very truthful comment I made to the media last week about my having the opportunity to decide whether or not to spend part of $500 million on the electorate of Kalgoorlie. I believe that it has been alluded to today that I was confronted with the situation of possibly being asked by the PM, `Well, Barry, would you like this half a billion spent in the electorate of Kalgoorlie, or would you rather that we spend it on the education of the Australian population for the introduction of the GST?' Let me assure the House that no such occurrence took place. It is my very firm belief, my very fervently held belief, that that $½ billion is being exceptionally well spent in preparing the people of Australia for the greatest change we have seen in the collection of taxation in this nation in the 100 years of federation. To suggest, as the ALP does, that the Australian population should on 1 July suddenly be subjected, out of the blue, to a new system of taxation that will see an equitable distribution of responsibility for funding the welfare purse is absolutely ludicrous. The majority of the $½ billion that was budgeted—in advance of the last federal election, I might add—to educate the people of Australia for the introduction of taxation change has been spent by peak bodies in educating their particular industries and other interest groups. There is a long list totalling nearly $2 million. That list includes organisations like the Australian Council of Trade Unions; it includes religious groups, sport and recreation groups, education peak bodies, construction peak bodies and commerce and manufacturing peak bodies. The list goes on and on. These are legitimate peak bodies who have taken on the responsibility to educate their particular areas of activity in handling the introduction of a new system of tax, an equitable system of tax—the greatest change in tax that we have seen in the last 100 years. The ACTU, amongst other unions groups, has received considerable funding for the education of its members.What is more, the ALP would have us believe today that it truly, by name change alone—by simply changing its title—is interested in representing the bush. What a lot of nonsense. A snake is a snake is a snake by any name—and its bite is poisonous. The member for Corio would have us believe that our people in the bush have long memories. People in the bush do indeed have long memories.UU5Horne, Bob, MPMr Horne—Mr Deputy Speaker, I rise on a point of order. I would suggest that that is unparliamentary. I would ask the member to withdraw. I am a person who represents a rural and regional electorate. I am not going to be spoken to in that manner.10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—Order! I do not think there is any necessity for the honourable member to withdraw.84THaase, Barry, MPMr HAASE—I thank you, Mr Deputy Speaker. The fact remains: you cannot change the name of a demon and expect to be able to sell it to cockies in my electorate.The additional information that is purported to be fact by the member for Corio is that, for some reason, the ALP is now the friend of the cocky, the friend of the miner and the friend of the prospector. Let me assure you that one of the greatest enduring memories of the ALP that my mob have out there is the fact that it damned the bush by introducing the FBT—the worst single act of destruction of the bush that we have seen in years. RI4Prosser, Geoff, MPMr Prosser—Who did that?84THaase, Barry, MPMr HAASE—The ALP. Members should never forget that the ALP is the enemy of the bush. By any name, the ALP is no friend of the electorate of Kalgoorlie. It was brought up this afternoon that in the electorate of Kalgoorlie we have the office of one Senator Cook. What an outstanding coincidence that there was no representation by the good senator in the seat of Kalgoorlie until such time as that seat was won by the Liberal Party. And that federal seat will be held by the Liberal Party, in spite of the purported facts that the member for Corio put to this House.Having dealt with some of the less than factual information brought up here this afternoon, I would like to now turn to some of the more substantial facts that substantiate our argument that this government indeed does support rural and regional Australia. The government's regional health strategy as announced in this year's budget will provide more than $560 million over four years to improve access to health services for Australians living in regional and rural areas. No other Commonwealth government has ever made such a significant contribution to the long-term sustenance and systematic reform of rural and regional health services—not the Whitlam government, which borrowed large amounts of money from disreputable overseas sources to fund its unnecessary, extravagant programs; and certainly not the Hawke-Keating government, which committed itself to the destruction of rural and isolated communities by centralising these services in larger metropolitan centres.The Rural Health Strategy will provide for the introduction of the following initiatives. An amount of $102.1 million is being spent to increase the number of general practitioners in regional Australia. By next year, 200 of the 450 vocational postgraduate training places for general practice will be located in rural and regional centres, resulting in an immediate—I reiterate: an immediate—increase in GP services for those in the bush. The government will also provide more than $10 million to support GPs who are starting their careers in rural areas. The strategy will also provide $48.4 million for greater specialist access throughout regional Australia. This will allow specialists from capital cities to conduct outreach work in the bush on a regular basis. It will also allow them to act as mentors to their counterparts in the bush so that they have the opportunity to bring their skills fully up to date.More than $49 million will be allocated to fund increased allied health services in country Australia. Services such as physiotherapy, podiatry, specialist nursing and even psychology will be readily available to country residents who, under Labor, were forced to endure long periods of travel in order to access those services. The increased provision of these services will be particularly welcomed by the member for Corio's constituents as it means they will no longer have to travel up to Melbourne to have treatment for ailments such as pains in the neck or recurring nightmares. In order to assist with the delivery of the services I have just mentioned, the Rural Health Strategy will provide more than $40 million per year for four years to support the educational and training needs of rural GPS. The list goes on. We have improved opportunities for education in the bush. We have improved social opportunities in the bush. There are many milestones of achievement that we can speak of here today. We have created outstanding situations for farmers in regional Australia. Through the new organisation of the tax system, we have created a situation where farmers costs will be reduced substantially with the introduction of the total fuel excise rebate. We have removed the wholesale sales tax. We will make products across Australia $4.5 million cheaper to our customers overseas. That means that we are having the equivalent of a fire sale for Australian products each and every year. That will mean greater job security and greater opportunities to create new jobs. For the opposition to suddenly claim that they, with the turning over of a leaf and the changing of a name, will in future represent the wishes of the bush is absolute nonsense. There is no way that they are going to pull the wool over the eyes of the cockies in the bush with this simple name change. I rest my case. We will have great success in the bush at the next election, contrary to what has been said. (Time expired)10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The discussion is now concluded.UU5Horne, Bob, MPMr Horne—With your indulgence, Mr Deputy Speaker, during the debate I spoke about a petition with 1,311 signatures which calls on the federal government to address the problems facing the transport industry. I seek leave to table that petition in conjunction with this debate.SE4Bishop, Bronwyn, MPMrs Bronwyn Bishop—Mr Deputy Speaker, as I understand it, the standing orders provide for the way in which petitions are to be properly tabled and this is not the way or the time, so leave is denied. Leave not granted. Committees17468174681746817468Lieberman, Lou, MPMr LIEBERMANXU5IndiLP10—I present the 16th 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.Ordered that the report be printed.Bills17468R1038BillsR104017468Debate resumed from 5 June, on motion by Mr McGauran:That the bill be now read a second time.upon which Mr Stephen Smith 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 (1) condemns the Government for the inordinate amount of time it has taken to introduce the bill, and the unacceptably short time now available for parliamentary consideration of the measure;(2) regards the narrow approach taken to the definition of datacasting as much too restrictive and certain to risk stifling a new industry before it emerges;(3) deplores the Government's failure to enhance the future potential in this area, as evidenced by its datacasting proposals;(4) calls on the Government to allow the national public broadcasters, the ABC and SBS, to multichannel;(5) believes that the restrictions on datacasting and the prohibition on the ABC and SBS from multichannelling will have particularly adverse consequences for rural and regional Australia; (6) believes that the enhanced services provisions in the bill go further than previously anticipated and will require careful scrutiny; and(7) believes that there will need to be careful, appropriately timed and statutorily based scrutiny through the review provisions proposed in the bill”.16:27:0017468Adams, Dick, MPMr ADAMSBV5LyonsALP00—I rise to speak in this debate on this broadcasting services legislation, the time for which has been reduced. This government is constantly under pressure to get through the bills on the Notice Paper. People will get five minutes to speak on this legislation instead of the 20 minutes we should get under the standing orders. It is typical of this government to force less debate on very important legislation before the House, which will become law and influence the lives of Australians.The legislation before us has been the subject of discussion both in this House and in the media for some time. It will have ramifications throughout Australia. The main elements of the legislation cover commercial free-to-air broadcasters who will be provided with seven megahertz of radio frequency broadcast spectrum to develop digital broadcasting and must simulcast digital and analog broadcast signals for eight years beginning 1 January 2001. After eight years, each free-to-air broadcaster must return to the Commonwealth the equivalent of seven megahertz. I will be very pleased to see that happen if it does happen. Other limitations in the bill include the fact that broadcasters must commence digital broadcasting in metropolitan areas by 1 January 2001 and must have commenced digital broadcasting in all regional areas by 1 January 2004. They must also broadcast a minimum of high definition television. That is a total waste of time. I do not believe that form of television will become very popular in Australia due to the cost. I think that is a furphy that is floating around. It will be many years before that will become acceptable and affordable throughout Australia and the rest of the world.Free-to-air broadcasters will not be able to provide multiple channels of broadcast content or, in other words, multichannelling, although the national broadcasters are not constrained by this provision in recognition of their role as public broadcasters. No new entrants to free-to-air broadcasting will be permitted prior to 1 January 2007, which is the moratorium period. Of course, this all adds up to being of great benefit to those who already have licences but pretty tough on anyone who was trying to get into the play. It is all about letting people get into the play so that you have competition and an ability to let new players bring in new standards and new ideas.Although we support the overall direction of the legislation, we have sought some amendments because of the extraordinary delays before the introduction of the bill, and there has been so little time to consider it in the parliament, and now there is even less time. We are very concerned that the bill is restrictive in its definition of datacasting and is likely to stifle any new industry before it even emerges and hold back its growth into the future. We think it is important that public broadcasters—the ABC and SBS—are allowed to multichannel, and any restriction placed on them will have adverse consequences, especially for rural and regional Australia, and that is to be regretted. It is hoped that the government will change its mind, and I understand that there was some talk that it may do and may allow the ABC and SBS to have multichannel opportunities. Some of the enhanced services provisions in the bill go further than we anticipated but will require very careful scrutiny into the future, along with the review provisions proposed in this bill.I believe that there is no harm in listening to others. There has been a lot of good debate about this bill and about the direction in which Australia should be going. I believe the amendments being suggested are very sensible and need to be given consideration for the sake of good broadcasting in this country now and into the future, along with taking up new technology. We really need to try to pick the best out of what people are saying right across the spectrum rather than just deal with this politically. Let us make it work and let us be even-handed in how we deal with all the interests, both public and private. I feel that a sensible look at the amendments put up by the opposition will only assist in the debate, and we can only move forward with broadcasting right across the spectrum in Australia.16:34:0017469Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—The Productivity Commission report on digital TV very appropriately exposes the antiquated nature of the government's policy approach to this very important transformation that is soon to occur in our society. We are seeing an approach that is based on the concept that high definition television will be the leading feature of digital TV, when I think most commentators realise that the chances of high definition TV flourishing are not high. In fact, there is a very high chance that it will end up being the latter-day equivalent of quadraphonic sound or the Beta video. So the government's policy approach to try to force high definition TV onto the Australian people at considerable cost and to hand over an enormous amount of spectrum to the free-to-air TV stations in order to facilitate that clearly is fundamentally and conceptually flawed. It is producing a situation where we will see a complete absence of competition, the retardation of technological change and a reduction in consumer choice—all of the things that are inappropriate in the world of new technology and rapid change that we are entering. We are also seeing these things applying to the emergence of the new category of datacasting, which really has no inherent meaning other than that it is not broadcasting because the government say it is not broadcasting. The regulations that they are proposing to impose in that instance are basically unduly restrictive. They retard the potential for a new industry based on interactivity and creative content to emerge, and they will undoubtedly retard the growth of new content activities in which Australia has considerable potential. Consumers, as a result, face less choice, higher costs and a missed opportunity that really is unfortunate. In that respect, Labor is endeavouring to amend the legislation in order to improve the position, in order to remove or reduce some of the restrictions that are being imposed on datacasting.From the perspective of the shadow minister for finance, I say there is also a serious problem with the opportunity cost involved in handing over spectrum which otherwise perhaps could have been sold or auctioned. There has been no process of evaluation, no process of tendering, no process of being able to measure precisely what value is being transferred here. Therefore, we are seeing a non-market approach to a situation where in other instances where spectrum is dealt with we see, appropriately, a market based approach where the spectrum is auctioned and enormous proceeds are reaped. It is sad that it appears that Australia will repeat its history in this instance. We were late into television. We were late into colour TV. We were late into pay TV. We were late into FM radio. In each case, we have encumbered these new technologies, these new industries, with regulation that is designed to protect income that is in existing industries, in existing activities, and, as a result, have retarded prospective growth in the sector overall.This sector is of fundamental importance to our society. Our society is in the process of transforming as we move into an information dominated age, and it is of paramount importance that we alleviate the prospective digital divide that is emerging in our society where half the community are online, where half the community have opportunities arising from the new information economy and the other half do not. It is extremely important that we deliver government services online, thereby producing enormous savings to government which can be redirected into things such as more teachers, more hospitals, more police on the beat and the like. It is extremely important that we create a stronger, larger market for our information economy which will give Australia a disproportionate strength in the world market relative to our population. In some respects that is already happening, but the opportunities to do so are enormous and we should not be retarding those opportunities by imposing antiquated regulatory structures that really have no inherent logic on an emerging new industry. We should be doing everything we can to ensure that the new creative talent that is being attracted to these new technologies, these new industries, can flourish, and that in existing industries like health and education the opportunities that are offered by these technologies can be fully taken up. We are, for example, world leaders in distance education. Therefore we should be looking to take the best possible opportunities we can arising from these new technologies, and we should be looking to foster the transformation of our society and our economy into a high-tech, information based economy, both for services and for manufacturing, all of which are associated with these new technologies.This is a rare occasion when social justice—with a strategy designed to ensure that everybody is online, that everybody can access the information economy—actually is directly beneficial to the economy. In no way is it a drag on the economy. In no way will it retard economic growth and economic development; it will actually facilitate and enhance it. So we have a tremendous opportunity here, and it is disappointing that the government have chosen to opt for very much a second-best strategy which I believe ultimately will not survive the test of time and will have to be revisited very soon when we see high definition TV not produce the results that were expected and when we see an unduly restricted regulatory framework preventing new industries from emerging, thus preventing the opportunities that will arise from digital technology being taken up to their full, thereby retarding Australia's economic growth and retarding our ability to develop new skills and new content. 16:39:0017471Andren, Peter, MPMr ANDRENKL6CalareIND00—This Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000, as detailed in the second reading speech of the minister, gives viewers four options when datacasting and digital television hits our screens next year. Consumers will be able to choose whether they want all the bells and whistles of HDTV and datacasting through expensive sets, analog TV set top boxes, or to continue analog alone for the time being. The government has wisely required the simulcast transmission of SDTV given the unaffordable nature of HDTV, at least in the initial years, and perhaps indefinitely. There are many who believe SDTV alone would have been sufficient for any Australian taste, but the government has committed to HDTV, requiring commercial and national broadcasters to provide at least 20 hours a week of HDTV programs within two years of commencement of digital transmission. However, in its report into broadcasting policy released in March, the Productivity Commission specifically recommended that HDTV not be mandated but be left to the market.The datacasting provisions of this legislation are probably the most contentious given the desire of current non-television media operators to access such a form of broadcast. Given the fact that most potential bidders for digital spectrum, including Fairfax and Telstra, now say they could not operate a viable business under this legislation, the government's expected $2.8 billion bonanza from spectrum sale is looking decidedly sick. The parliament has already legislated that no new commercial television licences can be issued, at least until the schedule review in five years time. This legislation heads off the possibility of broadcasters utilising datacasting services to provide multiple broadcasting channels and circumvent the multichannelling ban. However, the ABC has presented sound arguments for a special allowance to be made for that organisation to broadcast on multiple channels. I understand the majority of senators are of a mind to amend this legislation to provide for SBS and ABC to deliver multichannel services, and that indeed was included in the majority non-government—but not the government—report which I have had a brief chance to look at and which was tabled in the Senate today. While there is a strong argument to not allow an extension of the market share of commercial television through multichannelling, there is no argument at all to deny the two public broadcasters the freedom to expand their services into these new areas.The ABC has further argued the need for multichannelling to fulfil its charter for education and children's programming. If I could use an analogy, at the moment all the sports, news, arts, children's programming, et cetera, are crammed into carriages on the one train heading along one line when there are now opportunities for different trains carrying different products heading down different branch lines depending on the taste of the passengers. To deny use of these lines by the public broadcasters is short-sighted and hampering our right to information through our publicly funded stations. This is more about dollars than a decent broadcasting policy. When those changes are made, the government should provide the ABC with a realistic budgetary framework to achieve those broadcasting goals.Pay TV is arguing, not unsurprisingly, for a tightening of the rules on multichannelling which they believe would allow free to air to compete unfairly. However, with the opportunities opening up for pay and cable TV in this country I think it is free to air rather than pay or cable companies who will need to look over their shoulders at the competition. In my own electorate, the Orantel organisation is planning an ambitious communications network with infrastructure established in partnership with the region's electricity supplier. There is enormous potential for local cable television down the track, and the broad region-wide coverage of local television will, I believe, be challenged down the track by far more community specific programming opportunities for local commercials and news.Finally, I wish to make a few points in this truncated debate regarding closed captioning. The government argues that the advent of digital television provides the opportunity to significantly improve the access of the deaf and hearing impaired to television services. It has proposed that broadcasters caption all news and current affairs transmitted at any time. I understand the WIN organisation, a regional broadcaster, made a submission to the Senate inquiry arguing that the insistence on closed captioning for all its news programs would seriously impact on the economics of providing its services into regional Australia. Only the Democrat report in the Senate today, as far as I can see, addressed this issue and rejected it. WIN called for a compromise arrangement where the presenter's introduction and journalist voiceovers were captioned but not all the sound grabs from talent used in stories. With the latest generation of news computer equipment such captioning is possible but not the captioning of prerecorded interviews, et cetera, which would require laborious transcription and then a separate captioning technique not available yet electronically. WIN argued that such generation of those data techniques would evolve but would add 24 per cent to current news costs if forced upon the regional television industry. As a former long-time news editor in regional television, I can relate to the problems detailed in the WIN submission. I am well aware of the significant production of regional news bulletins generated by the WIN organisation. I am also aware of the $260 million over 13 years provided by the taxpayer to assist regional television convert to digital, albeit mainly through rebates on annual licence fees but nonetheless a subsidy to commercial operations. If regional television is serious about lobbying local members to protect its free-to-air privileges and taxpayer subsidies and to defend its arguments about the cost of such things as closed captioning, then it needs to lift its game in relation to its commitment to local content programming—such things as outside broadcasts of major sporting events, local current affairs and documentaries, not just a half-hour news often with generic market wide, non-specific local stories. I am not going to support organisations that simply allow their stations to become slaves of the major networks and rip the advertising dollar out of regional areas and return little by way of local program content. WIN is by far the most committed. Prime has sadly allowed local content to fall away to levels below those enjoyed by viewers in the 1980s and earlier. Having said that, I think the Win submission on captioning was reasonable, provided always there are requirements that full captioning is put in place as the technology becomes available, and I would ask the government and the majority in the Senate to revisit this when this bill reaches that place.16:46:0017472Lee, Michael, MPMr LEEMG4DobellALP00—When the government's original policy on HDTV, digital broadcasting, was announced in 1998, and following the minister's announcements in December last year, a number of commentators—I think quite rightly—described this as the biggest free kick that free-to-air TV has ever received in Australia. If you compare the regime which Australia is putting together with that introduced in other countries, it is quite clear that those descriptions are reasonably accurate. When we had the launch of HDTV here at Parliament House in the main committee room, we were promised cinema quality television. I think it has to raise some concerns for the government, at the very least, that the experience of HDTV in the United States has certainly not been the great success that some people predicted. I understand that one of the people who gave evidence to the Senate committee into this legislation suggested that if Australia had the same per capita penetration of HDTV that the United States now has then we would have 200 HDTV sets in operation. You cannot build an industry with only 200 people out there receiving your signal. Certainly with the developments that have taken place since the government's initial policy was announced in 1998, you would have thought that the government would have perhaps looked very carefully at whether it is going down the right path in locking Australia into HDTV. One of the reasons why we need to be concerned is that in deciding to bring in HDTV the government has given the free-to-air broadcasters three very large blocs of rare spectrum. Allocating those blocs of spectrum to the free-to-air networks to broadcast HDTV makes it very difficult for Australia to have new entrants operating in the digital broadcasting market. One of the concerns I have is that perhaps free-to-air television is not simply seeking to introduce cinema quality TV after all. If the US experience is anything to go by, broadcasters very quickly moved from their promises of cinema quality TV to their desire to introduce multichannelling. If Australia moves from three commercial networks—the Seven Network, the Nine Network and the Ten Network—to a digital environment where each of those networks get to own four multichannels—so we go from an oligopoly of three commercial broadcasters to an oligopoly of three commercial broadcasters in the digital environment with each having four channels—then I think that would be a disgrace. It would be a complete failure of broadcasting policy if we moved to have 12 commercial channels in capital cities but no new entrants. If the three existing networks monopolised those channels, then that would be an outrage. We need to be assured that this government is serious about HDTV. If it wants to put all of the Liberal Party's chips on HDTV technology, then it will be judged by time. Those of us who have asked questions about whether HDTV will succeed are quite prepared to wait and see whether the test of time will show that the government has been right in locking in on HDTV. Certainly the experience in the United States compared with Britain, Spain or Sweden suggests that the government may have put its chips on the wrong side of the table. The minister's announcement late last year produced a ridiculous definition of `datacasting'. When you go to other countries and ask them what they think of Australia's policy on datacasting, the first question they ask you is: what is datacasting? They have never heard of the concept of datacasting, which the Australian government has invented because of the tortured and tangled way in which it has developed digital broadcasting policy. But, to make matters worse, the Minister for Communications, Information Technology and the Arts developed a definition of `datacasting' which is really a complete joke. For this parliament to seek to define what is news or what is drama or what are some of the other categories of broadcasting that appear on television now is the ultimate attempt of a parliament to come up with a definition that will not stand the test of time for very long at all. My colleague the shadow minister for communications, the member for Perth, has made it clear that Labor believes that the government has made a mistake with this ridiculous definition of `datacasting'. I am sure that he will be very wise in putting together amendments with our colleagues in the Senate to make sure that Australia is not the laughing-stock of the broadcasting world with the government's current proposal for `datacasting'. The best way to think of this, in my opinion, is to look at the current system of the Internet. At the moment it delivers us text, photographs—slowly—a bit of audio streaming and some jerky video streaming but, in the not too distant future, the pipelines that now deliver us Internet will be much larger. TV quality Internet is not that far away. As soon as you have TV quality Internet and TV quality video streaming available at the click of a button on your computer or TV, then the whole broadcasting regime that we have had in the past, both in Australia and other countries, just falls away. For the government to come up with these ridiculous definitions of datacasting, for us to try to pretend that the massive changes in communications will allow these restrictive regulatory regimes to stand, is just cloud-cuckoo-land. The member for Perth has also outlined the Labor Party's concerns about the government's attempts to move the goalposts on enhanced services—and that is something which I support—as well as his long argued support for the ABC and SBS to be allowed to multichannel.I ask the minister if, in his summing up, he could perhaps comment on the fact that in the United States they are, as I understand it, having some difficulties with signal reception as they roll out digital broadcasting. As the minister would well know, with the switch from analog to digital, you do not just go from having good reception to hazy reception. In a digital environment, you go from having a signal to absolutely no signal. If you do not have a proper signal in the digital environment, the whole thing falls away. I would like the minister to give his assurance that every Australian who now receives analog TV will receive a proper digital TV spectrum. If that is not going to be the case, will the government or will commercial broadcasters be responsible for making sure that money is spent—and whose money will that be—to ensure that every Australian who now gets a TV signal will continue to get one in the digital environment? Finally, I would also like to express my support for the proposal for an indigenous channel. I think a number of people have been arguing for more Australians to have easier access to some of the indigenous broadcasting material. I think that would be a good thing. Another good thing would be the provision of greater access to closed captioning for Australians who have hearing disabilities. For those reasons, I support the position that has been taken by the member for Perth.16:54:0017474McGauran, Peter, MPMr McGAURANXH4GippslandNPMinister for the Arts and the Centenary of Federation10—Sadly, I have but three minutes in which to sum up what has been a very stimulating, worthwhile and mostly constructive debate—as it should be—on what will be the most significant changes in broadcasting and datacasting that will happen to us over the next 10 years. The changes are difficult to predict. However, the government is responsible for providing a transition path and for ensuring that the digital revolution delivers benefits and choice to consumers.To the extent that there are, regrettably and unavoidably, unanswered questions, I am sure they will be answered by the Minister for Communications, Information Technology and the Arts in the other chamber. There were many issues raised by government and opposition members: datacasting, ABC and SBS services, program enhancements, reviews, mandating HDTV and various other matters. The opposition made a number of superficial and false criticisms at times, but on the whole they did bring to this debate, particularly the member for Perth—unlike the member for Dobell—a studied consideration, at least, of the issues, however misinformed he is at times.In conclusion, the Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000 is a very important bill, which is going to shape the future of the television industry and will set the framework for the transition to new digital broadcasting and information services over several years to come. I agree with the member for Dunkley: this bill is about maintaining quality television for Australia and about giving viewers a real choice. The government believes that the transition to digital television must be a smooth one for industry and consumers. The bill will enable the establishment and development of a new and exciting industry, providing a whole range of new services for consumers. Inevitably, putting in place a system which allows the old and the new to exist side by side will, for a reasonable period, involve balancing different and potentially competing objectives.The bill endeavours to implement the main elements of the framework already agreed to by parliament in a way which minimises disruption to the existing system and which moves firmly towards the future. I have been carefully avoiding the interjections, puerile, banal and trite as they are, of the member for Dobell. But the prize for the most unforgettable line of this debate must go to the member for Dobell when he questioned and warned the government about protecting the viewing rights of rural consumers when the transition is made from analog to digital. This is the man who oversaw the collapse of telephone reception in rural areas in the transition from analog to digital. He really has no credibility on the issue. The member for Dobell is shameless for even uttering the words `analog' and `digital'. It brings back memories of his negligence concerning the rights of country people to reasonable reception.We are putting in place the framework because digital television starts next year. We do not want to jeopardise the timetable or Australia will fall behind the rest of the world in the implementation of digital broadcasting. The passage of this bill in the next few weeks is vital to provide certainty to all in the industry. I thank all members for their contribution. 10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—The honourable member for Perth is seeking my indulgence. He has that briefly.16:58:0017475Smith, Stephen, MPMr STEPHEN SMITH5V5PerthALP00—On indulgence, normally I would have forced a division on the second reading amendment, and then, in the consideration in detail stage, I would have asked the minister a series of embarrassing questions which he would not have been able to answer—questions such as: could you explain to me the difference between those things which are informative and educative but are not likely to be entertaining? Could you give me a definition of what reality television is? However, these matters will be resolved in the Senate, and given the arrangement that this debate be resolved by 5 o'clock, the minister avoids any embarrassment.Amendment negatived.Question resolved in the affirmative.Bill read a second time.17475Leave granted for third reading to be moved forthwith.Bill (on motion by Mr McGauran) read a third time.Bills17475R104017475Consideration resumed from 10 May, on motion by Mr McGauran:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.17475Leave granted for third reading to be moved forthwith.Bill (on motion by Mr McGauran) read a third time.Bills17475The following bills were returned from the Senate without amendment or request:Fuel Sales Grants Bill 2000Fuel Sales Grants (Consequential Amendments) Bill 2000Primary Industries (Excise) Levies Amendment Bill 2000Pooled Development Funds Amendment Bill 1999Taxation Laws Amendment Bill (No. 10) 1999Miscellaneous1747517475Motion (by Dr Wooldridge)—by leave—agreed to:That so much of standing and sessional orders be suspended as would prevent the moving forthwith of a motion rescinding the resolution of the House agreed to at this sitting agreeing to Senate amendments to the Health Legislation Amendment (Gap Cover Schemes) Bill 2000.Motion (by Dr Wooldridge) agreed to:That the resolution of the House agreed to at this sitting agreeing to the Senate amendments to the Health Legislation Amendment (Gap Cover Schemes) Bill 2000 be rescinded.Bills17475R100017475Consideration resumed from 7 June.Senate's amendments—(1) Page 2 (after line 5), after clause 3, insert:4 Review of operation of Act (1) The Minister must cause an independent review of the operation of gap cover schemes to be undertaken as soon as practicable after 1 July 2002. (2) A person who undertakes such a review must give the Minister a written report of the review. (3) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament not later than 31 December 2002. (4) In this section:independent review means a review undertaken by persons who: (a) in the Minister's opinion possess appropriate qualifications to undertake the review; and (b) include one or more persons who are not employed by a registered organization, the Commonwealth or a Commonwealth authority and have not, since the commencement of this Act, provided services to a registered organization, the Commonwealth or a Commonwealth authority under or in connection with a contract. (2) Schedule 1, item 6, page 4 (after line 19), before section 73BDD, insert:73BDDA Purpose of gap cover schemes The purpose of a gap cover scheme is to enable a registered organization to offer insurance coverage for the cost of particular hospital treatment and associated professional attention for the person or persons insured where: (a) the cost of the treatment or attention is greater than the Schedule fee (within the meaning of Part II of the Health Insurance Act 1973) for the treatment or attention; and (b) there is not a hospital purchaser-provider agreement, a medical purchaser-provider agreement or a practitioner agreement between the registered organization and the service provider concerned; and (c) the person insured pays a specified amount or percentage under a known gap policy or the full cost of the treatment or attention is covered under a no gap policy.(3) Schedule 1, item 6, page 5 (line 12), at the end of subsection (5), add: ; or (d) an index or method for measuring the inflationary impact of gap cover schemes on the total cost of treatment and the rise in private health insurance premiums.(4) Schedule 1, item 6, page 5 (lines 13 to 18), omit subsection (6), substitute: (6) Without limiting the criteria to be specified in regulations made for the purposes of paragraph (5)(b), criteria must include the following: (a) the provision of particulars sufficient to demonstrate, to the satisfaction of the Minister, that the operation of the gap cover scheme for which approval is sought will not have an inflationary impact; (b) the requirement that a person providing hospital treatment or associated professional attention under a gap cover scheme for which approval is sought must disclose to the insured person any financial interest that the first-mentioned person has in any products or services recommended or given to the insured person.(5) Schedule 1, item 6, page 5 (after line 18), at the end of section 73BDD, add: (7) The Minister must not approve a gap cover scheme unless the scheme provides for insured persons to be informed in writing, where the circumstances make it appropriate, of any amounts that the person can reasonably be expected to pay for treatment and the insured person acknowledges receipt of the advice.(6) Schedule 1, item 6, page 6 (after line 22), after section 73BDE, insert:73BDEA Regulations Subject to section 73BDE, the regulations may make provision relating to the operation and regulation of gap cover schemes approved by the Minister.(7) Schedule 1, item 6, page 5 (line 19) to page 6 (line 22), omit section 73BDE, substitute:73BDE Review and revocation of gap cover schemes (1) Subject to regulations made for the purposes of this subsection, each registered organization must provide an annual report to the Minister and the Council in respect of any gap cover scheme that it operates. (2) Regulations made for the purposes of subsection (1): (a) must provide for the form and content of each report; and (b) must provide for the date by which each report is to be provided to the Minister and to the Council; and (c) may provide for the Minister to permit the provision of a report after the date provided for under paragraph (b) in specified circumstances; and (d) may provide for the initial report in respect of a gap cover scheme to be provided in respect of a period of more or less than a year in circumstances specified in the regulations; and (e) may provide for reporting on the proportion of cases in which advice about the expected costs of treatment was provided to insured persons in advance. (3) Where a scheme fails to perform in accordance with: (a) the requirements of paragraph 73BDD(6)(b); or (b) any prescribed criteria for approval; or (c) any condition imposed by the Minister;the Minister must establish a review of the operation of the scheme to determine whether it should continue to operate, or continue to operate subject to further conditions. (4) The Minister may revoke a scheme if: (a) the Minister has established a review of the scheme under subsection (3); and (b) a period of 12 months has elapsed since the review was completed; and (c) the scheme has failed to rectify any faults identified by the review. (5) A registered organization may seek variation or revocation of a scheme in prescribed circumstances and the Minister may: (a) approve such variations subject to any additional conditions that he or she thinks necessary to achieve the objects of gap free schemes; or (b) revoke the scheme.(8) Schedule 1, item 7, page 6 (after line 30), after paragraph (bc), insert: (bd) to publish on the Internet, and make available for inspection at its offices, details of all gap cover schemes approved by the Minister under section 73BDD, including details of any terms and conditions that apply to the relationship between a registered organization and individual medical providers;17:03:0017477Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—I indicate to the House that the government proposes that amendments Nos 1, 2, and 4 to 8 be agreed to, and that amendment 3 be agreed to with an amendment. I suggest therefore it may suit the convenience of the House to first consider amendments Nos 1 and 2 and 4 to 8 and, when those amendments have been disposed of, to consider amendment No. 3.10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Please proceed.17:03:0017477Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—I move:That Senate amendments Nos 1, 2 and 4 to 8 be agreed to.These are a number of amendments that were moved in the Senate. The government is happy to accept them.Amendments agreed to.17:04:0017477Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—by leave—I move:That Senate amendment No. 3, as amended, be agreed to.(1) Senate amendment (3) (proposed new paragraph 73BDD(5)(d) of the National Health Act 1953): Omit the paragraph, substitute:; and (d) an index or method for measuring the inflationary impact of gap cover schemes on the total cost of treatment and the rise in private health insurance premiums.This is a minor technical amendment that the government is happy to facilitate.17:04:0017477Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—We are happy to agree to the changes that the Minister for Health and Aged Care has proposed, but I want to take the opportunity to make a few remarks about this legislation, the Health Legislation Amendment (Gap Cover Schemes) Bill 2000. There is no doubt that the large gaps people have been paying on top of their health insurance have been a major reason for people's dissatisfaction with private health insurance. In recent years we have seen the level of services covered by no gaps schemes increasing but this has come at a considerable price. Funds are paying above the schedule fee to those doctors who agree to no gaps. A critical test for this new scheme that has been devised with the urging of the AMA will be whether it delivers the much higher participation rate promised by doctors without an inflationary burst in health insurance premiums and doctors' fees. We do have concerns about the potential inflationary impact of the new schemes, but I am pleased that the government has supported Labor's amendments to try to minimise this impact. The passage of the bill provides doctors with an opportunity to show their commitment to ending the long-running problems with large medical gaps for people going into hospitals. With this bill about to become law, the onus is on the AMA to sell the long-term benefits to private medicine of no-gap coverage. The spurt in membership from Lifetime Health Cover will be short-lived unless the gap problem is solved, and the doctors need to rise to the challenge. They now have their preferred mechanism for no-gap insurance, and I certainly hope the proportion of doctors entering these arrangements jumps from the current level of around 16 per cent to more than 50 per cent over the next year. If it does not work the public will suffer on two fronts: higher premiums and ever rising gaps. This would of course pose a serious political risk for the government, who have put forward this scheme. It is important that we make sure that we have no inflationary impact as a result of this legislation.The opposition, as I said, have tightened this legislation to do as much as we could to dampen this risk of inflation. A requirement has been inserted for regulations to define an index and method of measuring the inflationary effect, for the procedures for revocation to be tightened, and for a full review of the scheme to be established after the first two years. Neither health funds nor the AMA should be under any illusions that these schemes will continue if they fail to contain inflation and to deliver better products for health consumers. We certainly saw in the submission of the previous President of the AMA, Dr Brand, to the Senate inquiry his recognition of this issue. He said: If all it does—that is, the gap legislation—is inflate fees and instead of putting money in patients pockets it puts money in doctor's pockets then the minister, I am sure, will exercise the right that the minister has to withdraw the schemes and put them back on the basis of a Lawrence style contract.We certainly welcome these statements of commitment and support this legislation on the understanding that there will not be any inflationary impact. The remaining amendments tighten the reporting requirements on health funds, strengthen the provisions for revocation of schemes which fail to perform in accordance with their criteria, and establish a review after two years to see whether these schemes have been successful. The amendment requiring adoption of an index will give health funds and doctors guidance as to what is an acceptable level of increase or how the combined impact of premium rises and changes in gap payments is to be judged. This will ensure that all parties are put on a level footing and deter funds from leapfrogging each other in what they are prepared to pay to get doctors to provide services to their members.On the positive side, this bill entrenches informed financial consent for the first time. In future, doctors intending to charge known gaps will be required to advise patients in writing and get their acknowledgment of the additional costs to be incurred. This is a basic practice elsewhere but something that has unfortunately not been part of the traditional medical culture. It is true that recent efforts by the AMA to promote informed financial consent have lifted the proportion of doctors giving advice on fees in advance to around 60 per cent, according to the AMA.The form in which informed financial consent has been introduced here is gentle. The intent is to achieve a turnaround in medical culture and achieve a general shift without being prescriptive or absolute. (Extension of time granted) There are no penalties for doctors, and the obligation is limited to where the circumstances are appropriate, which means that billing details do not have to come first in emergency situations, where the patient is unconscious or where there are other reasons where it is not appropriate to discuss billing with the patient at that time. The discretion is left with the doctor to exercise his or her judgment. The detail of how each scheme will work is to be decided between the fund and the doctors, and it is the fund which is responsible for reporting on how well the provision of informed financial consent is being done. The enforcement mechanism is that the minister can revoke a scheme if the fund fails to achieve a satisfactory performance by doctors who are part of their scheme. I certainly hope that doctors will willingly embrace these changes. These provisions only apply to private in-hospital medical treatment. The opposition moved a similar provision to apply to all doctors who charge in excess of the schedule fee. This amendment won support from the Democrats and Senator Harradine, who both highlighted their concern at the slow progress towards giving all patients informed financial consent. The government has raised constitutional objections based on some comments made by the Australian Government Solicitor. However, my reading is that he did not say that the amendment was unconstitutional; the comment was simply that the person giving the opinion could see no obvious constitutional basis. There would appear to be a number of possible arguments to the contrary. I would therefore ask the minister to give an undertaking to obtain independent legal opinion to examine the issue more fully.I will also seek further advice and will return to this issue as soon as I possibly can. It is fair to say that we have had some vigorous debates between all of the parties involved on this bill, and compromise to find the middle ground, and I certainly thank the minister for his willingness to accept the vast majority of the opposition's amendments. I also welcome the amendments moved by the Democrats to require doctors to disclose any financial interests that they have in products or services that they recommend to their patients. Again, this is an important step forward in giving full financial consent to patients, and one which deserves to be expanded to cover all doctors.I just want to finish by noting the continuing concern that we have about the potential for inflation that is within this legislation. Certainly, if we find that doctors take advantage of these schemes, fail to deliver informed financial consent and—even more significantly—fail to control costs, then we will of course only see these schemes weaken themselves. It is the case that the onus now rests with both the funds and the medical profession to make sure that these schemes work without driving up fees.17:12:0017479Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—I thank honourable members for their contribution. Similarly, I thank the opposition for their constructive approach to this piece of legislation.Amendment, as amended, agreed to.Bills17479R105017479Bill returned from the Senate with amendments.Ordered that the amendments be taken into consideration forthwith.Senate's amendments—(1) Clause 47, page 27 (after line 28), after subparagraph (i), insert: (ia) an officer of the ACCC and is of information that is related to fuel sales grants and is to be used for the purposes of Part V or VB of the Trade Practices Act 1974; or(2) Clause 47, page 28 (after line 6), after subparagraph (i), insert: (ia) an officer of the ACCC and is of information that is related to fuel sales grants and is to be used for the purposes of Part V or VB of the Trade Practices Act 1974; or(3) Clause 47, page 28 (before line 14), before the definition of disclose, insert:ACCC means the Australian Competition and Consumer Commission.17:14:0017479Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—I move:That the amendments be agreed to. The provisions of the Product Grants and Benefits Administration Bill 2000 provide a standardised, administrative framework for grants and benefits administered by the Commissioner of Taxation. The bill applies to the Fuel Sales Grants Scheme. Clause 47 of the bill imposes an obligation of secrecy on persons who, in the course of their duties relating to the administration of product grants and benefit schemes, acquire information about the affairs of another person. The person who holds protected information or documents is prohibited from making a record of the information or disclosing it to anyone else except in specified circumstances. The penalty for a breach of this prohibition is imprisonment for two years. Amendment of clause 47 is required to give express authority to the Commissioner of Taxation or a Deputy Commissioner of Taxation to disclose information to an officer of the Australian Competition and Consumer Commission. The amendment will permit the disclosure of that information only where the information is to be used by the ACCC for the purposes of part V or part VB of the Trade Practices Act. This amendment ensures that the ACCC will have the information it requires to carry out its functions in relation to that great piece of legislation, the price exploitation legislation. In particular, it will ensure that the ACCC has sufficient information to monitor petrol and diesel prices to ensure that retailers pass on the benefits of grants received under the Fuel Sales Grants Scheme. This bill and these amendments help to protect consumers and ensure that the full benefits of our program are passed through to consumers. 17:16:0017480Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—This really has been a terrible week for the government. We have seen them do backflip after backflip on important issues of GST administration and legislation, rushing through truck loads of amendments and gagging and guillotining debate on important issues. And this amendment is no exception. It has been introduced to the legislation that provides for the Fuel Sales Grants Scheme introduced in the dying moments of the parliament this week without proper opportunity for the opposition or the community generally to scrutinise it. But we are in a situation where we effectively have no option but to support it.This is no small matter. It provides for the Commissioner of Taxation to disclose information to the ACCC in relation to the Fuel Sales Grants Scheme. The government had come up with this scheme under pressure and duress from the opposition to try to contain country prices and ensure that the GST did not push the price up. In their budget they devoted over $500 million over four years towards that. They then said `We are doing a great thing by rural communities here; we are spending $500 million over four years'—a major part of their rural grants package. In fact, at best it stops country prices going up still further and the city-country price differential increasing as a result of the GST. But when they put their bill through there was a small matter they had overlooked: the Commissioner of Taxation had no power to give information to the ACCC about the Fuel Sales Grants Scheme. So the ACCC would have had no capacity to monitor whether the grants were actually being passed on to rural consumers or whether rural motorists were getting the benefit of the government's scheme. As with previous legislation, much of which we dealt with in the House today when we talked about yet another 200 amendments on the GST to go with the previous 1,000 amendments on the GST, this legislation is being rushed through the parliament with inadequate opportunity for scrutiny. It is quite unreasonable to expect small business, accountants, tax agents and the like to come to grips with this complex legislation. Now another piece of legislation is being foisted on us involving a change made by the government when they realised they had made a serious mistake and there needed to be amendment to their legislation.They have gone very badly on the issue of disclosure and privacy this week. At the end of last week, the opposition was raising great concern about the sale of ABNs by the Taxation Office. Tax Commissioner Carmody claimed that reports that privacy laws had been breached by the tax office were `completely false'. That was on the Friday; on the Monday the tax office had to agree that their disclosure statements did not comply with information privacy principles as set out in the act. So they had to agree to amend their web site to meet the guidelines for web sites published by the Federal Privacy Commissioner. They had to look at providing individuals with an opt-out provision and make sure that, in these cases, they release only data essential for administering the ABN. It was a pretty serious backflip with pretty serious privacy concerns being raised by the opposition—and the government were forced to do that. Today we saw the opposition raising an equally serious privacy issue and the government folding on the GST mail-out fiasco, where Senators Faulkner and Ray wrote to the Commissioner of Taxation and the Electoral Commissioner seeking undertakings that the electoral roll would not be rorted for GST mail-out purposes. The Attorney-General came into the parliament today—the minister was talking about hospital hand passes yesterday; I think he was given the hospital hand pass by the Treasurer—and said, `We acknowledge that the proposed use of— (Time expired)17:21:0017481Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—The member for Willis has raised a number of issues, and I think there is a due response to a few of them. We were looking forward to an early end to this debate on the Product Grants and Benefits Administration Bill 2000, but the member for Wills has gone off on a tangent, talking about matters which are essentially irrelevant to the debate on the bill before the House. I want to point out to the member for Wills, the members of the Labor Party and in fact to the audience listening to this debate that the Labor Party have this week come to the House on a number of occasions and asked questions in relation to price monitoring. They have asked questions over the last few weeks about powers and laws in relation to the 10 per cent GST.10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Order! I trust the minister will follow his own advice.DK6Hockey, Joe, MPMr HOCKEY—Mr Deputy Speaker, this is part of the bill because it relates to the ACCC and price monitoring. The Labor Party have come into this House repeatedly asking questions about the legal impact of section 75AU of the Trade Practices Act. I say to the Labor Party: put up your amendment or put up your proposal in relation to price monitoring because on this side of the House we have had a gutful of the Labor Party coming in here and lecturing us about price monitoring, about the information going to the ACCC and about consumers' rights. The Labor Party has not put up one amendment that is going to give further powers to the ACCC. In fact, in relation to a bill before this House a little earlier in the week, it was the Labor Party that watered down the price exploitation powers of the ACCC. The only reason we accepted the Senate amendment put forward by the Labor Party was that we wanted to have powers given to the ACCC in relation to misleading and deceptive conduct for unincorporated bodies. The Labor Party has the hide to start lecturing this government about consumer protection and about price monitoring when on no occasion has the Labor Party come in here and said, `Here is our amendment to strengthen the hand of the ACCC during the transition to the new taxation system.' Not once has the Labor Party put down its budget proposals for the funding of the ACCC, and yet Labor members have the gall to come in here and lecture us about price monitoring, price monitoring that the Labor Party never had in government.When the Labor Party increased wholesale sales tax, who was protecting consumers? When the Labor Party introduced fringe benefits tax, who was protecting consumers? When the Labor Party introduced capital gains tax, who was protecting consumers? Absolutely no-one. The Labor Party has the gall to come in here and lecture this government about consumer protection and price monitoring when it did nothing in 13 years and in all the years before that. No government ever put in place a price monitoring or consumer protection regime during the transition to the A New Tax System. There has not been a single occasion. The only time the Labor Party ever suggested to the Australian people that it might put in place a price monitoring regime was in a press release from Ralph Willis two days before the 1996 election, when after previous commitments he said that he was going to direct the ACCC to monitor bank fees. Two days before the 1996 election after 13 years! Under those circumstances, we will not cop the Labor Party lecturing us on price monitoring anymore because the Labor Party has been deceiving the Australian people and has been ripping off consumers with its rhetoric that goes nowhere. 17:26:0017482Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The Minister for Financial Services and Regulation rises to his feet because he is embarrassed about the point we have made about the government mucking up the GST mail-out and being forced to admit today in this place that their proposals were illegal and that, as a result of these privacy breaches, the Prime Minister's letter will be pulped. We believe that the Liberal Party ought to pay for the pulping and printing of this letter. This is an important privacy issue, and it puts paid to the Prime Minister's assertion in the House of Representatives on 30 May. He said:All I say is that the correct procedures have been followed. There will be a letter sent out, there will be an information booklet, and it is entirely appropriate ...Senators Ray and Faulkner have belled the cat in relation to that issue, and we now have the government admitting that their proposal breached the Commonwealth Electoral Act. It would have been quite inappropriate to direct mail—0V5Slipper, Peter, MPUK6Thomson, Kelvin, MPMr KELVIN THOMSON—I will tell the parliamentary secretary about what has gone on here.10000SPEAKER, MrMr SPEAKER—I agree that the member for Fisher should not have acted as he did. The member for Wills has the call and will address his remarks through the chair.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Thank you, Mr Speaker, I intend to. The government has been well and truly caught out on this issue, and it has had a bad week in relation to privacy issues. Notwithstanding the fact that this amendment is going to be passed with our support, we are concerned that it does not provide for an appropriate guarantee that the savings arising from the Fuel Sales Grants Scheme will in fact be passed on. In the Senate estimates, Allan Asher from the ACCC admitted that he could not guarantee that the fuel sales grants would be passed on. So, for all the money being spent as a result of this legislation and notwithstanding this amendment giving the ACCC the power to access that information, the facts are that there is no guarantee that motorists will receive the benefits from this proposal and that we will not see the city-country price differential rising as a result of the government's GST. This is simply one further way in which this government has botched the implementation of the GST.XT4Ronaldson, Michael, MPRH4Kerr, Duncan, MPUK6Thomson, Kelvin, MPMr KELVIN THOMSON—Mr Speaker, we agreed that I would have 10 minutes—10000SPEAKER, MrMr SPEAKER—Chief Government Whip, the member for Wills has time to address this matter, he has the call and he will be heard. He will not be interrupted by the Chief Government Whip or the member for Denison.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—I indicated to government representatives that I intended to speak for 10 minutes. My 10 minutes has not elapsed. The Democrats said today, with these amendments becoming law, that they hoped the tax office could quickly—Consideration interrupted; adjournment proposed and negatived.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—The Democrats today said that they hoped the tax office could quickly address the 20,000 outstanding private rulings on the GST and give business some degree of certainty as soon as possible. Words fail me. These are the people who gave us world's worst practice in relation to the GST, and now they come in here and say, `We want the government to address the 20,000 outstanding private rulings on the GST.' Indeed, we can all worry about that. With only a few weeks to go before the GST comes into effect, it is simply not good enough. This amendment, this bill and other bills we have been debating on the GST show to the parliament and to the electorate just how comprehensively this government has botched the implementation of the GST. (Time expired)Question resolved in the affirmative.Adjournment17482Motion (by Mr Hockey) proposed:That the House do now adjourn. 1748317:31:0017483Gillard, Julia, MPMs GILLARD83LLalorALP00—Can I record in this House what a great pleasure it was for me to attend the Wyndham Business Awards last Friday night. The city of Wyndham is almost wholly within my electorate. It is a very vibrant and growing community—growing in population and also growing in economic activity. It was great to be there on Friday night with representatives of the local business community. I want to formally record my congratulations to the winners of a number of business awards in different categories.I formally congratulate the following businesses: the winner of the `Transport and storage—small' category, which was Laverton Transport Services Pty Ltd; the winner of the `Transport and storage—large' category, which was Kalari Pty Ltd; the winner of the `Manufacture—small' category, which was Agfab Engineering Pty Ltd; the winner of the `Retail' category, which was Lasercycle; the winner of the `Arts and entertainment—small' category, which was Westside Talent Pty Ltd; the winner of the `Arts and entertainment—large' category, which was the Hoppers Crossing Club; the winner of the `Agriculture and agribusiness—small' category, which was Plants Galore Pty Ltd; the winner of the `Agriculture and agribusiness—large' category, which was the State Chemistry Laboratory; the winner of the `Tourism—small' category, which was May Tow Caravan Hire and Towing; the winner of the `Tourism—large' category, which was Victoria's Open Range Zoo at Werribee; the winner of the `Service—small' category, which was Cafe Wise; the winner of the `Service—large' category, which was the Werribee Superbowl; and the winner of the Mayor's Award, which was a very special award not judged by an independent committee as such but given directly by the mayor to a business that he believed was of merit and deserved encouragement. Our mayor, Councillor Henry Barlow, gave that award on this occasion to RCM Industries Pty Ltd.I specifically congratulate the winner of the most prestigious award of the night, which was the Wyndham Business of the Year award. That was won by Claytons Kitchens Australia. It was my very great pleasure to go to the premises of Claytons Kitchens Australia when they opened their very new and modern factory in Laverton North, which is located within my electorate. I went to the opening of that business in my capacity as the chief of staff to John Brumby, who was at that stage Leader of the Opposition. John Brumby had been invited to open that business and did so, and a plaque was duly placed upon the wall. That is still proudly displayed upon the wall to show that John did open those premises. It was great to see the whole thing come full circle when not only was I present at the Wyndham City Council business awards on Friday night but also John Brumby himself was present at those awards and was the speaker at those awards in his capacity as state Treasurer and Minister for State and Regional Development. On that occasion, John made some very important remarks about the nature of doing business in the city of Wyndham. I want to refer to those remarks briefly. He said in the course of his address to the Wyndham Business Awards:The Wyndham Business Awards are the premier regional awards in the state with winners going on to the Telstra business awards and some, like Alex Fraser, win state and national titles. You are proving yourselves to be leaders not only in this municipality ... and not only in the West of Melbourne ... but in all of Victoria. And I am not the only one to notice. BRW Magazine ranked Wyndham the number two `hotspot' in Victoria for industrial and commercial development. It is the largest and most advanced of Victoria's six technology precincts, and specialises in food, packaging and biotechnology. This community is showing the rest of the state what doing business is all about.I wholeheartedly endorse those remarks by the state Treasurer, John Brumby, from Friday night and once again congratulate each and every recipient of an award from Friday night. They are great businesspeople doing great business in my electorate. It was terrific to note that the winner of the Wyndham Business of the Year award made a special mention of the great contribution the staff make to the success of Claytons Kitchens. I congratulate the staff: Paul Bradbury, Glenn Earl, John Driscoll—the directors—and the staff member they thanked most of all, who is a woman called Sugar, who works at Claytons Kitchens and is seen to be the backbone of the business. (Time expired)1748417:36:0017484Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—The events in the port of Townsville today underline the call and the strong representations that I have made to bring a permanent naval base to the port of Townsville. Late last year, I was pleased to be able to announce that the Navy was establishing a forward base in the port of Townsville to support the Tobruk, the Manoora and the Kanimbla. The reason for that—and it was an eminently sensible decision—was to support the elements of the 3rd Brigade, which is Australia's ready deployment force. Currently, those three ships are home based in Sydney, but it seems rather odd to me that the ships are home based at a place quite remote from where their actual role and need is. Today, the Manoora is in port in Townsville and it is loading equipment and supplies to support the Tobruk, which is off the Solomons. The Manoora will sail for a similar destination tomorrow. It was scheduled to sail at about 6 a.m., but it will not have finished loading at that stage. It was then to sail at midday but the berth was required for another purpose. It looked like the ship was going to be asked to leave early because currently we only have a forward base. This is why we need a permanent naval base in the port of Townsville. I thank Lyn Taylor, the CEO of the port authority, and the staff of the port authority for moving heaven and earth to ensure that the Manoora can in fact stay alongside until midday tomorrow to finish loading so that she can then go fully equipped to her task in the Coral Sea. I will continue to work for Townsville to achieve the status of a home base for those three ships, because I know that they are certainly very much in demand to support the 3rd Brigade and 10 FSB.On another matter, I happily report to you, Mr Speaker, and to the parliament that a couple of weeks ago we had Townsville's East Timor parade. This was the parade to welcome home the troops that had been in Timor, to pay tribute to the families that had stayed behind and also to wish well the 1st Battalion, which will be going over to Timor later this year to do their part in Australia's operations in that area. Mr Speaker, 40,000 people turned out on Townsville's Strand. It was an absolutely magnificent occasion—just incredible. Townsville has a reputation of running very good quality events, and this one was no exception. The atmosphere was somewhat electric on the tropical evening, even though it was heading towards winter, along Townsville's Strand. So many people turned out to see the biggest military parade in our city since World War II. We are a garrison city and we certainly well deserve that particular reputation. To see the looks on the faces of the soldiers and those in the crowd was just terrific. The number of Australian flags that were all being waved in unison just made you proud to be there on that occasion and to be there supporting the defence forces from Townsville and Thuringowa. Afterwards, I was privileged to go to the officers mess of the 2nd Battalion. It was the 2nd Battalion that did the really hard, tough and dangerous work in Timor in the first instance. I was with the Prime Minister, and we were just there privately with the officers and their wives. I can tell you, Mr Speaker, it was quite remarkable and none of us wanted to leave that particular night. The stories that were being swapped were just terrific. I certainly pay tribute to the committee that helped me organise that parade, to the people who participated and to the people of Townsville and Thuringowa who turned out on that evening. 1748417:41:0017484Kerr, Duncan, MPMr KERRRH4DenisonALP00—I have just come from a meeting of the parliamentary delegation which is preparing its report following its visit to Papua New Guinea and the Solomon Islands. I speak more in sadness than in anger in relation to the circumstances that have led Australia to make what I believe to have been a significant misjudgment in relation to the conduct of our relationship with the Solomon Islands. There will be an opportunity when the report is tabled to speak at greater length, but the report of the Acting Prime Minister today that HMAS Tubrok is steaming to the Solomon Islands in order to evacuate Australian residents and others who need to be evacuated from the Solomon Islands in view of the increasing danger to their safety leads me to reflect, firstly, on the visit and, secondly, on the response of the Australian government. The circumstance of our visit was very unusual in that the Solomon Islands Prime Minister pressed upon us the need for there to be an outside operational police force due to his own police being incapable of dealing with the situation then arising. The ethnic tensions affected his own police force, and he explained the very strong reasons why he required the assistance of an outside contingent to assist to restore order, lest his country be wracked by the kinds of consequences that too tragically we are seeing. That assessment was supported by the Leader of the Opposition and the Chief Justice of the Solomon Islands, who confirmed that the Solomon Islands Police Force themselves had no operational capacity to hold that country together in the light of the threat posed by the militias.The Prime Minister of that country was seeking a Commonwealth contingent to provide assistance. He was hoping it would be made up of police not just from Australia but from Fiji, Vanuatu, Papua New Guinea and New Zealand. At that time, both he and the Leader of the Opposition indicated that there were only a handful of armed militants who were threatening the stability of the country. But, of course, with the police paralysed, the citizens who were being thrown from their homes, shot and terrorised inevitably chose sides. Too tragically, the country has now been wracked by the conflict between the Malaitan Eagles and the original group that threatened the stability in the country, the Guadalcanal Liberation Army, which has had a number of different names.The violence has escalated. I saw reports of an Australian supply patrol boat being used to shell positions of the other militias on Guadalcanal. There were reports even when we were in the Solomon Islands of weapons being smuggled from Bougainville through to Guadalcanal and Malaita. With some of the police going over to the Malaitan Eagles and forming part of the forces that have sustained the coup, it means that there are now very heavily armed people involved in this conflict.The Prime Minister has indicated that the Australian government would have to take into account interfering in the affairs of other countries. That response lasted for no time at all because it is very plain that the requests were made by the government, the opposition and all involved with the Solomon Islands. The next point he indicated was that there would be no exit strategy and that it would be inappropriate to send Australian police. This is a government that sent police to East Timor without a defined exit strategy because it believed it was in our national interest. How is it in our national interest that we see events like that which we are seeing occur now where people are being forced to evacuate, where the Australian owned Gold Ridge Mine run by Delta Gold has been forced to suspend its operations, where people involved in a number of very important AusAID projects which we witnessed when we were there have obviously been shut and Australian personnel are having to flee, where business programs, like the UEPI Island Resort with Australian investment, are obviously now unable to operate, where the airport is being shelled and citizens are dying and where a once functioning and very successful democracy in our region has fallen because of our indifference? How is that in our national interest? In light of this talk of a lack of exit strategy, was that our exit strategy? (Time expired)1748517:47:0017485Lloyd, Jim, MPMr LLOYDIK6RobertsonLP10—I listened with interest to the comments of the honourable member for Denison. It is very distressing to hear about the happenings in the Solomon Islands and the instability in the Pacific region. I find it quite distressing that the Labor Party seem to think that the Australian government is responsible for everything that is happening in the Solomon Islands. It was only literally a few months ago we were being criticised for being the region's policeman when we took some positive and very successful action to help in East Timor. Now the Labor Party seem to have changed tack and they seem to want us to be responsible for everything that happens in the Pacific region. Tonight, I want to mention AusAID and the fantastic work Australia does in the Pacific region. Again, the Labor Party has tried to imply that we have not been responsible in the Pacific island area and we do not contribute to or assist the Pacific island nations. Nothing could be further from the truth. We have literally thousands of fantastic Australians throughout the Pacific island nations, under the AusAID banner, who are assisting. The Pacific island nations are countries of unique contrasts. Most have small subsistence based economies and very limited natural resources. They rely very much on imports to supply their basic commodities and they have a very narrow base of exports. It makes it very difficult for their economies to grow. The people from the Pacific island nations that I have met are wonderful people. They are very proud of their nations and, in most cases, their independence. But it does make it very difficult for their economies. That only goes to highlight the tragedies that have faced the democracies in Fiji and the Solomon Islands and the effect that will have on all the other nations in the Pacific island area.Australia, through AusAID programs, contributes a huge amount of money to assist these countries. For example, in 1998-99 we contributed to the Cook Islands, $1.7 million; Fiji, $19.5 million; Kiribati, $6.6 million; Micronesia, $2.6 million; Nauru, $2.9 million; Niue, almost $1 million; Samoa, over $11 million; the Solomon Islands, $13.1 million; Tonga, $10.2 million; Tuvalu, $2.5 million; Vanuatu, $13.1 million; and the French territories, $1.8 million. All up, with policy and management reforms and regional programs, we contributed $131.2 million—a very significant amount of money. In December last year, I had the opportunity to see first-hand where some of this money is spent and how valuable it is. I visited the small island of Aitutaki in the Cook Islands and inspected their water supply. We in Australia take fresh water for granted, in most cases. We turn on the taps and expect to get clean drinking water. On many of these islands that is not the case. The Aitutaki water supply project incorporated an integrated water supply management plan for the island. It involved overhauling the water reticulation network for the island of Aitutaki—a very successful program. It helped them understand how to manage their water resource. It actually involved drilling into the mountainside and collecting the water which was safe for drinking and then reticulating it. We also inspected the Manihiki power upgrade and were informed about the Penrhyn Island power upgrade. This involved getting electricity to some of these islands.One of the things I became very conscious of is the tyranny of distance for these island nations. I was scheduled to fly from Rarotonga to Penrhyn. I did not actually take that trip, but that is some six hours by light plane and still within the Cook Islands. These island nations are so isolated that trying to get supplies and any services to them is very expensive and very difficult. It is one of those things that really does hold back their economies. I am very pleased that Australia, through AusAID, is putting so much effort and so much money into important projects such as the ones I have mentioned tonight. It cannot be said that we have neglected the Pacific island region. (Time expired)1748617:51:0017486Rudd, Kevin, MPMr RUDD83TGriffithALP00—I think it is important that we stand back this evening in view of recent developments in Fiji and the Solomon Islands and try to take a measured view of what these events mean for the long-term strategic stability of the south-west Pacific, Australia's interests in that region and how best, in the long term, our policy responds to that region. Paul Dibb rightly has described developments across our immediate region in recent times as the `emergence of an arc of instability', ranging from Melanesia through the Indonesian archipelago, Fiji, the Solomon Islands, Papua New Guinea, Irian Jaya—West Papua, as some call it—across the separatist movement in Aceh, the ethnic problems in Ambon as well as unresolved disputes both in Bougainville and New Caledonia. If we were to apply the measure of the last 10 years, we would have to conclude against any objective standard that we now live in an infinitely more unstable subregion than we did at that time. What are Australia's interests in this region? First and foremost, it is strategic stability and, as a subcomponent of that, strategic denial—that is, to deny any large external power from becoming a dominant, decisive factor within that subregion. In the period of the Cold War, this was reasonably a straightforward concept. Strategic denial operated on the principle that the Soviet Union, for example, should not be provided purchase or access to our immediate environment. But the contemporary applications of it, for example, are that we should not allow competitiveness—for example, between the PRC and Taiwan over diplomatic recognition—to allow one or another state to begin to exercise purchase over immediate regional developments.A second Australian interest is domestic political stability: peace, order and democratic government. Not only are these universal interests which reflect Australian foreign policy objectives across the world but they are particularly relevant to our immediate region. Of course there is a second and associated interest there, which is that, by virtue of preserving peace, stability and proper forms of government, the prospect of a large and substantial outflow of refugee populations is reduced. A third Australian interest long term is the economic development of the region, poverty alleviation, as well as the creation of trade and investment opportunities for Australian business. The fourth, of course, is effective environment management, given the particular problems of climatic change in that part of the world. We need to be clear about these changes which are emerging in our strategic environment. We need to be clear about what our long-term interests are in this strategic environment.What has this government done? What the government has done and its overall policy architecture sound fine on paper. You read statements such as those from the Minister for Foreign Affairs, and they sound elegant indeed. I quote from a speech of his of December 1998:The Pacific Islands region is a unique part of Australia's neighbourhood and we intend to give the region the recognition it deserves. The need for this recognition was a key factor in my determination to have the Minister for Foreign Affairs, rather than a junior minister, represent Australia in the region and I am pleased to say— referring to the election of the Howard government in 1998—that I will be retaining that responsibility ...All fine and good. But we go on, and the minister states also on that occasion:The Australian Government commends the many courageous steps that have been taken by regional Governments—including those of Samoa, the Solomons and Vanuatu—... to refocus the business of government and to impose budgetary discipline, and here in Fiji—from where the minister was speaking—... where a new constitution which offers a vision of hope for all Fiji's communities has been developed and put in place ...And `these represent notable examples of the proper path for the future,' the latter being my paraphrasing of what the minister said.We have seen many such statements from the foreign minister, and again in 1998-99 there was his release of a Pacific islands development strategy which he articulated as forming the appropriate basis for Australia's aid engagement into the region over the triennium 1998 through to 2001. It all sounds fine on paper, but the reality we now face is that it is actually not working on the ground.What we require at this stage is a fundamental review of our long-term strategy for this region. Its first characteristic should be a clear and unambiguous statement that the south-west Pacific is an area of primary strategic interest to Australia—nothing half-smart through the Howard doctrine, not attending every second regional forum, but a clear and unambiguous statement. The second point should be a fundamental review of the ADF's power projection capabilities into the region and for the future, one which provides the ADF with the capacity to project power, should that be necessary in the future. The third relates to the question of Australia's ability to effectively influence the outcome of the Nandi framework, a critical issue which goes to the whole question of the effective control of small arms and weapons supply right across the region. The fourth is a review of Alexander Downer's Pacific Islands Development Strategy and its capacity to deliver, through that $130 million aid program, an effective form of aid recovery. Fifth is Australia's national capacity in its diplomatic service. (Time expired)Privilege1748817:56:0017488SPEAKER, MrMr SPEAKER10000PON/A10—On 13 April I gave an initial response to a matter of privilege raised by the member for Stirling. I indicated that I was seeking more information from the Australian Taxation Office through the Treasurer. Advice has now been received from the office of the Treasurer on this matter, which I have discussed with the member for Stirling and copied to her. The advice confirms that the matter did not constitute a contempt. I table a copy of the advice from the office of the Treasurer.Adjournment174881748817:57:0017488Ronaldson, Michael, MPMr RONALDSONXT4BallaratLP10—It is with a note of sadness that I rise tonight to talk briefly about a young man who was the pilot of the plane that crashed in the Spencer Gulf over a week ago: 21-year-old Ben Macklewicz. Ben was educated in Ballarat at St Patricks College, he went to Damascus College, and he had been flying with Whyalla Airlines for about 17 months. I am sure on behalf of all honourable members I am able to extend my sympathies to the families of all of eight who were taken in this tragic incident, particularly in relation to Nannette and Kurt Macklewicz, the parents of Ben—who, as I have said, was aged 21—and indeed Ben's partner, Sam Koehne. They are all obviously absolutely devastated at the loss of this life. I am sure there are seven other families who are grieving after this horrible accident. On behalf of everyone in Ballarat, our hearts go out to the Macklewicz family and to all the other families involved.In the time left to me, I would like to just very briefly congratulate the winners of the CGU Insurance Ballarat 2000 Business Awards. Rob Golding is the Rural Insurance Manager at CGU, which has been sponsoring these awards for a long time. The commerce section was won by Hair by Hart for the second year running, with Tracey Hart from Hair by Hart accepting that award. Rustic Reflections won in the hospitality section, the award being accepted by Leon and Marina Beaton. McCains won in the manufacturing sector, and Kerry Stevens, the Customer Service Manager, accepted the award there. BRACE won the service industry section, and the executive director, Christopher Carroll collected that award. The Ballarat Visitor Information Centre won the tourism and special events section, and Janet Reynolds, the manager, accepted the award on behalf of the team there. In the retail sector the Bed Shop won, with the manager, Jenny Browning accepting the award. These are fantastic awards and I congratulate all winners.10000SPEAKER, MrMr SPEAKER—Order! It being 6.00 p.m., the debate is interrupted.House adjourned at 6.00 p.m.2000-06-08—————Mr DEPUTY SPEAKER (Mr Nehl) took the chair at 9.40 a.m.Statements by Members174891748917489Ellis, Annette, MPMs ELLIS5K6CanberraALP00—I want to take this short time available for me this morning to talk a little bit further about the implications of the GST on my community, particularly in relation to small business and community groups. I am sure I am not unique in the experiences that I am having in relation to the contacts that I am getting from some of these groups. I am extremely alarmed particularly when on occasions like this we take the opportunity of bringing these things to the attention of the government and are accused of scaremongering and running a false campaign. Nothing could be further from the truth. What I am doing is standing here and telling the House and the members, and you, Mr Deputy Speaker, the actual experience happening with some of the people in my community.For instance, take the small business out at Hume, a small secondary industry area in my electorate. This small business comprises two people, a couple who employ one person. Earlier on this year they decided to do all of the right things and act in plenty of time and they went out and purchased a new computer at the cost of $2,500. They had been in business for 15 years and they needed to upgrade for the GST. They then applied for the rebate to small business which is, I think, $200 for this investment only to be told that they could not get it because they had purchased the equipment from someone who was not registered as a person to buy from. I really think that this is a needless hurdle placed in the way of this small business in a stupid way. Who cares whom they buy it from frankly? They have done it because of the GST and in order to do all the right things but that is where they find themselves.Another organisation here that represent a particular group within the community are trying really hard to get an interpretation of the words `fund' and `account' to try to find out whether they need to have more than one bank account to run their community organisation to meet GST requirements. To date, no-one in the system has been able to tell them whether the word `fund' means `account' and whether, therefore, they need to open up more than one bank account. We are persisting on that score. Then there is the sporting club, a junior soccer club in my electorate—1,200 kids a week go and play soccer. They are going to have to employ someone for the first time ever probably, purely to handle the GST issues that affect their accounting system because they run on volunteers. These are genuine cases, genuine instances, where I wish the government would listen, not because I want to win them over but because I want these people to have a simpler way of getting through the imposition of the GST.1748917489Billson, Bruce, MPMr BILLSON1K6DunkleyLP10—I rise today to reassure the citizens of Dunkley that the student safety net is strong and secure. They may have been concerned by reports in the local news-paper taking account of some comments from the Victorian Democrat Senator Lyn Allison in questioning the funding that is available to support young people at risk of not completing secondary school. We know that if people do not complete secondary school they are three times more likely to be unemployed. It is for that reason the government introduced changes to the youth allowance to encourage young people not to reach out for the short-term financial benefit of going on unemployment benefits in their middle to late teens but to actually remind them that, while that money might be nice now, they are actually doing away further opportunities in their future life. So the youth allowance was changed to encourage young people to invest in their own futures while the government and the taxpayer provided income support. The youth allowances changes required young people to be involved in training or education so they could build their kitbag of what they could offer workplaces and the community in the longer term and so look forward to a happy future. Lyn Allison was drawing on the fact that the transitional funding to support that introduction of that policy was the Full Service Schools program. That was known to be a three-year program simply to deal with the transitional period. It is wrong to suggest that now that that transitional period is over the support is not there for young people who are having difficulty at school—maybe because of problems at home, maybe because they are not finding the curriculum stimulating, maybe because they are not academically gifted but are skilled in other ways.So for the citizens of Dunkley, be reassured that the student safety net is strong and secure, and that excellent programs are being developed and are ongoing in the local schools. We have PVET working to provide vocational education and training to students; literacy and numeracy support; the Jobs Pathway Program to help people make that transition from school to work and to have a reality check on their capacity to gain employment; JPET for people who are at risk—who may be wards of the state or who are having difficulties; the Reconnect Program; part-time school-based apprenticeships; and enterprise and career education. Senator Allison would have been better off asking the Victorian government why, when we have put in new programs to support new apprenticeships, the Victorian government is insisting that any growth in that program be directed through the TAFE system. One of the reasons the growth is there is that employers like the flexibility of getting training from other providers, and the Victorian government is stifling that rejuvenation of new apprenticeships in our state.In the few minutes that are left to me, I would like to talk about this bold experiment that is being kicked around in Victoria for supervised injecting houses. I have met with a number of parents in my community who have had to support their young family members go through detoxification and rehabilitation programs. It is outrageous that people have to wait two and three weeks to get into a detoxification program, and in some cases travel to Mount Gambia and Canberra to get into a rehabilitation program. If there are funds available for new initiatives in the area of drugs, let us look at providing more support for those people who want to kick their addiction. (Time expired)1749009:46:0017490Plibersek, Tanya, MPMs PLIBERSEK83MSydneyALP00—I am disappointed that the Howard government has claimed that the GST will not affect education. It is obvious from the discussions that we have had during the week on HECS debt and the GST that education will be affected by the GST. Indeed, it seems that individual students' HECS debts will increase by up to $700 next year because HECS debts are linked to the consumer price index, and we know that the consumer price index will increase by over five per cent next year. Not only will new graduates see their debt increase but existing graduates who have had a debt for some time will also see that debt affected by the consumer price index. Unfortunately, the repayment threshold—the point at which students need to start to repay their debt—will not be similarly indexed because the repayment threshold is linked to average weekly earnings, which, of course, will not increase by anywhere near five per cent. In fact, the Minister for Education, Training and Youth Affairs confirmed that:There will be no GST-inclusive index used in relation to the HECS repayment thresholds.It is disappointing that almost a million people will be affected by this GST slug on HECS debts—and the government stands to make a windfall of over $180 million in additional student debt next year. It is very sad, indeed, that this government is about making profit from debts that people have been incurring for many years and indeed will be repaying for many years to come. The many thousands of students who live in my electorate and who attend the University of Technology Sydney and Sydney University certainly will remember, when election time comes, who has imposed this extra $700 debt on students. They will also remember who took $800 million out of university operating grants, who cut $1 billion from student assistance, who doubled the rate of HECS and introduced much higher rates for some degrees, who reduced the repayment threshold so that students have to start repaying debt much sooner when they start working at below average weekly earnings, and, of course, who is imposing all the extra costs associated with education and living away from home—paying the gas and electricity bills, buying the clothes for the job interview that is so important, getting transport to and from university and paying software bills. We all know how important computer equipment and software is, and that will be affected by the GST. It is amazing that this government is able to spend $431 million on advertising a GST which it claims does not affect education yet it is obvious that there is an $180 million affect on HECS debts alone.1749109:49:0017491Brough, Mal, MPMr BROUGH2K6LongmanLPParliamentary Secretary to the Minister for Employment, Workplace Relations and Small Business10—I just want to raise a few issues of youth in my electorate and the fabulous job that many of them are doing from Maleny through to Narangba and Bribie Island and Caboolture. Last week I was privileged to graduate one of the Green Corps groups from Maleny. A finer group of young people you could not meet anywhere. These young people have been working in Mary Cairncross Park, building walkways, protecting a piece of riparian rainforest area—one of the last that are left in the region. It overlooks the magnificent Glasshouse Mountains.These people did a lot more over and above what you would expect on such a Green Corps project. They worked 10 hours a day, with half-hour lunch breaks at best, in leech and tick infested areas. The good thing was the camaraderie that they built up. This is testimony to the will and the attitude these young people have to their work and to what they want to achieve, for not only the environment and themselves but also the wider community.On another front, down at Morayfield High School, a school of about 1,200 students, I was invited to be part of their leadership program—something which I was very privileged to do. Some months later some of the students came back—not the school captains, just members of the school body—asking if I would assist them to help improve the facilities in the school—not the educational facilities but the appearance of the school so there would be greater pride in it. I thought it was a fantastic thing that students would want to do this of their own volition. A couple of weeks ago we had students from year 8 to year 12, a few teachers, parents and groundsmen volunteer one Sunday morning. We got in and built new garden beds, planted trees, laid down mulch and had local business people such as the Beerwah landscape suppliers provide free topsoil. The council provided trucks to provide the material to put down over the top and trees were also donated. It was a great community event and showed that young people do have pride in their schools and communities and, given the opportunity when adults work with young people, they can express this in a very positive manner. The Treasurer came down to Narangba Valley High School, which is brand new—it was opened this year—a few months ago to launch its parliament. He was very well received, I might add. He spoke highly of the need for young people to actually understand good behaviour and how not to interject and be rude in parliament like my colleagues opposite are. Those young people understand the importance of listening and of interchanging ideas. We and the school are teaching them the finer points which they might well like to pass on to those that sit opposite here today who find it important to interject on an important issue that we are dealing with—the good attitude and the commendable behaviour of young people in the electorate of Longman. (Time expired)1749209:52:0017492Albanese, Anthony, MPMr ALBANESER36GrayndlerALP00—I rise today to draw the parliament's attention to the inequities in the government's First Home Owners Scheme connected with the introduction of the goods and services tax. This legislation provides for a $7,000 grant to people buying or building their first home in Australia. The problem with this is that the Master Builders Association is predicting a 7.5 per cent to nine per cent rise in the short term and a 6.1 per cent rise in the cost of new housing in the long term. By our calculations, a subsidy of $7,000 will provide adequate compensation only for homes costing $87,000 or less. In my electorate, you certainly cannot buy anything for $87,000 or less. But the inequity extends a bit further than that. I have received a letter from a constituent of mine, a resident of Summer Hill. She has written asking me to raise in federal parliament the inequity which is occurring with her situation. This constituent exchanged a contract at auction on 20 May 2000. It was her first home. The sale contract stipulates, as a standard practice in conveyancing contracts in New South Wales, a settlement period of 42 days. Guess what? This means that the completion of the purchase occurs on 1 July 2000. Because of that one day she gets no compensation. In her letter she says:As far as I can see, I will be required to pay the GST on the same things that a first home buyer who enters into a contract after 1 July 2000 will be forced to pay: on conveyancing costs, removalists and basic renovations needed to make my unrenovated 1920s house livable for myself and my family. Things like paint, and painters, plumbing, (the house has no inside toilet), rubbish removal etc will cost me more because of the impact of the GST. Yet I will receive no compensation whereas another first home buyer, who exchanges after 1 July 2000 and who, like me, will only move into their house after 42 days, does get the full benefit of the one off $7,000 payment. Sure, I can buy paint before it increases in price. But I cannot get the keys to the house until I complete the purchase. This, as you are aware, does not occur until settlement. I cannot call tradespeople out nor indeed move out of my flat until I get the keys, which means I will incur GST the same as a person who exchanges on or after 1 July 2000. The Government chooses to compensate them but not me.This is just one of the anomalies of this disastrous GST package. This is not mentioned in the $431 million advertising campaign to sell this unsellable new tax. (Time expired)17492NaN:00:0017492Kelly, De-Anne, MPMrs DE-ANNE KELLYFK6DawsonNP10—I want to speak today on the bedrock of our democracy, the Australian Constitution. At a time of dangerous instability in our region as democratically elected governments in Fiji and the Solomon Islands have been toppled by armed rebels, it is timely to reflect upon what gives Australia its inherent strength and stability: our Constitution and our strong commitment to the rule of law.On 1 January next year, the Australian Constitution will have been in operation for exactly 100 years. It was largely the product of decisions made in Australia by Australians over the decade of the 1890s. Yet, as Sir Ninian Stephen, the former Governor-General and chair of the Constitutional Centenary Foundation, has observed, it is a document that is not well understood. The fundamentals of the Constitution based on those decisions made more than 100 years ago have stood the test of time and Australians have shown a marked reluctance to change them. The defeat of the Republic Referendum is the most recent case in point.What makes our Constitution the bedrock for our democracy is that it is a living document that can be changed by an expression of the popular will. Truly, Australians have real ownership of it. Only eight proposals to change the Constitution have succeeded of the 44 questions put to the Australian people since 1901. I believe that the proven reluctance of the Australian people to want significant change to the Constitution underlines their belief that the Constitution does have flexibility and a high degree of workability. People have shown that they have confidence in our Constitution. Naturally, there is a marked reluctance to give the Commonwealth more power and a similar marked reluctance by Australians to fall into line as directed by the power elites. Indeed, the first attempt at a constitution was defeated by a referendum in 1898 and it only succeeded the following year when amendments were made. There is a feeling abroad in some circles that the Commonwealth has in the past tried to circumvent the Constitution and the express will of the people to gather power to itself. In 1937 a referendum to give the Commonwealth power over civil aviation was defeated, yet the Commonwealth gained this power through the signing of international treaties. That was a precedent for more alarming subsequent grabs of federal power to override state rights. The most welcome recent decision of the government for a fundamental review of our international treaties, the ways they are entered into and their implications for our constitutional structure and law is to be applauded.If the Constitution, the rule of law and the very fabric of democratic government are to be preserved, there must be full accountability and consultation with the Australian people before the Commonwealth signs any proposed treaty. Any change to the Constitution requires the majority of the people in a majority of the states. That guarantees that the larger states will not overwhelm the voices of the smaller. (Time expired)10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Order! In accordance with standing order 275A, the time for members' statements has concluded.Bills17493R107617493Debate resumed 7 June, on motion by Mr Costello:That the bill be now read a second time.upon which Mr Tanner 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 condemns the Government for its:(1) failure to address the significant investment needs in the areas of education, health and the provision of social services in the 2000-2001 Budget;(2) wasteful and profligate spending on poor quality programs to buy Democrat support for its unfair GST;(3) misuse of over $360 million of taxpayers' money on its politically partisan GST advertising campaign;(4) reduction of a potential Budget cash surplus in 2000-2001 of $11 billion, to a real Budget deficit of $2.1 billion;(5) use of creative accounting techniques in an attempt to deceive the Australian public on the true state of the Budget;(6) mishandling of the move to accrual accounting by providing complex, confusing and uninformative budget documents;(7) failure to identify in the Budget papers the cost of GST collection and implementation; and(8) failure to put in place arrangements that deliver its guarantee that no Australian will be worse off as a result of the GST package 10:00:0017494May, Margaret, MPMrs MAY83BMcPhersonLP10—I am proud to stand on this side of the House and speak about the enormous benefits which the 2000-01 budget will bring to all Australians, particularly residents of my electorate of McPherson. With this year's budget, the Howard government continues to deliver the things that matter to all Australians, no matter where they live. It is a budget that delivers the biggest tax cuts in the history of this nation, a fairer and less complicated tax system, increased and targeted funding for our social infrastructure, a crackdown on welfare fraud, an expansion of programs associated with the government's mutual obligation policy, well-deserved repatriation benefits to the veteran community and more money for aged care services, funding injections in education and knowledge based industries that will secure Australia's future, and it takes Australia to the brink of historically low unemployment. And all this while the government has kept the budget in the black.It is an achievement that those on the other side must acknowledge. It is a skill they never manage to acquire. The Labor Party's negative reaction to the 2000-01 budget, their attempts to obstruct much needed tax reform, their opposition to government policies which have unquestionably delivered more jobs, higher wages and better living standards, and their complete subservience to the union movement confirm that the Liberals and the Nationals are the only parties capable of forming a government and running this country. In fact, the only thing worth noting about the opposition's reaction to this budget is their complete lack of alternative policies. It is a unique and somewhat curious situation to be in—to be saying to the Australian people, `We are the alternative government; vote for us, but if you do, we're not quite sure what we will do. We haven't quite worked out where we will take this country.' So while the coalition continues to take Australia forward into the 21st century with a clear plan and a proven record of outstanding economic management which is strengthened in this year's budget, the Labor Party will remain on the sidelines without a shred of credibility.In the 2000-01 budget we have delivered a healthy $2.8 billion cash surplus. That means for the fourth consecutive year the Howard government is able to reduce public debt, and all Australians benefit from lower debt. By slashing $50 billion from the $80 billion of debt Labor racked up in its last five years in office, the Howard government has more money to spend on health, education, defence, aged care and ordinary families. It is a credit to this government's prudent financial management that our net debt is now amongst the lowest of any nation in the world. That is an achievement that the other side could not have even dreamt was possible. But let me say clearly to the Labor Party that the tax and spend days are over. That is what responsible economic management is about. This budget also puts in place the final stages of the new tax system. It is a new tax system that is desperately needed; a new tax system that delivers income tax cuts to every single Australian worker. It puts more money in the pockets of ordinary families, secures the future of our older Australians and restores business confidence. But the Labor Party do not want Australia to reap these rewards. In fact, those opposite think it is so unfair, unjust and unreasonable that, if they are elected, they will keep it. And we all know why Labor will keep it. They will keep it because, like the Howard government and every single state government, the federal Labor opposition know that the new tax system will boost economic growth. This fact has even been agreed to by the Labor government in my home state of Queensland. Even the Beattie government has signed an agreement that says economic growth will increase by a minimum of two per cent as a result of the new tax system. They know the benefits that are right around the corner and they want to jump on the money truck.The GST will deliver truckloads of money to the states—money that can be spent on schools, hospitals, roads, infrastructure and police. In my electorate of McPherson, people have been waiting for years for the Labor government to fund desperately needed upgrades to the Gold Coast Hospital. With the economic bonanza that the GST will deliver to the states, the Beattie government has run out of excuses. It must either upgrade the Gold Coast Hospital or admit that public health just is not one of its priorities. The GST will also enable the Beattie government to remedy the shortage of police on the Gold Coast that has led to a spate of crime which is deeply concerning the business community. It is for these sorts of reasons that the Queensland Premier pushed the other state premiers out of the way in his enthusiasm to sign the agreement with the federal government. But it seems buckets of extra money are not enough for Mr Beattie. Now he wants to claim the credit for tax reform as well. In fact, we heard this week in the House about recent Queensland government advertisements claiming as its own the First Home Owners Scheme. Make no mistake: the First Home Owners Scheme, which will deliver $7,000 into the pockets of first home buyers, is a product of the new tax system and the Howard government.But that is not where the Labor Party's hypocrisy ends. Merri Rose, a minister in the Beattie government whose Currumbin electorate is also on the southern Gold Coast, is out in the community desperately trying to link her name with the new tax system. She has been busy putting out press releases which detail all the benefits Queensland businesses will get from tax reform. She is sending out brochures and leaflets on tax reform, with her name and her picture on them. She is absolutely determined not to let the opportunity to gain a bit of kudos in her marginal electorate go by, and she knows that the tax reform the federal government has put in place brings that kudos. But the Gold Coast community, like the rest of Australia, sees this for the hypocritical stunt that it is. Staging stunts to trick voters into believing them is what the Labor Party is famous for. Whereas the coalition delivers real policies that create real jobs, the Labor Party relies on rhetoric and empty promises. Before the last election in Queensland, Premier Beattie stood before the people, hand on his heart, and promised that he would get the state's jobless rate down to five per cent. But ever since that unfortunate day when the Beattie government was elected, the Queensland unemployment rate has gone in exactly the opposite direction. This week Mr Beattie finally had to come clean and admit there was no hope for the jobless under his government. He admitted that unemployment was stuck at over eight per cent, with no hope of improvement in sight.I am afraid the jobless were out of luck the day Mr Beattie stepped into the Premier's office. Since that day the state's unemployment rate has defied the national trend and risen through the roof. At a time when the national unemployment rate is 6.8 per cent and falling, the Queensland rate is on the up and up. It is not until this irrefutable evidence is out in the public arena and Mr Beattie has his back to the wall that he finally admits that his election promise of five per cent unemployment was impossible from the outset and a cruel hoax on the people of Queensland.In stark contrast, the Howard government has delivered the lowest unemployment in a decade. The 2000-01 budget takes Australia to the brink of a historically low rate—6¼ per cent unemployment by mid-2001. These are not just empty figures. They represent real people and real families all around the country who will earn a real income and get real opportunities. My electorate of McPherson has experienced massive job growth, with the unemployment rate plummeting by over two per cent in just over a year. This is proof positive that the Howard government's industrial relations reforms are helping business to create jobs for Gold Coast residents.But the good news does not end with the Gold Coast. Unemployment on the Gold Coast has followed the national trend and fallen significantly since 1996. From the time the Howard government came to power, we have created around 700,000 new jobs. Total employment has increased to a historic high of nine million jobs. The rate of job creations has been twice as fast as Labor could manage, and the vast majority of these jobs are full-time jobs. In the year to April 2000 more than 70 per cent of the 291,900 new jobs were full-time jobs. That is over seven times the rate under the last two terms of the Labor government. I am proud to say that in order to continue these great results, the 2000-01 budget has allocated $2 billion to fund a variety of new and existing measures in the areas of employment, workplace relations and small business. But this budget has not forgotten the jobless. This government refuses to let them rot on the scrap heap of unemployment. In 2000-01 the Work for the Dole program will be expanded to a record 50,000 places. Many of these will be on the Gold Coast, where our projects have received national recognition and given the jobless real hope.As part of the Olympic Art Pole project in Coolangatta hundreds of young jobless people are painting telegraph poles with colourful Gold Coast imagery to mark the route of the Olympic torch relay. It is a historic project that captures the Olympic spirit and gives the participants real training, team skills and the motivation to achieve. Similarly, another Work for the Dole project at Palm Beach is responsible for the Faces of the Millennium. The mural includes hundreds of faces of local children and stretches for kilometres along the Pacific Highway. In fact, in the last three months alone the Work for the Dole program has provided more than 460 jobless in McPherson with opportunities, training and hope.But again, the Labor Party are opposed to this. They are opposed to giving young people opportunities, training and hope. In fact, the opposition spokesperson for employment, the member for Dickson, took time out during her recent European junket to criticise a Work for the Dole project at the Broadbeach kindergarten in the local Gold Coast Sun newspaper. Of course, as usual, she got it wrong. The member for Dickson claimed that Work for the Dole participants had to work five days a week, were not insured if they had an accident and did not receive proper training. The reality is that participants work a maximum of 2½ days a week, are covered by special Commonwealth accident insurance policy and, in the case of child care, must actually have some practical experience in order to be accepted into a child-care degree at university. In this case, Work for the Dole is an integral part of the participants being accepted into tertiary study and in starting them out in their chosen career.There is no doubt that the Gold Coast is a very tempting place to move for someone who is in search of a beachside lifestyle. The new mutual obligation initiatives announced in this year's budget deter such people from doing the wrong thing, and go a long way toward reforming the handout mentality cultivated by Labor. This year's budget requires all job seekers to sign a preparing for work agreement before receiving unemployment payments. This is another measure this government has introduced to curb welfare fraud. We have already saved hardworking Australian taxpayers $750 million.The 2000-01 budget also looks after those who have worked all their life to progress Australia and serve their country. The Gold Coast is home to one of the largest veteran communities in the nation. More than 10,600 ex-service personnel live in the McPherson electorate alone. Every single one of those people will be given a boost from this budget. The Howard government recognises that no group in the community is more deserving of our gratitude and assistance than those who served Australia in times of need. That is why we have continued to support the most generous repatriation system in the world and have allocated a record amount of funding to the veteran community in this year's budget.Vietnam veterans in McPherson whose health has suffered as a result of their service will share in a $32.3 million support package. More than 2,600 personnel who served in South-East Asia will receive $26.6 million worth of repatriation benefits. Elderly veterans will have the option of quality living at home thanks to the introduction of the veterans home care package, and $6.8 million has been set aside to ensure that residential care facilities with veteran residents meet accreditation standards. Another $17.2 million has been allocated to extend the Their Service, Our Heritage program and ensure that veterans are recognised during the centenary of Federation. The list goes on, and so does the good news. The large proportion of older Australians in McPherson will also benefit from this budget. Under the new tax system, the age pension will increase by four per cent and is guaranteed to remain at least two per cent above any rise in the cost of living. There are also two types of savings bonuses for retirees to protect the value of their savings and investments after the GST is introduced.Many of my older constituents are also concerned about maintaining good health and a decent quality of life in their later years. That is why the government has allocated $66 million for aged care in this year's budget. Almost $12 million will be spent on a residential aged care and compliance system to ensure that standards are up to scratch. About $11 million will be spent to simplify income testing procedures for those in nursing homes and other residential facilities, and $6.1 million over four years will go towards developing a national strategy for an ageing Australia. Older Australians have given a lot to this country throughout their lifetime and the Howard government will not shy away from returning the favour.This year's budget will also enhance the Gold Coast's reputation as a knowledge and education hub. With two world-class universities and a multitude of local primary and high schools, McPherson residents have a great stake in the future of education. The funding injection of an extra $382 million for education and training means Australia will continue on the path to becoming a knowledge nation. Our intellectual capital is our competitive advantage and this government is now spending $11.6 billion on educating and training Australians. Over the next four-year funding period, government schools will receive a funding boost of 21 per cent, or an extra $1.4 billion. In order to rectify the unequal funding arrangements for low income schools in poorer areas, funding for non-government schools will rise by 40 per cent. The advancement of our knowledge base particularly affects the Gold Coast as we strive to become the leading information technology corridor in the country. In April this year the Gold Coast demonstrated its capacity to be at the forefront of ground breaking technology when a local company secured $9.5 million in federal government funding to set up a new high growth information technology company. The company, named Timsco, was awarded the funding under the federal government's BITS program. The BITS program provided $76 million to establish 10 information technology and communications incubator centres around Australia. Timsco plans to operate under the name Inqbator and was the only company in Queensland to be awarded funding. The company now plans to invest $25 million in new IT start-up companies on the Gold Coast over the next five years. It is this sort of vision and leadership by the Howard government, combined with a willingness to be on the cutting edge, that will get these sorts of essential projects off the ground and see Australia, and electorates like McPherson, prosper in the coming years.In addition to adopting new technologies and building new industries, the Gold Coast relies on the city's traditional money-spinner, tourism. The Gold Coast tourism industry provides tens of thousands of local jobs and has been growing steadily. The sound economic stewardship of the Howard government has led to soaring business confidence and an expansion of work opportunities in the hospitality industry. This goes hand in hand with the falling unemployment levels in McPherson that I mentioned earlier. Given that 80 per cent of the tourism industry is made up of small businesses, there are also significant gains to be had from the government's reform of the business tax system and the related cuts to the company tax rate. And around 24,000 small tourism businesses, many in McPherson, will directly benefit from this week's decision by the ATO which allows financial transactions between principals and agencies to be carried out on a net or value added basis. For the tourism industry, this decision means far less paperwork and associated compliance costs, simpler tax dealings which eliminate the legal and tax obligations that would have applied to principals and agents under the original proposals, and improved cash flow.This year's budget also allocated almost $92 million to the Australian Tourism Commission as part of a $361 million package over three years. It is a record amount of funding and it will ensure that the premier tourism destinations like the Gold Coast are effectively and properly promoted to overseas markets. I have every confidence that this will result in a boom for the Gold Coast tourism industry which will outstrip even the previous year when visitors pumped a huge $2.9 billion into our local economy. International tourism is Australia's largest export industry and is forecast to grow at a faster rate than the economy as a whole, so it is definitely an area that the government is serious about supporting.I am proud to be standing on this side of the House today to support the very positive measures the 2000-01 budget has put in place for our country. In just five budgets the Howard government has turned the economy around, powered through a financial crisis in our region that would have left us crippled if the Keating government had remained in power, and reformed the cycle of welfare dependency and unemployment that had become ingrained in Australian society after 13 years of Labor. The country has much to celebrate in the 2000-01 budget and I am sure the best is yet to come.10:18:0017498Evans, Martyn, MPMr MARTYN EVANSN36BonythonALP00—When the Leader of the Opposition gave his budget reply speech a few weeks ago, he described the Howard government as being in love with the past but afraid of the future. When he said those words I am sure he would have had squarely in his mind the government's attitude towards the science, technology and the innovation aspects of the budget.There is no doubt that humankind has gone through a number of revolutions in its brief history on this planet. The first was the agrarian or agricultural revolution, which enabled us to feed substantial numbers of people in large communities and cities and enabled our population to grow and our technological base to expand. We then went through a period, only 400 or 500 years ago, of an industrial revolution which established the very basis of our modern society and enabled the factory mass production which has so revolutionised the economics of human society.But now, as many people in the community well recognise, we are in the throes of an information revolution which will change again the very nature of the way we organise our society and certainly the way our economy is based. This information revolution has a number of very evident changes throughout our society and is based on several enabling technologies. While we are all familiar with the fact that technological change is pretty much one of the only constants in our society, along with death and taxes, the reality is that it is only occasionally that technology changes in such a way that it revolutionises the basis of our economy. Two of the most important technologies, which we should describe as enabling technologies—those technologies which enable us to move forward in a quantum leap to the next level of economic development—are IT, information technology, and biotechnology. Both of those technologies will form the basis of a whole new revolution in this century.When we look at the budget this year, it is interesting to note that in the last year of the real 20th century, the second millennium, or alternatively in the first year of the popular millennium, as we might describe it, the reality is that this government chose to ignore science, technology and innovation in its budget speech and largely in the budget documents. Indeed, where it was singled out for attention it was singled out for harsh treatment and for gradual reductions in funding. This is a terrible reality to face as we transition from the 20th century to the 21st century and at the cutting edge of the millennium where people had real expectations that the government will actually understand the significance of the science and technology changes which we confront. We can actually see the evidence of this in our own immediate economy. I had the privilege of attending a Press Club luncheon on Monday, which was sponsored as part of Medical Research Week, when Dame Bridget Ogilvie spoke. She is the former director of the private research foundation, the Wellcome Trust, a very massive funding body established on the basis of private philanthropy in the United Kingdom. Dame Ogilvie has very strong connections to Australia, so she is not a foreigner who has come here to lecture us on our own society, but rather one who has a firm basis in the Australian community and who at the present time is living and working in the United Kingdom. I would just like to quote briefly from her address to the Press Club, which was in fact very important and illuminating. She said:Even here in Australia, the contribution of rural and resource exports to the economy has fallen from 77 per cent to 58 per cent in the past 20 years, and the contribution of high tech industries, now 30 per cent plus, is growing at more than 30 per cent a year. At the same time, government has let the funding of the science base in education slide to an astonishing degree compared to competitor nations.Dame Ogilvie has very correctly identified the fundamental problem with this government's budget and its treatment of science and technology. Why is this so important? If we look at recent history, the last 50 years or so, we will see that the kinds of changes which she highlighted in that brief quotation have taken hold in our society. The plus side of that, the benefits which flow from the investment in science and technology, have also been very evident. I would like to quote briefly from the paper entitled `Supporting Research and Development to Promote Economic Growth: The Federal Government's Role,' by the Executive Office of the President, Council of Economic Advisers, dated October 1995. They highlighted, in respect of the US economy, but it is equally true here, that:Investments in R&D have high rates of return. The social rate of return, which may be close to 50 per cent, exceeded the high private rates of return, of 20 to 30 per cent, because of the `spillovers'—benefits that accrue as other researchers make use of new findings, often in applications far beyond what the original researcher imagined.And that is very much the case with the new economy and the new information society revolution in which we are currently engaged as a nation, and indeed as a planet.If we are to benefit from this and benefit from the very obvious advantages which flow to society in the way of high wage, high skilled jobs, it is essential that our governments invest in science and technology to form the base on which the private sector can then build and on which our society can grow. Unfortunately, the Howard government has a poor track record in this area. It is ironic then that the Prime Minister and other senior figures in the Howard government often say, in respect of science and technology when they attend functions that are related to science and technology, which unfortunately is not as often as they should, that the Howard government should be judged on its record in science and technology. Unfortunately, when we do that we find a very disappointing track record indeed.If we look back to the very early days of this government, one of the first actions that it took was to reduce the position of Chief Scientist to a two-day-a-week part-time position. That, I understand, reflected a debate in cabinet about whether the position should actually be abolished. The fact that it came out at two days a week was in reality a compromise between those who wanted it abolished altogether and those who wished it retained. I do not know whether this story is apocryphal. I was not present in the cabinet room so I cannot testify to that. Clearly, the fact that this government changed the position of Chief Scientist to a two days a week position in order to save money is something which typifies its response to science and technology. It sends an unfortunate signal to the private sector about the value which this government places on it, when its own Chief Scientist is demoted to a two-day-a-week part-time role. Times have changed a little and the present incumbent of that position, Dr Robin Batterham, who also works for Rio Tinto for the balance of his time, is a very hard-working and competent individual who has brought great credit to the position. The government is now fond of saying that it appointed him to a part-time position because it wanted to exploit the benefits of his private sector involvement. I suspect that is a justification ex post facto and one which now suits the government but which has little basis in fact. The changes which the government introduced in its early days in office have continued to wreak havoc with business investment in science and technology. One of its first decisions was to reduce the R&D tax concession from 150 per cent to 125 per cent. That, of course, has resulted in substantial cuts to business investment in research and development, which I will highlight in a moment. Subsequently, it has decided, for other quite proper reasons, to cut the corporate tax rate further on 1 July, in a few weeks time, which will reduce again the value of the R&D tax concession. The value of that concession is now so low that I doubt that most businesses would find it worth their while to even make the claim. When this government first came to office, business investment in research and development in 1995-96 was $4,343 million. In the following financial year it fell to $4,200 million, in 1997-98 it was $4,043 million, and in 1998-99 it was $3,650 million. So we have seen a continuous decline in business investment in research and development since this government came to office—a trend which totally reverses the previous trend in business investment. This is catastrophic in an era when science and technology forms the basis of our economic growth. It is quite disastrous. Although the government is fond of citing the total figure as to its commitment to science and technology and highlighting the sheer telephone numbers of this commitment, that conceals the reality that it is a declining share of GDP. Telephone number figures are often impressive but you have to look behind them and see the trend that they reveal and the overall percentage commitment of the national economic effort to understand their real importance. When this government came to office, in the final year of the previous government, the total Commonwealth commitment on science and innovation represented 0.772 per cent of our GDP. It is now down to a disastrous level of 0.678 per cent of our GDP—a declining proportion. The telephone number figures mean nothing if they are not representative of an increasing commitment by a government to business R&D.There is, of course, the substantial commitment which any government makes to public sector R&D. What is the track record of this government? Unfortunately, with one minor exception, the track record is again very poor. ARC funding is at appallingly low levels as a percentage of those who seek to apply. Many of our better researchers are turned down. The CSIRO is under attack, with property and IT outsourcing proposals. This government is not only outsourcing IT in CSIRO, which can only be for ideological motives and certainly not for proper scientific motives, but also selling their property and forcing them to pay to rent it back—an absurd proposition for a science agency like CSIRO. The CRCs, another exciting innovation of the previous government, are also under attack from this government. Even Tony Staley, who has a reputation as a spokesman for the present government, has made no secret of the fact that he is very concerned about the significant cuts to the CRC program which will flow from the government's clawback of GST components in their grants. While the government claims that science will benefit from the GST, the reality is that it is cutting science grants and science budgets in the public sector agencies and also in the grants which it gives to individual researchers in a way which cannot be justified. The reality is that most scientists are currently exempt from wholesale sales tax. Whether that is because they are part of a government agency like CSIRO or whether it is because they are part of public hospitals or public universities, they are not currently paying sales tax. If they do not pay sales tax, they certainly will not get much benefit when the GST comes in. But this government is hitting all of their grants and operating budgets with a cut of just over three per cent—a very significant cut indeed, and one which few scientists will be able to do anything about, other than by reducing their effort.A particular area which I remain concerned about and which this government refuses to address is the impact of the GST on grants funded by overseas research agencies. Many brilliant Australian researchers are able to attract funding from agencies like the National Institutes of Health in the United States or the Wellcome Trust in the UK. This is substantial funding which flows to this country and supports many scientists. These overseas based bodies are not registered for GST in Australia, nor can we expect them to be. They have probably never heard of it but of course these scientists have, and they will be hit for the GST on their grant unless this government changes the rules and makes sure they are not. I believe this is an unintended consequence of the GST. But, like so many of the unintended consequences of this iniquitous new tax, it will have a diabolical impact on scientists who receive overseas based grants, if the suspicions of the legal advisers to those institutions are correct and they are in fact subject to the GST. This is a situation which must be urgently clarified by the government so that the scientists who receive those grants—often our best scientists—know where they stand. At the moment they do not and they fear a 10 per cent cut, for which they will get no recompense from overseas agencies.While Australia is taking these kinds of decisions and while the Howard government is failing science in general, we see the investment by competitor countries powering ahead. The examples of the United States and the United Kingdom are particularly outstanding. Even Newt Gingrich, not one known for his generosity to the public sector, sponsored, as part of his Contract with America some years ago, a massive increase in National Institutes of Health spending for medical research and a substantial increase to the National Science Foundation—the NSF, the public sector grant agency in the United States—for the next few years. Indeed, under the current US administration, Democrat or Republican, those agencies continue to enjoy massive increases in their budgets. Their annual increases dramatically exceed our total commitments. They understand the importance of science and technology investment to future economic growth and the very basis of the American economy. The United Kingdom is doing much the same.These are not countries with which we would normally compare ourselves in a general economy sense. Obviously, our economies are similarly based, but the dramatic differences in population mean that the United States and the United Kingdom have opportunities which we do not. But we certainly have niche opportunities in this country and we can compare ourselves with countries like Canada, Finland and other equivalent economies. When you do that, you find that Australia is poorly placed. Canada, particularly, a country where we can make direct comparisons, is investing massively in new chairs in universities, at a time when this government is increasing the HECS fees on science students and reducing its commitment to science expenditure and infrastructure investment in our universities. You need only talk to any person in the science faculties of Australian universities to understand the impact which the progressive and continuing cuts which this government has imposed on the tertiary education sector has had on the investment in science. Science is a very expensive thing to teach and very expensive to learn, as compared with other university faculties. When the universities are put under pressure financially, that is where they cut. There was even a rumour that one of Australia's major universities was going to close its science faculty. I think that was nothing more than a rumour, but the reality is that in previous years that would never have even surfaced. No-one would even have thought it remotely possible. The fact that that rumour gained currency reflects badly on this government.To turn briefly to some of the resources sector, which I will cover again in a future contribution: we have seen technology in AGSO cut dramatically in recent budgets. The Australian Geological Survey Organisation, which is not only part of the science effort of this nation but also a direct contributor to the economic wealth generated by the minerals industry, has not fared well under this government. When we left office and when this government came to office, the organisation had 582 staff. It now has 441 staff and there seems to be a continuing decline, although I noticed one extra staff member in this year's budget.This is in a budget in which the Taxation Office gained thousands of new staff, and I find it incredible that a government can have a budget in which the Taxation Office gains thousands of new positions while science agencies and important vital contributors to our national economy, like AGSO and CSIRO, suffer significant cuts or, at best, minor increases over a period of five years in which they have seen significant decreases. It is the total of that budget that matters, not the one-year change but the trend under the Howard government since it first took office. This is not a government which supports science and technology; this is not a government which understands the value of innovation to the bottom line as a nation. Earlier this year we saw an investment in the National Science and Innovation Summit. This was an innovative idea and a good one for the government to adopt. Many people went to the summit and contributed substantially of their time and expertise. Unfortunately, the innovation of holding an innovation summit was the only innovation we have seen. No further changes have flowed—no policy decisions, no changes in executive decision making—as a result of that summit. Business is now expressing very seriously its concern to the Howard government about the way in which the trend of investment in government and private R&D is heading. We had the innovation summit, but we have seen very little innovative thinking from this government ever since. As my leader said on budget night: `a government in love with the past but afraid of the future'.10:35:0017502Entsch, Warren, MPMr ENTSCH7K6LeichhardtLPParliamentary Secretary to the Minister for Industry, Science and Resources10—I rise in the Main Committee this morning to speak on Appropriation Bill (No. 1) 2000-2001, Appropriation Bill (No. 2) 2000-2001 and Appropriation (Parliamentary Departments) Bill (No. 1) 2000-2001, and highlight the many benefits and challenges they present to people of Far North Queensland, particularly in my electorate of Leichhardt. Before I go into that, I just respond quickly to some of the comments made by the member for Bonython. Firstly, with regard to our commitment to science and technology, I suggest that there is a very strong focus from this government and a commitment to support science and technology in this country. Clearly, there had been a significant lack of commitment by our predecessors and, as a consequence, we put up the Science and Innovation Summit, which was held not so long ago. What we are determined to do, though, is ensure that the money we spend in this area is spent in areas that are going to maximise the benefits for this country and for the science community. In parallel to the Science and Innovation Summit, we have commissioned reports from the Chief Government Scientist, who is also going to put forward what he sees as priorities in that area for our country. We are waiting on those reports and when those reports come up we will assess them and look at ways to maximise our opportunities through funding initiatives.The universities argument is a tired old argument, I would suggest. Yes, Labor certainly pumped a lot of money into the sandstone universities—they were very fat and very healthy, but very much at the expense of our regional campuses. We have, in fact, cut back a little—we have put the sandstones on a Jenny Craig diet and in return pumped that money into the regional campuses. Speaking for my own university, the JCU in Townsville and Cairns, the money we have recently spent there, for example, on our new library and more recently on our medical school, is an indication of the commitment that we have. It is a matter of being able to provide university opportunities for not only those based in metropolitan areas but also those based right around the country. I think that JCU is a classic example of that.With regard to AGSO, I point out that a lot of the staff reductions in the previous budget that the member was talking about were directly related to contracts that had expired. As a consequence, there was no need to continue those programs. Again, we are focusing on areas in AGSO that we think will maximise opportunities in this country. At this time we are doing a lot of work offshore. As a result, there is an opportunity for AGSO to pick up a significant amount of funding for the contracting work that they will be carrying out. So what the member was saying was not entirely accurate.I am proud to stand before you today as a member of a government that has taken Australia from the brink of economic disaster to a position of hope and optimism for the future. The budget is hard evidence of the benefits that can be achieved by a government through responsible fiscal management. Sustained growth of more than four per cent over the past three years is set to continue. Unemployment is forecast to fall to around 6.25 per cent by June next year. That was only a pipedream for our predecessors. As a matter of fact, this figure is the lowest in a decade. Inflation will remain low and the Treasurer has been able to deliver his fourth consecutive budget surplus. This country's economic outlook is certainly a far cry from what it was four or five years ago. Those consecutive surpluses need to be put in context, because in the time that we have been in government we have not borrowed a cracker; not a cent. The last time a government was able to boast that was in 1910. So that is an achievement in itself.The achievement that is foremost in my mind, and in that of many others in my far northern electorate, is the slashing of net debt by about $50 billion. That is certainly a remarkable feat when you consider that in 1995-96 taxpayers were paying as much in interest repayments as they were for hospitals and schools. I am not suggesting for one moment that there has not been hardship along the way as the government has pulled in the reins, particularly in regional and rural Australia, where loss of services and lack of infrastructure have intensified the impact of geographical isolation. That is why I was pleased to see in this budget that the government has been able to give something back to rural and regional Australia in the area that matters most to people in my electorate, and certainly to many others. I refer to the $562 million country health budget package, which represents the largest effort ever by an Australian government in addressing the historical imbalance between rural and city health.The reality is that people in Far North Queensland and many other remote electorates will never have total equality. I suggest that they really do not ask for that. But people in Far North Queensland do expect to be able to access locally a reasonable standard of health care services. They just want a fair go. They do not want to wait for months for specialist appointments; they do not want to compromise when it comes to the health and wellbeing of their loved ones; and they do not want to travel to some distant city in the southern areas for medical treatment and procedures, away from the support network of their family and friends. In towns like Cooktown and Weipa, having one extra doctor on staff can mean the difference between whether or not the other two can have a night off occasionally without being on call. It also means the difference between having a 12- or 14-hour day or having 18-hour days. It can mean the difference between whether or not one of these doctors gets time to do outreach work in the outlying Aboriginal and rural communities, where diabetes, heart disease and other nutrition-related conditions can spiral out of control without frequent medical supervision. I certainly do not need to tell the chamber that overworked and highly stressed doctors burn out very quickly, with communities left to suffer the consequences of the high turnover rate of doctors and the resulting lack of continuity in health services and acute shortages in most health disciplines. The most pleasing aspect of the country health budget package is that it is all about coming up with medium- to long-term strategies aimed at restoring some of the balance in the regional health equation. We do this not by seeking to punish those young doctors who are unwilling to leave the comforts of the city but by rewarding those who make a genuine commitment to serve regional and rural communities. The budget has allocated $36.7 million in incentives for new medical students to practise in the bush, which includes 100 new scholarships at $20,000 each, as well as allowing graduating doctors who work in the country to forgo their HECS debt for every year that they serve. They are certainly very real incentives for very real outcomes, and that is what this health package is all about.I am pleased to acknowledge another federal budget initiative is the injection of $117.6 million to establish nine new clinical schools in regional and rural Australia. If there is any doubt about the demand for such training facilities in regional areas, one only has to look at the success story of North Queensland with the new James Cook Medical School at Townsville and Cairns. I understand that, prior to its opening this year, the university was overwhelmed with more than 850 applications for a possible 60 places. The opening of the new medical school fulfils a long-term vision of the local medical fraternity. The intention is not so much about producing more doctors, but more about selecting a different kind of student for a different kind of course, focusing on rural and remote, indigenous and tropical health care issues. For this reason, I speak with much confidence about the ability of the country health package earmarked in the 2000-01 budget to make such a difference to the lives of rural and regional Australians.There are many other positive initiatives funded in the budget of direct benefit to my constituents: the continuation of the highly successful Black Spot funding program which has seen millions of extra dollars injected into fixing the tourist sections of roads between Cairns and Cooktown; fast tracking of the duplication of the Southern Access Road, a major arterial road to the Cairns CBD; increasing assistance for isolated children without access to local schools by $14.4 million over the next four years—a major benefit to people living in the remoter areas of Cape York; and an additional 1,500 CDEP places being funded for Aboriginal and Torres Strait Islander communities in regional and remote areas. This is certainly a major benefit for those in my community, given that I represent in the parliament the third largest number of Aboriginal and Islander people, with some 23,500 to 24,000 indigenous people in my electorate.There is also very long overdue recognition for support for Vietnam veterans and their families, with a $32 million package in response to the findings of the Vietnam veterans health study. It includes free psychiatric assessments for veterans' partners, expanding the Vietnam veterans counselling service residential lifestyle programs into rural areas with another 16 programs per year. There are anger management programs, the expanding of coping skills programs for partners of veterans into rural areas with another 20-odd programs and care of Vietnam veterans' children with spina bifida and cleft palate. These areas have needed to be addressed for a long time and this is certainly a major step in the right direction. Other support for Vietnam veterans' children includes extending access to counselling services to include veterans' children up to the age of 35, offering free psychiatric assessments for veterans' children up to the age of 35 and extending eligibility for the Veterans' Children Education Scheme to include Vietnam veterans' children. All of these things are a major step in the right direction in dealing with many of the inadequacies that have been there in the past for Vietnam veterans. Another long overdue area of recognition is the support for the veterans of South-East Asia from 1955 to 1975 by extending the repatriation benefits in recognition of their service—a major achievement.With all of these positives in the budget, I have to say that there is one other critical area of need which I am working hard to have addressed. I am talking about the lack of communications services, particularly the lack of infrastructure necessary to boost the services in my North Queensland electorate. It is certainly of great concern to me that, as the rest of Australia contemplates its future with the new age of digital television and information technology, many communities in my electorate continue to go without even basic communications services. I have been battling for more than four years in this parliament for infrastructure to facilitate increased television, radio and Internet services in my electorate, and with some progress, but very slow. Indeed, to this day over 90 per cent of my electorate remains without access to mobile telephone coverage, 80 per cent of it without SBS TV, and over 50 per cent without a reliable commercial television transmission, including one community less than 10 kilometres from the CBD in Cairns. The remote communities of Bloomfield and Rossville are completely devoid of television and do not even have a designated radio signal for the area.It is simply not acceptable that, with the exciting technological advances sweeping the nation and the insatiable appetite of Australians for mobile phones, high-speed data and other multimedia services, many of my constituents are still unable to tune into a local television or radio broadcaster. Although the minister's announcement in February for the launch of the $150 million tender to extend untimed calls across is certainly a major step in the right direction, many shortcomings remain which must be overcome if we are to make a difference to the everyday lives of many within my electorate.I know from my own personal experience that many of the problems being encountered do not fall within the jurisdiction of established funds. The Regional Telecommunications Infrastructure Fund, now Networking the Nation, generated considerable expectation when it was first launched and in subsequent years through the injection of funds from the social bonus package. However, to my dismay and frustration, the guidelines ensure a low priority is afforded to addressing infrastructure problems. I do not in any way wish to detract from the good work being achieved in communities throughout Australia as a result of Networking the Nation; however, it seems to be recognised that while there is a big bucket of money available to telecommunications projects, it is in no way addressing, nor is it intended to address, the single biggest area of need in remote Australia—that is, the lack of infrastructure.Another example is the $10 million self-help subsidy set up to assist only those communities with existing self-help communities to gain a second commercial television signal. This leave remote communities such as Laura and Coen in Cape York, who are unable to afford to fund the self-help infrastructure in the first place, without access to one commercial station, let alone two, and that means that the people in those communities do not have the opportunity of being able to watch on television the Olympics, one of our greatest events, certainly for a long time. It is unfortunate and I am trying very hard to rectify that prior to September. My office did investigation the possibility of co-location and shared arrangements, utilising existing ABC towers. Unfortunately, National Transmission Ltd provided a quote which was completely unrealistic, given the limited capacity of a rural based shire such as Cook Shire Council to pay for telecommunications infrastructure. I am hopeful that the government's announcement of the $10 million Regional Communications Partnership Fund with NTL will assist community based self-help groups obtain access for transmission sites such as those that exist in Coen and Laura. Subsidising the costs associated with retransmitting commercial and national TV and radio services is certainly a step in the right direction, but I certainly remain concerned about the ability of small cash-strapped local rural communities to pay for such services, particularly when their local authority in the area struggles to maintain its rural road network and other basic local services.Families growing up in communities such as Coen and Laura accept the disadvantages posed by geographic isolation. They accept that their children will not have access to the same educational, sporting, entertainment and employment opportunities, because it is a lifestyle choice, the one thing they cherish. However, it gets a little hard for them to accept that just about everyone in other regional and remote communities have access to not one but two commercial channels.Many communities in my electorate are anxiously awaiting the guidelines for the Black Spot funding component of the Telstra fund. The guidelines were initially scheduled to be released by the department in February this year; it was then revised to May and then to the end of May. We are into June and there is still no word, although I understand that announcement is imminent and I look forward to that.Radio broadcasting is obviously a vital communication link for people living in remote areas, proving to be the most popular medium for residents accessing news, weather, entertainment and general information about the region in which they live. Unfortunately, the ABC has no plans afoot to upgrade its dish in Cairns, much to the disappointment of the people living in Cape York and the Gulf Country, who receive their ABC signals from the dish in Longreach rather than by the more relevant regional broadcast out of Cairns. A good example of that is that people living outside Cooktown or further north at Lockhart River or at places in between will be sitting there listening to their radios telling them about the floods in Longreach. I guess they would get their canoes ready in case it goes to Far North Queensland, up into the cape, not knowing that there is a cyclone beaming down on them from behind, 50 or 100 kilometres off the coast. Here they are getting ready for a flood and they are going to be blown away by a cyclone, and they have no idea because their radio broadcast comes from Longreach.I hope that in some way we can address that because it is a real anomaly. I hope that some time in the future the ABC will see a way of being able to provide a regional service in the communities that is far more relevant to those people, particularly in relation to the weather and those types of services, because people living in Laura or in places like Musgrave are not interested in the floods in the Longreach area; they are more interested in the winds that are likely to cause them some damage.In summary, I am confident that the 2000-01 budget will deliver real, tangible benefits for the people in Far North Queensland, particularly in health. I will certainly continue to fight to ensure that areas that are not directly addressed in this budget remain high in the priorities for the future. Those include issues such as infrastructure—something that I speak about very regularly and something about which, as we start to sort out our debt problems, we will be in a position to do something positive. My constituents have only ever asked for a fair go when it comes to the vital issues of health, telecommunications and other infrastructure. I am certainly determined to see that they get that fair go. 10:58:0017507Sercombe, Bob, MPMr SERCOMBEQK6MaribyrnongALP00—The previous opposition speaker in this debate, my colleague the member for Bonython, in his contribution talked at great length, naturally enough, about science, technology and innovation matters. In that context he drew some comparisons between the Australian experience and that of Canada, which is a country which most of us would agree has a great many characteristics in common with this country. One of the very obvious comparisons which he did not draw was with the political climate. A few years ago, when a Canadian government of a conservative hue was attempting to conduct itself with the sort of shonkiness and deceitfulness of this government in terms of its management of the economy, particularly in terms of the tax package that it presented, it paid the very interesting price at the subsequent election of losing all its seats other than three, including that of the Prime Minister. I do not want to be so optimistic in expecting the opposition here to achieve quite that feat, even if that level of change were desirable in terms of the functioning of our democracy. Nonetheless, against the background of the very high levels of anger and concern that exist in our community regarding the way in which the government conducts itself, as reflected in this budget, that Canadian experience sends a very strong message.It does not matter what aspect of the government's policy management reflected in this budget one wants to look at; one frankly sees those characteristics of shonkiness that I was referring to. For example, the much vaunted budget surplus that is built into the government's budget is frankly a shonk. We all understand that budget surpluses are something that are inherently desirable in terms of the perception of our economy in markets, particularly in global markets. In 1997-98, a cash surplus of $10.7 billion was forecast in the budget for this year. We have seen, on the government's own figures, which are, frankly, shonky, that that forecast surplus of $10.7 billion has come back to $2.8 billion against a background of very considerable economic growth, when achieving budget surpluses ought to be easy. The government has reduced its forecast from $10.7 billion to $2.8 billion, but even that figure simply does not stand up to scrutiny. An amount of $2.6 billion of that $2.8 billion surplus is built around the government's estimates of the sale of spectrum. Even in today's Financial Review considerable doubt is cast on that. There is a story on page 7 of the Financial Review headed `Ruling may hit spectrum sale'. The story briefly indicates:A shadow of doubt has been cast over the Federal Government's expectations of raising $2.6 billion from the sale of third generation mobile phone spectrum later this year following an international decision on the spectrum's decision.10000Causley, Ian (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Hon. I.R. Causley)—Order! I think the honourable member would be aware about the standing orders in relation to newspapers in the chamber.QK6Sercombe, Bob, MPMr SERCOMBE—I am, thank you, Mr Deputy Speaker. I was simply referring to the story; I did not intend to read the whole article. I simply wanted to draw to the committee's attention that, even as recently as today, this question of the spectrum sale that underpins the government's surplus is very much in question. Even ignoring the achievabilty of this sum, the accounting treatment of this asset sale is frankly something which the private sector could not get away with. Following on from the budget, for example, the chief economist of the Colonial State Bank said in relation to this matter:We wouldn't give it a pass mark, no.The difficulty with the Budget is the way that the Budget surplus looks like it is being achieved. $2.8 billion budget surplus is projected, but alongside that is effectively $2.6 billion in asset sales. That's really what the financial markets didn't want to see.In the Senate estimates committee shortly before the budget was handed down, the senior officer from Treasury, in fact the director of the budget office, was asked whether the spectrum sale was in fact a sale of a capital asset. His response to the Senate estimates committee was, `Of course it is.' The government is claiming to achieve this surplus on the basis of a one-off asset sale in a situation where, in the private sector, as I indicated, such an extraordinary item would not be capable of being brought to account to produce a surplus. There are other aspects of the budget on the evidence of its own documentation that show the shonkiness of this. For example, $1.65 billion of the GST compensation package for the states is described in the budget as a loan—a loan, mind you, rather than an outlay—in order to prevent it being brought to account in calculating the real underlying deficit of the budget.A third area—frankly, a shonk—which, once again, in terms of commercial accounting practice would probably result in ASIC coming down like a tonne of bricks on the company concerned, is the treatment of the almost $700 million of the Reserve Bank's dividend which has been shuffled into the 2000-01 year to artificially prop up the bottom line. Frankly, we have a situation where this sort of shonkiness characterises the budget.Turning to another aspect of the budget, the tax cuts, once again—and in full deference, of course, to your drawing my attention to the standing orders, Mr Deputy Speaker—I refer to page 6 of today's Financial Review. One would almost think that the Fairfax press is not very impressed with the government! The article is headed `Bracket creep “will eat post-July tax cuts”' and quotes respected economist Professor Ann Harding as indicating that the tax cuts due in July will be completely wiped out for average workers within three to four years by bracket creep.We have a government that makes a claim that it is in fact a great reforming government. On the budget's own figures, after only two years taxpayers will be paying $600 million more per annum in income tax than they are now. In addition to that $600 million which is built into the forward estimates, they will be paying the goods and services tax. The budget forward estimates for revenue show that individual income tax will be up by 10.9 per cent in terms of receipts by the government in the 2001-02 year, by 6.6 per cent in the following year and by 9.9 per cent in the year after that. This is not, as the Treasurer said, the biggest personal income tax cut in Australia's history; it is the biggest income tax fraud, frankly, in Australia's history.We have people who I think are associates of your party, Mr Deputy Speaker, such as former senator John Stone, commenting on this. He was quoted in the Adelaide Review recently as saying:In truth, as every taxpaying man and woman in Australian streets knows, in the coming financial year Commonwealth taxes are going to rise.3J4Sawford, Rod, MPMr Sawford—John Stone said that?QK6Sercombe, Bob, MPMr SERCOMBE—Yes, John Stone said that. We have a situation where we have a budget under which ordinary Australians are going to be paying higher taxes, higher prices and higher interest rates—we are experiencing those now—and, frankly, going to have a tougher life. All this is against a background where the government has frittered away a very substantial surplus that it had accumulated by making cuts to a whole range of areas in earlier budgets. We have a situation where the $400 million plus advertising campaign is not going to be able to cover the gaps that the government has created. In terms of price effects, for example, in the House over recent days we have seen the Minister for Financial Services and Regulation ducking and weaving in relation to the price effects of the GST. The Prime Minister himself has indicated that a spike of 6.75 per cent in the CPI is going to occur as a consequence of the GST, and this is in a situation where Australian workers and Australian families are, frankly, feeling the pinch. A very common attitude I find in my electorate and elsewhere is, `If the economy is going so well, why aren't we feeling better off?' I am sure that you also, Mr Deputy Speaker, in your electorate, come across that sentiment. Let us look at the price effects which have been revealed during questioning of the government in recent days. We have seen, for example, that the dual price tags for pink cardigans are showing a rise of a full 10 per cent. Carriers have plans for mobile phone charges to rise by the full 10 per cent. Workers compensation premiums, we have discovered, will rise by 12.4 per cent. There are dual prices for magazines. Appliance rentals are going up by the full 10 per cent. Prices for insurance and electricity are rising well in excess of the government's pre-election promises.We have seen a discrepancy between what the Treasurer had been indicating in terms of the GST impact on particular price items and what the ACCC has been indicating. For example, we have had the Treasurer in the past indicating that on clothing the effect of the GST will be an increase of 6.8 per cent. Professor Fels's organisation is saying that clothing prices will increase by up to 9.8 per cent, and footwear similarly. I have referred to electricity supplies and so on. Ordinary beer, which some of us are known to enjoy after a long day in this place, was supposed to be increasing by just 1.9 per cent. We now discover that when it is served as draught beer it is going to be increasing by between seven per cent and eight per cent. Against this sort of background, one can understand the deep-seated cynicism that exists in the Australian electorate. This impacts on the industrial relations climate of this country.On the fringe of my electorate we have a very bad situation at the Caterpillar plant, for example, where the twin disaster areas of this government's approach to the GST and industrial relations intersect. Some 80 workers have been taking industrial action for a number of weeks, because they have been wanting to have reflected in their agreement a capacity to negotiate after 12 months experience of the GST's impact on CPI. One can understand why workers who are wanting to protect their standard of living are taking that position. Their need for such a position is illustrated by the fact that within Minister Reith's very own portfolio, in the Industrial Registrar's Office, clerical employees mainly do have such a GST top-up clause in their award. Yet at Caterpillar the management are simply not prepared to talk to the work force about that.I am not particularly wanting to comment on the specifics of the industrial relations environment there, except that I would be somewhat critical of a management that is apparently being directed by its American head office not to negotiate with the local work force. The point I am simply trying to make is that two of the worst aspects of this government's approach—its confrontationist approach to industrial relations and the destabilising effect of introduction of the GST—and the fact that people simply do not believe the government about the price impacts of the GST, are producing a situation where a significant number of working families are suffering because of that industrial situation.If we turn to other sections of our community that have legitimate cause for concern because of the way they have been treated by this government, one can look at the situation of pensioners. In that regard, the compensation package that has been worked out for pensioners as a consequence of the tax changes has been worked out on the basis of the earlier prediction of the price effect of the GST, 1.9 per cent, rather than the 6.75 per cent that the Prime Minister now is claiming prices will spike by. Under the Howard government the age pension has fallen to its lowest level in more than a decade when compared to the level of wages in the broader community. The single rate of pension has plunged below the benchmark of 25 per cent of male total average weekly earnings, which breaks a core promise, as distinct from a non-core promise, that the Prime Minister made in 1996. In effect, pensioners are finding that the equivalent of one week's pension has been pilfered from their pockets as a consequence of the erosion of the value of the pension that has occurred under this government, despite the promises of the government to protect them. Another fundamental issue which the government in the past, particularly in its opposition period, made considerable play on was the question of foreign debt. ABS figures released just a couple of days ago show a $12 billion rise in foreign debt over the last three months. It is now $256 billion, the highest on record. One wonders what has happened to the debt truck that the now Treasurer and some of his colleagues were running around in prior to 1996. This foreign debt situation is alarming for Australia's economic prospects because, with the United States in particular running a record trade and current account deficit, it is becoming increasingly hard for Australia to finance that current account and debt situation. It does not matter what aspect of the management of the economy one cares to look at, one can understand the underlying anger that exists in the Australian community about this government's performance and why some of us are predicting almost a Canadian style result in the next federal election.I started off by referring to the comments made by the member for Bonython in terms of science, innovation and technology. One of the consequences of the frittering away of the government's budget surplus is that the sorts of investments needed for our future as a knowledge nation, as the member for Leichhardt described it, are not being made. The member for Bonython referred to the dramatic effects of the cuts on the R&D tax concession and the declining value of that reduced tax concession as a consequence of the business tax changes. He referred to significant reductions in funding for the Australian Research Council, the CSIRO, the cooperative research centres, and the like. Even the member for Leichhardt indicated that the sandstone universities have been put on a Jenny Craig diet. That is actually not a bad line from the member for Leichhardt. We must file that one away. But in a whole range of other areas we are seeing the effects of this government's misapplication of resources. Significant programs for investment in this country's economic future have simply been downgraded. The TCF Strategic Investment Program was $700 million over five years; it is now back to $680 million over five years. The Pharmaceutical Industry Investment Program was $300 over five years; it is now $292 million over five years. This is occurring because, as was revealed in the Senate estimates committee, a three per cent wholesale sales tax clawback would apply across the entire department of that close colleague of the member for Sturt, who is following me, Senator Minchin. Senator Minchin, as perhaps the member for Sturt might indicate, has not been as effective—3J4Sawford, Rod, MPMr Sawford—Would not be described as close colleagues.9V5Pyne, Chris, MPMr Pyne—He is a very good man.QK6Sercombe, Bob, MPMr SERCOMBE—He doesn't say that of you, actually. He has not been as effective in protecting what are fundamentally important parts of his budget program. They are important because they lay the foundation for a strong, sustained and economically prosperous Australia in the future. What we have is a government that, frankly, has lost the confidence of the Australian people. It is a government that really is misapplying resources. It is a government that has tried to deceive the Australian people in a whole variety of ways. Whether one talks about pension levels, prices, the surplus or whatever, frankly, this government ought to go, and ought to go quickly.11:15:0017511Pyne, Chris, MPMr PYNE9V5SturtLP10—Today, on the Appropriation Bill (No. 1) 2000-2001, I wish to speak to the House about Australia's role in the world. While there is much we can do to continue to develop Australia's continuing role in the world, we also have much to be proud of that has been achieved in recent times. Our more recent record deserves a brief commentary today. What better source for a bit of self-credit than a one-time adversary of the government. He is not someone you might suspect of bias towards the government or our foreign minister. Dr Bob Catley used to be the member for Adelaide in this House. He is now a visiting academic at the University of Otago in New Zealand. Writing recently in the Australian Financial Review, Dr Catley provided a useful check list of recent Australian foreign policy achievements. He noted Australia's continuing influence with the United States of America. It is true that we have excellent relations with the United States. That goes without saying. Our influence with the United States is second to none in the Pacific and Asia. In more recent times, this has enabled us to get the US to take a more dispassionate view of Indonesia than simply concentrating solely on human rights concerns in that country. It meant that, during the East Timor crisis this year, the US was prepared to listen to what Australia had to say and act in concert with Australia with respect to our response to developments both here and in the United Nations.Dr Catley noted Australia's role in the establishment of the United Nations peacekeeping force in Cambodia. We can be proud of the way our forces performed in Cambodia. Most recently, Australia's active involvement in the region over the East Timor crisis showcased the skills of the government and the Australian Defence Force, both diplomatically and militarily. This is particularly true of our efforts to involve countries in the region and to secure United Nations' backing for an Australian led peacekeeping force in East Timor. Dr Catley raised the important role played by former ambassador to the United Nations, Richard Butler, as the chief UN weapons inspector in Iraq. His appointment was a feather in our cap and recognised the respect in which Australia is held at the United Nations. Neither should we underestimate the important influence that Australia continues to exert in Papua New Guinea. We have a longstanding partnership with the government of Papua New Guinea that is enduring and critical to solving PNG's challenges. Australia is still highly regarded in PNG. There is no doubt that the financial and moral support that we are providing to the government of Sir Mekere Morauta is vital to the success of the reforms that he is trying to bring about in PNG.Our former adversary opined that it is testimony to the status of Australia that North Korea has chosen us as a test place for the process of North Korea tentatively opening up to the world in a way that has not been seen for 50 years. Whether that is true or not is immaterial to the fact that the normalisation of relations between Australia and North Korea is an achievement for the government. It reflects the very positive moves being made by the two presidents, Kim Jong Il and Kim Dae-Jung, in meeting and advancing slowly the process of `thawing'—for want of a better word—between their two countries.Our central role in the establishment and nourishment of APEC, the Cairns Group within the General Agreement on Tariffs and Trade and our ongoing support for and critical involvement in the Commonwealth of Nations are all things in our less recent past of which we can be proud. Australia has always punched above its weight in international fora since the Versailles Conference in 1919, with the indomitable Billy Hughes as our advocate. These three fora are continuing indications of the tradition that we Australians admire in our sporting teams, in the individual efforts of our people and in our own government on the world stage.What is important today, however, is the future. I believe Australia needs to make a fundamental psychological shift. This needs to happen at all levels of government and the public service, business and the media. We need to shift from thinking about ourselves as a Western nation with its historical roots in Europe and its postwar history with the US. We need to think of ourselves as a nation that is wholeheartedly rooted in Asia and the South Pacific, with its future in Asia and the South Pacific in alliance with the United States. A few of our priorities should be: to be considered by Asian countries as a neighbour worthy of inclusion in the yearly Asia-Europe meeting; to be considered by South Pacific nations not as a big brother with vast and daunting financial and economic power but as a nation that is a partner in the South Pacific's future; to progress opportunities for closer economic reform with nations that fit economically and in a financial structural sense with Australia beside New Zealand, like Singapore; to thoroughly assess why it was that we lost our bids to secure a seat on the Security Council of the UN—we need to find out what we were doing then that caused countries that should have voted for us not to vote for us; and to secure the best possible intelligence on areas of importance to Australia's defence and foreign policy that allows us to pre-empt any potential security concern in our region.The future of Australia's foreign policy deserves debate, close attention and lateral thinking. We must avoid being content to be a middle power in a Western world; admittedly, a middle power with important alliances and relationships; admittedly, a middle power with a keen interest in important multilateral issues like nuclear non-proliferation and the international ban on landmines. These things are important and so is maintaining our position and not slipping back. But we also need to be visionary about what we can do with our future. Australia should be aiming to be the most significant and influential middle power at the UN. Australia should be aiming to be the sort of nation that Asian nations believe cannot be left out of regional fora. We need them to know the contribution we can make in those fora because of our intrinsic worth as a friend, ally and economic partner. We need them to feel that we are important to them as well as their being important to us. Australia should be aiming to be the country that South Pacific nations turn to first for assistance and advice. We can learn things from each other, partner them in economic development and champion their causes on issues of importance to them as proof of our genuine intentions.We have begun to understand the resource that young people represent through the Australian Youth Ambassadors Program. This program harnesses their energy, curiosity and great attitude that leads young people to be individual ambassadors for Australia. This is an initiative which, if used to its maximum advantage, could be of great benefit to Australia in advancing some of the aims and priorities that I have outlined already. Australian youth ambassadors can spread the kind of goodwill and evidence of a genuine commitment to engagement in Asia and the Pacific that Australia needs. The program has the potential to operate in countries in the Asia-Pacific region which are eligible for Australian aid. These are Bangladesh, Cambodia, China, Indonesia, Thailand, Nepal, Sri Lanka, Vietnam, Laos, Maldives, Mongolia, the Philippines, Kiribati, Fiji, PNG, Samoa, Tonga, Micronesia, Solomon Islands and Vanuatu. All of those countries are important to us. We need to ensure that it is operating in all of them, not just that it is eligible to operate in them, and that we gain maximum advantage from the activities that they undertake. I refer to advantages like friendship, better understanding and a cadre of people who have an intimate understanding of our region on their return.Australia has some tremendous assets that are much sought after around the world and, in particular, in the Asia-Pacific. One of these is the financial architecture that underpins our financial system. One of the ambitions of the Minister for Financial Services and Regulation is to make Australia the financial centre of Asia. This is a realisable goal only because of the reputation Australia's financial sector has for security, stability and honesty. It is also because of the accountability of our companies and investment houses. This is brought about through tough regulation by regulators like the Australian Securities and Investments Commission, the Australian Competition and Consumer Commission, the Reserve Bank of Australia and the National Competition Council. In a very positive sense, we are building on that reputation. Following the Asian financial crisis, renewed interest in international cooperation to regulate international financial markets led to the setting up of numerous international fora for that purpose. Australia's reputation in this area led us to being invited to join the Bank for International Settlements in Geneva's Committee on the Global Financial System, the BIS Gold and Foreign Exchange Committee and the Financial Stability Forum. Within the Financial Stability Forum, Australia is a member of the Working Group on Highly Leveraged Institutions, the Study Group on Market Dynamics and the Task Force on Implementation of Standards. These are important global and regional groups that enhance Australia's reputation and influence around the world. They are a good example of the practical engagement with the Asia-Pacific region that the Minister for Foreign Affairs has talked about in recent times. Importantly, they provide Australia with a platform to highlight our advantages and gain the respect of countries throughout the world. We are using other means to advance practical engagement in the region. Australia's judicial system is second to none around the world. World wide, it has a reputation for fairness and honesty. For this reason we are finding Australian advice is much sought after, and projects for the training of judicial officers and the reworking of legal systems are much in demand. Australia is operating projects in good governance and the judicial system in countries like Bangladesh and Cambodia as well as in the Palestinian Territories. When I was in Bangladesh for the US based National Democratic Institute and, similarly, in the Palestinian Territories for the NDI, Australia's projects in the judicial and good governance areas were well known and respected. It was another example of Australia using its best attributes to good effect.This government also established the Centre for Democratic Institutions, a group not dissimilar to the National Democratic and International Republican Institutes in the US which are funded by the US Congress. The CDI conducts projects in partnership with some of our key neighbours—Thailand, the Philippines and most particularly Indonesia and South Pacific nations like Fiji. The CDI's charter is to promote democracy, human rights and good governance in the region. The centre does this, led by its dynamic director Roland Rich, through education, seminars, workshops and an annual lecture series. Their work assists the government in engaging in a genuine sense in the region. They particularly assist in Indonesia, given the transition to real democracy that is continuing in that country.Could we be doing more in a practical sense to be engaged in Asia? I think we could. For example, why doesn't Australia compete in the Asian Games? The next games are in Pusan in 2002. Given Australia's proficiency in sport and our reputation for robust but fair competition, I cannot think of many other things that would more demonstrate our total commitment to our engagement with Asia than to compete in the Asian Games. Middle East nations like Saudi Arabia compete in the Asian Games, so doesn't it seem a little incongruous that Australia is not there? While I understand that there would be a process to be gone through for application and acceptance which may take some time, I do believe it would be a worthwhile goal in the medium term.We have a formidable reputation as a country that delivers high quality education to its citizens. This is so at all levels, from kindergarten to tertiary education. Each year about 70,000 overseas students choose to travel and pay for tertiary education in Australia. Besides the fact that we need to give them an experience that will have them leaving Australia as individual ambassadors for our country, the fact that they are coming here is a clear indication of the confidence that they have in our education system. They obviously believe that they will be highly employable with Australian university degrees. But perhaps we could use this resource more. There are around 10,000 South Koreans studying in Australia at any one time. There are 50 high schools and a number of universities in Australia that teach the Korean language. With this resource, and evidence of interest in both Australia and South Korea in closer ties, we should conceive a program that involves student, teacher and academic exchanges between South Korea and Australia that includes schools and universities in both countries. Yet again, we would be creating opportunities for the creation of individual ambassadors for Australia and, in the same way, Australians who had had this experience in South Korea would be able to genuinely engage in our region and then proselytise the benefits of engagement at home. Finally, I would like to make some comments about the recent report entitled America's Asian Alliances. It is a report written by American and Australian experts on foreign defence policy, like Professor Paul Dibb, General John Baker, Douglas Paal and Robert Blackwill, backed by the John F. Kennedy School of Government at Harvard. The report was a wake-up call to Australian policy centres. The report demands attention. It requires that we look dispassionately at our relationship with the US, our levels of spending on defence and our future in the region. While not all Australians interested in foreign or defence policy would agree with its findings—indeed, on the key point of a new alliance involving South Korea, Japan, the US and Australia, Professor Dibb himself included a different viewpoint—it is useful for governments to regularly be jolted into reviewing their country's direction.The report makes a series of recommendations which the government should not push to one side. While not all the recommendations may be right, they each need to be seriously considered and addressed. America's Asian Alliances suggests that it is up to Australia to push for change and renewal in its relationship with the United States. The authors believe that the current level of interaction between ministers is insufficient and needs to be more open and ambitious. They write that Australia should have moved the US along further towards the goal of control and reduction of nuclear arms. Importantly, in the recommendation that received great media attention when the report was released, they believe that Australia's spending on defence is inadequate and needs to be increased from the current 1.9 per cent of GDP to 2½ per cent.Further, they are concerned that Australia's defence capacity is not maintaining the necessary interoperability with the United States that enhances our alliance and gives our relationship real meaning. They also note that the US must increase its interest in Indonesia and the level of attention that the US pays to Indonesia. These are serious recommendations from a high powered group of people that will, I am sure, be given the attention one would expect from the government.In relation to the suggestion that the United States, South Korea, Japan and Australia should consider a four-way alliance rather than the US's bilateral relationships with each country, I would like to make a few points. For middle powers like Australia, we need to be very mindful of the reaction of countries like China to talk of a four-way alliance involving Korea, Japan, the United States and Australia. It would be counterproductive if China misinterpreted such a move. China may well be sensitive to an alliance that included those countries in particular. There are other solutions to the problems posed by the paper, like the separate reinvigoration of each bilateral alliance between the US and its Asian allies. For Australia, that might mean an increase in spending on defence. I would be surprised if South Korea would be interested in a four-way alliance that had the potential to make China uneasy. South Korea is a middle power geographically close to China and Japan and historically keen on balancing those two powers in preference to antagonising them. A four-way alliance is probably unnecessary. Our bilateral relationships with Japan, Korea and the US are essentially in good shape. Perhaps now is a good time to review where we are going generally, in the light of America's Asian Alliances, but we should be mindful that we build on strong foundations in all these relationships. With those few words today, Mr Deputy Speaker, I have tried, during this debate on the Appropriation Bill (No. 1) 2000-2001, to speak on an issue that I find of great interest to me—that is, obviously, the issue of foreign policy and, in particular, our future in this region and our engagement with Asia. I would hope that some of my comments would be picked up and interpreted by the Minister for Foreign Affairs and the government as constructive comments designed to add to the general debate in this country on foreign and defence policy. I would particularly draw the House's attention to the report which has been handed down entitled American's Asian Alliances. It is a fascinating and dramatic report with respect to Australia's future. I believe it needs to be given close and careful attention by those who set policy and foreign affairs in this nation in order to make sure that as a country we are maintaining our position as a middle and a growing power, and a power that is more and more engaged in and intent upon becoming a very integral part of the Asian region.11:34:0017515Kerr, Duncan, MPMr KERRRH4DenisonALP00—I rise today to give expression to what are growing and serious concerns regarding the way in which the airconditioning system of the National Gallery of Australia is operated, and a broader range of issues regarding the response to those issues and larger management issues that have been recently given some public attention.To begin with, I indicate that the opposition has been aware for some three months that there is a very large group of employees, or former employees, who have expressed significant concerns. They have come to the opposition because those concerns have not been responded to, in a way which they regard as satisfactory, by the management of the National Gallery of Australia. I might also indicate, by way of a preliminary remark, that largely those who have come forward have indicated that they do not place personal responsibility at the feet of the director of the National Gallery of Australia, notwithstanding Dr Kennedy's comments that he believes that a vendetta is being directed against him. What they do indicate, however, is that, for various reasons, management has not been responsive. These issues now have reached a point where, in my view, it is necessary for the opposition to express concern in a public forum in relation to them, and to indicate our view that there is now an appropriate circumstance where there should be an open and public examination of the circumstances applying at the National Gallery of Australia, and to explain why that is so. The first thing I should indicate is that in Senate estimates the opposition raised a number of concerns that have been put to us, in the first instance by Mr Brian Cropp, who was formerly a full-time contractor with the National Gallery and responsible for the supervision and maintenance of the airconditioning system. Mr Cropp raised with the opposition a number of concerns, some of which we took up publicly in the estimates committee and others which, because of the nature of those concerns and our concern not to scaremonger, we raised with the management of the Gallery and the minister. The government's response to those concerns was that the airconditioning had been the subject of a Comcare report in February of this year and that the Comcare report had given the airconditioning system a clean bill of health. The basis upon which the report clears the Gallery's airconditioning system is that there is a residue of hydrogen peroxide present in the water tank and that this hydrogen peroxide also goes through the ducting. That really was to respond to the matters being put forward by Mr Cropp, that because of the poor maintenance of the airconditioning system there were various moulds which had been not only sighted in the water tank area and in the rooms where the main airconditioning equipment was, but also spread through the building through the ducting. The Comcare report, in paragraphs 4.11(a) through (e), indicate that Comcare is satisfied that at the beginning of each month the fan unit of the system is shut down and a solution of hydrogen peroxide is introduced to the water tank. It says the sprays are run for three hours prior to a contractor using a high pressure hose to clean out each coil unit, but it also goes on to indicate in paragraph 4.12(d):A handhole cover in the ducting downstream of the AHU 2 fan unit was removed and although the vicinity was dark, there did not appear to be any evidence of mould or slime on the inside of the ducting and surfaces were clean to touch. This is consistent with the use of hydrogen peroxide, which is very effective at oxidising any mould that may begin to form along the ducting. Comcare, essentially, received reports and information that hydrogen peroxide was used through the system and went through the ducting. That, of course, then led to a concern, not about occupational health and safety—which was the original source of Mr Cropp's concern, that is, a risk to the employees, a number of whom, he asserted, were subject to various illnesses that related to the moulds and other circumstances regarding the poor maintenance of the system—but about the issue of the use of hydrogen peroxide. This use of hydrogen peroxide became known to Bruce Ford, a former head of conservation of the Gallery.Mr Ford has raised publicly his concerns as to why the use of hydrogen peroxide would be highly damaging to many of the art works held by the gallery. In response to that, the gallery released a statement on 7 June which said:Mr Bruce Ford, a Gallery employee who is on compensation leave—an unnecessary and perhaps slighting remark, I would have thought—and has not worked in the Gallery for several years, has alleged wrongly that hydrogen peroxide is being pumped through the Gallery's air-conditioning system. He is referring to a comment ... by Comcare which is inaccurate on this point.If the comment by Comcare is inaccurate in relation to the presence of hydrogen peroxide in the ducting, it can hardly be used to deny the spread of mould, which is supposed to be inhibited by the hydrogen peroxide—the reason why the moulds and other spores that are said to be causing health problems both to the employees of the gallery and potentially to the public would not be a health hazard. The two things are essentially inconsistent. It is impossible to maintain that the hydrogen peroxide is cleaning the ducting and therefore there is no health risk, and at the same time to say that there is no hydrogen peroxide in the ducting. It is impossible for those two propositions to be logically consistent.What is the truth? The truth may be that there is mould both in the ducting and throughout the building. We have seen photographic evidence brought to us by former employees of the gallery which suggests strongly that that is the case. It may be that there is that dangerous by-product of poor maintenance in the system and that, at the same time, excessive amounts of hydrogen peroxide are being used in attempts to try and deal with this very real occupational health and safety issue. I will go to a statement by Mr Cropp in relation to how the hydrogen peroxide was applied. He said, in one of his conversations with me:Yes, they're using about 100 litres at a time of straight hydrogen peroxide sprayed into the coils. This is done by a company which comes in at 5 o'clock at night when people have gone home and they work through to 1 o'clock in the morning. They're spraying straight hydrogen peroxide through the coils to try and clean them out. This seems to be the only thing they can think of. It's not really the coils that are the problem. They do create a bit of the smell, most of the smell is actually coming from within the contaminated walls of the air-conditioning. That is why a lot of people comment when they go into the Gallery, they can smell a mouldy smell. He remarked that the people from Queanbeyan Cleaning Services then doing the task were not being given proper gear, and went through some of the occupational health and safety issues relating to its application.It is not just that company that applies the hydrogen peroxide. We discovered that a former janitor actually became responsible for the maintenance and supervision of this system, and he was charged by the Gallery with the task of applying hydrogen peroxide. I mean no disrespect to Mr Robinson, who has come to see us, but he has made it plain that he has no technical expertise in this field whatsoever. He is neither an electrician nor a chemist, nor qualified to look after the airconditioning system. But he was asked to apply the hydrogen peroxide. The only protective equipment he was provided with was some $10 disposable masks which were not suitable for vapour, and then, when he complained about that, a dust mask that was out of date by some seven years.He tells me that when he applied the hydrogen peroxide he felt skin irritation, that he experienced vomiting and diarrhoea after cleaning the coils and that it happened several times. He talks about removing a mouldy gyprock wall from the return side of airconditioning unit four, when the unit was switched off for cleaning. He talks about being told to cover up the situation. He was told not to speak to anyone about the airconditioning system and not to take anyone down the tunnels. That is a very serious matter.What is also serious is that this man was left alone to supervise this whole area. When he first started working he had no airconditioning or electrical experience, but he was left in that position whilst the person who was supposed to be responsible for it, a Mr Tava Sitauti, was on leave for some six weeks. Again—and I find it very odd that such arrangements were put in place—he was given responsibility for undertaking electrical repairs, wiring three-phase motors and high voltage switchboards, learning the electrical side of the airconditioning system and maintaining the lights. He was told to do the lighting and electrical work after an electrician was sacked. We have very serious suggestions that people with quite inadequate qualifications were being left to undertake this quite significant work.We also have reports about sloppy practices in the proper storage of chemicals, for example, the storage of hydrogen peroxide. Hydrogen peroxide is said to be an explosion promoter. In other words, if a fire occurs it is likely to be a significant danger. We are told—again, this is an allegation but the truth or otherwise of it is, I think, a matter which does need public attention—that sometimes labels are removed from these bottles so that they are not seen to be a danger, but they remain a danger, and they are not stored in a flame room, but rather in areas adjacent to artworks. They really should have been stored in the flame room that the Gallery has. The risk is that, should there be a fire, the hydrogen peroxide would promote explosions and exacerbate the problems.We also have other serious reports. We have reports regarding quarantine. A number of people who have worked in or around the quarantine areas of the Gallery have said that when goods are received from overseas the quarantine area is often not sealed off from other areas of the Gallery. Examples of why this could be a significant issue have been addressed in relation to the Inside Out exhibition. There were a number of rock crystals for the Chinese exhibition which came packed in earth and it is alleged that some of this earth was disposed of in the car park and hosed down the storm water drain into Lake Burley Griffin. At the estimates hearings the director was not able to tell the committee whether the quarantine area of the Gallery had been approved by quarantine authorities. We understand why the Gallery does need to be exempted from normal arrangements for the importation of quarantine materials. Many of the artworks are very fragile; it would be entirely inappropriate for quarantine officers to be prising them open with crowbars. It should be dealt with through arrangements between quarantine and the Gallery but, from what we are given to understand, there are significant issues relating to quarantine and public health which do not seem to be adequately addressed. We have already heard Bruce Ford's comments about the risks to artwork from hydrogen peroxide. He wrote to the director expressing his concerns—a very strong letter to the minister and copied to the director:In view of the seriousness of the potential risk to the health of employees and visitors ... and the certain danger posed by a culpable level of mismanagement of the air conditioning system at the Executive and technical levels within the organisation, the only sensible option available to you and the Council, I believe, is to remove the Executive and Heads of Conservation, Facilities and Collections Management and appoint an administrator.Pretty strong language. As a result of that, Brian Kennedy, I understand, has responded to Mr Ford and, in the course of that, makes what I would have thought is a thinly veiled threat. He states:I would ask you to try and remember your responsibilities. You are unwell and I have tried over a long period to remember that fact by calmly receiving letters and emails from you which contain threats and defamations against me and other members of staff. I cannot allow you to do this in the public domain without taking recourse.I must indicate to all involved in this that it is not Bruce Ford alone who is speaking. We have had a number of informants, some named and many unnamed, who have come forward over these last few months in relation to their concerns about the Gallery. It would be a great misfortune if this were seen as a personal vendetta between employees and former employers and the current director. As I indicated at the beginning, in truth, most coming forward have indicated that, other than the general responsibility that Dr Kennedy bears for the management of the Gallery, they are not seeking to appoint blame to him personally. But they are saying that these issues can no longer be covered up, that there was a culture of cover-up that now needs to be confronted. To the extent that Dr Kennedy appears to be seeking, still, to deal with these matters by ignoring the substance and making remarks that could be interpreted as threats seems to me to be very unfortunate.I took the occasion yesterday, after the publication of Mr Ford's remarks, to write to both Minister Alston and Minister McGauran setting out in some detail some of the concerns that I have had passed to me and asking them to give certain undertakings as to how they would respond. But I do believe that matters have now reached such a pitch in terms of public importance—and there are other matters which I have not got time to detail now but which we can return to in due course—that some response larger than simply saying that there are going to be further inquiries internal to the Gallery needs to be given by the government.There are, as well as the issues I have raised put forward by those who have spoken to me, allegations of commercial conflicts of interest. As I have indicated, they are not only a handful of former employees and current employees who have sought to speak with the opposition in relation to these matters; they are many. I think it cannot be gainsaid that there is a really important set of issues that the public is concerned about in relation to public health, that employees should be concerned about regarding occupational health and safety, that the community should be concerned about regarding quarantine, that the community should be concerned about regarding management and management competence and the way in which so many staff have left and so many staff now have a bad taste in their mouths regarding the experience that they had in their employment with the Gallery and the suggestions that morale has reached a point of abysmally low levels, and that the community should be concerned about regarding allegations of commercial conflicts of interest. These are key matters. If I can conclude by going back to the remarks in the response given today by Bruce Ford. He said very directly to Dr Kennedy: You should act quickly in the interests of the public, collection and staff and forget about wasting time on investigating avenues of legal action against me.I would say to the ministers: forget about avoiding this issue. Confront it directly. It is time for a public examination of these issues. (Time expired)11:54:0017519Hawker, David, MPMr HAWKER8H4WannonLP10—In talking to the Appropriation Bill (No. 1) 2000-2001, I must admit that, when I looked at the amendments that moved by the opposition, I was somewhat lost for words. We see an attack on the Democrats over the whole GST program. When you stop and think about it that is extraordinary. Here we have the Labor Party attacking the GST program. Yet it is so bad that, if ever they were elected, the Labor Party would keep it.The whole hypocrisy that comes from the opposition is mind-boggling. Then it goes on to make this extraordinarily misleading statement about the money being spent on the GST advertising program and all the funds being used to help the community to adapt to what is biggest tax change we have probably ever seen. A public education program is not only expected; the opposition has been calling for it by saying people do not understand the tax. When the government turns around and says it will take the advice and help the public to understand it, it then turns around and criticises it. 3J4Sawford, Rod, MPMr Sawford—Because most of the money is going into the hands of a few people in Sydney.8H4Hawker, David, MPMr HAWKER—No, most of the money is going into helping organisations, whether they be industry organisations or people like the Salvation Army—9V5Pyne, Chris, MPMr Pyne—The Catholic Church.8H4Hawker, David, MPMr HAWKER—The Catholic Church. Thank you, member for Sturt. The money is going into helping people understand these changes. The parliament has approved these changes. It is the government's responsibility to make sure that the public can cope with them. They go on to talk about criticising the so-called reduction of the cash surplus from a figure of $11 billion to $2.1 billion. These are the same people who had Beazley's $10 billion black hole. Now they are turning around the criticising because the surplus is not as big as they think it should be. Yet, when they were in government, what did they do? They ran up deficits. 9V5Pyne, Chris, MPMr Pyne—They are going to have a bigger surplus, tax cuts for all and roll back the GST—8H4Hawker, David, MPMr HAWKER—And so on. But I wanted to talk about a specific aspect of public policy at the moment. That is the whole question of the greenhouse gas abatement program and one effect it is going to have in my area if we follow the Kyoto proposal. More importantly, there is the basis on which a lot of public policy is being driven on this and some of the questions that can quite rightly be asked to open up the debate on whether or not we are rushing headlong down a particular path.First of all, the assumptions behind the need to go down this path still need to be questioned. Secondly, there are many parts of the world who are not going to be following the sorts of steps that Australia is being asked to take by some people in the community. I want to point out that maybe the real motive behind some of the views of other countries on this is not so much their concern about the whole greenhouse question—although I accept that we all have a very keen interest in a better environment—but more how they would like to use it as a new form of trade barrier. The current government does have some excellent credentials on the whole question of the environment and greenhouse. We are currently spending $100 million a year to support the greenhouse abatement programs to further assist in meeting some of the targets that we have been expected to follow. It is important to note that the Prime Minister did announce the $180 million greenhouse program in November 1997. The government has been working to do a lot of very important and responsible things. Following the passage of the Environment Protection and Biodiversity Conservation Bill in 1998 the government will look at the question of the greenhouse trigger. That is an issue that we have to really start to question before we go too far down that path.In other areas, it is worth reiterating some of the credentials that the government has. I think they are very good ones. For example, the incentives to switch to lower sulfur diesel will obviously have a very positive impact on improving our environment and we are going to see a differential excise on the treatment of low and high sulfur diesels. This will lead to quite an improvement. We have already seen speeding up of the introduction and use of lower sulfur diesel in the market. That will come about through the encouragement of some negotiation with the oil majors on an early voluntary introduction. We will also see a diesel standard set at 500 parts per million by the end of 2002 for road transport and we will see an increase in the diesel excise for high sulfur fuels above 50 parts per million which will be coming in at 1c a litre from 1 January 2003 and 2c a litre from 1 January 2004. So we are going to see a number of incentives there and the bringing forward of the introduction of new petrol vehicle and fuel standards. Again, these will have a very beneficial effect on our environment.Also, we are going to maintain the current price relativities between diesel and compressed natural gas and other alternative transport fuels by making those transport applications that are eligible for the diesel fuel credit also eligible for clean fuel credits. As well as that, we will see a subsidy program for the conversion of compressed natural gas and liquid petroleum gas for vehicles over 3½ tonnes to complement the compressed natural gas infrastructure program. And, recognising that rail transport is a more efficient user of fuel and less energy intensive, there will be 100 per cent excise credit for diesel use in all rail transport. It is important to note that, despite the fact that the government has gone down this path, the opposition continues to vote against these things. We hear people talking about the Labor Party being friends of people in the country. When it comes to assisting our economy so that we can afford to do all these other changes, it seems that the Labor Party continue to oppose it.There will also be moves to assist with oil recycling and a grant of up to $5,500 to help householders who want to set up a photovoltaic system to generate electricity in their own homes. There are also going to be other grants to help people who are off-grid electricity users to convert to renewable energy systems and a number of other issues to come with that. What this really does show is the contrast between the current government and the previous Labor government. The Labor government seemed to studiously practise the art of talking up the environmental issues but, equally, seemed to have great difficulty in delivering anything of substance. What Labor really showed was that their commitment lacked any depth. They certainly never got around to developing a comprehensive nationwide appraisal of the environmental and economic costs to the nation of greenhouse warming or, indeed, of how they might address that.On the question of greenhouse and the whole question of climate change, it is time that we looked closely at what the government has done so far and, equally, at some of the assumptions that are being pressed upon us as to how much further we should go. Already the coalition has allocated nearly $1 billion to the issue. The important point to remember is that while we did become party to the Kyoto protocol to reduce greenhouse gas emissions, we also believe that it is very important to protect Australia's industries and the employment that goes with them. Obviously there are many things that can be done and many things that are being done. For example, there are the voluntary agreements with industry to reduce greenhouse gas emissions and we have seen the Australian Greenhouse Office being established as the lead Commonwealth agency on greenhouse issues. It has a very important role being responsible for promoting a whole of government position on greenhouse issues to the broader domestic and the international community. We have also seen $10 million over three years to fund the Commonwealth National Greenhouse Strategy measures which were announced by the Prime Minister in 1997, and also $14 million over four years for greenhouse science. Mr Deputy Speaker, I have some charts which I seek leave to have incorporated in Hansard. Leave granted.The charts read as follows— 8H4Hawker, David, MPMr HAWKER—I thank the chamber. I would like to show the way in which you can use figures to get different outcomes. With respect to the question of observed climate change, there are two ways of measuring it. We have the so-called surface record. This is a record that has been compiled by the Goddard Institute in the United States and the Climatic Research Unit in Britain. The Goddard Institute indicates a global warming of 0.8 degrees centigrade over the last 20 years. That sustains one argument. However, if you take the same figures that the Goddard Institute used from the United States only—and these figures are taken from 48 states of the USA since 1880—you find a very interesting alternative view. What you find is that the warmest period in the century was back in the 1930s. If you look at these figures, you will find that the graph is pretty well a straight line, going up and down, but certainly not showing any signs of the global warming which has been claimed by some others. If you then take the satellite record—which, admittedly, is only over the last 21 years; nonetheless, it is taken with a great deal of accuracy—with respect to the lower troposphere temperature variation over the period from 1979 through to this year, you will see that there is no variation. Sure, it goes up and down, but the mean line is a straight line. This method is accurate to one-hundredth of a degree. We could argue that it is clearly the best record available. It shows that the troposphere is in fact not warming at all.I had the opportunity to attend a conference in Melbourne a couple of weeks ago organised by a group called the Lavoisier Group. For the benefit of honourable members, I add that the chairman of this group was none other than Peter Walsh, a former Labor senator from Western Australia. I think he and the other organisers wanted to raise this matter because the time has come to open up the debate and not to take as given what we are being told about expectations that may or may not be based on scientific fact.A question has been raised about the quality of the advice that has been given by the CSIRO, Australia's premier scientific research organisation, when it goes into the public domain. As Peter Walsh pointed out, the quality of some of this, as he called it, quasi-monopoly position of the CSIRO, with respect to the information that it is now giving, is cause for very great concern. He sees that with a monopoly source of information there are always risks. He said that, in the case of the Division of Atmospheric Research, these risks have become manifest.It is interesting to note that the CSIRO made a submission to the Senate Environment, Communications, Information Technology and the Arts References Committee inquiry into global warming. If you read that document by the CSIRO, you come to the point of view that only the most committed global warming enthusiast would fail to realise that the Australian government now has a real problem concerning the source and quality of advice that it has been receiving on this issue. An even more disturbing question then arises concerning the issues upon which the CSIRO has advised the government. Has that advice in other areas been as partisan as the advice that has been given on greenhouse? Clearly, confidence in institutions like the CSIRO depends entirely upon the people within them carrying out their responsibilities with the utmost probity and scrupulous care. We in Australia, unfortunately, often have to rely on the Americans to provide us with the ammunition to maintain an alternative point of view, and I think that is a cause of great concern.In this critique that was presented, Professor Richard Lindzen, Sloan Professor Meteorology at the Massachusetts Institute of Technology, made a number of comments, and I will just summarise them in the time available. He felt the CSIRO's submission was one-sided, frequently misleading and ultimately vague. He emphasised the point that the approach to the environmental focus is on potential problems—not on real problems but on potential problems. He also outlined one of the problem facing researchers—that is, the question of funding. There are obvious practical advantages in the competition for scientific resources if one could follow issues that clearly have a keen public interest, but the point then is that if you follow down that path, do you run the risk of seeking to find solutions that may be favourable to better funding opportunities in the future. He also points out that advocacy groups often dismiss the caveats and vagueness that come in the scientific reports as undue scientific caution, while again invoking this precautionary principle. What is pointed out by the professor is that there are still gaps in our understanding, and clearly a lot more work needs to be done before we can be convinced on this.In the short time I have left, I would like to pick up on a couple of key points that Mr Alan Oxley drew from this whole question of the Kyoto chimera—as he called it—which I think are very important. He said that, in the event that the Kyoto protocol is not implemented, Australia would have reduced global competitiveness through the increased cost of energy by following through on the Kyoto protocol. In other words, we would be penalising ourselves for very little gain for the world, let alone for other countries. Our policies will have only a very minor impact on Australia's share of the CO2 emissions. In fact, we are responsible for less than 1½ per cent.As Alan Oxley points out, there are three fundamental flaws in the protocol. First of all, it is a square peg in a round hole—that is, developing countries are not obliged to make a commitment. China and India, for example, two of the world's biggest CO2 emitters, will not be following this protocol, and clearly we can expand on that. Secondly, what Kyoto would require is the regulation of world markets. History will tell you that this has never happened, that it is just full of failures on this matter. What it really means is that, again, we could be disadvantaged. Thirdly, of course, in a global system of trading permits for emissions, first of all, it would be impossible to do this in the short- to medium-term at least; and, secondly, there is no consensus amongst the signatories in favour of the global system of emissions trading. The European Union now opposes this, and we still do not have an agreement on what the level of CO2 stock would be and how we would handle that.What it is really saying is that this whole question of greenhouse and global warming needs a lot more scientific work done on it. A lot more questions need to be answered. At the moment, we do not have the answers, and therefore we have to ask ourselves the very serious question: why are we thinking of going down the path of penalising industry in Australia and putting jobs at risk? I give one example: it has been suggested that a smelter at Portland in my electorate would probably have to close if we were to go down the full Kyoto protocol path. I think I would fight very strongly against that, because this is an example of an industry that has been decentralised for all sorts of reasons and, of course, it provides jobs in my electorate. I think this question has to be up for a lot more debate. We do not yet have a definitive answer. (Time expired)12:14:0017526Ripoll, Bernie, MPMr RIPOLL83EOxleyALP00—I rise this afternoon to speak on the Appropriation Bill (No. 1) 2000-2001 and draw attention specifically to the budget handed down by the Treasurer on 9 May this year. I have got the budget speech here with me and it is a very thin, very veiled, very unattractive document. It is a veiled document because it has not got much to say. In fact, it has got very little to say. This is supposed to be `the' budget for the 21st century. Instead, what we have got are a few pages of very little for ordinary Australians.It is a budget about fiddling the books. It is a nasty budget that does not address any of the concerns of Australians today. It is a budget that does not actually deal with any of the real issues that ordinary Australians want something done about. In fact, this budget does very little in any department. I think the most telling tale about this budget is that it is definitely a non-election budget because nobody in their right mind would take this as their election platform budget to another election. So there is one thing we can take out of this budget which is definite: we are definitely not in the run-up to an early election, because if this was it, if this was all that the government was going to be offering the Australian people, then it has got a few very serious problems. One of the things that the government is very good at doing is telling everybody about how great it is at managing the economy, telling everybody about how well off they are, telling everybody how well the economy is going generally and how everybody should be extremely happy. But the reality, when you go and talk to ordinary Australians, is that they are not telling us the same story. They are certainly not telling me that story. So while, on one hand, we have the government telling us how good we should all feel and how relaxed and comfortable we should all feel, ordinary people out there are not so relaxed, they are not so comfortable and they are not feeling so good about what is contained in the this budget.We are told, from economists, how well the budget is going generally and how good the bottom line is, but at the same time we are seeing a number of things happening. We are seeing the Australian dollar fall to record lows in something like 30 years. We are seeing the share market taking extraordinary hits. Usually when the Treasurer of this country, who should be helping the markets and helping the economy, stands up and says something, we see an immediate reaction in the fall of the Australian dollar or we see the markets reacting adversely to any comments by the Treasurer. Here we have a Treasurer who stands up and says he is the manager of great credibility in economic terms, and every time he speaks we see the Australian dollar take another fall. So there are some real concerns and none of these things are addressed in this budget.We are seeing foreign debt at all time record highs. We are seeing a government that says they are paying off the Australian debt. Well, who are they paying it off to? They are talking about $50 billion and $80 billion—they are throwing around billions like they were absolutely meaningless. But, at the end of the day, we are seeing record levels of foreign debt. We all remember the debt truck that the Prime Minister, John Howard, was driving around. He has still got this debt truck, except now it is a B-double instead of what he was driving originally, and it is his debt truck. What is he doing about it? He is making it bigger—we are going to see a triple trailer debt truck from the government. So while they are crowing on about how good they are at economic management and that they are setting the record straight in the economy and everything is going so well, we are seeing a different picture. I am prepared to look at this philosophically. I am prepared to look at it from both sides and—as the Prime Minister likes to say—walk both sides of the street. I will walk both sides of the street just for a moment and take it from their point of view. If the government is correct that the economy is going so well and that everything is so rosy, then, okay, let us look at that for a minute. But, if it is, isn't it under the old system of the economy that you are getting rid of? Isn't it under the system that has brought us to this position today that you claim that the economy is doing so well? So, if that is the case, why would you change it? If we are doing so well today under the old system—because the new system does not start until 1 July this year—then why would you change it?The reality is two things: in a number of areas we are doing okay but we should be doing a lot better, and we are not doing a lot better because this government has got all of its priorities wrong. Most of its wrong priorities are set out in this very thin document called the Budget speech 2000-2001. I just wanted to start off by saying that. But what this budget does at its very heart, and it is what this government does at its very heart, is find ways to take from the poor and give to the rich. It sounds like a simplistic approach, or maybe even a simplistic argument, but everywhere I look it is the only conclusion I can find. It takes from the poor and it gives to the rich. Everything about this new tax system is about broadening the tax base, a consumption based tax system. It is about taking from the poor and giving to the rich, because the richer you are, the better off you are under this system. But for most ordinary Australians, that is not the case. They will be much worse off, and this budget actually magnifies that. It actually makes that worse.Again, what we have seen in this taking from the poor and giving to the rich exercise are huge increases in taxation, not less taxation. The government tried to cover it up with income tax cuts, but let nobody be fooled by this; there are no income tax cuts, not in reality, because in reality the revenue raised by the government will be at a record all time high. Where is this revenue coming from? It has got to come from somewhere. It is coming from our pockets; it is coming from the pockets of ordinary Australians.When the government says, `We are going to give you all this money,' it is the old trick. I have heard it before. The government comes along, steals $1,000 out of your pocket, comes back a year later and gives you $10 and says, `We are giving something to you.' I am afraid most people are not going to swallow that pill because they want to know where the other $990 are. What it is actually doing is taking from the poor and giving to the rich.The tax increases contained in this document, and in all of the government's policies, are about increasing prices. The GST is not about lowering any prices anywhere at any time at all. Let us be very clear on this: the GST is about one thing and one thing only—to increase the price of all goods and services at the end of the day, regardless of whether it is through a direct GST impost or by the effect of GST. Regardless of which one it is, every single price will be increased.I see one of the government members having a bit of a smirk and a bit of a laugh because he does not believe me. He does not think that all prices will be increased. Well, the GST has not yet been introduced—I think we can agree on that because it is to be 1 July—and yet all prices have already been increased. Just go shopping. Surely you do that once in a while. Go shopping, go to your local supermarket and have a look at the price of milk, have a look at the price of bread, have a look at the price of eggs, have a look at the price of ordinary goods that will not attract GST, and you will see that they have already been jacked up. Most of them have already gone up by at least seven per cent according to my pricewatch figures in Oxley, let alone in other areas where it has gone up more.Let me tell you briefly a little bit about Oxley pricewatch. It is about going out there and keeping a check, being a bit of a watchdog because what we are seeing from the ACCC is not a great deal of watchdogging. There are a lot of words, a lot of hollow promises, a lot of `We'll look into it', but not too much detail. There will not be one prosecution. There will not be any prosecutions. There will not be the strong arm of the ACCC because that is not what this government wants. This is not what it wants. We will not see this happen. What we will see happen is all goods and services increasing before the GST, and then when the GST comes in we are going to see everything else getting slugged.I am not going to go on about that. There are a number of other things I do want to raise. Consider this budget from the perspective of the community. There was this huge build-up and the Treasurer was walking around smiling and crowing and showing his teeth—baring his teeth I would say—and saying how wonderful this would be. What a let down on the night. What an uneventful, boring night it was. You would think that, with this tax change, the greatest tax adventure in 100 years, at least the budget speech would contain the words `GST'. Of course, it did not because he is ashamed of the GST and he does not want to be associated with it. He wants the community to know that the GST is not really his, that it is John Howard's GST. That is what he really wants us to know. This budget at the end of the day is a disgrace and is meaningless except in one area. It is meaningless except in the area where it takes from ordinary people and gives to those not so ordinary people who should not be getting as much as they are getting now.Let us turn back to economic management and have a quick look at the budget surplus which this government likes to throw around the place. According to my figures there was about $10.7 billion at one stage of budget surplus. Where are we at today with this budget? There is a so-called, supposed, $2.8 billion surplus which, when we really look behind the scenes, we realise is actually a structural deficit of $2.1 billion. It is another case of fiddling the books and fiddling the budget.The government is out there crying very loudly. You look at the frontbench ministers and see their big broad smiles about how well they are doing. But there is a real story to be told. That is not on the faces of the ministry but on the faces of the coalition backbenchers, those 25- to 30-odd government members sitting in very marginal seats. Every time the Treasurer and the Prime Minister giggle and carry on about how good they are, you see the faces of those members drop and look very sad and long. They know that, when they have to go back out to their communities, they are the ones standing up there having to answer questions on why this GST is going to hurt them so much. You can come up with all the excuses you want in parliament but you cannot use those out in the community because you will be stung by the people that count. You will be stung by the people who elected you. They will be asking the questions. When you cannot come up with the answers—10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—The honourable member should direct his remarks through the Chair.83ERipoll, Bernie, MPMr RIPOLL—Mr Deputy Speaker Nehl, you will also know of those people out in the community who will be extremely upset about some of the changes that are going on. I am assuming that you, as I do in my electorate, would get a number of calls, as would all other members in this House in relation to concerns over the GST and how it is going to impact on their families. That is what it does. It impacts directly on families. Families are the ones who have to bear the cost. They are the ones who have to have the broad shoulders. It is not the business world, although I am going to come to some of the problems they are going to be facing under this legislation and budget.It is the families, the ordinary Australians, who have to bear the biggest cost. The more children you have under this government, the more it is going to cost you. It is like a triple whammy and not a double whammy. It is another case of this government giving a bit of Orwellian doublespeak—more is less, less is more, the greatest tax bill and so forth. We all know it is the total opposite of what is contained in the actual bill. As you have more children, you have the normal increased cost that you would expect, but then you also have the increased cost of the GST, which magnifies your cost. The more children you have in your family, the worse off you will be. This government does nothing at all to try and address those issues. There is also another issue I want to raise quickly in terms of the unbelievably wide gap we are now seeing between what the government says will be the price increases. Nowhere you look do you see what is really going to be any decrease at all compared to what the ACCC are putting out on their list of what will happen under the GST. Thank God we have those two lists that we can actually compare, because that gives us a benchmark before July 1. People will very closely keep an eye on those benchmark lists and have a look at where the government misled them in terms of what is being going on with this legislation and the budget. I want to quickly address a number of portfolios in the budget. Let us run through them quickly. Take agriculture. Interest rates are a priority in the bush and you are not doing very well on those. There is a $300 million cut in road funding and a cut in green funding. That is very good. Take defence. There is a $250 million budget cut, a $500 million sale of assets and only $300 million to be retained. There is a drop of 1,000 people in the reserve program and cuts in staff for the RAN and RAAF. That is funny. This is typical of this government. Take communication. The ABC and SBS are marginal because content and digital broadcasting are unspecified. There are still no decisions or a clear outcome for these people. There is nothing in the regions for infrastructure.The arts have no relief from GST. This is a government that hates the arts. Education has total new money—something to really crow about—of $64 million over four years. That equals 86c per person per year. I think a round of applause is due to the government over 86c a year per person. Mind you, they can find $420-odd million to spend on useless ads on television that people are absolutely sick of, but they can only find $64 million on education. What is the priority? They tell us the ads are educational. I disagree.Workplace relations does nothing to secure worker entitlements. In disability there are cuts to hearing. There is no new money. In Foreign Affairs, overseas aid is cut by 0.25 per cent of GDP, making it the lowest in 30 years. There are cuts to the Department of Foreign Affairs and Trade. Trade has no new spending. Funny that. The government say that they are very keen to get out there and promote trade, yet there is no new spending. There is no protection of existing markets.At least we have some money in health. There is $500 million over four years. Congratulations to the government for finally doing something for health, because they have done nothing for health through the private health funding mechanism they have set up and through the rebate system I will come to in a minute. Aged care has seen reannouncement of the regional health centre program. Reannouncement for what—the 60th time? How many times can you reannounce the same money and the same program over and over and over? Keep announcing it. That is great. But I think people have worked it out and there is not a lot of money in it. Industry and science have no innovation funding because this is a government about no innovation. It is a government of no ideas.Debate interrupted; adjournment proposed and negatived.83ERipoll, Bernie, MPMr RIPOLL—You would think that the government would do something serious about small business because that is where it claims that its heartland is. Let us see: what have we got here? No dollars for research on the impact of the GST. Small business is left to continue wallowing in the mud while the government says that they are going to spend $420 million on education. What does small business get for that $420 million of our money? It gets a few ads on television. Absolutely brilliant!Let us turn quickly to private health insurance and see what the real impact on the community will be. This is one of the most serious matters that I ever come across. The government is going to set into concrete, forever and a day, the 30 per cent rebate—which is much appreciated by people out in the community; I assure you of that. But the biggest problem with the rebate is that it locks people in and locks people out forever. On 1 July, if you are not in the system, you never will be. That is the outcome of this legislation. Less than 33 per cent of people are now in the private health insurance system. An incredible amount; fantastic! But that also equates to 68 per cent—two-thirds of the community—not being in the system. And because they are not in, and they will not be in on 1 July, they will be locked out, because the government is imposing one of the harshest, meanest, most regressive policies I have ever seen. It will be applying— Government members interjecting—83ERipoll, Bernie, MPMr RIPOLL—Government members are laughing. You can laugh, because you can afford to have private health insurance. But come and talk to the people in my electorate and see what they are saying, because they are now left with no choice. In 10 years time, when they might have the money to get into private health insurance, not only will they have to pay at a rate for their age group at that time, but they will have pay a 20 per cent penalty on top. So they have now resigned themselves forever and a day to being locked out of private health insurance by this government. They will never have it because you have legislated to exclude them forever from private health insurance. It is the meanest and most disgraceful piece of legislation I have ever seen.What it means for families is that they are now contemplating, before 30 June, whether they should sacrifice about $120 a month. Do you know how much money that is for ordinary families? They have got to sacrifice that money now so that they are not penalised down the track, maybe in 10 years time, when they might need it. What are they getting for their money if they take out private health insurance? If they use it, they are not getting much that is different from what they are getting now in the public system. You should spend some of this huge amount of money, over $2 billion of recurring funding, on the public health system. This government will always be remembered for having locked out two-thirds of ordinary Australians from ever having a chance to join a private health fund. I think that is one of the most disgraceful pieces of legislation that I have ever seen.There are so many parts of the budget legislation and the government's policies that I would like to talk about that I would need all day to go through them all. Pensioners and self-funded retirees were promised some money. Eighty-five per cent of them will actually get nothing. I have got it on the record as a question to the Treasurer. The GST ads are supposed to be based on information. All you get is a phone number and you are told that you had better get in now because, if you do not, it is going to cost you a hell of a lot of money. That is what the ads tell you. So we have got $420 million of taxpayers' money wasted on an ad that gives you a phone number. It could have been done a lot faster and a lot cheaper. But don't just take my word for it, Mr Deputy Speaker; take the word of the so-called experts out there—the analysts and the advisers in the newspapers. We see headlines such as: `Budget gives little cheer to voters'. Another article, which is headed: `Bumpy road ahead for healthy bush', states: ... Mr Ian Causley yesterday told reporters the Liberals should consider minority government if the Treasurer failed to meet expectations raised by the Prime Minister's recent bush tour and last year's rural summit. You are not looking after the bush, and people know it. Other headlines read: `Mixed reaction: from concern to caution'; `Access Economics: concerned about the budget surplus—it's a fiddle'; `Budget buries research promises'; `Concern about lineball surplus'; `Risks beyond the Budget'; `Honestly, the sums don't add up'. Like everything done by this government, it does not add up. `Budget gives us the creeps.' What this means is that this government is not in touch with the community. (Time expired)12:35:0017531Lawler, Tony, MPMr LAWLER834ParkesNP10—It was interesting to sit here and listen to a lot of hot air come from someone who has no concept of much of the government, especially in the area of health. It is a great reflection of the understanding that the opposition spokesman on health has on how important it is to get people into private health funds and on the benefit of the 30 per cent rebate that the government has put in. That has reversed completely the trend under the previous government that they are so proud of, the trend that had people leaving private health funds in droves. I accept that it is the job of the Leader of the Opposition to challenge the budget and to highlight any flaws or anomalies. However, in a nutshell, it was interesting to hear what the Leader of the Opposition said in his reply to the budget. He said, quite simply, that we should spend more on education, more on infrastructure, more on welfare and more on communication. Those are laudable sentiments. He also said that he would roll back the GST, that he would deliver a budget surplus and that he would not put up income tax. Again, those are laudable sentiments—not achievable—but laudable.I accept the criticism that perhaps people have been impacted by some of the cutbacks that the coalition government has made, but on the credit card of the Australian nation we owed $80,000 million from the spending spree in the last years of the Labor government—and much of that, incidentally, when the current opposition leader was the finance minister. His reply to the budget indicates that he has still not learnt how to manage without the credit card. For a few days after the budget, interestingly enough, the Leader of the Opposition was trumpeting the benefits of Country Labor. As a person who lives in the country, I would genuinely welcome an attempt by Labor to engage country people—perhaps not through spokesmen like the member for Hotham and the member for Batman, who claim to have such an interesting affiliation with country people. I would welcome them engaging country people because, as night follows day, at some stage in the future there will be a Labor government running the country, and competition between different groups, though challenging, usually leads to a better deal for customers or, in this case, constituents.If we are looking at that proposition, however, we must look at the scant impact that Country Labor has had in New South Wales. The recent announcement by the Premier indicated that there will be a $12.3 billion building program to ward off a post-Olympic downturn. Despite the fact that a hugely disproportionate amount of money has already been spent in Sydney to prepare for the Olympics—and I have no problem with the preparation for the Olympics—the spending in areas outside Sydney, which probably account for about 95 per cent of the land mass and 30 per cent of the population, amounts to half a billion dollars or about four per cent of the proposed spending. It is not a strong indication of newfound care for non-metropolitan New South Wales or the `proper plan and program' that was alluded to by the Deputy Leader of the Opposition when talking about the possibility of Country Labor establishing a hold.I thoroughly welcome the reforms announced in the budget—a $560 million rural health package and $300 million for the farming industry really is a highlight for me. The $560 million in the health package is going to deliver a tremendous turnaround in the delivery of medical services to my electorate and to other areas in regional Australia. There is $100 million to attract medical specialists to rural areas, $32 million in scholarships for 100 medical students which will be taken up in return for spending six years in the country, and the establishment of nine clinical schools in regional Australia. It is well known that the way to address the shortage of medical practitioners in the country is to attract country students into the bush. The RAMA scholarships, the John Flynn scholarships, the money that is put into the Royal Flying Doctor Service, the fly in-fly out female GP service—all different initiatives of this government—are designed to take the pressure off GPs and to put more GPs into the bush. A greater critical mass of GPs will in turn make it more attractive to get city people to come out because there will be the perception of less pressure.The primary focus of this package is on attracting GPs, but for the first time the federal government is also looking at allied health professionals, like pharmacists, physios and nurses, to get them to rural and regional areas. This strategy is designed to tackle another concern which most country people are very well aware of. The farm community will certainly appreciate a $300 million windfall to further improve farm skills and improve market access, both domestically and abroad. To me, other highlights of the budget were the $65 million for childcare and $32 million to improve the health of Vietnam veterans. This budget addresses the two issues which are most often raised in regional Australia, and that is great news. People in Western New South Wales are concerned about health, about doctors and about specialists, and they are aware of the difficulties facing some in the farm sector and its impact on smaller country towns. The federal government made a decision to strike most heavily in the areas that need the most support and, in the words of the Treasurer, `to make a big difference in a defined area'. That certainly has been done.Another recent announcement by the government was the funding of West 2000 Plus to the tune of $5.9 million. West 2000 was a program implemented under the AAA package about three years ago, and it was designed to help farmers in the western area of New South Wales to adjust to the new challenges that are facing their enterprises. It was a three-year program and the members of the West 2000 board recognised that, when you are talking about restructuring a whole industry, it does take longer than three years. They rejigged the proposals under West 2000 to form West 2000 Plus, and came to both the federal and state governments with a plan to take the best and the most accepted programs out of West 2000 and put them into West 2000 Plus. I was very happy to be able to announce a couple of weeks ago $5.9 million to continue with the funding of West 2000. The most popular area of that program, surprising as it may be to many, was education. The farmers were most appreciative of this component of West 2000 and West 2000 Plus, as well as the things like access to assistance in funding, rabbit ripping, woody weed control and other resource management.This leads me to the next point. The conservation controls which have been imposed by the New South Wales government in recent years are not going to be addressed by West 2000, or any other program, for that matter. These controls are becoming overwhelming and financially debilitating. There is absolutely no argument from anyone in the community, be they in the rural sector or the metropolitan sector, about the need for Australia to rethink its policy on conservation of vegetation, water and wildlife. But, as so often seems to be the case, a change in community perception, values and priorities has led, in this case, to a small group of Australians bearing the cost for the common Australian good.Recently I read in the paper a criticism of Australia for not moving fast enough to meet its Kyoto protocol obligations. This may be the case, but we should not address that problem by ramping up and again picking the easy mark—people who live in rural and regional Australia, especially on farms, who are trying to make a go of their farming enterprise and make some profit.The phrase `clearing of land' has over a few short years come from a noble pursuit, where the community demanded that farmers go west, clear land and grow crops, to the situation that we have now, where anybody who even mentions the word `clearing' is immediately branded an environmental vandal. In our attempts to arrest the decline of trees and other native vegetation, we have rewarded those that have taken the D9 out and cleared thousands of acres, not leaving a tree in sight, and we are punishing those that have bought land and cleared small areas with a view to clearing more, based on an assessment of the ability of the soil to sustain crops and to protect against degradation and erosion.There are countless examples in my area of young farmers having purchased land with the intention of sensibly clearing and planting crops, with a view to remaining viable and repaying debt over a period. They have been faced recently with a definite trend to locking up any remaining vegetation as a counterbalance to the clearing that has taken place in other locations, yet there has been little attempt by any government department to organise replanting of trees in these sensitive areas—just a single minded determination to keep all existing trees, no matter what the consequences. This action simply transfers the weight of responsibility from the land-holder that has cleared extensively to the land-holder that has taken a more moderate approach to developing his holding over a longer period of time. To disallow further development, without significant forms of compensation, is a huge impost on the very land-holders who have been the most conservation minded farmers of the past, instead of being at the expense of their more aggressive neighbours. There are so many parallels with the water debate in this issue. By routinely capping water usage, those that have wisely used water and spent much on computerised dripper systems and targeted crops for soil types have limited ability to accept further cuts to supplies. Those who have not bothered will still have the option to meet financial commitments with reduced water access by utilising the very techniques that their more progressive neighbours have used and that these people have ignored before. Thereby, again, we are rewarding the cowboys and penalising the farmers who have voluntarily minimised their water usage.The Fiveways Landcare Group has made a submission to the House of Representatives Standing Committee on the Environment and Heritage, and I must pay tribute to Gabrielle Holmes for the submission. I have also seen copies of other submissions, but the Fiveways Landcare Group refer to endeavours of their landcare group which:... are being undermined by the Department of Land and Water Conservation's continued refusal to allow for the clearing of dense cypress pine and areas of large bimble box with a dense understorey of woody weeds.The submission goes on to say:The continued insistence of conservation groups that “all trees are good trees” is leading to a potential environmental crisis in our location. There are principally red sandy and red gravelly loams present, and these soil types cannot support a stand of any dense timber and maintain adequate ground covers to prevent water/soil erosion from occurring. With an annual rainfall of only 350-375 mm the competition for moisture is too great. If these tree numbers were allowed to be limited, it would ensure a healthy environment for all fauna and flora that could be supported in a true balanced environment, not the mono-environment that exists now.The diaries of John Oxley refer to open grasslands with scattered stands of timber in areas that are now a dense, impassable aggregation of cypress pine. These areas used to be cleared naturally by lightning strikes followed by fire and even by Aboriginal people setting fire to and burning out areas. Many native flora species actually seed during the extremely high temperatures experienced in these bushfire conditions. As an example, the bushfires recently in Sydney have done more for local vegetation than the National Parks and Wildlife Service could have done in years, according to one of the workers from the National Parks and Wildlife Service. We cannot go back to pre-1770 conditions simply by stopping clearing, and that appears to be the intention of the New South Wales government.When considering the actual costs of conservation measures imposed on land-holders, there are several issues that are considered as having a major impact. The devaluing of the capital value of land holdings is one of the hidden costs associated with these measures. Another impact of the conservation measures is the loss of annual production income by the land-holder. The effect of regrowth on the ability of a property to support a reasonable level of stock is significant and it clearly illustrates the effect of a lock-up practice. Even the unimproved areas that are maintained throughout the development of a particular property are suffering from the effects of increased regrowth over a period of only 20 years. The stocking rates on one farm in particular have diminished by one-third because of this practice. At this rate, even the native fauna would be struggling to survive in only a matter of years. As I said, with the controlling of bushfires these days, the natural culling of regrowth no longer occurs. The government's contention that only trees less than 10 years old are deemed to be regrowth is a simplistic approach to this matter. There is anecdotal evidence from long-time residents of the Tottenham area that much of the country that is now timbered was open grassland that could be ridden over on a bicycle—not even on a horse. In its present state it is barely accessible by foot.All conservation issues must be balanced. Should the public good considerations be more heavily weighted than the requirements for sustainable land management and the financial responsibilities of the landholders? A balance must be maintained to preserve the viability of farmers and, in turn, ensure the health and prosperity of our natural resources. To disallow further development without significant forms of compensation is a huge impost on the very landholders who have been the most conservation minded farmers of the past at the expense, as I said, of their more aggressive neighbours. In the introduction to the National Framework for the Management and Monitoring of Australia's Native Vegetation, this statement is made—and, incidentally, this is a Commonwealth statement:The Commonwealth, States and Territory Governments have committed themselves, through the Natural Heritage Trust, to reverse the long term decline in the quality and extent of Australia's native vegetation cover by June 2001.It goes on to list the social benefits which include:providing places of scenic beauty;providing sites for tourism and recreation;providing places for research, education and scientific purposes;maintaining the distinctive Australian landscapes.There is great consideration placed on the social benefits of conservation measures but a determined refusal to pay for this consideration. Words such as `providing' and `maintaining' all imply that some maintenance of these sites will be required, some ongoing commitment by the land-holder to preserve this native vegetation. It would seem that the maintenance aspect of our unique Australian landscape will be borne by the individual landholder. To achieve desired native vegetation outcomes, the expertise and historical associations of land-holders must be given due respect and credibility. Land uses generating insufficient returns to enable land users to fulfil their duty of care would, by definition, be unsustainable and hence unsuitable uses of the land. Any government that endeavours to legislate its farming community out of business by making it impossible to create sufficient returns to meet financial and imposed conservation obligations needs to review its intentions. For too long the extremes in all sections of our community have had too great an influence on decisions that are made that affect our entire social and economic fabric. It is time that commonsense and moderation are introduced into the discussions and into policies that are being made.There are problems associated with land clearing. Erosion and salinity are well known and well documented, but a possible solution to the funding of conservation and management of native vegetation issues would be to introduce a conservation levy—similar to the Timor levy perhaps—and apply this to all taxpayers in Australia, corporate and individual. This surely would allow for the collection of sufficient funds and spread the costs of these measures over the entire nation. The level of acceptance of this proposal by the public would indicate the preparedness of the community to pay for its conservation targets. BV5Adams, Dick, MP834Lawler, Tony, MPMr LAWLER—In response to the interjection, Mr Deputy Speaker, I was drawing the analogy to the Timor tax, which actually targets higher income earners rather than lower income earners. To require a land-holder to change his management to maintain biodiversity or a particular ecosystem for the wider benefit of the whole community without some economic incentive or compensation is grossly inequitable. In all land management practices there is some element of public and private benefit. Compensation payments should be associated with involuntary acquisition of property rights.There is currently a regional vegetation management plan being prepared for the North Lachlan-Bogan area, with the committee having completed three planning sessions and achieved some initial outcomes for that region, with further planning and development to occur. It is quite interesting to find included in the national framework clear guidelines for the preparation of these plans, outcomes that they are expected to achieve and priorities that are identified—and all without setting foot into any region that is involved.The source of these committee members is set out as part of the Native Vegetation Conservation Act, and all appointments are made by the New South Wales minister. So we have a committee made up of 15 people, only seven of whom could be recognised as government appointments likely to take the required stand to achieve national framework outcomes. Local representatives have no input into evaluating prospective members of this committee. Once the committee has commenced work on the plan and a lack of expertise is shown on region-specific vegetation, environmental and land management issues, there is no action that can be taken by rural representatives to correct this anomaly. While the objective of the management plan, to allow decisions to be made by the local committee, is laudable, I have serious doubts that this will ever be honoured. The impact on farmers in my electorate of the continuously one-eyed approach to environmental management is sending many of them out of business. It is their belief and my strong belief that the way we are looking at it at both federal and state levels needs to be re-evaluated and reassessed.(Time expired)Debate (on motion by Ms Gerick) adjourned.Adjournment17536Motion (by Mrs Elson) proposed:That the Main Committee do now adjourn.1753612:56:0017536Price, Roger, MPMr PRICEQI4ChifleyALP00—I want talk a little bit about the Deputy Prime Minister's recent announcement via the Telegraph that the Badgerys Creek decision will be revealed before the end of August. There has been an exceedingly long gestation period for the government to come to a decision. He indicates that not only will a decision be made but also a centrepiece of the announcement is going to be the approval of a high-speed Canberra-Sydney rail link with perhaps the feasibility of extending it to Melbourne. Also in the report by Malcolm Farr in Telegraph is that there would be no major development of Badgerys Creek in Western Sydney as a second airport. I suspect what that is code for is that there will be an announcement about baby Badgerys. I wanted to place on the record, yet again, a couple of things. Firstly, I am opposed to any airport—baby, teenage, adult or elderly—BV5Adams, Dick, MPMr Adams—Or even dead.QI4Price, Roger, MPMr PRICE—Yes, or even dead—for Western Sydney. Environment Australia has recommended to its minister, as part of the EIS process, that a curfew should apply—that there should be no night flights at Badgerys Creek. What this does, of course, is rule out Badgerys—baby or otherwise—being a 24-hour operation, which tended to underpin much of the rationale for the airport. I expect the government to honour that assessment and that recommendation by Environment Australia; I expect the Minister for the Environment and Heritage would not ignore such a recommendation. Indeed, I placed a question on notice to both ministers to ensure that that critical element, amongst a raft of 41 other recommendations, is adhered to by both the minister for the environment and the minister for transport. I again want to place on record that not one person in Sydney suffering from airport noise from Mascot is going to have reduced noise as a result of any construction on Badgerys Creek. I want to again say to you, Mr Deputy Speaker, and to other honourable members that, in the year 2016, more than half of Sydney's population will live in Western Sydney. These are ABS statistics and the statistician includes Gosford and Wyong—I have excluded them. If you want to include them, it just delays the proposition by a couple of years. Who in their right mind would want to put an airport in the middle of more than half of Sydney's population?MP6Baird, Bruce, MPMr Baird—Laurie Brereton.QI4Price, Roger, MPMr PRICE—Well, and a number of others that I could name—and the odd one on your side, including your good self. Let me just make this point to those who feel that somehow a baby Badgerys announcement is going to protect government members in western Sydney. If you are to be re-elected to office at the next election, you need to preserve all your western Sydney seats. I do not think it will be feasible for you to contemplate government without those seats. The feeling of people in western Sydney is abundantly clear. Like me, they do not want a baby Badgerys, a teenage Badgerys, an adult Badgerys or an elderly Badgerys. They just do not want an airport. The government would be foolish if it did not take heed of that. For the Labor Party, of course, Kim Beazley—often to the discomfort of some of us in western Sydney, I suppose—has always said we will settle our position once the government has announced its. I look forward to that.1753713:01:0017537Hardgrave, Gary, MPMr HARDGRAVECK6MoretonLP10—My constituent Joe Shaw is a David against a taxpayer funded Goliath. He is an enthusiastic and capable bloke who will not let go of something or someone he believes in, and Joe first and foremost believes in himself. He has good reason to. He has successfully coached a number of key and rising squash players. The Australian Institute of Sport invited Joe to coach his players under their programs in 1995. In 1996, it all fell apart. Joe says he took on the institute because they were not doing the right thing by his players.Finding out the facts about this has been hard. Joe believes he is a victim of the most extraordinary cover-up. He may well be right, but to prove matters one way or the other has been a frustrating process. I believe no-one or no institution in government is above public scrutiny. Yet, over the past three years, officers of the AIS and the Australian Sports Commission have used taxpayer funds to evade simple scrutiny in this matter involving Joe Shaw. In this Olympic year, the institute and the Sports Commission are sacred cows. That may be why nothing has happened in this matter which has now blown so far out of proportion.Joe took political action. He first came to see me in 1997. My inquiries were at first dismissed and then redirected to the institute themselves. It was the classic Caesar judging Caesar scenario. I have in my possession hundreds of pages of letters and documents which outlined Joe's claims and allegations. The material is mainly questions, questions no-one is prepared to answer. Joe Shaw took direct action. The board of the ASC did absolutely nothing every time Joe Shaw wrote to them. Joe believes the officers he was concerned about intercepted the letters. Over the past three years the bureaucrats have enjoyed power over this whole process. After all, ministers have come and gone, but to the credit of the Minister for Sport and Tourism, Jackie Kelly, she has at least tried to settle the matter and progress mediation between Shaw and the AIS. The bureaucrats slowed things down. Shaw became impatient and took action through the court to get answers. The AIS and the ASC fought this at taxpayer expense and played out typical legal manoeuvres to stop the answers from being given. No-one can tell me the cost of the legal defence of the case put by Joe Shaw against the decision making of the AIS and the effects that it has had on certain squash players he coached, including the Major twins, Kate and Emma, who left the AIS two years ago anorexic.Given what Joe has spent, the institute has probably clocked up a legal bill which runs into hundreds of thousands of dollars. How many other sports stars could have been advantaged by using those funds in a positive way? Someone obviously judged Joe Shaw's case as a strong liability which needed such sturdy defence. These matters could be drawn out through the Senate estimates process; however, the previous Labor government appointed many of the personalities involved, so perhaps another committee process would be better.All Joe Shaw has sought is some understanding of the whole process used by the people involved, because he was angry about the effect the AIS had on the players he had coached and the sport he loved. The questions about the squash program, though, were apparently too hot to handle. The Sports Commission legal team managed to strike out any chance Joe had of getting answers through the court. Essentially, the taxpayer-funded legal beagles stopped any of Joe's evidence or questions from even being heard by the court.The political system struck out a chance for answers too, because the bureaucrats refused to answer the questions involved. Senior departmental and AIS people have met with me. The meetings we had were years too late for the moral justice that Joe deserves, and the taxpayer who footed the bill. These meetings seemed designed to hose me down because Joe Shaw, may set a precedent for other action. I found no-one who would commit anything in writing so I could report to my constituent. I have even been given the clear message there is nothing they could or would do.I am elevating this matter in the national parliament because it is Joe's only recourse left. The bureaucrats involved should be probed about the money spent against Joe Shaw and, over time, under appropriate mechanisms, perhaps the facts will finally come out. This should have been solved early on. Instead, it has grown into what may be a costly cover-up. Joe Shaw deserves a moral victory, not the second mortgage and massive legal debt he now has from fighting the taxpayer funded defence of certain personalities and their decision making at the Australian Institute of Sport and the Australian Sports Commission. The taxpayer cannot foot the bill without complete disclosure of the action and motivation of the officers involved.Maybe Joe Shaw is wrong, but what if Joe Shaw is right? No-one should fear the disclosure of the facts surrounding the expenditure of public money. There is no institution in this society so sacred as to be above public scrutiny.1753812:58:0017538Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—I was privileged recently to visit Lebanon, Syria, Israel, and the Occupied Territories that hopefully soon will become the heart of the independent state of Palestine. It was a great privilege to witness some of the things that are going on in Lebanon, in particular. There is an enormous revival of the Lebanese economy, particularly the Solidere project, which is the renewal of the entire old CBD of Beirut and the docklands area involving considerable reclamation of land and enormous building projects. There is great vision, there is great energy, there is great optimism emerging in Lebanon. However, there is a major restraint on the economic prospects for Lebanon, and that is the absence still of a comprehensive peace in the Middle East. Since my return from Lebanon, Israel has withdrawn from southern Lebanon, which is a huge step forward, something that has been long overdue, although there are still a number of issues to be dealt with associated with the final completion of that withdrawal and the arrangements that flow from it. That withdrawal, of course, is in compliance with UN resolution 425. There remains one big, unresolved question with respect to Lebanon, and that is the continuing Syrian dominance, the presence of Syrian troops, and the Syrian hegemony in the Lebanese economy. It is extraordinary to travel around Beirut and see everywhere huge pictures of President Assad of Syria in the streets, on buildings and the like, and very few pictures of President Lahoud of Lebanon. There are allegedly up to a million Syrian workers in Lebanon and there are allegedly about 35,000 Syrian troops.In my discussions with a number of key Lebanese political figures, including President Lahoud and Prime Minister Selim al-Hoss, it became apparent that with the likely withdrawal of the Israeli troops from southern Lebanon, the large Palestinian refugee presence in Lebanon will become the new excuse for the presence of Syrian troops in Lebanon. Although there are other major issues still to be resolved in the Middle East, most obviously the future of the Palestinians and their right to obtain a homeland and an independent state, it is very important that we do not forget the rights of the Lebanese people, their right to their own independence and freedom, their right to run their own economy, their right to determine their own destiny. For that reason, as well as pursuing the implementation of United Nations resolution 425, we should not forget United Nations resolution 520, which is widely neglected in international debate on these issues because it calls for the withdrawal of all foreign troops from Lebanon.The Palestinian refugee issue obviously has to be addressed in the peace process in the negotiations between Israel and the Palestinians. I was fortunate to be able to visit two Palestinian refugee camps, one in Bethlehem in the Occupied Territories, and the other in Beirut, the Bourj el Barajneh refugee camp, where there were approximately 16,000 people living in a very small and cramped area in extremely harsh and difficult conditions. When it rains, all of the floors of people's dwellings flood. The electricity provision is intermittent and very difficult. They are not allowed to work in most jobs in the Lebanese economy. They do not have citizenship rights. It is a very difficult existence.But I was pleased to see that substantial Australian aid is being provided to this camp from APHEDA, the union organisation, and also from Austcare. When I stood there in a small schoolroom with about 30 or 40 kids aged about eight or nine years old, where there were school projects showing Australian themes, it made me very proud to be Australian, to see that we are actually making a contribution to people who have been forgotten by history, who have been cast asunder, who have been left aside, who have very little hope and who have been living in very difficult conditions for a very long time.It made me very proud to be Australian, much more so than any sporting victory or any other thing of that nature ever does, at least for me personally. This is something that I feel we have contributed, and are continuing to contribute, for people who are far more unfortunate than most Australians. I look forward to us contributing further.I would like to conclude by paying a tribute to a woman called Olfat Mahmoud, the leader of the women's humanitarian organisation in a camp which runs child-care programs, training and education programs and a whole range of other services, many of them aid funded. She was an extraordinary woman who is performing great things under enormous difficulties. I applaud her vision, and the fact that she is not vengeful or bitter. She realises that the Palestinian people have to work through their very difficult circumstances, take a positive view of the world and try to ensure that they can one day achieve their independence, justice and rights. (Time expired)1754013:11:0017540Baird, Bruce, MPMr BAIRDMP6CookLP10—I rise today to speak on the question of human rights abuses in Afghanistan. This is an issue that has been brought to my attention by members of my electorate who have been concerned about this issue. Having been involved in a meeting of the human rights committee this morning, where I heard of similar human rights abuses occurring in Iraq against women and what are called `honour deaths', I think it is appropriate to raise the issue. I know that the chairman of the human rights committee, Peter Nugent, is planning to undertake a number of steps to bring this matter to the attention of the general community and also through our ambassador to the UN to raise it in international forums and with our foreign minister.A public information campaign is under way at present to bring attention to women's human rights abuses in Afghanistan since the rise to power of the Taliban in that country in 1996. Reports of the human rights situation there are disturbing, to say the least. One woman was beaten to death by an angry mob of fundamentalists for accidentally exposing her arm while she was driving. Another was stoned to death for trying to leave the country with a man who was not a relative. Women are not allowed to work or even go out in public without a male relative. Professional women have been forced from their jobs and into domestic subservience. Women live in fear of their lives for the slightest misbehaviour. Because they cannot work, those without male relatives or husbands are either starving to death or begging on the street. Depression is becoming so widespread that it has reached emergency levels. Since 1996, the suicide rate and the mental illness rate amongst women have skyrocketed. At a time when the Australian government is committing hundreds of millions of dollars to combating domestic violence in Australia, we should have particular regard to the situations in other countries. In Afghanistan, husbands have the power of life and death over their women relatives, especially their wives, and an angry mob has just as much right to stone or beat a women for causing the slightest offence. This has not always been the case. Until 1996, when the country officially adopted fundamentalist Islam as its national doctrine, women enjoyed relative freedom, to work, dress generally as they wanted, drive and appear in public alone. This doctrine is not their traditional culture but is alien to them. It is extreme even for those cultures where fundamentalism is the rule. Australia remains deeply concerned about the human rights situation in Afghanistan. Amidst recent reports of renewed fighting in Afghanistan, Australia urges all factions to observe international and human rights law and to support the delivery of vital humanitarian assistance to the Afghan people. We are deeply concerned about the strict social policies imposed by the Taliban which impinge most acutely on the rights of women and girls. The lack of adequate health care and education currently received by women and girls in Afghanistan is particularly disturbing. Australia remains supportive of all efforts by the international community to find a peaceful resolution to the conflict in Afghanistan. Australian concern at this situation has been expressed in a variety of international fora. These include the United Nations General Assembly and a range of other international meetings, including, most recently, the Afghan Support Group meeting held in Ottawa in December 1999 and the UN Commission on Human Rights in Geneva in April 2000. The Australian government has supported efforts by the international community and non-government organisations to encourage both sides in the Afghan civil war to observe international and human rights law. The protection and promotion of human rights is an integral component of Australian aid activities. Afghan women have been a key focus of Australian aid. All projects supported by Australia in Afghanistan have been in accordance with the agreed United Nations principle that women and girls participate in and benefit from aid projects. In 1997-98 Australia provided $4.5 million in emergency assistance to Afghanistan. This assistance was for food aid, de-mining, basic health care and water supply services. Australian aid was provided through the United Nations and non-government organisations, in the absence of a bilateral aid program with Afghanistan. The Australian government was unable to provide any direct financial assistance to Afghanistan in the 1998-99 financial year or the current financial year due to the considerable humanitarian demands in our immediate region. There may be scope, however, for limited de-mining assistance to Afghanistan in this financial year.It is my pleasure to support moves to a public information program in relation to the human rights abuses in Afghanistan, particularly related to women and girls, and also as it applies to Iraq in terms of honour killings. Women are being abused because of what are seen by their husbands or brothers or fathers as moral infractions of the law, often for the wrong reasons; they are put to death, stoned to death, in the most horrendous way. We as Australians should object to this and take the opportunity to disseminate information on the issue.1754113:16:0017541Adams, Dick, MPMr ADAMSBV5LyonsALP00—I would like to tell a story about a young man who has been severely disadvantaged by this government's cavalier attitude and harshness towards young people. Recently, the parents of this young man contacted me in my electoral office and told me that their 17-year-old son who had finished year 11 was not particularly going anywhere academically and so he had felt he would get into the work force. He decided to leave school and then he found work. He found a very good job in a bakery and was earning good money for his age. He was going along very well, he worked hard, he left home and established himself in a flat and purchased a car on hire purchase. Then disaster hit him. The company he was working for closed the section in which he was working and moved that to Hobart.Seventeen jobs were lost. Some of those jobs were carried over to the Hobart section with new technology, but they were offered to the people who had families. He had had six or eight months work and therefore had built up very few benefits. He went off to Centrelink to sign up for assistance and look for more work because he was very keen to do so and he is a very independent young person. The Centrelink office took down his details and said, `Sorry, you are under age. You cannot get a benefit. You are three months before your 18th birthday.' He has a lease on a flat and is committed to paying off his car. Now, through no fault of his own, he is in the situation of having no money to meet his commitments. Of course, without his car, how could be go to job interviews to find more work? His parents live in a country town so it is a long way to go to find other work in the bigger employment areas. He has been told to go home and live with his parents. Living there could restrict him in finding work. He would have to break the lease on his flat, lose his bond and probably go into debt.This is nonsense. It is a very stupid way of dealing with young people. Not all youngsters are the same. In fact, I find very few are not prepared to go and have a go. This young person wants to be independent; he wants to live his own life. He wanted to gain skills and to feel better off by achieving in the work force. Suddenly he is lumbered with debt and disillusionment because he has not turned 18. `Go home and live with your parents' was the only advice. What sort of incentive is that for a young person to want to go on and continue to grow up. Once people are out of the nest and starting on life they do not want this sort of nonsense fed to them by a government that really does not understand young people at all. There should be some discretion for those who are independently living to be able to get Jobstart if they put in some evidence of their independence and what they have been doing. There is no discretion at all. This is ridiculous and very harmful for those who are making a start in life. For the sake of three months he has to put his life on hold, incur debts and go backwards. Another case that has come to my notice is a young fellow who is desperately hunting for work after losing his job from another closure. He has been in work for most of his working life—he is now in his 20s. This lad went to the job brokers and was told to go to Devonport for an interview. Devonport is about one hour and 20 minutes drive from Launceston where he lives. He has a flat and a lease and a bond so if he did win selection for this position he would have to abandon those, thereby losing his bond, losing his good reference and, of course, his money through breaking that bond and he would probably go onto the black list of the landlords. Because he could not drive every day to a job in Devonport, he would have to find local accommodation. This young fellow is not a job snob in any way, but to get that job interview he had to ask his parents to lend him enough money for the bus fare.We used to have a system when we were in government under Labor. Youngsters could get an opportunity and were given bus fares to get to interviews, and it was targeted in that way. Since privatisation nobody has looked at these sorts of situations to endeavour to assist these young people to get to interviews in that way. Nobody thinks that it is difficult. They think that people have got money in their pockets. I am very angry about this; it is not fair to treat young people in this discriminatory way. (Time expired)1754212:58:0017542Elson, Kay, MPMrs ELSON6K6FordeLP10—I appreciate the opportunity to bring to the attention of this House some very special people who help make my electorate of Forde such a wonderful place to live in. I am a strong believer that the biggest advances in this century will be not in technology but in the reassessment of how we live together and an emphasis on building stronger communities.I am fortunate to represent an area that is built on the strength of its many individual communities where many people are willing to lend a hand to help others and there is a very strong sense of community spirit. It is something I am very keen to foster and encourage especially in future generations.Each year I am proud to recognise the outstanding achievements of many local voluntary workers throughout the Forde Community Contribution Awards. I established these awards in 1996 as a way for our community to say thankyou to the many people who give so much of their time helping others. These are the people who give their community its heart and soul and never seek recognition. They are a shining example for our younger residents in particular.This year I was delighted to name 30 local recipients of the community award and to congratulate them in a special presentation ceremony in my electorate. While there is certainly not enough time here today to list all their achievements—it would take almost a full day of sitting—I would like to thank them once again on behalf of our community. Their collective services range from the rural fire brigade, to Meals on Wheels, the CWA, youth art groups, helping drought stricken farmers, local show societies, senior citizens organisations, and a whole range of local and national charities. Every year I am amazed and inspired by the letters of nomination that I receive from local residents, people who have witnessed years of dedication and community service and who are truly grateful for that service. This year's award recipients are yet another outstanding example of how special our corner of Queensland truly is, and to be able to represent people with such huge hearts and willing hands is, indeed, a very special privilege for me.I would like to recognise the year 2000 Forde Community Contribution Award recipients here today and I would like to name each one of them to register their names in our national files. They are Elizabeth Early of Eagle Heights, Robert Henderson of Tamborine, June Hintz and Calvin Pybus of Beenleigh, Ted Hodby of Bahrs Scrub, Jean Jenyns of Tamborine, Ross Kruger of Beenleigh, Michael Maskell of Eagleby, Mary McSherry of Beenleigh, Betty Pugh of North Tamborine, Sylvia Seaton of Logan Village, Ian Robinson of Loganholme, Frank McKay of North Tamborine, Carol Anderson of Mount Tamborine, Kevin Kane of Mount Tamborine, Albert Garcia of Beaudesert, Coral Duncan of Beaudesert, Lindy Dennis of Beaudesert, May Brook of Beaudesert, Gwyntha Platell of Beaudesert, Joe Hanson of Beaudesert, Colin and Vi Love of Beaudesert, Diana Buchanan of Beaudesert, Estelle Brown of Beaudesert, Beryl Dennis of Beaudesert, Dorothy Cahill of Hillview, Greg Maynard of Boonah and Margaret Opperman of Boonah. I am sure all honourable members of this place will joint me in congratulating and thanking these special people who play such a vital part in our community. Each year I also recognise a community organisation which has excelled. This year I was very proud indeed to present a special community contribution award to the members of the Woodhill Rural Fire Brigade. These rural fire brigades are enormous supports of many local community events and organisations. Their members are always active and ever present. They do a vital job in helping protect the community from the dangers of bushfires. I congratulate the members of Woodhill Rural Fire Brigade for their ongoing service. They are a wonderful example to all of us.I also want to take a few minutes to congratulate the Biddaddaba heritage group on the tremendous local history book they compiled which I was very proud to launch. The history of Biddaddaba Creek, Boyland-Canungra Line Queensland is a remarkable book and a rich pictorial and factual history of the beautiful and unique local region. I have purchased several copies of this book to present to local schools so that our children can learn more about the history of our region and the pioneers who established our communities. It was great to see so many local residents join us for the launch of the book at the site of the old Boyland station.In celebrating and learning from the past, and congratulating those who currently serve us so well, I believe we can help create stronger local communities and a better way of life. They are certainly one of my top priorities and I look forward to continuing to work with our local residents to achieve that. Debate (on motion by Mrs Elson) adjourned.Main Committee adjourned at 1.26 p.m.Answers to Questions in Writing17544The following answers to questions were circulated:17544(Question No. 1039)103917544Price, Roger, MPMr PriceQI4ChifleyALP00 asked the Minister for Aged Care, upon notice, on 22 November 1999:(1) Did the Government announce in press release WS100/98, dated 20 September 1998, that an additional $80 million will be spent over 4 years to provide 130 000 days of additional in home respite care every year for carers of people with dementia.(2) Has the announcement been honoured; if not, why not.(3) How many days of additional in home respite care will be provided for carers of people with dementia each year.17544Bishop, Bronwyn, MPMrs Bronwyn BishopSE4MackellarLPMinister for Aged Care10—The answer to the honourable member's question, in accordance with advice provided to me, is as follows:(1) A pre-election commitment was given to spend $80 million to provide additional respite care for carers of people with dementia.(2) Yes. Annual funding of $3.8 million has been approved for expansion of Carer Respite Centres to provide additional respite services for carers of people who have disordered behaviours as a result of dementia. In addition, 82 new services for this client group have been approved at a cost of $14 million per annum and education and training initiatives are being developed with the Alzheimer's Association Australia and the Carers Association of Australia. (3) It is not appropriate to assess the impact of these measures in terms of days of in home respite care. The Department of Health and Aged Care is to collect data on the range of services provided under the National Respite for Carers Program. On average, $20 million will be spent each year over the four years 1999-2000 to 2002-2003 to increase respite care for carers in the target group, including in home respite. This will be under three strategies:1. Expansion of short term and emergency respite through Carer Respite Centres;2. New services to meet the ongoing needs of this group; and3. Carer and service education to ensure the viability of services.17544(Question No. 1153)115317544Murphy, John, MPMr Murphy83DLoweALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 15 February 2000:Will he provide details of former Senator Colston's movement records in 1999; if so, what do the records reveal.17544Ruddock, Philip, MPMr Ruddock0J4BerowraLPMinister for Immigration and Multicultural Affairs and Minister Assisting the Prime Minister for Reconciliation10—The answer to the honourable member's question is as follows:No. This is precluded by the provisions of section 488 of the Migration Act 1958 on access to and release of such information.17544(Question No. 1227)122717544Horne, Bob, MPMr HorneUU5PatersonALP00 asked the Minister for Aged Care, upon notice, on 7 March 2000:(1) Is it a fact that the Oban Nursing Home in Raymond Terrace, NSW, owned by Moran Health Care, failed to meet 12 out of 31 national minimum standards in 1998, and despite continued promises to upgrade and rebuild Oban Nursing Home, her Department granted a 12 month extension to Moran Health Care in February 2000.(2) Has Oban Nursing Home operated since December 1998 with only 49 beds while it is licensed for 68 beds.(3) Have persons who have lived in the Raymond Terrace Community all their lives been forced to leave the area to find aged care because Oban Nursing Home is operating 19 beds below capacity.(4) Does she accept that persons have the right to aged care services in their own community.(5) Is she able to give an assurance that Moran Health Care will not be granted permission to remove aged care beds from Raymond Terrace and will be required to upgrade the Oban facility and restore its 68 bed licences. 17545Bishop, Bronwyn, MPMrs Bronwyn BishopSE4MackellarLPMinister for Aged Care10—The answer to the honourable member's question, in accordance with advice provided to me, is as follows: (1 to 3) Moran Health Care (Australia) Pty Ltd purchased the Oban Nursing Home in June 1998. At that time the Home was subject to an Undertaking to Remedy Non Compliance in respect to 11 of the 31 Residential Care Standards. The provider was required to reduce the number of beds in the home from 68 to 49 as soon as possible, in order to address overcrowding, space and privacy for residents. This occurred. The provider is also required to rebuild the facility on the current site or another site in the Region. In order to ensure security of tenure for existing residents the Department has advised Moran Health Care of its agreement in-principle to a 12 month extension of the Undertaking to June 2001, subject to Moran Health Care (Australia) Pty Ltd submitting an acceptable redevelopment plan with a commitment to firm time lines.(4) The Government has established a comprehensive planning framework which aims to provide an equitable distribution of residential and Community Care Places in each planning region. (5) Under the terms of the Undertaking to Remedy Non Compliance, Moran Health Care (Australia) Pty Ltd is required to rebuild the facility on the current site or another site in the Hunter Planning Region. While a formal application for the transfer of places has not been received, the Department of Health and Aged Care is working with the provider to develop a proposal for a new facility at another site within the same Statistical Local Area (Port Stephens) which will use the balance of the 68 places originally approved at the Oban Nursing Home. This will ensure that the places will be available in the area. However the final number and mix of places approved to operate in Raymond Terrace will be determined in accordance with the Aged Care Act 1997 and on the basis of the greatest benefit for older people living in the Port Stephens Statistical Local Area overall, including those in Raymond Terrace.17545(Question No. 1265)126517545Edwards, Graham, MPMr Edwards83RCowanALP00 asked the Minister for Veterans' Affairs, upon notice, on 15 March 2000:Is he able to say how many children of Vietnam Veterans have committed suicide; if so, what was the (a) age of each victim, (b) method of suicide, and (c) breakdown of victims according to State, metropolitan, rural and remote areas.17545Scott, Bruce, MPMr Bruce ScottYT4MaranoaNPMinister for Veterans' Affairs and Minister Assisting the Minister for Defence10—The answer to the honourable member's question is as follows:No. The Australian Institute of Health and Welfare (AIHW) who undertook the Validation Study of the findings of the Morbidity of Vietnam Veterans, reported that 111 suicides were able to be confirmed. The AIHW is currently preparing a supplementary report to the Validation Study which will provide further details.17545(Question No. 1267)126717545Andren, Peter, MPMr AndrenKL6CalareIND00 asked the Treasurer, upon notice, on 15 March 2000:(1) Is it the case that (a) providers of curriculum related excursions will have to charge GST in full to schools taking students on such excursions and (b) schools will then to have to either cover the cost of the GST themselves and claim it back, or charge students the GST and distribute refunds to them.(2) If so, will this place cashflow and administrative burdens on schools and excursion providers.(3) Will food prepared for students while on excursion attract the GST while the accommodation component will not, despite both being necessary because the student is attending a curriculum related excursion; if so, why.(4) Why is this administrative burden being imposed on schools and excursions providers and what assurances can he give that this treatment will not increase the cost of school excursions and lead to reduced business for excursion providers.17545Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honorable member's question is as follows:(1) (a) When excursion providers are registered, they will have to charge GST on excursions provided to schools. (b) Schools will be eligible for input tax credits for GST paid on excursions. Where the school on-sells the excursions to students, the excursion will be GST-free as long as the excursion is curriculum-related.(2) The GST treatment of school excursions will not involve a cash flow cost for excursion providers as they will collect GST on these supplies and are not required to remit these funds to the Australian Taxation Office until the end of their tax period. This treatment will also minimise the administrative costs for excursion providers.In relation to schools, the cashflow and administrative burden of taxing their acquisition of excursions is not expected to be large because schools will be paying GST and seeking input tax credits on a large number of other taxable supplies.(3) Basic foods provided to students while on an excursion will be GST-free. However prepared food will be taxable. The accommodation component of excursions will be GST-free. The treatment of food and accommodation for excursions is consistent with the treatment of these supplies at schools.(4) See (2), the Government considers that the GST treatment of school excursions will minimise the administrative costs for schools and education providers. It is not expected that the cost of school excursions will increase.17546(Question No. 960)96017546Zahra, Christian, MPMr Zahra84HMcMillanALP00 asked the Minister for Aged Care, upon notice, on 30 September 1999:(1) Further to the answer to question No. 784 (Hansard, 23 August 1999, page 6825), is the Residential Care subsidy the only source of funds provided by his Department to Croft Health Care P/L, Croft Health Care Vic P/L and Gracedale Manor P/L.(2) Have other subsidies or supplements, including the concessional resident, pensioner, respite and viability supplements, under the Aged Care Act 1997 been received by the companies referred to in part (1); if so, (a) what sum was paid and (b) when were the payments made.(3) Have complaints been made against the three companies referred to in part (1) or the facilities they operate; if so, what is the full list of complaints that may be lodged.(4) For each complaint referred to in his answer, (a) how was the complaint detected or lodged, (b) on what date was the complaint detected or lodged (c) how was the complaint resolved within the Aged Care Complaints Resolution Scheme, (d) did the complaint result in a surprise visit or inspection by the Aged Care Standards Accreditation Agency (ACSAA) or departmental officers and (e) when was the complaint resolved.(5) Have the facilities operated by the companies referred to in part (1) been the subject of a surprise inspection or assessment conducted by the ACSAA or departmental officers; if so, (a) on how many occasions, (b) what was the assessment of each facility and (c) were problems detected or complaints received; if so, (i) what were they and (ii) what action was taken to resolve the problems.(6) What sum has been provided to each of the companies referred to in part (1) by his Department.17546Bishop, Bronwyn, MPMrs Bronwyn BishopSE4MackellarLPMinister for Aged Care10—The answer to the honourable member's question, in accordance with advice provided to me, is as follows:(1) No. (2) (a) Payment of $25,075,495 is the total amount of subsidies and supplements paid to the listed companies between the period 1 October 1997 and 30 April 2000. (b) Commonwealth residential aged care subsidies are paid on a monthly basis. (3) Yes. (4) The complaints were lodged with the Complaints Resolution Scheme and dealt with through a process of negotiation. Advice is that one complaint is still in the process of negotiation. (5) Bairnsdale Private Nursing Home, Sale Private Nursing Home and Narracan Gardens Nursing Home all operated by Croft Health Care Vic P/L have been visited and assessed by the Aged Care Standards and Accreditation Agency (the Agency). (a) Bairnsdale Private Nursing Home was visited by the Agency in October 1999 and assessed against the four Accreditation Standards. It was rated “commendable” in respect of three standards and “satisfactory” in respect of the fourth. It has been accredited for the maximum period of three years. Sale Private Nursing Home was visited by the Agency in November 1999 and assessed against the four Accreditation Standards. It was rated as “satisfactory” against all four standards and has been accredited for the maximum period of three years. Narracan Gardens Nursing Home was visited by the Agency and assessed against the Residential Care Standards on two occasions; February 1999 and June 1999. (b) & (c) An assessment of Narracan Gardens Nursing Home against the Residential Care Standards in February 1999 resulted in an “action plan”, to remedy the unacceptable outcomes detected, being submitted by the service provider following the February 1999 assessment and the Agency monitored progress against the facility's “action plan”. Narracan Gardens was assessed as satisfactory in June 1999 and has continued to operate satisfactorily and is proceeding to accreditation. (2) See answer to (2) above.