2000-11-013917REPS2179302000-11-01—————Mr SPEAKER (Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Bills21793R115521793Debate resumed from 31 October, on motion by Mr Truss:That the bill be now read a second time.09:31:0021793Hawker, David, MPMr HAWKER8H4WannonLP10—As I was saying last night, it is a great disappointment to find the opposition not supporting the Wool Services Privatisation Bill 2000. The opposition have some unfortunate form on this matter. Many of the problems the wool industry and the wool growers face today are the result of some very poor decision making by the previous Labor government. It is to their shame that, when the government have gone to so much trouble and come up with such an excellent outcome, we still get that opposition from Labor; they still demonstrate a total lack of understanding of the importance of wool growing to Australia and what these changes are going to mean not only for wool growers but for wool growing regions and, indeed, for country people generally. I think it is to their eternal shame that they have done that.I would like to again commend the Minister for Agriculture, Fisheries and Forestry for the work he has put into preparing this bill. As has been outlined already, the Wool Services Privatisation Bill 2000 is all about establishing Corporations Law company arrangements to replace the way wool industry services are delivered by the Australian Wool Research and Promotion Organisation. On 8 August the government announced the detail of the new arrangements. This means that AWRAP will be converted from a statutory corporation into a Corporations Law company limited by shares. The shares in the company will be issued to Australian wool tax payers—which generally means wool growers. It will have two main subsidiaries: one will be responsible for commercial activities, including the commercial development of the Woolmark and its sub-brands and their intellectual property; and the other subsidiary will manage the proceeds from the wool tax, and outsource research and development and the management of future intellectual property. It is expected that there will be greater transparency and greater accountability, and we believe certainly better outcomes. There is no doubt that, in the area of wool growing as a whole, AWRAP and future development, a couple of things stand out. The first is the excellent work done by the task force headed up by Ian McLachlan, the former Minister for Defence and someone who has a lifelong interest in wool growing, which produced a landmark report. The report contains many excellent points, most of which have been picked up in this legislation; but, more importantly, many of these ideas will be the province of the new organisation. Clearly, it gives it a great starting point.I would like to elaborate on a few telling points raised by the task force in its executive summary. The first one emphasises the need for a fundamental cultural and attitudinal shift among wool growers. It talks about how wool growers individually must take more responsibility for their business and for their fibre and, most importantly, move away from the term `the wool industry'. The wool industry as a collective term can mean all things to all people and, in the end, means a lack of proper focus. In many cases, it has been an excuse for people not to take action on their own behalf or collectively within a region or whatever; instead, they wait for others to do it. The second point made in the report is that the diversity of wool should be celebrated, not lamented. Too often people lament the huge variation in wool. But, as we know in one very successful industry—which you know only too well, Mr Speaker, because of the area you represent—the wine industry has demonstrated how that diversity can be a very valuable asset and exploited to the advantage of the industry. Over the last decade or more, the wine industry has had an enviable record not only domestically but also as an exporter. The third and another very important point made by the report is that the future success of wool depends critically on continual innovation and quick implementation. This is something that the new organisation clearly will have as one of its major focuses and, most importantly of course, its success will be measured on how well it can not only do the innovation work but implement the outcome. The fourth point talks about the need to avoid, wherever possible, government intervention. I would like to remind honourable members of a couple of important conclusions the report made. One was the need for truth in labelling for Australian wool. This is something that the wine industry has developed. We have seen how the Europeans, and the French in particular, have developed `appellation controllee' as a way of ensuring that consumers can buy with confidence because they know what they are getting. Also in the conclusions, the task force identified some of the serious processing problems that have befallen wool growing. One of these was the problem with top making. There has been a tendency for many top makers to blend down to a price and not up to a quality. Clearly, while this may be profitable for the top maker, it is not the way that wool growers are going to get maximum value, particularly those who are trying to produce a superior quality. If I could use the wine analogy again, it is a bit like trying to blend all your wine into a cardboard box type quality rather than trying to get into the premium bottle end of the market. I believe fervently that for wool growers to be successful they have to aim at the quality end. That means not allowing top makers to blend good wools with inferior wools and produce an FAQ product, which may be profitable for top making but which does not promote the best attributes and qualities of wool. The report also made some interesting criticisms of the Woolmark Co., pointing out that it has been a blockage to more effective communication between processors and wool growers. This is going to be a critical factor that has to be overcome with the new organisation. The current board of AWRAP are only too conscious of this. It is essential that that communication blockage is removed so that the consumers of wool are communicating properly with wool growers. It is only by doing this that both can benefit from providing a product that the market actually wants in a way that it wants and at a time that it wants. Too often there have been those blockages. The Woolmark Co. is identified as one, but it is certainly not the only one. This is another challenge that wool growers and others involved in the pipeline of wool have to face. They have to make sure that the communication chain is opened up rapidly in such a way that the benefits flow both ways. I will come back to that point later. There was also some criticism of AWEX, the Australian Wool Exchange. It was seen, far from being a catalyst for reform, as an inhibitor of reform. That demonstrates some of the problems that have been faced in wool growing. As most people would be aware, the last decade has not been a happy one for wool growers. I can speak from personal experience of the difficulties that people are facing in my region. Certainly there have to be changes. I would like to go into a little more detail on a couple of the points that the wool task force outlined. One of them involved the costs associated with getting wool from the farm to the consumer. The second chapter of the main report went into some detail about the transport costs. In the report the task force pointed out: The transport, handling and marketing system from farm to domestic scouring/top making mill or ship for export has been exhaustively analysed over the past 30 years. Indeed, the degree of scrutiny seems inversely proportional to the changes which have occurred. While it may be that the large claimed benefits in some of the theoretical studies could not be confirmed in practice by those whose capital investments were on the line, an industry-wide consensus style decision making process added lead to the saddlebags of potential reformers. It goes on to compare the costs of producing wool to the costs of producing cotton and artificial fibres: ... cotton and artificial fibres have significant competitive cost advantages over wool. This occurs at various stages, including fibre delivery to the mill, cleaning and combing, and spinning. An analysis was done and it was pointed out that these delivery costs: ... account for over 80 per cent of the 83c/kg clean cost differential between wool and cotton. At least 20 per cent (or 25c/kg) of total wool delivery costs are attributed to price discovery ... So the transport costs in the supply chain are around 83c a kilogram clean more expensive for wool than cotton. As has also been pointed out, many studies in the last 30 years have identified how these costs could be reduced, but to date very little change has resulted from those studies. The criticism of AWEX is probably due to the fact that 25c a kilogram of total wool delivery costs are attributed to price discovery. There is no doubt that there are superior systems available for price discovery, for the selling, of wool. There has been great reluctance by some of those who have a vested interest in the status quo to adopt some of these new technologies and new techniques. One of the most obvious of these techniques is electronic selling. There has been a lot of talk about it to date, but the results have been very limited in terms of it being applied. Another point that the task force emphasised, which has been spoken about many times but is still a problem, is the cost of contamination. The CSIRO have put this at 14c a kilogram clean. Again, it is a fairly serious problem that has been talked about a lot. So far the results have not translated into cleaning up what has been done, although the move to the use of nylon wool packs is a very important step in the right direction. As someone who was myself involved in the task force and in recommending that, I believe that we have moved to get rid of one of the sources of contamination, although, as always, it is unfortunate that it has taken so long to get those results. I turn to a couple of points in the AWRAP report, which was tabled here yesterday. In the chairman's report, Tony Sherlock makes some very telling points about what is happening with wool at the moment. It is to his credit that Tony has taken on the job at a fairly difficult time because of all the changes that have been occurring, but he has done it with enthusiasm and, I think, great skill. As he points out in his opening remarks:This has been a remarkable year for AWRAP/The Woolmark Company ... Perhaps, in time, it will be seen as the turning point. He then lists all the things that happened: An enquiry into the wool industry ended, a poll of all woolgrowers was taken, the woolgrower agricultural associations remained united, an Interim Advisory Board was formed and a new structure for a wool services company was developed. On the brighter side, he said:Wool prices went up, wool stocks reduced, and there was clear evidence of increased grower response to and acceptance of market demands. At the same time, The Woolmark Company increased its focus on delivering innovations to customers throughout the wool industry pipeline, developed plans for the Interim Advisory Board whilst restructuring itself to meet the decreased levy levels six months ahead of schedule and ended the year with an increased level of reserves. It was a remarkable year. One of the points he made was that during the year, in March, a poll of wool growers voted to halve the amount of wool tax levy they pay. This has been quite a year of change in wool, but I believe that it will be change for the better. It is unfortunate that it has taken so long to bring about these changes, but it is very much to the credit of this government that we have moved to make them. Clearly, they will be changes for the better. We are seeing a very positive response from those who are serving the wool industry, many of whom will be involved in the new corporation when it gets up and running. The report of the managing director of AWRAP points out: ... the company delivered on their Operating Plans, ensuring greater adoption and higher success rates for R&D investment and the faster delivery of innovation to growers and the textile industry.The report focuses on one particular point, which is quite exciting, and that is the Sportwool development. In July 1999, over one million Manchester United player and supporter shirts hit the global markets, less than 12 months after the finalisation of this development. Sportwool obviously is going to play a very significant role. As I have said, this bill is a very important step in revitalising a very important part of the Australian agricultural scene—in fact, the whole Australian scene, when you think about the role that wool has played. It is of great disappointment to find that the Labor Party cannot find it within themselves to support this after all the work that has gone in, the excellent consultation, the work of the wool industry task force, and the work of people like Rod Price and David Webster in developing what is going on. The Labor Party stand condemned for their lack of support for what is clearly so desperately needed to take the next step in making wool growing a commercial and successful operation in Australia. (Time expired)21:49:0021796Horne, Bob, MPMr HORNEUU5PatersonALP00—I rise to make a small contribution to the Wool Services Privatisation Bill 2000. I cannot let the comments from the member for Wannon go unchallenged. What he misses is the fact that the opposition support the concept of this bill. We have made that clear right from the start. We have no objection to the concept that wool industry services should be managed by the wool industry itself. We know, we understand, that wool and the history of wool are an integral part of the development of the nation of Australia. We have to move on and we support what this bill is about. We accept that the legislation is a response to the McLachlan report that was tabled on 30 June 1999. This legislation is going to be implemented in 61 days time, on 1 January 2001, and it is being presented to the parliament and debated in the parliament today—61 days, out of which you take the Christmas and New Year period.The point we most strongly object to is the way that this has been brought into the House. This is a government that talks about transparency and openness, but this is a piece of legislation that, even at this late stage, is short on detail. The shadow minister—and I have spoken with him this morning—has advised me that he has asked for a number of documents that he has not been given the courtesy of seeing. They are not being passed over to the opposition even in a draft form, yet we are being criticised by the member for Wannon and others because we are opposing the legislation. We are opposing the way this government does business. We are opposing the arrogance of this government to simply think that they can walk into this chamber and, by weight of numbers, put up any piece of legislation, bulldoze it through and have it go out and move off to the Senate without challenge in this place. Well, that is not the way we do business. We say that, if the Howard government prides itself on being open and transparent, it will cross every `t' and it will dot every `i'. That is what the people of Australia expect, and it is what they are not getting.What about the wool growers? I listened with interest to the member for Corangamite, who made the claim last night that the detail was in the annual report of AWRAP. I just happen to have a page from a Hansard of the Senate Rural and Regional Affairs and Transport Committee. Mr Connors, who I am sure is known to the members on the other side, was giving evidence to the committee. I understand that Mr Connors is the president of the Western Australian Pastoralists and Graziers Association. There was the following exchange:Senator FORSHAW—I have just one question. I want to go back to Cape Wools again. When did you first hear about this issue?Mr Connors—Time and day?Senator FORSHAW—Was it recently?Mr Connors—Yes, very recently. It was within the last couple of weeks.And let me tell you that this is dated Friday, 8 September 2000, so we are not going back a long time. It continues:Senator FORSHAW—So you were not alerted from the annual report last year to any potential negotiated settlement or whatever?Mr Connors—Definitely not. It was within the last couple of weeks. Everybody seemed to know at once. So I cannot even tell you who the first source was that I heard it from.CHAIR—As a studious reader of AWRAP annual reports, you did not pick it up?Mr Connors—Me either.Mr Connors is a man who is very involved in the wool industry. Despite what the member for Corangamite said here last night—that the detail was in the annual report of AWRAP—that is challenged by evidence that was given to a committee by a member of the wool industry. Those comments were made in September of this year, just seven weeks ago. Whilst members of the wool industry are out there saying, `We are not aware of the detail,' and the government is claiming that the detail was in the annual report of AWRAP, I can tell you that the opposition certainly are being kept in the dark because we have not been given the courtesy of any documentation at all. The government will say, `Well, it's all in the fine print; it's all in the detail.' Where are things like a deed of agreement? Where is the documentation to show what control the government will have over the expenditure of $11.3 million R&D funding. Do we simply hand it over? Do we simply say that this new privatised organisation will do the honourable thing? Do we have any controls? If we do, we in the opposition have not been told of them. Maybe the next member to speak will advise us of exactly what controls are in place. The $11.3 million is considerably more than the ABC is asking for, but we cannot be told what control the government has over it! Where is the constitution for this privatised organisation? I guess there is one. I guess there is a draft in place. Maybe we can be told that. Maybe we can be shown just a draft of a constitution. But at this stage there has been no constitution tabled—and this is from a government that claims it is open and transparent. The member for Wannon has come in here and criticised the Labor Party for not supporting the legislation; I just point out the reasons why. There is the liability to Cape Wools of South Africa for their 8.3 per cent ownership of Woolmark that will have to be bought out as a result of this new arrangement and this privatisation. What is the extent of commitment of government funding to that? I know that the Deputy Prime Minister has been asked that in question time on a number of occasions, but the people of Australia, the taxpayers that will be paying that, still have not been advised of the extent of our commitment to that buy-out. And where is the regulation governing the future relationship between the Australian government and this new privatised entity that we are talking about today?I will conclude my comments simply by saying that the way this legislation has been presented to this parliament brings no credit to the government. That this government can simply come in here and present a piece of legislation without the necessary detail of government expenditure—because there will be associated government expenditure with this legislation—and simply expect the Labor Party to support it epitomises the arrogance that my colleagues and I believe this government has in the way it treats this place. It is arrogance, because the government has known all along that we support the concept behind the legislation. The government cannot claim that it has been lack of time. As I said, the McLachlan report was tabled back on 30 June last year. Now, with less than 21 sitting days to go before the end of the year and the implementation of this legislation on 1 January next year, there is an urgency to get it through. We say that is shameful. We say it is not acceptable as parliamentary practice. We say that the Minister for Agriculture, Fisheries and Forestry should have done the right thing and ensured that this legislation went through with the support of both sides. All he needed to do was provide the detail that was asked for. That will go down to the discredit of this minister and this government and be another mark on the wall to show the arrogance of the Howard government.10:00:0021797Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—It is interesting that the opposition have sent the member for Paterson in here to have a few words on this particular bill. I think they were embarrassed yesterday when the only speaker from the opposition on what is a very important bill for the wool industry and for the country, given the ongoing benefits of the wool industry, was the shadow minister for agriculture. Obviously, he had to speak and I think that probably he even found that difficult. I think they realised just how important this was and felt the need to send somebody along to say a few extra words to show some sort of feigned concern about the wool industry, so they threw in the member for Paterson to do his little bit.I certainly want to commend the Wool Services Privatisation Bill 2000. This legislation allows for the privatisation of the wool industry services provider, the Australian Wool Research and Promotion Organisation, AWRAP, and its operating subsidiary, the Woolmark Co. Passage of this bill will pass ownership of the management of wool industry services into the hands of wool growers, a move that will be welcomed by wool growers in my electorate of Eden-Monaro—and there are many of them; some of the best fine wool comes from Eden-Monaro down there on the Monaro—and all the wool growers right around Australia. This is what they have been working towards for quite some time. It greatly reduces the government's involvement and is a strong example of the government and industry working together to achieve a common goal. I thought it was interesting, listening to part of the shadow minister's comments yesterday, that, when you really look around what he was saying, you realise he was basically saying the Labor Party, as usual, cannot let go of control. They love to control everything. Really, for all the so-called concerns and various things that he was expressing, at the end of the day it was like the new parent taking their first child off to kindergarten: the parent could not quite let go of the child's hand to go off into the great wide world on their own. That is really what the opposition is all about; they really do not want to let go of control of an industry.Honourable members interjecting—10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The minister and the honourable member for Paterson!OK6Nairn, Gary, MPMr NAIRN—Thank you, Mr Deputy Speaker. It is a bit difficult to speak with this sort of chatter there at the table. The privatisation of AWRAP is part of a larger process to enable the wool industry to assume ownership of its service delivery body and for it to be accountable to levy payers as shareholders. Rod Price, as chairman-designate of the new company, says this change marks `an exciting new era' for wool growers. He says:The Government will no longer control the expenditure of wool levy funds, and these funds will only be invested in a contestable manner. The Board of Australian Wool Services will be accountable to woolgrowers for the company's performance.Mr Price is well qualified to hold this position. He is a former director of John Fairfax Holdings and of the US and UK subsidiaries of Brierley Investments Limited. He is a former managing director of Pioneer International Limited. He was also a member of the Wool Industry Review Committee and the Australian Wool Industry Council.The process to establish the best structure to replace AWRAP has been comprehensive and well supported by wool producers. AWRAP is a Commonwealth statutory corporation which was established in 1993 under the Australian Wool Research and Promotion Organisation Act. Its functions include undertaking generic promotion of wool and wool products and providing funds for research and development in the wool industry. AWRAP's funding has come from a wool tax which is levied by the Commonwealth on sales of wool and by a matching Commonwealth research and development contribution. Those wool growers who pay the wool tax do not hold shares or have any other proprietary interest in AWRAP, other than being able to participate in an annual general meeting of AWRAP under special provisions contained in the AWRAP Act.A motion of no confidence passed by wool growers, which we all remember quite well, at the November 1998 AWRAP annual general meeting led to the government establishing the future directions task force to investigate the available options for the future of the wool industry. Their recommendations, contained within the McLachlan report released in June 1999, reflected four major principles—wool growers should take individual responsibility for their business and their fibre, the industry should explicitly accommodate diversity of supply, the industry should explicitly accommodate diversity of demand, and the government should only intervene in response to clear market failure. The report recommended that AWRAP be replaced with a Corporations Law company limited by shares owned by wool growers.In September 1999 the government announced an eight-point plan for implementing the task force report. The plan, which was subsequently endorsed by the National Woolgrower Forum and other key stakeholders, mainly concerned the establishment of a wool working party to conduct—and report on—a vote among wool growers to determine their opinion. As such, a voluntary wool grower poll, known as Wool Poll 2000, was conducted in March this year. In line with the task force report, the working party assumed services would be delivered by a shareholder company owned mainly by wool growers. The preferred outcome from this poll was a two per cent wool tax to be invested in research and development, technology transfer and delivery of some information services. In line with the Wool Poll result, the wool tax rate was lowered from four per cent to an interim rate of three per cent as at 1 July 2000. This will cover the costs of transition to a predominantly research and innovation body, and from a government authority to private ownership. As soon as these costs are met, following the establishment of the new arrangements, the levy will be further reduced to the two per cent. The bill provides that AWRAP will be converted to a Corporations Law holding company limited by shares, with shares to be issued to Australian woolgrowers. The company will be called Australian Wool Services Ltd, AWS, and will have two principal subsidiary companies. Of note is that the boards to be established under the new arrangements will be responsible primarily to shareholders rather than to the government, as is the current case. Shareholders will receive annual reports and audited financial statements and may vote at general meetings. All AWS directors will be required to stand for election by rotation. One subsidiary, CommercialCo, will be responsible for commercial activities, including the commercial development of the Woolmark and its sub-brands and the commercialisation of intellectual property matters. The other subsidiary, R&D FundCo, will manage the proceeds from the wool levy and outsource research and development and intellectual property management. These arrangements also foreshadow that after a transition period of 12 to 24 months the board of the converted AWRAP may consider the option of dissolving the converted AWRAP, leaving the two subsidiaries as separate commercial entities directly owned by shareholders.Whilst the government is committed to minimising its involvement in the new arrangements, as long as payments continue to be made to the company by the government it is appropriate for the government to responsibly monitor the expenditure of those payments. Therefore, this bill does provide for the government to enter into a contract with the company in relation to payments of wool levy and matching R&D contributions. The government's role will be to collect wool levy funds, contribute funds for R&D, audit the expenditure of these funds and ensure accountability to parliament and taxpayers. The government will have no representation on the boards of AWS and its subsidiaries. To ensure that AWRAP staff are transferred to the new arrangements without breaching their employment contracts, a strategy is currently being developed.This bill also allows for the establishment of the wool levy to replace the wool tax. The establishment of the wool levy will help in the future conduct of wool levy ballots and will assist to maintain the accuracy of the shareholder register by ensuring wool levy information is passed on to the register managers. A wool poll will be held at least every three years for the purpose of setting the levy rate. These changes will allow for wool growers to take responsibility for the management of their assets. They will have a real say in the operation of the company, there will be contestability and transparency in the expenditure of wool levy funds and the focus of investment will be on innovation. Change and innovation are needed due to a low demand and poor prices for wool over the last decade and due to a general uncertainty felt by many. Globally, we have seen changing consumer preferences, and the rise of synthetics, wool blends and fibre substitutes have a significant effect on the local market.Concerns had arisen that AWRAP was focused too heavily on consumer promotion and too lightly on research and development. Under the four per cent wool tax regime, AWRAP spent only around 40 per cent of its annual budget on R&D and innovation activities. Substantial funds were spent on licensing of the Woolmark and promotional activities. A key focus of AWS will be wool product innovation and the strategic marketing of new wool products to optimise their uptake. Levy funds will no longer be used for generic promotion activities. Privatisation of AWRAP and the formation of AWS is expected to occur on 1 January 2001 or as near to that date as possible. From that time, the company will be in the hands of the board and its shareholders. All wool tax payers are entitled to register for shares in the new company. Share registration kits have already been mailed out to wool growers and brokers across Australia. The kits outline the new structure for AWS, and enclose a share registration form to be returned by 30 November. Shares and voting entitlements in AWS will be allocated for each $100 of wool tax paid over the three financial years ending 30 June 2000. No income tax or stamp duty will be payable by wool growers upon the issue of shares in AWS. Upon the separation of ownership of the two subsidiaries, no income tax or stamp duty will be payable on the issue of shares in exchange for AWS shares, provided this occurs within two years of the formation of AWS. Capital gains tax may be payable on the disposal of shares in AWS or the disposal of any shares received in exchange for AWS shares.Wool growers will be required to support their registrations for shares by providing documentary evidence from an independent third party which shows the wool tax payer's name and address and the amount of wool tax paid in respect of wool sold on a particular date or in the financial years ending 30 June 1998, 30 June 1999 and 30 June 2000. Examples of acceptable documentary evidence include: `account sales' issued by registered wool tax agents to the person at the time of wool sales made by the person; statements from registered wool tax agents describing the amount of wool tax deducted by the agent from the proceeds of wool sales made by the person in each of the relevant three years; and invoices issued by registered wool tax agents to the person at the time of manufacture or export of wool by the person.As a shareholder in AWS, wool growers will have a real say in how their wool levies are invested and will participate in the commercial success of the enterprise. These changes have been instigated by wool growers themselves. A couple of weeks ago the Woolgrowers Advisory Group, WAG, warned federal politicians that they would be ignoring the wishes and interests of wool growers if the legislation to privatise the Australian Wool Research and Promotion Organisation failed to be passed by the parliament. They were responding to reports that some members of the Senate committee examining the legislation were considering opposing its passage until the resolution of the dispute between AWRAP and Cape Wools South Africa. I note that some of those people were given great accolades by the shadow minister yesterday in saying these were the right sort of people to make these decisions. Their background was the usual one of being union employees and nothing much more than that, but he seemed to think they were probably the greatest experts you could ever put forward to make recommendations on this particular matter, which I thought was quite amusing. I quote from the Woolgrowers Advisory Group:Woolgrowers have been waiting a long time for the chance to take control of their industry's research and development activities, and there will be a lot of anger out in the paddocks if this process is blocked.It is almost two years since the Goulburn meeting that passed a vote of no confidence in the previous Board of AWRAP and demanded that control of AWRAP be handed over to woolgrowers.A succession of government-appointed AWRAP Boards have failed to deliver commercial outcomes for woolgrowers. The Board of the woolgrower owned AWS will be best placed to lead negotiations with Cape Wools South Africa in the interest of Australian woolgrowers. The AWS Board will be fully accountable to woolgrowers.The very suggestion that the privatisation be delayed until the government appointed AWRAP Board resolves the Cape Wools matter is exactly the sort of political interference and paternalism we're trying to put behind us.I wholeheartedly support that, and the wool growers in my electorate wholeheartedly support that. I have not been a wool grower, but my first job when I left school was working in the Dalgety wool stores—as a member of the Storemen and Packers Union, I recall. I was not allowed to go and work there after school unless I joined it, and I had to go to the union directed blacksmith to buy the union directed wool hook to be able to work in those stores. I have had enormously fond regard for wool ever since those days. It is a great product, and it really should have greater prominence in the world than it does today. A lot of that has to do with far too much government involvement in the industry over a long period of time. Yesterday the member for O'Connor constantly talked about the opposition and the wool growers as being almost together. I do not think the opposition have really talked to many wool growers at all. They cannot have talked to many wool growers because, if they had, they would have heard those wool growers urging them to get out of the way and to let this legislation through. Yesterday evening in Parliament House I attended a meeting with a number of farmers from my electorate of Eden-Monaro who came here to talk to me about a whole range of matters. As they were leaving, they said, `By the way, you've got to get that wool privatisation bill through.' I said, `I'll be talking on that tonight,' as I thought I would be speaking on this last night instead of this morning. Let me quote some of the things that they said in talking about the possible blocking of this legislation. These are direct quotes from their comments:We don't want political interference—[it is] just plain politics. The next one is very significant:They will put us in a weak bargaining position. It is absolutely stupid if they block this legislation.The legislation is going absolutely in the right direction and we don't need any more delay.Their message, and the message from the Woolgrowers Advisory Group, is extremely clear: pass the legislation and let the wool growers get on with the job of furthering their business. They know, and a string of government appointed AWRAP boards know, that only the people working in the industry can really know what will work best for the future success of the wool industry. I join these organisations in their call. I urge all members to support this bill, and I hope for its speedy passage through parliament.10:18:0021801St Clair, Stuart, MPMr St CLAIR84BNew EnglandNP10—I rise today in very strong support of the Wool Services Privatisation Bill 2000 on behalf of my electorate of New England, one of the finest wool growing areas in Australia, if not the world. This bill is enormously important, and the previous speaker, the member for Eden-Monaro, really reiterated the fact that the wool growers out there need this legislation. They want this legislation, and they want it as soon as possible.While the lower prices of recent times—certainly not in the last week or two—have reduced the relative importance of the wool industry, it remains the single most important industry throughout the region. New England is home to more than 6½ million sheep, many of which produce some of this country's finest and most sought-after fleeces—in fact, some of the world's most sought-after fleeces. Wool growers in my electorate are blessed with ideal conditions for fine wool production, with altitudes up to 1,400 metres spread across a significant part of the northern tablelands area of my electorate. It is vital for local communities that wool production once again become profitable and sustainable to encourage employment and growth in services, certainly in our small towns.In the 1930s, wool accounted for over 62 per cent of the total export value of Australian primary products, which gave rise to the expression that Australia in those days `rode on the sheep's back'. While the national economic base has certainly broadened, the Australian wool industry still holds principal international standing. The national flock currently stands at around 115 million sheep, of which 75 per cent are merinos. Australia still supplies two-thirds of the wool sold on the world market, and New South Wales wool exports were valued at more than $600 million in 1998-99, a year of particularly low prices. This dominant position on the world market has been defended in the face of a number of recent economic storms, including falling demand, competition with other fibres and the abolition of the wool floor price in 1991. That brings me to the role of the Australian Labor Party in the mismanagement of the wool industry and to the broader economy in the late 1980s and 1990s. The House must be reminded of these things. It was the then Minister for Primary Industries and Energy, John Kerin, who oversaw the decline in the wool industry. Of course, prices were under pressure because of events in the Soviet Union and other parts of Asia. UU5Horne, Bob, MPMr Horne—Just a minor detail!84BSt Clair, Stuart, MPMr St CLAIR—I am pleased the member for Paterson is in here enjoying this speech. I know how he loves the wool industry! It was John Kerin's lack of leadership that allowed events to spin out of control. He committed the fatal sin of speculating in public about the future of the floor price scheme. This would obviously terrify any prospective buyers, and they stayed away in droves, waiting for events to transpire. John Kerin also created a huge amount of resentment among buyers of Australian wool because his actions devalued the stock held throughout Europe and Asia. No-one in their right mind would buy a commodity in the climate of uncertainty created by the Australian Labor Party. John Kerin drove down the market through his actions and then the Labor Party abolished the floor price scheme altogether. Naturally they were pleased with this outcome, because the Labor Party thought it was good to see those rich squatters brought down a peg or two.Wool producers have had a tough time, but as with so much of the ALP revenge agenda, the real victims were the battlers. It was the shearers, the wool classers, the shed hands and the transport operators who suffered under that regime. It was the people who worked on the farms and the rural supply companies that felt the downturn because of those Labor Party policies. It was the transport operators and the people handling the wool along the chain right through to the ports who felt that. These were the people who suffered at the hands of Labor's incompetence. The sad part is that many of these people would be Labor supporters. They were betrayed because of the blind ideology of the party hierarchy.The Labor Party was not finished with wool growers. They allowed the economy also to spin out of control and interest rates skyrocketed to record levels. Imagine the poor wool growers having to cope with depressed prices and then watching the interest rate on some farm loans rise to more than 25 per cent! In fact, many of them have not yet recovered and the ramifications of those events are still being felt throughout my electorate of New England. I am proud to say that the wool industry in New England and around Australia has shown great resilience in the wake of Labor's utter incompetence. They are rallying and fighting back.The Wool Services Privatisation Bill 2000 is about the wool growers of Australia taking control of their industry and therefore their own future. The Wool Services Privatisation Bill 2000 is the final step to deliver privatisation of the wool industry services provider, the Australian Wool Research and Promotion Organisation, and its operating subsidiary, the Woolmark Co. It passes ownership of the management of wool industry services into the hands of wool growers and reduces government's involvement to oversighting statutory funding and accountability. The process to establish the most appropriate structure to replace AWRAP has been comprehensive and well supported by wool growers. It has been a strong example of government and industry working together to achieve a common goal that provides a future for the wool industry here in Australia.The initial impetus for reform stemmed from the low demand and poor prices for wool over the last decade. In response to the uncertainty felt by many in the wool industry, this government appointed the wool industry Future Directions Task Force in December 1998, chaired by the Hon. Ian McLachlan AO, to define the issues facing the wool industry and to identify appropriate responses from government and industry on where they can support and help. The government supported the broad thrust of the recommendations in the task force report.A voluntary wool grower ballot known as Wool Poll 2000 was conducted in March this year, with wool growers indicating their preferences for a two per cent wool tax to be invested in R&D, technology transfer and delivery and some information services. In response to the Wool Poll result, the wool tax rate was lowered to an interim rate of three per cent from 1 July 2000. This interim rate is to cover the costs of transition to a mainly research and innovation body and from a government authority to private ownership. The levy will be further reduced to two per cent as soon as these costs are met following the establishment of the new arrangements. Following Wool Poll, a process was undertaken to identify the most appropriate Corporations Law structures to replace AWRAP in conjunction with the wool Interim Advisory Board and the Woolgrowers Advisory Group. The preferred structure received unanimous endorsement from the IAB and from the Woolgrowers Advisory Group. Wool growers will be invited to apply for shares by providing evidence of wool tax paid over the three-year period through to 30 June 2000. The establishment of a voluntary shareholder register is a major logistical exercise. At this stage, the intention is that the minister will sign off on the list of wool grower shareholders in time for the company to be established on 1 January 2001, subject to appeal procedures and dispute resolution procedures being completed by the company over the following six months. In relation to tax treatment, the government worked on the simple principle that neither the new company nor its shareholders should be disadvantaged in moving to the new privatised arrangements. To achieve this, the bill includes provisions which exempt the company and shareholders from certain taxes in relation to specific steps involved in the restructuring process. There will be a nil cost base for capital gains tax purposes for shares issued in the new arrangements. This was a decision based on two good reasons. Firstly, wool growers will not pay for the shares they receive and, in the payment of their wool tax for industry research and other services, there was no expectation that this would lead to realising equity. Secondly, growers have already been able to claim a deduction for the wool tax they have paid, which has resulted in their share allocation. The process to privatise AWRAP is in response to industry calls for reform. We have certainly heard previous speakers speak on that particular issue and on the absolute importance and need for wool growers to determine their own future without the interference of outsiders. The new arrangements differ from AWRAP in a number of key areas which address some of those industry concerns. Wool tax payers will be the owners of the new arrangements. There will be full contestability and transparency between the receipt and expenditure of the wool levy and matching R&D funds.The government's role will be limited to that required for accountability for the wool levy and matching R&D funds received and to ensuring efficient and effective service delivery. Shareholders in CommercialCo will have the opportunity to realise future capital gain as a result of share trading and the new companies will operate as commercial entities under the Australian Corporations Law. The privatisation of AWRAP is part of a larger process to enable the wool industry to assume ownership of its service delivery body and to be accountable to levy payers as shareholders. Industry and government have worked together closely to produce this important result for the wool industry. The good work done by the IAB, under the leadership of Mr Rodney Price, and by the Woolgrower Advisory Group, under the leadership of Mr David Webster, has ensured that the process has run smoothly and certainly to schedule.I am pleased to report to the House that there are signs that wool has started to regain favour with consumers in the domestic and export markets and that prices are starting to rise. Certainly those superfine wool growers in my electorate of New England are now starting to reap benefits and rewards because of the turnaround in the market, because of the new genetics and because of the way they are treating their fleeces. Those benefits are being reaped through higher prices. As this recovery continues to happen—and it will continue to happen and grow—there will be broad benefits for the economies of regions such as the New England. In the last week or two the Carr Labor government in New South Wales put out a survey reporting that the area of the Northern Tablelands in the northern part of my electorate would be a ghost town by the year 2016. I suggest to those who wrote that survey that they are obviously ill informed. They are obviously city based. They sit there and do nothing but number crunch. They have no intelligence in working out what is happening in regional New South Wales. They are taking their figures back to 1996 and earlier. They have simply taken out figures at the lowest level of wool prices over a period of time. I hope the member for Patterson passes the message on to his New South Wales counterparts that areas in New South Wales are doing well, that the little towns will survive—as he knows because he comes from those areas that do have smaller towns—and that they will not be ghost towns over the next 20 years, thank goodness. The only way that they might become ghost towns is if for some reason the Labor Party is re-elected. That really does concern me not only for our small towns but for all the industries that are out there in regional Australia. Investment and employment will grow through the wool industry, particularly in New England, and our young people will have more reason to stay there and work because there will be more opportunities for employment. Let us look forward to a very strong wool industry not only in New England but also in Australia. I commend the Wool Services Privatisation Bill 2000 to the House. 10:33:0021804Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—in reply—In summing up the Wool Services Privatisation Bill 2000 I thank those members who have made a contribution to the debate, particularly the honourable member for New England, who has just completed his remarks, and the other government members, who include some people with a deep personal knowledge of the wool industry: the honourable member for Wannon in particular, who has been heavily involved in the wool industry for a very long period of time; the honourable member for Corangamite, who obviously also has a significant understanding of these issues; and the honourable member for Eden-Monaro. That is just to mention some of those who have spoken with distinction on this bill and who have pointed out, quite correctly, the landmark nature of this legislation and the fact that this is the beginning of a new era for the wool industry. They have commented favourably upon the unanimity and the strong industry support that there is for this legislation and the opportunity that it provides to build a strong and vibrant industry into the future.The wool industry is indeed one of Australia's great national industries. It has often been said that our country rode on the sheep's back and, while many question the closeness and the importance of the industry now to our nation's economy, the reality is that it still is a very significant exporter and a very significant contributor to the regional economies of many local communities and to our nation as a whole. The wool industry still has, in my view, a strong and vibrant future. Of course, like all industries, it needs to change, to better equip itself and to identify the directions that are appropriate for a new era. This legislation will help to create for the wool industry an environment in which it will be able to take control of its own destiny, take advantage of the opportunities that are there and, in a keen and focused way, identify the best possible future for wool growers and their products.The industry has worked very cooperatively to reach the stage when this legislation can come to the parliament. The industry has a long history of dispute and a long history of disagreement internally about its affairs. Indeed, the hostility within the industry has often been a part of the destabilisation of its capacity. In this particular instance there has been a remarkable degree of unanimity. An `outbreak of peace' is a term that I have used to describe the way in which the industry has worked with the government to develop the legislation that is before the parliament today. It is for those reasons and because of the clear expression by the industry itself of its support for this legislation that I am absolutely amazed and staggered that the opposition intends to oppose this bill. I cannot understand how people can come into this place and be so out of touch with the clearly demonstrated will of the industry as a whole. Indeed, I doubt that the honourable member for Corio is in support of the position that his party is taking on this piece of legislation. If you carefully read his speech, he acknowledges that the industry is supportive of the legislation. He knows that he has been personally lobbied by the industry to support this deal in all its detail. In fact, I will quote briefly from the remarks of the member for Corio. I hate quoting a member of the opposition but, in this particular case, I think it is important that I do so. He said:I do note the strong desire expressed to me by wool industry representatives and individual wool growers to forge a new path independent of what they have seen in the past as government interference in their industry...He acknowledges later in his speech that the industry have clearly indicated that they want this legislation supported. They want this bill to be passed. They have voted through the Wool Poll for change in the industry. They have indicated very strong support in the most democratically possible form, by a ballot of growers, that they want this legislation to proceed. Yet the opposition have indicated they are going to oppose it.If you carefully read the opposition spokesman's speech, he provides no reason why the opposition are opposed to the bill. This is a classic case of opposition for opposition's sake. Instead of joining the spirit of unity in the industry at the present time to proceed with a new start for the wool industry, the opposition are simply going to oppose it for no logical reason. If you look carefully at the remarks of the opposition spokesman, and perhaps those even more vigorously expressed by the member for Paterson, it is clear that Labor's opposition, if there are any grounds for it at all, is a part of this ideological opposition they have towards industries taking control of their own destiny. Labor still seem to believe that governments know best, that unions know best; that industries should not have control of their destinies, should not have the opportunity to benefit from the profits that can be made by providing services to their own industry and should not have any say in the direction of their industry. That is simply not a position that this government advocates, and it is not a position supported by the industry. Let us make it abundantly clear: what the opposition are doing today in opposing this bill has no support whatsoever in the industry.84BSt Clair, Stuart, MPMr St Clair—None at all.GT4Truss, Warren, MPMr TRUSS—None at all, if I may take up the comments of the member for New England. There is no support within the industry for the position of the opposition and I find, therefore, their unwillingness to support this legislation to be quite appalling and a clear demonstration that Labor are out of touch with what is going on in the industry. My view that the member for Corio does not have his heart in opposing this legislation I think is also demonstrated in his own speech. I can only assume that he got rolled in caucus on this particular matter by Senators Forshaw and O'Brien. He seems to be fingering them as the people who are to blame for the opposition's position on this particular matter. I think the member for Corio knows that the industry wants this legislation. He knows that it is right, but it seems that a couple of Labor senators have been able to roll him in the caucus. Therefore, for mindless reasons, the opposition are going to oppose rather than join the national spirit of unity on this particular matter and support this legislation. If the opposition have so little confidence in their spokesman, he has no option but to join the Aboriginal affairs spokesman and move to the back bench—and, hopefully, somebody there will come to the front bench who can get across to the Labor Party the industry's wishes and deliver a satisfactory outcome from the opposition. The dreadful thought of the opposition ever coming to government again is certainly highlighted through the inability of the shadow spokesman for agriculture to deliver key support from the Labor Party on vital industry matters.I turn now to matters raised specifically in the legislation. The passage of this bill will convert the Australian Wool Research and Promotion Organisation and its operating subsidiary, the Woolmark Co., to Corporations Law arrangements. Importantly, it gives wool growers ownership of the organisation that delivers industry services. The role of the government in the new arrangements will be reduced to oversighting the statutory funding mechanism and ensuring accountability for the funds provided to the new company. Passage of this legislation will endorse a reform process that has had unprecedented industry support. Following the clear message received from Wool Poll 2000, both government and industry have worked closely together to develop new arrangements that deliver key results, including greater industry control, transparency and contestability between the receipt and expenditure of industry funds as well as significantly reduced overall government involvement. The interim advisory board and the wool growers advisory group have been instrumental in the development and implementation of the new arrangements. Once again, I place on record my appreciation and the government's appreciation for the ongoing efforts in this process. As I mentioned earlier, there has been a remarkable degree of unanimity within the industry in progressing along the lines outlined in this legislation. Australian Wool Services Ltd will be a Corporations Law holding company with two operating subsidiaries: Australian Wool Innovation Ltd will fund research and development activities and the Woolmark Co. will undertake commercial branding and provide technical services to industry. These arrangements provide flexibility to the new board of AWS to consider the demerger of the holding company and subsidiaries within 12 to 24 months, leaving the two subsidiaries as stand-alone commercial companies owned by shareholders. The legislation contains provisions that exempt the company and shareholders from certain taxes in relation to specific steps involved in the restructure process. The legislation also provides for the establishment of a wool levy to replace the current wool tax. This change will see the compulsory industry contribution arrangements harmonised with all other industry levies. The wool levy will continue at the same rate as the wool tax, currently three per cent. As I previously indicated, the rate of wool tax will be lowered further, to two per cent, as soon as possible after the commencement of the new arrangements. I anticipate this will occur on 1 July 2001.Work continues to progress on the establishment of the dual class shareholder register. On 4 October, I launched the shareholder registration kit, which has now been sent out to Australian wool growers, inviting them to apply for shares in AWS. This is the first milestone in the development of the register, and I again encourage all wool growers to take advantage of this historic opportunity. I acknowledge that there are considerable challenges to establishing a wool grower register by the target date of 1 January 2001. Every effort is being made to meet this date; however, before giving my approval, I am committed to ensuring that the list of eligible wool growers, as provided for in the legislation, is reflective of eligible wool growers. I note that there will be a six-month period following conversion to the new arrangements to allow the shareholder base to be trued up to ensure that any incorrectly issued shares are corrected and that those with legitimate claim can receive their shares. Many growers will be able to add their AWS shares to their wool stock shares, demonstrating the ongoing shift towards grower ownership and control of the bodies they fund.A number of issues were raised during the Senate Rural and Regional Affairs and Transport Legislation Committee's consideration of this legislation, and its report recommended three amendments to the bill prior to its passage. The committee recommended amendments to provide, firstly, that any funding of a wool grower representative body be prohibited by the constitution of the new company; secondly, that a conscience clause be inserted in the bill to enable interested wool growers to pay a levy towards R&D but refuse any shareholding or partnership involvement; and, thirdly, that the definition of shorn wool be amended to include harvested wool. The bill does not need amendment to achieve the objective of the report's recommendation, and I am happy to respond to those matters. The Interim Advisory Board, the Woolgrowers Advisory Group and the Commonwealth are discussing how the issue of consultation funding for the wool grower representative bodies should be addressed. All agree that payments should not be made to agripolitical bodies by the new company and that the issue should be addressed either in the statutory funding agreement between the Commonwealth and the Australian Wool Services or in the constitution. Although this is still being settled, it clearly does not require an amendment to the bill. This is also consistent with the McLachlan task force report, which noted that it would be inappropriate for a Corporations Law company to make consultation payments to industry representative bodies. Regarding the conscience clause, I am aware that there are a number of wool growers who have expressed their desire, due to their religious beliefs, not to become shareholders in the new company. Corporations Law provides that a person cannot become a shareholder without their consent, and the bill has been drafted consistent with the Corporations Law in this regard. An amendment to provide for a conscience clause is therefore not required. The regulations covering issue of shares will, however, make it clear that shares cannot be forced on any levy payer against their will. The bill provides for a list of eligible wool growers to be established that would provide the basis for shareholding in the new company and its proposed subsidiary. It is intended that eligible wool growers would have to apply for shares now and in future years. This provides a mechanism for those growers who do not want to become shareholders, as they can simply refrain from applying for their initial share entitlements. It is intended that the shareholder register of the R&D subsidiary company would generally reflect the wool levy payers of the day and that growers who pay wool levy in the three-year period prior to any voting event in the company would, upon application, be issued a share and have voting rights in proportion to wool levy payments. Those wool levy payers who do not hold shares will simply have the right to vote at levy rate ballots, which are expected to be held three-yearly. This does not mean that they will be required to vote, as I understand some wool growers also do not wish to vote at levy ballots, for the same reason as they do not wish to receive shares.The wool levy will, from 1 January 2001, be imposed by regulations. It is those regulations that will contain the definition of wool that attracts the wool levy. It is proposed that at 1 January 2001 the definition would be aligned with the current shorn wool definition in the wool tax legislation. The legislation was constructed this way to allow the coverage of the wool levy to change from time to time, in accordance with the government's levy principles, without having to amend the primary legislation. Before changing the scope of the wool levy, the government would need to be convinced that the levy's principles had been met with regard to the change. I have instigated a review into expanding the definition of eligible wool to encompass non-shorn wool such as fellmongered wool, wool on skins and biologically harvested wool. Should this review indicate that there are legitimate reasons to expand the definition in line with the levy's principles, the government would amend the regulations to accommodate this. To legislate that all harvested wool should attract a levy would provide a less flexible system than that proposed in the legislation. The report also recommended to the board and management of Australian Wool Services that all staff positions be made contestable within the first 12 months of the life of the new company. This would provide the accountability and discipline required to drive the necessary cultural changes for the new company to become a dynamic player in the future of the wool industry. This is, however, a matter for the new board to consider on its merits, once it has assessed the staffing needs of AWS. Mr Price has made it clear that the primary assets of AWS are its staff; therefore, the clean sweep approach as suggested by some would not be cost effective and may have implications for the development of the new industry. The opposition and Democrat members of the committee have submitted a dissenting report that the bill should not proceed until all relevant material, such as company constitutions, have been considered and the legal position of the Commonwealth in relation to Cape Wools liability is clarified. The documents referred to are currently being drafted, and I am more than happy to make them available as soon as they are ready. The legal position of the Commonwealth in relation to Cape Wools liability is clear now, and it was clear at the time the bill was introduced. The only issue to be addressed is the proper management of any Commonwealth transfer of the liability to the Woolmark Co. to ensure the minimisation of any risk of an acquisition of the property on other than just terms in this process. Under the AWRAP Act, Cape Wools would not be able to access AWRAP assets within the wool research and development fund, and the conversion arrangements would take this into account. The Cape Wools liability exists whether or not AWRAP is privatised. If it is not privatised, the liability remains a liability of AWRAP. If it is privatised, it continues as a liability of AWS. I would suggest that the liability is manageable and that it should not delay the privatisation. The liability is no greater than 8.3 per cent of the value of some intellectual property that AWRAP fully owns. It is the value of this IP that is in dispute. The restructure plan will ensure that future wool levy proceeds are fully protected from any potential claim on the value of the commercial brands held by the Woolmark Co.The report also states that successive ministers have failed to inform members and senators of the true state of AWRAP, as they are obliged to do. Again I suggest that the management of its liabilities is a commercial matter for the AWRAP board to handle. By raising these sensitive commercial matters in parliament, the opposition has placed in jeopardy the sensitive negotiations between AWRAP and Cape Wools, which were, as everyone knows, subject to confidentiality provisions of the IWS members' agreement.There is still considerable work to be done if Australian Wool Services is to be operational by the beginning of next year. This legislation is an important milestone to facilitate the establishment of the new commercial company arrangements. It is essential that the legislation be dealt with promptly by the parliament and not delayed; otherwise, the hopes and aspirations of the industry to have its new company structures in place by 1 January 2001 will be placed in jeopardy. I encourage all members of parliament to support this legislation to give the industry a new beginning. (Time expired)Question resolved in the affirmative.Bill read a second time.Message from the Governor-General recommending appropriation announced.21808Leave granted for third reading to be moved forthwith.Bill (on motion by Mr Truss) read a third time.Bills21808R1150BillsR114921808Debate resumed from 7 September, on motion by Dr Kemp:That the bill be now read a second time.10:55:0021808Lee, Michael, MPMr LEEMG4DobellALP00—I will begin the debate on the Australian Research Council Bill 2000 and the Australian Research Council (Consequential and Transitional Provisions) Bill 2000 by making a few comments about the importance of Australia's producing great researchers. Given that this week is the annual occasion that Australia's scientists and researchers come to the federal parliament to meet members of both the House of Representatives and the Senate, it is a very appropriate time for us to debate this legislation.The first point I want to make is that, for Australia to produce good researchers, we need to have good teachers in our schools. If we are to ensure that we produce top quality medical and IT researchers, and if we are to improve the way our manufacturing industries work, we have to make sure that our universities are producing top quality graduates and postgraduates. We have to ensure that we produce students who, when they finish school, have a great foundation for learning and training throughout their working lives. For that to be the case, we need to ensure that students—like those in the soundproof galleries upstairs today—have had the best possible education when they finish year 12. As I said before in another debate about schools funding, we can debate what this means for the Australian Research Council, for a particular university and for the tens of thousands of people who study and carry out research at university. We can debate what the opportunities will mean to the three million kids who are at school today and for the several hundred students who come through this parliament every day. But in debating this legislation we should think about what it will mean for one student. It can be summed up with one question: what do you want to be when you grow up? It is a question we were often asked when we were kids, and it is probably the question that adults most frequently ask children. The gap between what students can do and what they can expect to do will be determined by the chances the kids get to learn at school, which will determine whether they can study at university, whether they will get a chance to develop skills at a TAFE college or a private VET provider or whether they will have the opportunity to carry out research for CSIRO, ANSTO or somewhere else. In many ways, this debate is about making sure that every one of those students—and every one of the kids up there in the gallery this morning—fulfils their potential to become a medical researcher, a nurse, a doctor, a manufacturing worker with the IT skills to have a secure job, a food processing technician with the computer skills to make sure they keep their job, a biologist, an IT programmer or a minerals chemist. The first thing we have to do is to make sure that kids get the best possible education at school. For that reason, Labor believes that, to make sure the kids get those choices, Australia has to do more to lift the national investment in education, training and research.Our aim should be no less than to ensure that Australia's education, training and research are the best in the world. That should be our aim. Let us have the most ambitious goal possible. Let us try to ensure that we are raising the standard of our schools, our TAFE colleges and our universities by working with the community to offer them support and that governments make sure they have the resources they need to raise the standard of teaching and research.In a document called Workforce 2010 the Labor Party opposition outlined what we thought the goals should be for our country for the next 10 years. We believe that we should be aiming to ensure that nine out of 10 Australians should be finishing their year 12 or equivalent. We also said that we need to ensure that every young Australian achieves a formal educational training qualification. We think that these goals can be achieved over the next 10 years. There are already some European countries that have more than 90 per cent year 12 retention rates. We believe that Australia should be aiming to achieve outcomes that are no worse than some of our European trading partners. The great concern we have is that on a day like today, when we wake up to the news that overnight the Australian dollar has hit another record low, we are not ensuring that Australia has as many jobs as possible of the future. We need to ensure that Australia, like a company, provides the largest number of high quality, high wage jobs that are as secure as possible. If you think of a company that invests more in research and development, that invests more in training its employees, then that will be the company that is most likely to survive. That will be the company that is most likely to offer secure employment and secure returns to their shareholders. In the same way, countries that invest in research and development, that invest in training their people, will be the countries that secure the best jobs of the future, that secure decent incomes for their communities and the families who live in them.Our concern—and I will say more about this later—is that in Australia people might have thought that when the last Labor government left office we were not doing enough in research and development. I have had people tell me that—and one of the members opposite nods her head. Even if Labor was not doing enough in 1996, surely members of the government accept that there is an alarm bell out there ringing for our country. When private business R&D expenditure falls three years in a row in nominal dollar terms—not just in real terms—that is a warning bell not just for our country or for the adults in the gallery but for our kids whose futures will be determined by how much our country invests in research and development for the future. The point that we need to stress is that, with private research and development expenditure falling three years in a row, with public research falling because of the billion dollars the Commonwealth has cut back from its investment in higher education, both our public and our private research effort is falling. This is happening at a time when other countries are doing the reverse. Again, I will address that in more detail later on. If we are not careful, Australia is going to end up with a rapidly growing intellectual property deficit. We pay other countries to use their intellectual property. If we buy a package of software from Microsoft that has been developed in America, we have to purchase that software and pay a royalty. If an Australian mining company uses some minerals process that has been developed by chemists in Germany, we have to pay them for the right to use that patented process. If we want to use new equipment in our food processing plants or in our car plants, then we will have to pay to use the intellectual property that has been developed in other countries. We need to ensure that we are developing our own intellectual property. We need to ensure that we have large and increasing numbers of medical researchers and increasing numbers of minerals chemists, geologists and IT designers developing intellectual property that can earn royalty payments and licence fees for our country. Otherwise, that intellectual property deficit gap is going to keep growing, and that is something which will do enormous long-term damage to our country.Turning briefly to the nuts and bolts of this piece of legislation before returning to some of the broader issues that I have addressed in my opening remarks, the Australian Research Council Bill 2000 establishes the ARC as an independent agency within the Education, Training and Youth Affairs portfolio. The ARC was previously a council of the National Board of Employment, Education and Training, which this government has wound down and seeks to abolish through the other bill in this package. The role of the ARC will be to provide advice to the minister on matters relating to higher education research, to make recommendations on the funding of competitive grants and to administer the National Competitive Grants Scheme. The ARC will consist of a board, including a CEO, committees and staff. The board will consist of a chair, eight appointed members and five ex officio members. The government claims that the composition of the board—its chair and the other members—will reflect the breadth of academic, industry and community interests in the outcomes of research. We will wait to see who they are. The second bill is the Australian Research Council (Consequential and Transitional Provisions) Bill 2000. It has three main effects. It transfers the funding under the Higher Education Funding Act from general university operating grants to specific research grants to implement the new Research Training Scheme and the National Competitive Grants Scheme. It requires universities applying to the Commonwealth for research funding to have submitted and approved research and research training plans. Finally, it abolishes the National Board of Education, Employment and Training—NBEET. In some ways we have been on a long march in getting to the position we are at today. We have had the government working on changing Australia's research funding arrangements for quite some time. In fact, this process started several years ago. We had the government floating a draft green paper in November and December 1998, suggesting that the aim of the Minister for Education, Training and Youth Affairs, Dr Kemp, was to hobble and virtually emasculate the role of the Australian Research Council. There was such a reaction to the leaking of that proposal to the Higher Education Supplement in the Australian that the minister very quickly back-pedalled. We welcome the fact that the minister did a backflip on his original proposal, because it would have been a very serious degradation of the quality of research advice the Australian government would receive if the role of the Australian Research Council were undermined in the way that he originally proposed in his leaked draft green paper in late 1998. In June 1999 we had the final green paper released by the minister for education. That green paper contained a number of whacky ideas. We in the opposition outlined our criticisms of the minister's June 1999 green paper on research. By the time the white paper appeared in December 1999, we were pleased to read that the government had picked up at least five of the Labor Party's concerns. I will go through those briefly. The final white paper contained a backflip on the funding formulae, which had previously been based on volatile annual student numbers rather than an average over a number of years. So the original green paper used a volatile mixture of annual student numbers, whereas the final white paper averaged the student numbers over two years. That was the first backflip. The second backflip was that the original proposal in Dr Kemp's green paper was the abolition of the publications index as a measure of output. The second backflip was that the white paper restored a version of the index. The third backflip is that the original green paper required PhD completions in 3½ years—another issue that was raised by the Labor Party—whereas the white paper extended the time to four years. The fourth criticism we made was that the original green paper included income from consultancies as though it were competitive grant money. The white paper also changed this. The fifth criticism we made of the original green paper was that it undermined the research infrastructure base by abolishing the research infrastructure block grants program. Once again, we were pleased that the fifth backflip of the minister in the white paper was that that program was retained. While we welcome the fact that the minister has done more backflips than the Flying Fruit Fly Circus in moving from the green paper to the white paper, that still had not addressed our first criticism, our major concern. That concern was expressed not only by the Labor Party but by almost every university in the country, by the cream of Australia's researchers. It was this criticism: having spent a year and a half reviewing Australia's research effort, Dr Kemp could not come up with one extra dollar for national research. So we had gone through leaked draft green papers, final green papers and a final white paper and, at the end of the day, there was still not one extra dollar. I thought that was because the minister for education had decided to release the white paper two days before Christmas in 1999 and that maybe the government was holding back the announcement of extra funding for the Innovation Summit, which the Prime Minister and the Minister for Industry, Science and Resources had carriage of rather than Dr Kemp. When the National Innovation Summit rolled around in the first half of this year, again we had the build-up of expectation, the great hope that the Prime Minister would make a major announcement of an increase in research funding—and what did we get? We got nothing. Not one extra dollar was announced at the Innovation Summit. So we have had the leaked draft green paper, the final green paper, the white paper, the Innovation Summit—and still no money. We are told that the industry minister and the Prime Minister might make an announcement before the end of this year. I am sure that every one of the researchers and scientists who is in this building today speaking to members and senators from all parties will be hopeful that after this snail's pace advance by the government we might actually get to the position where some extra funding is provided for Australia's research and development effort. We certainly have some ground to pick up. Business expenditure on research and development has fallen for the last three years in nominal dollar terms. In 1998-99 it was $3,992 million at current prices, a fall of five per cent on 1997-98 and nine per cent lower than the record level of 1995-96. If we compare our performance to that of other countries, then our business expenditure on research and development is behind the United States, Germany, France, Denmark, Canada and even Finland and the Czech Republic. Even worse, it is falling dramatically if we compare ourselves with ourselves. It has fallen from 0.86 per cent of gross domestic product in 1995-96 to just 0.67 per cent of GDP in 1998-99. The latest figures show countries like the US, Japan and Korea spending three times what Australia is spending on research and development. I want to take a few extracts from the Australian Science Capability Review. The discussion paper focused on what some of Australia's trading partners are doing in this area. The United States is acknowledged as being a major investor in basic research. The Science Capability Review said: A recent study found that 73 per cent of science papers cited in patent applications were based on research funded by government or non-profit agencies. Not only did the United States increase funding for basic research, as a share of federal R&D support, from 18 per cent in 1992 to 21 per cent in 1997 but also the National Science Foundation budget received an increase of 7.1 per cent in 1999 and a further 6.9 per cent in 2000. President Clinton has announced a $US2.8 billion increase for 2001, including a $US1 billion increase for the National Institute of Health. So we have the US government investing massive sums of money and lifting its investment in science and R&D and in medical research. It is pleasing to see that the Americans have recognised that investing in basic research can provide great returns to their economy, and can help generate long-term jobs. Unfortunately, one of the only conclusions that we can draw from the white paper put out by the Minister for Education, Training and Youth Affairs is that he believes that we need to not only concentrate the national research effort in our sandstone universities but also concentrate the research effort in applied research. I have made it clear in this House before that, if we have to cut back funding for pure research, for basic research, to invest more in applied research, that is a failure of national research and development policy. If the only way we can get an extra dollar for the sandstone universities is to take money away from university research at Coffs Harbour, the Lismore campus of Southern Cross University or some of the other smaller and newer university campuses around the country, that will undermine the great research effort that takes place at some of our newer, smaller regional university campuses. For the life of me, I do not understand why the government is obsessed with changing the division of the pie rather than working out how we can end up with a bigger pie. Every other country is increasing the size of its pie, the size of its investment in research and development. Why is it that only Australia is obsessed with cutting back our investment in pure and basic research to ramp up applied research, with cutting back the investment in research that is taking place in our newer, smaller regional universities to fund extra research at the sandstone universities. It is of great concern to many of us. Returning to the international comparisons, in Britain the Blair government has recently announced a billion pound increase in its national science and research effort. The Canadians have announced a massive increase in the number of fellowships that the national government will fund. And countries like Finland, South Korea and Singapore know that future jobs rely on research and development expenditure today. Why is it that Australia is cutting back its research and development expenditure today? Doesn't this government understand that that undermines the opportunities for the kids who are at school today? Doesn't this government understand that that is going to expose Australia to a rapidly growing intellectual property deficit that will hurt us for many years to come? As I say, we suspect the government might make some announcements later this year. They have been a long time coming. When they do arrive, we are certainly going to require them to try to explain whether they are going to meet the enormous need that is there today. In contrast, while the government has had Dr Kemp, the Minister for Education, Training and Youth Affairs, with his snail shell on his back, moving at that fraction of a millimetre per year, we have been trying to create a few positive ideas to encourage debate on the need for the national government to be investing more. HM5Georgiou, Petro, MPMr Georgiou—Very few.MG4Lee, Michael, MPMr LEE—The member for Kooyong interjects and says, `Very few.' Let me give you one and challenge you to convince your close friend John Howard to match us. At our national conference, Kim Beazley committed a Labor government to double the number of research fellowships—double the research fellowships that go to Australia's best researchers, the early researchers, the mid-career researchers and our top researchers. I welcomed the fact that John Howard's Chief Scientist—10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—The Prime Minister's.MG4Lee, Michael, MPMr LEE—Not only John Howard, but currently the Prime Minister. The current Prime Minister's Chief Scientist is Robin Batterham. The first recommendation of his report was that the government should be providing HECS-free scholarships for science. That was another announcement that Kim Beazley made at our national conference in Hobart.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—The Leader of the Opposition.MG4Lee, Michael, MPMr LEE—He is currently the Leader of the Opposition, but perhaps shortly to swap jobs with the other person you mention.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—The member for Dobell should realise we can only deal in realities, not fantasy.MG4Lee, Michael, MPMr LEE—I might spend more time talking about the needs of your university and high school at Coffs Harbour, if we head down that path. The serious point I am trying to make is that the Labor Party, at its national conference, a year and a half before the next election is due, announced a commitment to double the number of research fellowships funded at the federal level. It would not take much for John Howard to say, `That's a good idea. Let's match it.' We in the Labor Party have not only said we would welcome the fact that you pick up our idea but said that we will increase our offer and challenge you to match that. If this election is going to be fought on something, let us fight it on who can invest the most in education, training and research, who can invest the most in addressing this great need that our country has—in investing more and making sure that those kids get the chance to become a medical researcher, a geologist, a minerals chemist or an IT designer. That was the first idea—doubling the national research fellowships.The second idea was also recommended by Robin Batterham, the current Prime Minister's Chief Scientist. That was that there should be HECS-free scholarships. This was an idea that I announced on behalf of the Labor Party earlier this year in a speech to the Sydney Institute. We are gravely concerned about the looming shortage of teachers, particularly in maths, science and IT. The proposal that I floated at the Sydney Institute—which we have costed, committed to and also recommitted to at our national conference—is that we will provide a series of scholarships, a particular number of scholarships, that will basically forgive the HECS debts of teachers who have these scholarships. A typical education graduate repays about $1,500 a year for 10 years. Under Labor's plan, we would forgive that $1,500 for each year that they teach. If they teach for 10 years, they basically pay no HECS. If they teach for five years and get elected to parliament or they teach for five years and change their career, they will have their HECS forgiven for the five years that they are in teaching.The reason we have put this suggestion on the agenda is that we have been very disturbed to read that up to 25 per cent of our maths and science teachers in high schools are not qualified to teach maths and science. The shortage of maths, science and qualified IT teachers is showing up in rural schools and schools in the outer metropolitan areas. The typical example that I use is the PE teacher who is asked to take a maths class. That not only is unfair to the PE teacher, who has not had the specialised training, but is doubly unfair to the students in that PE teacher's class. We are proposing to offer scholarships to attract more of our best high school graduates to consider a vocation in teaching. The other suggestion we have proposed is that the federal government should be investing more in professional development for teachers. We believe that the federal government can play a greater role not only in funding the cost of the professional development for teachers but in offering a completion bonus, especially for teachers who do this in their own time. This is a way that we can ensure that that PE teacher gets the specialised training that they need to improve the quality of teaching in that teacher's classroom. We need to close the gap between our best schools and the schools that are underperforming. The way we intend to do that is not only to provide more scholarships to attract graduates into teaching and not only to offer professional development for teachers to get our existing teachers to improve the quality of teaching in their classrooms but also to put extra money into schools in areas where social and educational disadvantage overlap. There are many parts of our country where schools need extra help, where the students at some schools need extra help. For whatever reason they start behind, in our education priority zones we will put more money into these schools so that these kids at least have a better chance than they now have to finish school with the basic foundations for learning through life, so that they can go on to university and get that science degree to become a medical researcher or get their IT degree so that they can become an IT programmer.Australia's national research effort relies not only on investing more in research and development. We need to ensure that we are producing good quality high school graduates by working with our teachers to improve the quality of teaching in the classroom. For all of these reasons, on behalf of the Labor Party I move a second reading amendment. I move:That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House condemns the Government for:(1) cutting Commonwealth Government investment in higher education by a billion dollars;(2) proposing new arrangements for higher education research which:(a) reduce the number of Commonwealth-funded research training places, particularly hurting newer, smaller and regional universities; and(b) fail to address the need for increased research funding; (3) abolishing the National Board of Employment, Education and Training and thereby removing a significant source of corporate knowledge and independent advice; and(4) seeking to reduce the independence of the Australian Research Council, by removing its ability to initiate advice”.This amendment criticises the government for cutting investment in education by $1 billion, which fails to address Australia's urgent needs in research, and also expresses our concern about the government's attempts to undermine the independence of the Australian Research Council by hobbling its ability to obtain independent advice and provide independent advice to the minister, whether or not he wishes to receive it. For these reasons, the Labor Party is going to ensure that the debate about education and investment in research is one of the key issues of the next election. We want to ensure that all Australian political parties are held accountable by the urgent need for our country to do more in this area. This bill provides an excellent opportunity for as many members as possible to participate in this debate about how we can improve the quality of research and development in our country. (Time expired)10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Is the amendment seconded?PG6Macklin, Jenny, MPMs Macklin—Mr Deputy Speaker, I second the amendment and reserve my right to speak.11:25:0021814Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—It is timely that on the day that we celebrate `Science Meets Parliament' we debate legislation that represents the fundamental reform of research funding structures in Australia. This is a move that will benefit Australian researchers and the institutions, firms and country that they serve. I believe it was Bismarck who noted in 1867 that politics was the art of the possible. But it was Peter Medawar, writing a century later in the New Statesman, who retorted that research was the art of the soluble and that both were immensely practical-minded affairs. In the debate before this House today we see these two immensely practical-minded affairs running side by side. Amidst the attention directed to the Sydney Olympics over the past month or so, questions of research and development and of general scientific endeavour have been receiving much attention and many varied responses. Some commentators have had cause to laud the achievements of nations such as Ireland and Israel and, by extension, policies that governments in those nations have adopted. Others have called for more tax breaks for R&D. Others have called for the scrapping of existing tax breaks. Still others have sought a greater commitment from industry on business expenditure for R&D, as it has fallen as a proportion of GDP over the past decade. Yet, amidst the clamour to comment, the success of the coalition government in rescuing Australia from an R&D quagmire has been somewhat overlooked. During the term of the previous government, business expenditure on R&D in Australia was 25 per cent lower than the OECD average, and Australia slipped to 24th in the OECD on this measure. Despite the posturing of the opposition today on its alleged funding policy and despite its posturing over the past month with regard to the CSIRO, it is salient to recall that CSIRO's research program was compromised in the 1995-96 cut of $60 million in triennial funding. At the same time, research infrastructure in our universities was running down to a level that the Boston Consulting Group would later indicate required at least $125 million in annual funding just to restore it to a level approaching international competitiveness. Particularly ill served by the previous government's R&D policies were the burgeoning new economy industries—communications and information technology. As an illustration, in 1995 Australia had to import over $20 billion worth of technology. That was Labor's legacy. Judge them by what they do, not by what they say.Recently the Minister for Communications, Information Technology and the Arts was able to tell an audience in Sydney that three highly respected international studies had praised Australia's recent economic and research progress. The Goldman Sachs July 2000 `Global Economics' paper concluded that Australia was `tech-literate', and the recent OECD Growth Project singled out Australia as one of the six truly fast-growth economies of the 1990s. The global ranking system of Merrill Lynch had Australia in a tie for second place overall and third behind the US and Sweden in the crucial category of technology. Interestingly, one of the three key variables in that ranking was R&D spending as a share of GDP. R&D is central to maintaining and enhancing this reputation for excellence, and that is why this government has invested so heavily in the National Innovation Summit, establishing the Innovation Summit Implementation Group, and why the government has sought to determine how best to reform our R&D institutions and policies.On 21 December last year, the Minister for Education, Training and Youth Affairs released Knowledge and innovation: a policy statement on research and research training. This new framework for the provision of research funding at the higher education level included stronger incentives for industry collaboration, a new quality assurance system, better quality training with improved completion times for postgraduate study and an additional $10 million for research into issues facing rural and regional Australia. The framework itself complemented the earlier Wills review of medical research and the reforms implemented under the Ralph review of business taxation. A key feature of the report was the number of recommendations in relation to the Australian Research Council, the ARC. The ARC was founded in 1989, under the Employment, Education and Training Act 1988, and it has advisory responsibilities to the minister on the distribution of research funding. The specific recommendations of the Knowledge and innovation report relating to the ARC included the re-establishment of the ARC as a properly independent body with a broader membership and a more strategic role, and the transfer of the management of current targeted research grants to the ARC, whilst retaining a balance between basic and applied research. The bills before the House will implement the important reforms identified by that report. Specifically, the government's reforms to the role of the ARC include: enhanced responsibilities in the provision of strategic advice to the government on research in universities; transferring the management and administration of the programs, under a new national competitive grants program, from DETYA to the ARC; and new governance and structure arrangements for the ARC, reflecting the need to link university research with the innovation system, increase flexibility and responsiveness in research programs and improve the capacity to identify and respond to emerging needs of research excellence and national priorities. The ARC will be reoriented, established as an independent agency within the Education, Training and Youth Affairs portfolio. So, its clear role will be as the provider of strategic policy advice to the federal government on matters related to research in our universities. The ARC will also be required to fulfil a somewhat different but very important role, that of increasing awareness and understanding of the outcomes and benefits of research amongst all Australians. Under these reforms, the ARC will also be given the responsibility of administering a new national competitive grants program. Through peer review, the ARC will be better able to identify and respond to emerging areas of excellence in research.An important reform of the ARC will be the appointment of program managers heading up six discipline areas: biological science and biotechnology; engineering and environmental sciences; mathematics, information and communication sciences; physical and earth sciences; social, behavioural and economic sciences; and humanities and creative arts. This is a particularly significant reform that brings the ARC grants administration into line with international best practice as these program managers will oversee the conduct of the peer review process that underpins the new programs, Discovery and Linkage, to which I will refer in a moment. They will liaise and communicate with the research community and users of research and they will identify emerging disciplinary and cross-disciplinary developments.The reorganisation of the ARC's funding schemes into the two programs, Discovery and Linkage, reflects the ARC's and the minister's view—as articulated in his report—of the two important but interrelated roles for the ARC in the Australian innovation system. They are to foster and support basic fundamental research—the seed corn of the innovation system—and to foster and facilitate linkages between that basic research enterprise and the balance of the innovation system here and overseas. The specific objectives of the programs are worth recording in this place. For the Discovery program they are to support excellent fundamental research, to assist researchers to undertake their research in the best possible conditions, to expand Australia's knowledge base and research capability, and to encourage research training. For the Linkage program they are to encourage excellent collaborative research, to contribute to a strong knowledge economy, to create opportunities for cooperation, to facilitate international linkages and to encourage industry oriented research training.I am indebted to Professor Michael Barber, Pro Vice Chancellor (Research and Innovation) at the University of Western Australia in my electorate of Curtin, who has confirmed to me that these reforms are exciting not only for the ARC but for the university sector and the nation generally as they will establish the ARC as a potentially very effective national research agency that will operate in line with international best practice and will be able to support strategically Australia's innovation system. Professor Barber has indicated that the Discovery program is particularly important for Australia since the university sector is the major player in basic fundamental research in Australia and the ARC is the major funding agency supporting such research. There is an interesting study that was jointly commissioned by the ARC and the CSIRO which analysed the USA patent register. Apparently, 91 per cent of private sector Australian invented US patents cite publicly funded research as their basis, with 58 per cent from the universities. Those are pretty significant statistics. From my discussions with Professor Barber and others at the University of Western Australia, as well as with people at the CSIRO, I am able to say that these reforms are supported strongly by the Western Australian research community. The member for Dobell raises the issue of funding—as argued for by the Innovation Summit Implementation Group and by the Chief Scientist in his response to the government's request for a science capability review. While there are and there will always be enormous competing demands for funding and in the allocation of priority funding, I will certainly support any funding increases that recognise the importance of science, engineering and technology for the future wealth and development of Australia.There are a number of examples of excellent research by researchers in Western Australia who have had the benefit of ARC funding. I mention just two by way of demonstration of the benefits that can flow to this country. The Centre for Offshore Foundation Systems, one of the ARC's special research centres funded at approximately $800,000 per annum, undertakes fundamental research into the mechanics of seabed sediments and into novel foundation systems in such soils. It is of immense importance to the development of the North West Shelf. The centre now has international links with other major centres of offshore engineering in Oxford, Tokyo and Texas. Professor Mark Randolph is a true world leader in offshore engineering and the work being done at this centre is a great example of the world-class research that is of fundamental importance to Western Australia and therefore, of course, to Australia.Secondly, I mention Professor Paul McCormick and the Research Centre for Advanced Materials and Mineral Processing, which works in the area of materials science and engineering, particularly aimed at adding value to the Western Australian mineral industry. One of the spin-off companies owned by the University of Western Australia has just ended a joint venture with Samsung Corning to commercialise technology that was developed in the centre in Perth. Samsung Corning will invest $7.5 million to build a pilot plant in Perth to make nanoparticles, which are apparently very important in the development of materials and devices that underpin nanotechnology, described by many as one of the next enabling technologies of the 21st century. So these are just two examples of Australian Research Council funded research contributing directly to the wealth of this country.The Minister for Education, Training and Youth Affairs announced yesterday the $210 million in federal government funding for new research grants for 2001-03. There will be funding for 1,300 new projects in all of the six disciplines of the ARC programs, including research into the semiconductor industry, quantum computer technology, information technology and the finance industry in the area of e-commerce, as well as industrial relations, child reading disabilities and crime prevention strategies, so it is a very broad cross-section. I believe that increased funding, together with a reform of policies, programs and structures, will be essential for Australia to reap the benefit from the proposed changes to the Australian Research Council. I also believe that there is no substitute for significant new investment, as well as incremental government funding that maintains existing programs. The minister has commented in this place that insularity is an enemy of innovation. By restructuring the Australian Research Council, researchers and industry will be brought closer together, to the benefit of Australian R&D generally. The ARC board is to include eight appointed members from across industry, academia and the wider community, joining five ex officio members, including departmental secretaries, the Commonwealth's Chief Scientist, the chairman of the NHMRC and the chief executive officer of the ARC. That CEO, a new position, will be a person who combines talents in research and management and brings those talents to the service of the Australian Research Council. To better measure achievement and progress, the ARC will produce for the minister an annual strategic plan outlining the objectives for the following three years. Performance indicators will be used to gauge how those goals are being achieved. Furthermore, the second bill we are considering will create performance based block funding schemes for research and training purposes in accordance with the recommendations of the Knowledge and innovation report. As a result of all these changes, the ARC will be better equipped to serve Australian researchers. The reform of the council continues the coalition's good work on R&D in Australia. That commitment to R&D is now bearing fruit in areas that I canvassed earlier, such as communications and IT. Nonetheless, there is still much to do. While public expenditure on research and development in Australia is higher than the OECD average, 0.84 per cent compared to 0.71 per cent, industry expenditure is still 62 per cent of the OECD average. The onus really is on the corporate sector to become research and development champions. I believe we should be comparing our trends not just with the OECD average but with trends in other comparable advanced economies and societies. As the director of the White House Office of Science and Technology, Dr Neil Lane, has said:The federal investment in science and technology is about as good an investment as you can possibly make with the American taxpayer's money.I happen to concur with that view with respect to Australia. But we also need a change of attitude from the corporate sector in terms of business expenditure on R&D. As a matter of fact, Dr Lane will be a keynote speaker this evening in Parliament House, and I very much look forward to his further comments on the United States experience. Hopefully, the substantial reforms to business taxation in Australia implemented as a result of the Ralph review will also go some way towards remedying current trends in research and development, although, as I said, we require the corporate sector to become champions or sponsors, not just seeking R&D for the purposes of tax matters. So, as science meets parliament on this day, I commend this bill to the House.11:42:0021818Evans, Martyn, MPMr MARTYN EVANSN36BonythonALP00—This is a very important measure before the parliament, not only because of the particular terms of the Australian Research Council Bill 2000 itself and the associated measure but also because of what it represents in terms of the future of this country—the economic future of this country and in many ways the social future of this country as well. At the Innovation Summit earlier this year, the Prime Minister asked Australians, and in particular those who are interested in technology and innovation and who were present at that important summit, to judge his government on its record. Well, we have done that, and I have to tell you it is an appalling record. The problem is that over the term of the Howard government private sector R&D expenditure, business investment on R&D, has fallen dramatically for the first time in several decades. The reality is that under this government we have seen a sustained fall in business investment in R&D the likes of which we have not seen before in this country. During the 13 years of Labor administration, there was indeed when we came to office a low base for R&D expenditure by business, and over a period of time the previous government was able to build on that base through a variety of incentives and innovative platforms to encourage industry and business generally to invest in research and development in this country. Over a significant period of time, the level of that investment was significantly increased, to the point where we were actually at a competitive level with OECD and European nations with whom we might like to compare ourselves.I will not say that, by the time the previous government left office, the level that we had reached was one with which I would be satisfied. Indeed, a lot more work remained to be done. I am sure that, had the government then remained in office, further increases in investment would have been necessary to ensure the future of this country. However, the reality of what has happened since that time—in the five or so years of the Howard government—is a startling turnaround in the way in which the graph is trending. Under the previous government, the business investment and R&D graph trended upwards. Under the Howard government, there has been a precipitant downturn in that level of investment, and it has continued its inexorable downward path ever since this government took office. That might be a coincidence. It might be just an unfortunate historical period that has occurred at this particular point in time. However, I would have to say as a scientist—my background is in science—that the evidence for the hypothesis of it being a mere coincidence is certainly not very strong. The evidence for the alternative hypothesis and explanation—that it is the policies of this government which have caused that downturn—is very strong, because one of the first acts of this government in coming to office was to dramatically cut the R&D tax concession. It also abolished the syndication tax concession which allowed those companies that were cash-rich and were subject to taxation to share their position with companies that were ideas-rich but cash flow poor. The syndicates which were formed were demonised by the present Treasurer as being nothing short of tax rorts. I am sure that there were some individual situations where the appropriate taxation was not being paid and where the scheme was being exploited. Indeed, I am sure that is the case with most taxation incentive schemes. However, rather than attempt to fix that scheme, rather than attempt to repair the damage and restore the workability of the scheme, the government chose not only to abolish it but to abolish it in a way which led the public and the business community to think that this government was very much opposed to investment in R&D and, in particular, to syndication. So the government took the opportunity not only to abolish the scheme and to dramatically cut the R&D tax concession in the income tax area but also to demonise the very basis of R&D tax concessions. This has had the obvious effect, with the dramatic downturn in business investment in R&D now clearly on the public record. Prime Minister, the public will judge you on that record and it will be a harsh judgment.The judgment in relation to private sector R&D is very clear, and I will go into more detail about that shortly. But we also need to consider the public sector R&D. Australia has always had a very proud record of public sector commitment to research and development, whether it was through long-standing organisations of great public credibility like the CSIRO or other public sector science institutions like AIMS and ANSTO or whether it was through the university sector. One of the primary objectives of the university sector, apart from teaching, has been the investigation and research of matters of interest to academics, research which in many cases ultimately benefited the community at large. The return on academic research, and investment in that research, is very substantial. There are indications from the United States that the rate of return on academic research is anything from 10 to 40 per cent, and the social rate of return can often be in the hundreds of per cent. So academic research, far from simply being an academic matter, is obviously very easily translated into economic gains for the country as a whole and certainly into social gains for the community. That kind of investment is rarely made by private sector firms. It carries a high level of risk, there is a high initial cost and the payback period is quite long—it can often be many years before that research is turned into practical, everyday applications which yield a profit for a company. So it is very difficult to expect business to invest in that high-return but long-term research with those high initial levels of risk. That is something which the public sector has always borne the responsibility for and always will, just as it must bear the responsibility for the public-good research which is done into matters for which there is no clear economic return. A case in point would be Antarctic research or perhaps, in the early days, climate sector research—now, of course, we are seeing a very clear economic consequence for climate sector research. Indeed, our understanding of the Antarctic may well turn out to be quite crucial in many issues of climate change and fisheries research, and that would lead us to be ultimately very grateful for the public sector investment in public-good R&D. How has this government treated public sector R&D? Although it has maintained a public face of a positive response to public sector R&D, I am afraid the reality of its treatment of those public institutions has been far from good. We have seen the CSIRO put under significant pressure in relation to property sales. We have seen the efficiency dividend extended from just administration to include the laboratories and scientific work as well. We have seen IT outsourcing, which is now moving towards the science agencies—agencies which include the CSIRO, the Bureau of Meteorology and other significant science agencies. We are now seeing their budgets cut in anticipation of savings that this government alleges will accrue from IT outsourcing, which, on all evidence that I have seen, is likely to end up costing those agencies more and delivering a lower standard of service. So this government is, by a somewhat devious mechanism, by the backdoor route, taking funds from our public sector science agencies and diverting those back into general revenue.We have seen cuts to the universities over a period of time which probably now amount to about $1 billion. We have seen the underlying level of scientific infrastructure in our universities greatly undermined by the cuts to universities then being translated by the university administration into underinvestment in long-term research, underinvestment in the infrastructure which maintains a lot of scientific research and underinvestment in the equipment which scientists need in order to undertake their work. Scientists in a university can now wait something like 18 months to secure a new form of electron microscope, for example—an investment which needs to be made quickly if this country is to realise the kinds of scientific benefits from that equipment which it needs to achieve in order to stay competitive.Lately we have seen the impact of the GST on research grants. That has impacted on research grants in several ways. The government has used the device of taking money up front from research grants to compensate for the savings which institutions will allegedly make on the GST. The government has reduced those grants by a percentage—I believe three per cent or thereabouts—on the understanding that institutions will make savings because of the GST. Of course, most of those institutions were exempt from sales tax in the first place. Many of the costs are spent on salaries, and they do not make the kinds of savings which the government implies they will make from the GST.We have also seen the recent debacle of the GST and its potential implication on grants from overseas. Many of our best scientists receive grants from overseas institutions like the National Institutes of Health in United States or the Wellcome Trust in the United Kingdom. Often those grants are quite substantial because Australian scientists are very competitive in terms of their scientific output. The science here is also very competitive because of the low level of our dollar, although that is probably declining somewhat too much at the moment for many of our scientists who may need to purchase equipment from overseas and to travel overseas to stay abreast of the latest developments and to confer with their colleagues. The government has very much left open the question of whether the GST is applicable to those grants. Recently, I asked the Minister for Health and Aged Care a question on notice in this place. He replied in ambiguous terms, but my interpretation of the answer is that GST is payable on these overseas based grants. Indeed, the Minister for Aged Care, when acting for the minister for health in the estimates debates, also implied that GST is payable on these grants, but that, if one had a local agent, one could claim some of that GST back.The National Institutes of Health in the US government and the Wellcome Trust in the United Kingdom are not going to let that worry them. They will simply make the payment and it will be up to our scientists to bear the cost of that. Many of our universities are uncertain about the way in which the GST will impact on those overseas sourced grants and the government has not yet acted to clear up that matter, although I do understand that the tax department has recently issued some kind of determination, the force of which I am not too sure, which implies that in fact GST is not payable now on those grants. This is a serious issue which the government needs to clear up. Why is this sustained attack by the Howard government on science, technology and innovation of such importance to our country? That is because it is very clear from all of the evidence from the United States, and indeed from work undertaken in this country, that innovation, science and research and development account for approximately 50 per cent of the wealth generated in Western countries since World War II. Fifty per cent of the jobs and the wealth in this country and the countries with which we compare ourselves—the United States, Canada and those of Western Europe—have been generated by the investment in technology and research and development over the last 50 years. That is a very substantial figure. Quite clearly, that figure and proportion are likely to grow in the future as science and technology assume an even greater part of our lives and become an even more important part of industry and commerce.Why can we not simply buy this investment from overseas? After all, countries like the United States spent massively on R&D. Why can we not simply pick up the investment which they have made, buy that on the market and adapt that technology to Australia? That is a Treasury solution, that is a Department of Finance and Administration solution, but it is not a solution which works in the real world. The reality is that technology diffusion—and OECD studies prove this quite conclusively—depends on geographical proximity. Unless people are in close geographical proximity, then the diffusion of technology from the labs and universities out into the industry and commerce of your country does not work. People must be able to confer readily, either in person or by telephone. Indeed, the people in those labs or in the research institutions must be able to go out into the community, with spin-off companies, in an entrepreneurial way and establish themselves in the immediate vicinity and, while still drawing on the resources of those laboratories or research institutions, develop their commercial idea on the spot. That is the way technology diffusion works. You only have to look at places like Silicon Valley and their close proximity to the major universities of California and areas like Stanford to see just why technology diffusion depends so critically on the close proximity of those people. It is not possible to buy that technology off the shelf. It is not possible to have a free ride on somebody else's investment in R&D. We have to undertake that work here in this country or we will not have our proportion of intellectual property which will be the mainstay of overseas trade in the years to come. The countries with which we compare ourselves—the United States, the UK, Canada and Finland, for example—have all very recently made substantial investments in research and development. Even in the right wing of the United States Congress, Newt Gingrich, with whom I would not normally find myself in broad agreement—0V5Slipper, Peter, MPMr Slipper—You're good friends.N36Evans, Martyn, MPMr MARTYN EVANS—The parliamentary secretary assures me he is a good personal friend. I think Newt has one very redeeming feature. He supported strongly the investment in science and technology which the United States government, sponsored by President Clinton, chose to make in the last two presidential terms during the last eight years. He understood, as did the President and his colleagues in his political party, the importance of that investment in R&D. In all of the recent budgets of the United States over the last eight fiscal years you have seen massive injections of funding into organisations like the National Science Foundation, the National Institutes of Health and the universities. That is being repaid many times over in industrial and commercial development and in employment in high skill, high wage jobs for the next generation of Americans.Canada has done the same thing. They have adopted a broader based principle, investing in their universities and academic research institutions across the board and ensuring that massive new numbers of well paid professorships as well as research grants were available to their scientists. They also will find that that significant investment pays them well. In the UK, a partnership between a private philanthropic trust, the Wellcome Trust, and Tony Blair's new government has seen massive increases in R&D expenditure as well. Unlike the position in Australia where Treasury and the Reserve Bank often take a dismal view of the benefits of the investment in R&D, whenever Alan Greenspan in the United States makes public appearances, he always takes care to attribute much of the economic growth and success of the United States to their massive investment in R&D. So we are left confronted with the position in this country where, due to the neglect of this government in recent years, we have seen significant falls in our R&D. The reality is that our investment in this country has declined significantly. Australia's gross expenditure on research and development now ranks 12th of 17 reporting OECD nations at only 1.49 per cent of GDP, which is well behind those leaders in the countries I have mentioned, with Japan at 3.06 per cent, Finland at 2.9 per cent and the United States at 2.74 per cent. Where was Australia? Just under 1.5 per cent.Australia experienced the largest drop in business investment in R&D between 1996 and 1999 of all 17 reporting OECD countries, with a drop of 0.16 per cent of GDP, which equates to nearly $1 billion. Australia was one of only four nations to record a drop relative to its GDP. Government expenditure on R&D, as I noted earlier, has fallen from 0.42 per cent of GDP in 1994-95 to only 0.35 per cent in 1998-99. So in all of the critical areas where it matters the most, this government has presided over a decline in our investment in R&D. In the ARC itself we currently see success rates that are below 20 per cent. We see average research grants which are well below the international averages in those countries with which we compare ourselves, and Australia often covers less of the indirect costs, the infrastructure costs and the expenses which those grantees actually face in administering their science grant.The government did make some concession to medical research with a modest increase in the NHMRC grants in the previous budget, but they were doing that in the context of previous reductions in that budget. So the impact of it is not as much as we would otherwise have liked to see. In fact, if we look at some of the research which has been undertaken in relation to ARC grants, we note that in 1996, in constant dollars, research grants, including small and large grants, were at $130 million and by 2002 are projected to reach only $132 million. Basically that is a constant level of funding in an era when everyone else is massively increasing their funding level. The same is true of Australian postgraduate awards, which are actually projected to decline in constant dollars. For research scholarships again there is a decline in constant dollars. For international postgraduate research scholarships there was a constant $16.2 million throughout the period under investigation.Again and again, whenever this government turns its budgetary attention to science and research, and whenever it turns its attention to education and higher education, we see a continuing decline and a sustained attack on one of the few things that would have underpinned our economic development in the 21st century. Clearly there are important areas of science and research and enabling technologies which this government must address. It deludes itself if it thinks its record is a good one. And it is a delusion which will, ultimately, be very costly for the Australian economy and the Australian people.12:02:0021822Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—The Australian Research Council Bill 2000 provides a more effective statute for and gives a more effective structure to the Australian Research Council, a body that is a vital contributor to Australia's research and innovation capacity. That capacity is fundamental to Australia's economic and social wellbeing and to our international competitiveness. Many world economies, including Australia, are currently becoming knowledge based, driven by scientific, engineering and technological advances through research, development and innovation. Our economy has always benefited from its competitive advantage in mining and agriculture. Now businesses which are based on science, technology and innovation are crucial to wealth creation. As Professor Sara, the chair of the ARC, has recently stated: There is widespread recognition that economic growth and competitiveness in the global market is increasingly reliant on the generation and diffusion of knowledge and technology.Research underpins competitiveness and economic growth by advancing knowledge and skills which sustain innovation ...The public funding of Australian R&D is substantial and important. Major Commonwealth support for science innovation is running at around $4.5 billion. A study commissioned by the ARC and the CSIRO on the nature of patenting activity underscores the importance of public funding of R&D. The report, Inventing our future: the link between Australian patenting and basic science, clearly identifies the crucial nexus between publicly funded research and the development of new technology in Australia. It found that 97 per cent of Australian scientific research was cited in all Australian invented US patents from Australian papers and was authored at publicly funded institutions. The report demonstrates clearly the value of the Australian government's investment in research, an investment that underpins much of the patenting activity documented in Australia. This patenting activity is ultimately of value to the whole Australian community.The research performed by Australian universities plays a fundamental role in Australia's overall R&D capacity. Of the $4.5 billion in Commonwealth support for research and development, some $1.8 billion goes to support research in universities. Universities conduct up to 27 per cent of all R&D and 78 per cent of all basic research, and provide the research training that is at the core of all research and development efforts in Australia. The 27 per cent of R&D compares with an OECD average share of total R&D by the higher education sector of 18 per cent and a European Union average of 21 per cent. Just as universities are at the heart of research, the Australian Research Council is central to our national research effort. The ARC is not just a conduit for public funding. As Professor David Penington observed in his very impressive review of the organisational structure of the ARC:Through national research agencies, countries are able to provide national direction, respond to opportunities, and allocate funds to the most capable researchers on the basis of peer-reviewed excellence which ensures the international validity of the national research effort.The ARC has a very important and very demanding role. The ARC, together with the National Health and Medical Research Council, is the main funding body in Australia for basic research. It allocates funds to the nation's best researchers on the basis of peer reviewed excellence. While the NHMRC is responsible for medical and dentistry funding, the ARC is the only government funding agency in the country whose role is to support research endeavours ranging from science to the humanities.The bill before the House represents a further step in a more effective R&D structure for Australia. It will enhance Australia's outstanding research capability and create stronger links between universities, other research institutions, government, the private sector and both domestically and internationally. It builds on the changes legislated by the government earlier this year which removed the requirement that the advice of the ARC should be provided to the National Board of Employment, Education and Training. Now this advice is to be provided directly to the minister. This is a matter of major significance. As the 1998 Penington review of the organisational structure of the ARC concluded, `The requirement for the ARC to provide any advice on any matter relating to national research priorities or the coordination of research policy matters to the Board acted as a major obstacle to fulfilling this aspect of its role, and indeed in developing relationships with freestanding research administration agencies in other countries.' This impediment has now been removed and the bill provides for an ARC as a body that will provide advice about matters related to research funding and policy at the request of the minister; provide recommendations to the minister about which research programs should receive funding; and administer the funding regimes established under the act. I have to say that I am a bit of a traditionalist on the ability of statutory bodies to proffer their own advice. Perhaps this is a function of misspent early maturity when I was the CEO of a Commonwealth statutory authority, the Australian Institute of Multicultural Affairs, which had the responsibility of advising the government on multiculturalism. I believe that the institute contributed significantly to strengthening multiculturalism in Australia, and I think there was a consensus that the institute was enormously successful in proffering policy advice and having that advice accepted It was too successful, perhaps, because when Labor came to government in 1983 they changed the institute's statutory mandate in order to nobble its ability to give advice. They actually changed its act. Having inflicted this damage on the ostensible grounds that the institute was too policy oriented, the Labor government then delivered the death blow to the institute by abolishing the organisation around 12 months later, on the interesting ground that it had not been very successful in executing its function of influencing policy advice. So whenever I hear the ALP squealing about statutory authorities, I think of Napoleon in Animal Farm. I have to say that it is rare that Labor makes me think of literature but, occasionally, they do make me think of George Orwell. But I have to be fair: the member for Dobell was very diminuendo when he moved his amendments to the ARC Bill about the function of advice. The reality is that, under Labor, the ARC in its constitution had its advisory capacity blighted by the fact that it had to report not directly to the minister but to the board, as was pointed out by Dr Penington. The fact is that now it has an unequivocal capacity to provide the advice on the areas the minister asks for. The fact is that the ARC's effective independence will be substantially enhanced by the passage of the bill. The enhancement has both symbolic and substantive components. Symbolically, the fact that an organisation operates under its own statute enhances its prestige and, in the case of a scientific research organisation or funding organisation, it does improve its capacity to act. Prestige aside, the content of the statute is important in terms of autonomy, accountability and effectiveness. Under the bill, the ARC will employ its own full-time chief executive officer, distinct from a part-time chairman, and, very importantly, will employ its own staff, who will form the secretariat of the ARC. These are quite distinctive departures from the existing form and their significance cannot be overestimated.Turning to the full-time CEO and the part-time chairman, I do think this is an important advance. Having said this, I would like to pay tribute to Professor Sara's very distinguished full-time chairmanship of the ARC and to her work and that of the council in advancing the cause of Australian research and development. Now that the ARC is more articulated, it seems to me to be important that there be a distinction between the CEO accountable to the council and a chairperson. I have to say that, in my experience, a full-time chairperson and a full-time CEO is a recipe for a degree of friction, no matter how cooperative people may be.Under the act, the CEO will have a distinguished record in research and management and will be responsible for the day-to-day management of the ARC, for developing policy advice and for the administration of its research grants program. As importantly, the staff servicing the ARC will be employed by the ARC. At the moment they are employed by DETYA. This may seem to be a small matter to some but it is a primordial fact of administrative life that there cannot be substantive autonomy if secretariats are employees of another agency. There are issues of loyalty, focus and career required for the effective performance of any agency. The provisions of the present bill seem to me to be very appropriate, indeed essential, to an independent body. A very dear friend of mine, to whom I owe an immense debt of gratitude, who was a superlative analyst of science and science policy, the late Leon Peres, said to me that getting the act right was nice but that getting independent servicing was absolutely irreducible. He was right, and I do find it interesting that the Penington review stated with regard to the servicing arrangements for the current ARC: The current dual accountability of staff both within DEETYA and to the ARC officers responsible for the programs has caused difficulties and should not continue.I have to say, personally, that servicing arrangements for statutory authorities have generated some of the most bitterly disputed bureaucratic turf wars. It think it is a major tribute to the minister that he has guaranteed the ARC a fundamental precondition for autonomy and effectiveness.The bill prescribes the membership of the board as consisting of a chair; the CEO; the Chief Scientist; the chairperson of the NHMRC; the secretaries of the Department of Education, Training and Youth Affairs and the Department of Industry, Science and Resources; and eight other members. It is, in my view, appropriate that the CEO of the council be an ex-officio member of the board and that key figures of the scientific community, the Chief Scientist, the chair of the NHMRC and the two secretaries be ex-officio. There are stipulations in the bill about the quality of the chairperson; namely that the chairperson, `in the minister's opinion, should be a prominent member of the Australian community and held in high regard by the research community'. With respect to the remaining eight members of the board, the minister is required to ensure that the board reflects the breadth of academic, industry and community interests in the outcomes of research. This bill does demonstrate the strength of the government's commitment to knowledge creation, innovation and economic growth. Its provisions will enable the ARC to function more effectively. As I said, its effectiveness is enhanced by its new statutory authority and, under this enactment, the key role of the ARC is appropriately recognised. The bill's provisions provide the ARC with a greater capacity to operate as a structure which fosters collaboration between researchers and industry. In part, this aspect of the ARC's role is enhanced by the provisions which relate to the qualifications and capacities of its membership. More particularly, the bill's provisions will enhance its role by providing it with the capacity to more actively create links between researchers and industry. It embodies the obligation of the ARC to prepare three-year strategic plans—on an annual basis—setting out its goals, priorities, policies and strategies. The strategic plan must include a set of performance indicators, and the ARC will be required to prepare annual general reports which include a performance assessment based on these indicators. Provision is also made for an annual program budget, which will set out how and where funds are distributed and used.The ARC's first strategic plan, which covers the years 2000 to 2002, revises the National Competitive Grants scheme and creates two funding streams: Discovery and Linkage. The core objective of Discovery is `to develop and maintain a broad foundation of high-quality, world-class research across a wide range of disciplines'. The ARC will continue to provide support to basic research on the basis of excellence. The Linkage stream is described as one that operates to encourage and extend cooperative approaches to research by strengthening links within Australia's innovation system and internationally. The ARC is of the view that, in funding partnerships between industry and researchers, the Linkage element of the National Competitive Grants scheme will lead to the development of the critical mass necessary to ensure Australian research is internationally competitive. I note in this regard that the new industry research grants for regional Australia, awarded on the advice of the ARC and announced yesterday by the minister, are part of the Strategic Partnerships with Industry—Research and Training Scheme. The government's contribution of $27 million has been matched by pledges of over $30 million from industry in cash and kind. Industry partners in the projects include CSR, Ford, Telstra, Normandy Mining, Vodafone, Glaxo Wellcome, Sanitarium and Cable and Wireless. As well as creating this grants framework, the ARC is in the process of undergoing significant internal reform, which flows from the new capacities given to it by the act. Program managers to head up six discipline areas will soon be appointed in the areas of biological sciences and biotechnology; engineering and environmental sciences; mathematics; physical and earth sciences; social, behavioural and economic sciences; humanities and creative arts. The program managers, supported by an expert advisory committee and a global network of expert readers, will oversee the allocation of funds to investigate initiated proposals through a rigorous peer review process. Although this system relies on research proposals being brought to the ARC, it is, I believe, a first step towards forging a more proactive role. In the long term, project managers will be equipped to foster linkages between like research projects, researchers and industry, and between Australian researchers and their overseas counterparts. As I said in my opening remarks, this bill gives a more effective structure to the ARC, a body that is vital to Australia's research effort. But it is also important to realise that, while more effective advisory and allocative mechanisms are fundamental, they are only part of the story. The government is currently in possession of the report arising out of the National Innovation Summit, and the report of the Chief Scientist is anticipated soon. The National Innovation Summit makes a significant number of recommendations on improving Australia's science and innovation capacity. For instance, it recommends that the funding available to the ARC competitive grants be doubled over five years. I expect that the Chief Scientist's report will also make a number of important recommendations, not least about funding. The government will be drawing together its responses to these reports in the form of an innovation action plan. The plan will focus on achieving innovation outcomes including higher business investment in R&D, increased rates of commercialisation of research, and job creation. I would like to echo the views of the member for Curtin, who spoke earlier: money spent on research and development is a very important investment in the future of Australia.12:21:0021826Burke, Anna, MPMs BURKE83SChisholmALP00—I rise today to speak on the Australian Research Council Bill 2000 and the Australian Research Council (Consequential and Transitional Provisions) Bill 2000. This has a significant bearing on my electorate of Chisholm. This proposed legislation is symptomatic of the government's maladministration of the higher education and research funding area. In short, these bills will give the minister new powers to disregard or vary ARC advice regarding the funding of research proposals. Further to this, the minister will no longer be required to table directions to the ARC. However, Labor's major concern is that these bills take steps towards implementing the government's research paper, which provides inadequate funding levels for research.I now turn my attention to the white paper. The Minister for Education, Training and Youth Affairs released the white paper in December 1999, just before Christmas. Most notably the paper contained no extra money for universities hard-hit by cuts of $800 million to operational grants. These have been experienced in my electorate of Chisholm, at Monash University, where 70 people have been cut from the arts faculty and, more importantly with regard to this bill, 70 to 80 people have been cut from the science faculty.There was also an admission that the number of Australian research students is likely to fall. Australia has 25,000 postgraduate research students, yet Dr Kemp has promised to HECS exempt only up to 25,000 places. Fears about cuts to research places have been realised in these two bills. There are reports that universities could lose as many as 3,500 Commonwealth funded postgraduate places due to the introduction of the research training scheme. It is alleged that this gap has emerged because education institutions have extended their research places above the number of scholarships they had won, by diverting funds from undergraduate places and offering research places on a HECS liable basis.The minister has said that these additional research places will not be funded under the RTS as they have been created at the expense of undergraduate student places. However, the minister and the government miss the point. Universities should not have to contemplate shifting students around in order to boost research places. If the government were truly committed to improving Australia's research base, they would simply expand the postgraduate program rather than argue with our universities. We should be talking about increasing the level of research undertaken by Australians rather than seeing the unedifying spectacle of the minister lecturing universities about their understandable attempts to try to grow their research places. Labor have a different vision about the future of education and research. We want to end the petty bickering and move towards a more cooperative approach. As announced by the Leader of the Opposition, a Beazley Labor government will double the number of research fellowships for Australian academics and create a new category of elite fellowships. Labor will double the number of early career fellowships to keep our best young minds here and prepare the next generation of leading academics. Labor have committed to double the number of fellowships for outstanding researchers and to create a new category of elite fellowships, valued at $200,000 a year for five years. In short, these new scholarships will be about preventing the brain drain and intellectual property deficit we are in danger of experiencing. By offering better support, these researchers will have an incentive to stay here, and hopefully we will be able to lure some of our best minds home.The bill abolishes the National Board of Employment, Education and Training, and it reduces the independence of the ARC. As we enter the new millennium it is nonsensical to have a research council that is responsible for administering research grants, with a diminishing ability to provide unsolicited advice to the minister. This bill further denudes the accountability of this minister. It is difficult to overstate the importance of education and research, particularly science, to Australia's future. I am sure that all of us have been visited by the scientists today, who are promoting the link and the importance of science in our society.Globalisation provides both opportunities and dangers to a small, geographically isolated country like Australia. The need to develop niche export markets and take leadership in the field of science and technology in our region is critical. It is most crucial at this time, as we look at the Australian dollar. It is being reported quite widely that, unless we actually embark on some of these new technologies, our Australian dollar will stay where it is for a long time to come, something that I do not think the rest of the country wants to contemplate.Our future living standards will depend upon our ability to be innovating and creative. As our traditional economic base continues to shrink and we find it difficult to compete with Asian neighbours, we must stake out new areas to continue to improve our knowledge base and grow the economy. The way ahead must be new ideas, more research and the marketing of Australian made products and innovations. As Labor leader Kim Beazley has said, we need to develop ourselves as the knowledge nation. However, one ingredient is needed that we as a country do not currently have—a federal government that is committed to resourcing and supporting research institutions in our quest to develop new industries. The government's record is as follows: since 1996, one billion dollars in government funding has been taken from our universities, and Dr Kemp's research white paper will slash the number of PhD places starting next year. The government's own science and technology budget statement admits that the government's investment in R&D has fallen by more than one-sixth, from 0.77 per cent of GDP in 1995-96 to 0.64 per cent in 1999-2000. Business investment in R&D has fallen for the last three years as a result of the cuts to R&D tax concession. It never fell prior to this.Our spending on research and development has plummeted, and Australia is lagging behind the rest of the developed world. Over the past few years, the world's leading industry powers such as the US, Japan, Germany and France have all made concerted efforts to increase their national investment in R&D. Even a country as small as Ireland has transformed its economy to become the world's largest exporter of computer software. In contrast, an IMF report shows Australia is the world's second biggest consumer of new technology but second last among advanced economies as an IT producer. Whilst record numbers of Australians may be hooked up to the information superhighway, we are missing out on the opportunity to benefit from it. Sadly, this is the case with many of our industries. Even if we manage to develop the technology, it ends up being financed and owned by multinationals. We must provide assistance in turning good ideas into commercial ventures that value add to our economy.My electorate of Chisholm, as I have said before, is home to one of the finest educational institutions in the country, namely Monash University. Its largest campus is at Clayton, in my electorate. It is regarded as one of the top research institutions in Australia, with one of the highest records of published research. Flicking through the university's strategic research objectives one sees all the positive things the university is seeking: to improve efficiency, to promote public awareness of the university's research achievements, to encourage strategic collaborations and to maximise research spin-offs on outside earnings. Certainly the university appears acutely aware of their responsibility to contribute to advancing and applying knowledge through basic and applied research and collaborating with other institutions in order to better the product and services that touch both industry and human lives. Moreover, Monash is aware that the commercialisation of research has the potential to lead to the establishment of joint ventures and the jobs that flow from this. As I have already pointed out, sadly we are seeing massive job losses at the university through lack of funding. One of the tragedies of this is that people, such as several friends of mine who went through Monash with me and who are currently PhDs with a fair number of research publications behind them, cannot get permanent jobs within the university. They are just not on offer.Another facility in my electorate, which is adjacent to Monash University and works quite closely in collaboration with them, is the CSIRO. I have had the opportunity on a couple of occasions to tour through the various divisions and witness some of the cutting-edge research being done by the organisation such as plastic banknotes. I did at one stage see the old-growth forests division that was actually value adding to paper products. Sadly, that division has been cut and we have lost 13 scientists out of that division. This is actually a great tragedy because it is one of the areas we keep talking about that we need to value add in. At the CSIRO we had people dedicated to this, but the division has been cut. Another area in which the CSIRO does fantastic work is X-ray innovation. CSIRO, like Monash, is acutely aware of its role in generating products and new technologies in conjunction with the business community. However, the CSIRO conducts much research that has no financial incentive but is necessary to our advancement as a nation. My electorate is also home to Deakin University where significant research is going on in sports and sports science, which I think has come into good stead recently. Also in my electorate are large industry leaders such as Bosch, Lockwood and Dulux. Dulux has just spent $11 million—actually going against the trend—in opening a new R&D research facility. Like Monash, Deakin and CSIRO, I am sure these businesses would be greatly assisted by a return to the level of R&D support they enjoyed under the previous Labor government. In the Business Higher Education Roundtable statementfrom April 1999 there were many interesting international examples provided about trends in research and development funding. In the US, President Clinton recently announced an extra $US2.8 billion for research. In the UK the `Building the Knowledge Driven Economy' white paper announced increased funding of more than 1 billion. Closer to home, Singapore now boasts over 60 research scientists and engineers for every 10,000 people. In South Korea the government will increase R&D spending by 28 per cent over four years in an attempt to overcome the Asian financial crisis. Another country that should prove instructive for Australia is Finland. Like Australia, Finland has a small population and is surrounded by much larger economies. The government has steadily increased public and private expenditure on research and development over the last 15 years. With just five million people, Finland boasts the company of Nokia with a value of $US226 billion, which is three times the GDP of Finland. The global chief economist for Zurich Financial Services was quoted in an article in the Australian on 16 October 2000 as saying: This is a good example for Australia ... This proves that the size of the country is no constraint on global success. The critical issue is human capital, management quality and making the right decisions.What does Australia need to do to ensure we do not miss the R&D boat? Much of the answer can be found in the report of the government appointed Australian Chief Scientist, Robin Batterham. The report recommends:... increase the number of Australian Postdoctoral Fellows—doubling would be appropriate.This mirrors the policy of doubling research fellowships which Kim Beazley announced in Hobart, though Labor will go further and add a new category of elite researchers as well. The report also recommends:HECS scholarships for students undertaking combined science/education qualifications.In March this year, Michael Lee announced Labor's teacher excellence scholarships, which give HECS exemptions to high achieving school leavers who study to become science, maths or IT teachers. The report's fifth recommendation calls on the government to `expand the funding for university research infrastructure'. This again is Labor Party policy. So when will this government get the message? Some of the effects of this bill will have a positive effect on research and development funding, but it is a case of too little, too late. That is not to say that Australia does not have an opportunity to reverse the decline in our commitment to research, but we must have policies in place to ensure it actually happens. We must provide more incentives for business to invest in research and more investment in our learning institutions and, importantly, encourage better links between research and industry. Labor have got the message and we are taking a very comprehensive policy of knowledge and innovation to the next election. It is clear that business has got the message. It is now incumbent upon this present government to harness the skills, innovation, education and creative strengths of our country by embracing a stronger commitment to the knowledge nation.12:34:0021829Gillard, Julia, MPMs GILLARD83LLalorALP00—There is no more appropriate day than today to be debating the Australian Research Council Bill 2000 and Australian Research Council (Consequential and Transitional Provisions) Bill 2000. It is the day on which Australians awoke to hear the news that their dollar had crashed to record lows and it is the day on which scientists have come to Canberra to beg this government, to plead with this government, to do something about the parlous state of research and innovation funding in this nation. On the surface we might ask: how are these two things related—the crashing dollar and the parlous state of research and innovation funding in this nation? We know that the two are related. We have been treated to newspaper column after newspaper column from economic commentators telling us that our dollar is being marked down internationally because we are seen to be an old economy and seen to be failing to invest in research and innovation. But our economic commentators are not the only ones who are making that comment and drawing that link. Let us hear the answer to that question in the words of the Chief Scientist, Dr Batterham, who, in answer to questions about his report The chance to change, said:We have been too lucky in the past. If our dollar is halved in one generation what does it matter. We have a pretty good life. But don't expect your children to eat as well as you do or to have the same sort of accommodation you have.That is a pretty startling quote and a pretty clear indication that the Chief Scientist of this nation, as well as economic commentators, thinks that there is a direct link between the value of the dollar and the way in which we invest in research and innovation and that this government's failure is causing our dollar to depreciate. If we move on from the words of the Chief Scientist, we find others who have warned us about the link between economic prosperity and innovation. Recently we saw in our newspapers an open letter raising these issues and signed by a number of organisations with clear expertise in commentating on the economy and on the state of research and innovation in this country. Those organisations were the Australian Academy of Science, the Business Council of Australia, the Australian Academy of Technological Sciences and Engineering, the Australian Vice Chancellors Committee, the Institution of Engineers, the Institute of Chartered Accountants in Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Federation of Australian Scientific and Technological Societies and the Business Higher Education Roundtable. They started their letter with this paragraph:The Chairman of the US Federal Reserve, Alan Greenspan, has said that the remarkable run of economic growth in his country appears to have its roots in advances in technology. More recently, the head of the World Bank, James Wolfensohn, has commented that if Australia hoped to compete in the new world economy it would need to emulate the American example, with greater investment in research and development. Once again, organisations in the know, just the same as the Chief Scientist, are telling us that there is a clear link between economic prosperity, the value of the dollar and investment in research and innovation. Perhaps we—and perhaps the government—might like to listen to someone who is on the ground doing leading edge research work. The person I refer to is the 1999 Young Australian of the Year, Dr Bryan Gaensler. Dr Gaensler, who is 25, is an astronomer who is now on a scholarship in the United States. In an attack on the Howard government's record on science, he told the National Press Club: You just cannot compete on the money and resources you get over there—meaning Australia. He continued: Universities are the absolute foundation upon which all scientific output is based, but it is almost as if the Government has announced a `going out of business sale', and the results have left our higher institutions in crisis. So there we have someone who is achieving on the ground telling us how bad things are in relation to research and development in this country. The words of all those highly credible sources point to one clear fact: we are in a situation of crisis. A quick look at the statistics puts that into very stark relief for us. Commonwealth funding of universities in this country hit a new low in 1998-99 at 0.8 per cent of GDP, against a 25 year average of 1.15 per cent of GDP, last achieved under a Labor government. Australia's gross expenditure on research and development ranks 12th out of 17 OECD reporting nations. Australia's gross expenditure on research and development dropped by the largest amount amongst OECD reporting nations in the 1996-97 financial year and in the 1998-99 financial year. The drop was 0.6 per cent of GDP, equating to nearly $1 billion. At this critical time, as we stand on the cusp of a biotechnological revolution, all but four nations out of those 17 OECD reporting nations increased their investment in research. We were one of the four that went backwards. If we were in any doubt about the nature of the critical time period we are in, let us once again refer to the words of our own Chief Scientist, who said: The windows of opportunity to benefit from the current revolution in information technology and biotechnology are at a maximum over the next few years. They are big opportunities based on these technologies, other technologies and telecommunications, where explosive growth creates niches for Australia, not only as market opportunities in themselves, but also as a means for greatly enhancing the existing industry base. It is likely—and these are very critical words—that entering the field at a later time will take greater investment and the available rates of return and benefits will be diminished. So we cannot afford to just put this whole business on hold in a desperate hope that we will be able to catch up some time later. There is no time to catch up. The time to fix this problem is now. Just a few more statistics. Under this government, spending has fallen to 0.7 per cent of GDP in terms of research, while the OECD average is up to 1.3 per cent. In the recently released OECD report Science, Technology and Industry Outlook 2000, it was revealed that, while over 60 per cent of countries had increased private sector spending on research and development as a proportion of business output since 1995, Australia had experienced the second greatest decline. Australia ranks 19th amongst OECD countries in terms of business research and development intensity as a percentage of industrial value added. We could keep doing these statistics all day, but it points to one thing—that our research and development is woefully inadequately funded. It is against the background of that kind of crisis that we need to assess this bill. When we do, what do we find? We find changes to the way the pie is cut up rather than the radical increase in the size of the pie that we need. However, given that we are dealing with the way in which the pie is cut up, I want to focus on two aspects of this bill in particular which raise fundamental concerns about the way the pie is divided and by whom. Those things are raised in our second reading amendment. The two aspects I wish to raise are the reduction in the number of Commonwealth funded research training places, which is particularly hurting new smaller and regional universities, and the disturbing moves to reduce the independence of the Australian Research Council.First I shall look at research training places. As we know, this bill is the product of a white paper and green paper process. We all remember the final white paper because the Minister for Education, Training and Youth Affairs was so proud of it he sneaked it into the public domain four days before Christmas last year, when people's minds were dominated by last minute Christmas preparations. Indeed, I think if you are lying in your bed on Christmas Eve and you hear a rustling under the Christmas tree, there are probably only two explanations: it is either Santa delivering your presents or it is the current minister disguised as one of Santa's elves putting out another white paper, because that is the way he likes to do them—to ensure that they go as unnoticed as possible. The white paper, which is reflected in these bills through the establishment in these bills of the Australian Postgraduate Research Student Scheme and the Institutional Grant Scheme, dealt with the changes to our research funding arrangements. These two schemes—the research training scheme and the Institutional Grant Scheme—are pools of money that are allocated to institutions on the basis of a formula that takes into account the following factors: each institution's success in attracting research students, success in attracting research income from a diversity of sources and in the quality and output of research publications. So three factors are assessed for both pools of money. The weighting is slightly different in relation to the two schemes, but there are the same three factors: the institution's success in attracting research students, the institution's success in attracting research income from a diversity of sources and the institution's success in the quality and output of its research publications. The total number of research scholarships under this new research training scheme is tied to the number of HECS exempt research places in the system, currently 21,500. This gives rise to a problem, because the current number of Commonwealth funded research places is approximately 25,000. The difference between the two figures is referred to as gap places. Institutions have offered gap places as HECS liable places, with the HECS costs absorbed by either the institution or the student. Let us look at this new system and ask why it is that newer universities suffer under it. The answer is that they suffer in two ways. First of all, the formula relies on criteria which are inherently discriminatory against newer, smaller and regional universities. Secondly, the eradication of the gap places will disproportionately hurt newer, smaller and regional universities, because that is where the places are disproportionately located. This question of the discrimination against newer, smaller and regional universities is not an academic question for me; it directly relates to my electorate in that the only higher education institution campus in my electorate is one of the campuses of the Victoria University of Technology. The Victoria University of Technology has given both me and the minister some very good feedback on the way in which this scheme will discriminate against it as a newer university. What it has said—and I think it is very fair—is that a fairer system would actually be based on the `need for reform' issues identified in the Christmas white paper, the one that was sneaked out just before Christmas last year. That white paper listed five `need for reform' issues: Funding incentives do not sufficiently encourage diversity and excellence;University research is too often disconnected from the national innovation system;Research degree graduates are often inadequately prepared for employment.There is too little concentration by institutions on areas of relative strength.There are long completion times and low completion rates for research degree students.They are the five `need to reform' issues. It seems to me that two of those `need to address' reform issues—the interconnection between university research and the national innovation system, and the concentration by institutions on areas that are not within their relative strength—are best addressed by the plan of the minister, contained in this bill, to have universities prepare research and research training management plans. That leaves us with three other indicators: excellence, employment prospects and completion times. In the current formula, only completion times are measured. The other two indicators—research income and publications—are indicators that are going to favour established sandstone universities with long research histories. Why doesn't the minister get serious and actually measure for funding the things that he says are `need for reform' issues. You can measure excellence and you can measure employment prospects. If you put them in the formula, and took the other two out, then it seems to me—and certainly seems to the Victoria University of Technology—that the bias against newer institutions would be eradicated. The Victoria University of Technology says, `Measure us on excellence.' If you do, you will find that the outcomes of postgraduate research at that university have been excellent. Eighty-five per cent of examination grades for doctoral theses were passed without further examination or passed subject to minor corrections. These theses have three examiners. They are high quality results. In terms of employment outcomes, VUT is able to say that it has tracked the employment outcomes for 1998 and 1999 doctoral graduates and that that reveals that, of the 49 doctoral completions, 47 were tracked into first employment outcomes. Those people found employment, 37 of them in teaching or research positions in Australian or overseas universities, mainly in their field of research; six in the public sector; one in the corporate sector; one in clinical practice; and one in institutional consultancy. Only one was not working, as a result of accompanying their spouse to an overseas posting. If you measure VUT on employment outcomes, once again it has an excellent record. VUT says, `Don't measure us on indicators that have a bias towards sandstone institutions; measure us on the indicators which are related to the “need for reform” issues listed in your own white paper. If you do that, and do that fairly, the bias against us will be eradicated.' I would strongly urge the government to think about that funding method as a fairer funding method.Secondly, this research system discriminates against institutions like VUT because they are where the so-called gap places have built up. We have departmental information on the location of the gap places. If we look at the sandstone universities, gap places are running at 3.4 per cent of their research place total. But for universities of technology like VUT, the average is 32.7 per cent, and for VUT itself it is 36.7 per cent. The number of people in my electorate who get into higher education is not high, but to the extent that they get there they tend to go to RMIT, VUT or Deakin University. All of those have very large numbers of gap places: 46.4 per cent in the case of RMIT, 42.7 per cent in the case of Deakin. With the eradication of those places, the prospects of the people in my electorate who actually manage to get into university—manage to get through the struggle that education can be in electorates like mine where we have underfunded primary and secondary schools—of becoming a postgraduate in a research place are going to be reduced by this funding system, because it is going to eradicate gap places. That is going to particularly hurt the newer institutions to which the people in my electorate disproportionately tend to go. I do not think that can be a fair funding method, and that is something this government should address. I turn to the other issue I said was particularly troubling in this bill, and that is the independence of the Australian Research Council. The coalition government's very own higher education policy in the 1996 election said that it would restructure the Australian Research Council as an independent body. One must think those written words are a bit like the ministerial code of conduct: somehow the plain sense of them on the sheet in black and white does not in any way equate with what this government does. The independence and transparency arrangements for the ARC have been downgraded by this bill. First, this bill removes the ability of the ARC to initiate its own inquiries. I would say this to the minister: a man who has nothing to fear has nothing to hide. What is wrong with allowing the ARC to do its own inquiries? Secondly, this bill downgrades the degree of transparency around ministerial directions to the ARC. Currently, ministerial directions must be tabled in this parliament, a clear transparency measure. In this bill, the minister is empowered to give directions in two different provisions, proposed section 7, where he can give written directions about the performance of council functions, and proposed section 10, where he is empowered to give written directions on the performance of the board's functions. Despite this web of control, there is no need to table these directions in parliament. The only accountability will be through the annual report, which might come out many months after the directions were given. Once again, I say to this minister: if a man has nothing to hide, he should have nothing to fear from clear transparency arrangements. Why is it that those directions will not be tabled in parliament?Even more disturbingly, there is a provision enabling the minister to inform the board of the general policies of the Commonwealth government with which the board must comply. Where is the independence here? Using this provision, what is to stop the minister attending at the board and saying that the policies of the Commonwealth government are to eradicate regional universities and they should no longer get research funding, or that the policies of the government are to ensure research does not happen in social policy areas, or that the policies of the government are to ensure that research only happens in conjunction with the top 100 listed companies in Australia? What is to stop the minister going along and saying those things and requiring the board to comply with those things as government policy? This is a very disturbing introduction, a very disturbing loss of independence, and I think something that this minister probably cannot justify in this parliament.What I think we should see in this parliament is what the government promised to do in its 1996 election policy, and that is to guarantee the independence of the ARC. We need to see a bill that actually does that, and this bill is not it. We also need to see a research funding arrangement in this country that radically increases the amount of research funding available and fairly allocates it between the institutions in this nation which are doing excellent research. They may be the newer, the smaller, the regional universities, and there should be no inherent bias in the research funding formula which prevents moneys being fairly allocated to those institutions.12:54:0021833Latham, Mark, MPMr LATHAMK26WerriwaALP00—I welcome the opportunity to speak on this Australian Research Council Bill 2000. It is one of the most important pieces of legislation to come before the parliament this year. It is particularly significant because today is the day in which science has come to meet the parliament. It is good to see so many representatives of the science and research sector across the parliament lobbying for their very good cause. The bill claws back $500 million in block grants to establish a National Competitive Grant Program. It also widens the eligibility for ARC grants beyond the university sector. The Minister for Education, Training and Youth Affairs may now accredit a research organisation upon application. As the member for Lalor was pointing out, this is a process which is fraught with danger. It may lead to ministerial interference—in fact, a direct ministerial role in the allocation of research grants. It should not be the role of executive government to sit in judgment on research proposals. Such a process should always be conducted at arm's length, independent of the executive, with equal rules for all applicants. I am worried about a two-tier system where some applicants will be going through the ARC and other applicants, seemingly through the back door, will be going to the minister direct. I would like to see these processes put together, established at arm's length and fully independent so that their integrity can be respected across the research sector.Notwithstanding that concern, I do support the widening of the research net. It could have been done better but it is a necessary step. One of the defining characteristics of the information age is that no organisation has a monopoly on the creation and distribution of advanced knowledge. In fact, universities have lost their 900-year monopoly on higher forms of knowledge. There are many creative small business innovations and many creative social and business entrepreneurs. One can look at Silicon Valley, for instance, and see that the level of innovation is 20 years ahead of economic theory and standard research. One can look at the social sector and see how the work of social entrepreneurs is jumping decades ahead of social theory and research. There is no monopoly on advanced knowledge. There are many more avenues now for research: the Internet; if this government got it right, digital TV in Australia; and, as I mentioned, the creative role of business and social entrepreneurs. The net for research funding needs to widen, but it should not be widened in a manner that hands over control to the minister. This is a process which will need to be examined closely and monitored by the parliament to ensure that there is no abuse. It is often said that Dr Kemp runs his higher education policy as an act of revenge for things that happened to him when he was a university lecturer in the 1970s. I hope this is not an instance of revenge, where the minister is trying to corral and control the allocation of research grants out of his own office.As has been mentioned by previous speakers, the legislation also gives rise to a broader debate because of this government's cuts to research and education budgets. One of the great concerns arising out of government policy is the secular decline in HECS funded postgraduate course work. Let me provide the House with the statistics. In 1996 there were 41,400 postgraduate course work funded places in this country. In the year 2000, there are just 16,400. That is a decline of 25,000 HECS funded postgraduate course work places. This number of 25,000 students is the equivalent of Australia's sixth largest university. Our sixth largest university, in equivalent terms, has been wiped out of equity funding for postgraduate course work. In Australia's universities, 60 per cent of the research comes out of these postgraduate efforts. The decline in HECS funded places is having a terrible impact on Australia's overall research effort. Cuts such as these have made research and development a major national issue. Talking about these questions through the prism of the new economy is one thing; knowing how the new economy works, however, can be an entirely different matter. Paul Keating in the 1980s made a quite infamous comment that all the pet-shop galahs were talking about micro-economic reform. I listen to the commentaries now and it seems that the pet-shop galahs have turned their focus onto R&D tax concessions, because there is a lot of nonsense spoken on this issue.I wish to present to the House what I regard to be the three principles for policy makers in improving Australia's R&D performance. The first of those principles is to fund the smart, creative people of a clever country, not industry welfare. The pace of change and the development of information and knowledge is so rapid that big clunky institutions are having trouble keeping up. It is individuals acting in collaboration who are at the cutting edge of innovation and creativity. Market incentives to engage in R&D, in fact, are a mandatory part of the new economy. The new economy is demanding so much R&D effort that it should be regarded as a core business activity. One can only wonder what sort of future there would be for an IT company, for instance, that had no research effort. It would be cutting its own throat. This is a core business activity. The problem in this country, of course, is that so much of our corporate management is risk averse. Decades of industry welfare prior to the 1980s created a risk averse corporate management culture. It takes a long while to overcome this problem. Only through the reform program of the 1980s and into the 1990s has progress been made. I think that we need to be cautious about the call for another generation of industry welfare through R&D tax concessions. As ever, these claims require close scrutiny. Figures from the Parliamentary Library show that, while the reduction in the R&D concession saved the government $450 million, the corresponding fall in business expenditure on R&D has been just $255 million measured in current prices. So when I hear the Australian industry welfare group, for instance, pleading for 150 per cent and 200 per cent tax concessions, I look at those figures and I have to say that there must be a better way of spending the money. This government has made the cuts—the cuts need to be reversed—but perhaps there is a better avenue into which the funding can be pumped in terms of improved research effort. For every dollar of tax expenditure on R&D just 56c is leveraged in additional private sector effort. It is as bad as the private health insurance rebate: it is not a good outcome—spend a dollar, get 56c of public return. That is not a good outlay, not a good policy and not an efficient strategy for national government. Under this government, national R&D effort has fallen dramatically. The best way to overcome this problem, however, does not lie in corporate tax concessions. Better results can be achieved through the introduction of small business research scholarships and a national program of portable research scholarships. In this area, as with most aspects of public administration, direct funding programs achieve stronger outcomes than the indirect and risky process of tax concessions. Tax concessions are the risky strategy. To directly fund Australia's smart, creative researchers is the sound strategy: fund people, do not fund industry welfare. The second principle I present to the House is to re-examine the role of government. I believe that the role of government in the information age is to leverage collaboration in the research sector. In the industrial age, it seemed that most of the interventions were made by individuals acting in isolation. We know who invented the steam train; we know who invented the industrial presses and machinery. In the information age, however, most of the inventions seem to be happening through collaborative research. We do not know, for instance, who invented the Internet, even though Al Gore thinks that he did. The information age is placing a premium on cooperation and collaboration between researchers. I suppose that is just commonsense. The explosion in information and know-how means that it is impossible for one individual to get across a full discipline and deal with these complex problems. They need to collaborate with others. I believe that, in the information age, the natural unit in society becomes a mutual team of collaborative learners, a mutual team of collaborative researchers. So the proper role for government is not to pour money into the old funding silos like R&D concessions but to use its funding powers strategically to try to leverage organisations together. I mentioned earlier my support for a program of small business research scholarships. This would work on a tender basis. Small businesses would apply for government funding, putting their research proposals forward, and government would be able to support the most innovative and promising projects. But then, in awarding the scholarship, the small businesses would have to go and use their money at an Australian university. This is a smart way of bringing the organisations together: small business research scholarships that then need to be used at an Australian university, establishing relationships of collaboration and synergy between the small business sector and Australian higher education. At the moment there are attitudinal barriers to collaboration. A lot of businesspeople think that universities are ivory towers. They are not going to put their dollars into the higher education sector for R&D. A lot of university people think that they do not necessarily want greater business involvement, because that might involve the creeping privatisation or commercialisation of their sector. These barriers need to be broken down, and there is a strategic role for government in leveraging the business and higher education sectors closer together. Let me give the parliament a statistic which demonstrates the scale of the task. In 1998-99 the proportion of business expenditure on R&D that was spent in the Australian higher education sector was just 3.4 per cent; that is, for every $100 of business expenditure on R&D only $3.40 is spent in Australia's universities. This is clear evidence that these organisations are not working collaboratively and are missing out on many of the advantages that would come from cooperation. So government through a small business research scholarships scheme could bring the business sector and higher education together. We could lift that percentage. I would have thought that 10 per cent or 20 per cent of Australian private sector expenditure on R&D should go into our universities. This sort of thing happens in the United States with tremendous results. Earlier I mentioned Silicon Valley. The big lesson there is that businesses working hand in hand with innovative universities create win-win outcomes—a win for businesses, because they get good innovation and market expansion, and a win for the universities, because the private sector endowments that come back are very good for their resource base. These are win-win outcomes from policies that leverage these sectors together. I strongly advocate that approach and regard that 3.4 per cent figure as one of the real problems in public administration in this country. The third principle I would mention is recognition of the fact that it is not possible to have a quality research sector without a quality education system. We need to recognise that the very foundations of successful research are laid in our schools, colleges and universities. In the information age education is the foundation stone upon which R&D is constructed. I noticed a very interesting analysis in the Australian Financial Review on 27 October by one of the spokespeople for Ericsson, one of the large private sector R&D focused companies. This is what Alex Gosman of Ericsson had to say:In the old world, research and development tax concessions were paid to encourage companies to invest in an externality, something which someone else could come along and benefit from, but now skills training is the biggest externality and our constant battle is to stop others from poaching the people who we have skilled.That is a very important lesson. Of course there is an externality in research effort, but now in the new economy there is a bigger externality in terms of keeping quality staff. In the research area, companies need to regard R&D as part of their core business activity. It is a basic part of business survival. The bigger externality now is for these companies to hang onto the staff that they have skilled up. Companies are finding it very hard to keep their quality people. There is a lot of poaching going on. Ericsson is saying that government would be better off funding up the education system to produce a skilled work force across Australia than putting scarce government resources into another round of R&D tax concessions. The biggest externality is in the skills of the work force, not necessarily the research effort of the private sector. The role for government is to fund our education system first and foremost and to then use a strategic role in terms of R&D. The lesson from Ericsson applies across the new economy. It reinforces the need for new innovative skills programs in this nation. I take a lot of inspiration from the success of the Skills Development Fund in Singapore, for instance, which is an attempt by government to leverage greater training and skills effort from the private sector. Those companies benefit from a much-improved work force. That should be our first priority. We should learn from the statement by the Ericsson representative. In conclusion, this debate should not only be a question about improved national resourcing of R&D; we also need to think carefully about the best way in which to spend these funds. I believe the role for government is to try to encourage boundary crossing, to ensure that skilled people within the formal research sector are collaborating as much as possible, forming new alliances and new allegiances, working up mutual teams of research collaboration and, of course, making state-of-the-art innovations. The other form of boundary crossing is to get the research sector cooperating much more with the business sector. I mentioned earlier on the relationship between creative small business and higher education in this country. On this day when science has come to meet the parliament, it is a time to celebrate what amounts to the globalisation of science. In some quarters globalisation gets a bad name. When we are talking about the easy transfer of ideas, products and technologies between nations, globalisation is in fact something to be celebrated and supported. For some of the parochialism that might go on in this forum, can anyone ever imagine scientists these days trying to erect national boundaries and borders between innovation and their effort? No-one could imagine the world of science trying to construct the sorts of boundaries that so many members talk about. We need to recognise the globalisation of science and to take it as an opportunity much more than a threat. In this regard government policy is letting us down. We hear a lot of talk from the Treasurer about high productivity in the Australian economy. He has a simplistic view of this. I do not know who taught him logic at university, but his argument is: productivity is high in Australia; therefore we must be part of the new economy. The truth is that all the productivity gains that are coming through the Australian economy were built on the foundations of micro-reform throughout the eighties. It was the Labor governments of the eighties and the early nineties that built the productivity base. It is now flowing through into the statistics. There is no cause and effect in the Treasurer's argument. There is no logic in his proposition. We need to examine the statistics.There is cause for alarm in the penetration of the new economy into the Australian business sector. Let me just give some figures comparing our outcomes here against those in the United Kingdom. In the United Kingdom, 87 per cent of small businesses are connected to the Internet. The statistics show that in Australia it is 60 per cent. We are 27 per cent behind the United Kingdom in Internet connections for the small business sector. In the United Kingdom, 51 per cent of small businesses are selling online, joining the e-commerce revolution—a great way to expand their product and service base. The corresponding figure in Australia is 15 per cent—15 per cent of our small businesses are selling online. The penetration of the new economy and the new technologies in our commercial sector is weak by any basic international comparison. This government has the wrong cause and effect in mind. This government is cutting R&D effort. This government is cutting back on our best national investment in education. It is in fact retarding the prospects of the Australian economy and the Australian people. Of course, the most obvious indicator of this is in the value of our currency. As the currency feels the weight of the international market, it is the weight of 30 or 40 years of National Party politics holding us down into the old economy. We used to ride on the sheep's back. The truth is that into the new century we need to ride on the back of our education and research sectors. My party's leader, Kim Beazley, calls it the knowledge nation—a great way to inspire confidence in our policy direction, a great way to set the direction for the nation. We do need to become a knowledge nation. We do need to invest fully in these areas.This bill is flawed in that it does not produce those investments in R&D. It is flawed in that it does not leverage together collaborative research effort. It is flawed, as the member for Lalor mentioned, because it could lead to ministerial interference by Dr Kemp. This is not good legislation. It is not consistent with a proper role for government in R&D. We can do much better, and I am sure we are about to hear how from the Leader of the Opposition. 13:14:0021838Beazley, Kim, MPMr BEAZLEYPE4BrandALPLeader of the Opposition00—I support the amendment that has been moved to the Australian Research Council Bill 2000 by the member for Dobell and record my interest in the remarks made by the member for Werriwa, who maintains an innovative fascination in these areas and is always worth listening to. We have three main concerns about this legislation. Firstly, it provides no new money for research; secondly, it spreads existing money across a wider number of institutions; and, thirdly, it will damage the research capacity of our regional universities—and it will because about all it does is change the structure of the ARC, making it much more susceptible to a bit of pressure from the minister and much more bureaucratic. These bills are being debated against the background of a total collapse of R&D expenditure since this government was elected, a collapse that has heightened perceptions around the world that Australia has an old economy. The bills come at a time when R&D is becoming one of the crucial issues facing this nation. The message is getting through to ordinary people not engaged in science or the humanities that our nation's future and the future job prospects for them and their children are dependent on the generation of knowledge and its application in industry. There are scientists around this building now who are lobbying us and drawing our attention to the significance of their contribution to the future national development of this nation. Their message is getting through to ordinary Australians; it is not necessarily getting through to this government.I have been saying for some time now that Australia must become a knowledge nation if we are to improve our living standards this century. By this I mean that we must increase our national investment in education, research and development, skills acquisition and modern infrastructure. We must become more innovative and we must translate this innovation into economic opportunities. We have been helped recently by the appearance of a number of key reports and statements that suggest that Australia is not on the right track to meet this challenge under this government. I have counted at least six recent reports and statements pointing to the size of the challenge we now face.The first OECD report, Measuring the ICT sector, released a few weeks ago rated Australia as the lowest of all countries surveyed in respect of the share of value adding in the information and communications technology sector as a proportion of the total business sector. It also showed that, while Australia has a high use of new technology, we produce little and export even less to the growing international market for digital technology. The report summarised this by stating that value adding to the manufacturing part of the ICT sector is relatively insignificant in Australia and that Australia recorded a similarly low proportion in respect of employment. As well, the OECD found that Australia's manufacturing output in the communications and information technology sectors has shrunk to `negligible levels'.The Prime Minister finds this acceptable because of what he says is a high take-up rate of information technology in Australian business. The statistics quoted by the previous speaker in this debate indicate that there is a major question mark over whether or not that is actually a valid assessment of our performance to this point. But the truth is this: in the modern world, if you are not inventing the technologies you are not going to be at the peak with the skills in exploiting them. There is a symbiotic relationship between the two. You cannot simply have one or the other and be regarded as a new economy.Another OECD report released a few weeks ago, Science, technology and industry outlook 2000, reveals a similar story. While over 60 per cent of OECD countries have increased private sector spending on research and development as a proportion of business output since 1995, Australia experienced the second greatest decline by the same measure of all countries surveyed. In August the Chief Scientist, Dr Batterham, delivered his report—the third of these reports I am referring to—warning that Australia had a narrow window of opportunity over the next few years to avoid national wealth decline by investing more in science, education and research and development. Among Dr Batterham's major findings were that Australia's investment in science, engineering and technology is being left far behind by comparative nations, such as South Korea, Singapore, Ireland, Finland, Canada, Israel, the UK and the US, which are implementing visionary programs to make themselves knowledge nations; we have fallen to 19th ranking amongst OECD countries in business expenditure on R&D; too few of our young people are studying science and technology; and too many of our highly qualified graduates are leaving for overseas because of lack of opportunities here. The desertion rate as revealed in the newspapers recently is something like 30 per cent of graduates in the key sensitive areas we are talking about. That is a massive increase on what it was a couple of years ago. What did our minister for industry have to say about that? He said, `Oh, well, it's a good thing. They go overseas and get a bit of experience.' They will go overseas, but they will not come back—not now, not to the environment which we now have encouraged to develop in this country after four years of this government.The fourth report I refer to is the Innovation Summit Implementation Group's report Innovation: unlocking the future. Last month the Innovation Summit Implementation Group's report reached similar findings to those of the Chief Scientist. It called for changes to R&D tax concessions, a doubling of the ARC's funding and an increase for university infrastructure investment, programs to improve teacher education, greater encouragement for innovation in small business through strengthening intellectual property protection, and freeing up venture capital more effectively. Then we had a statement by 10 prominent scientists last month. Scientists, educators and business people published this statement in our newspapers calling on the federal government to create and implement urgently an innovation action plan to underpin growth in existing and emerging industries and to develop a knowledge based society.Finally, the last report that I want to refer to—there are, in fact, a number of others, but I identify these six—was a report by FASTS entitled Mathematical sciences in Australia: looking for a future. It makes chilling reading, this report, and here are just a few of its findings. The number of year 12 students studying advanced mathematical courses continues to decline. There is a massive shortage of maths teachers' with about 40 per cent of junior secondary students being taught maths by a teacher who has little or no background in mathematics and no studies in the teaching of mathematics. There has been a decline of 25 per cent in university mathematics staff since 1995. There are falling applications for research grants in mathematics. There is difficulty in filling some university maths and statistics vacancies due to the brain drain. Some universities are no longer offering three-year degrees majoring in mathematics. As they conclude, the brain drain from universities exemplified by the data from the mathematical scientists represents the kind of loss of intellectual capital that no nation that aspires to be a leader in science and technology can afford. The Chief Scientist, along with others such as the head of the World Bank, James Wolfensohn, has already pointed out that a key factor in the fall of the Australian dollar is the perception that we have not invested enough in education and science. These statistics call for urgent government action—action that we are yet to see. The window of opportunity that the Chief Scientist has warned us about is narrowing more quickly than we could have imagined. Urgent action is required to reverse these trends and perceptions and demonstrate to world markets that Australia will be a significant international player in the rapidly developing new economy. But instead of more research, all we have from this government is another costly restructure that narrows the independence of the Australian Research Council. It is yet another example of the government's inaction in responding to the crisis facing research and development in Australia. In all crucial areas Australia is now falling behind. Since the election of the Howard government, we have seen a billion dollar cut to university operating grants. As a result of this, the government's own cabinet documents have admitted that eight institutions are now operating at a deficit, a number of regional campuses are at risk of closure and that universities now have higher student-staff ratios, less frequent lecture and tutorial contact and outdated technology. University quality is falling. That is why it is important that, in contemplating things like improving the research grants that are going into universities, we actually look at the total research picture that we are seeing now. One of the areas in which university quality is falling is research infrastructure as much as expenditure on research. In universities now we have technologies more backward than would be the case in the average Australian business in a number of the critical research areas. That infrastructure is becoming important to the capacity of the universities to perform. The unfair enrolment benchmark adjustment is removing 60 million per year from our state schools, despite increasing enrolments. Many state schools and poorer non-government schools are having to run raffles and cake stalls to pay for essentials like additional staff and new computers, and as a result opportunities are not available to all. The number of enrolments in maths and science in our secondary schools has declined. In some states, only 25 per cent of maths and science teachers have university qualifications in these important disciplines. Australia's expenditure on R&D has declined 10 per cent against GDP since the election of the Howard government, and this has happened at a time when investment in other advanced nations has increased dramatically. Our high-tech exports, as a percentage of merchandise exports, are now lower than those of Finland and Canada, both of whose economies were formerly heavily reliant on commodity exports like we are. We have a 30,000 shortfall in trained IT graduates while more than 2,000 young Australians are unable to find places in university IT courses. Nothing is more likely to hold us back than skill shortages in the IT industry. Too many talented young Australians are leaving Australia to continue their research in places like Silicon Valley and Cambridge, creating a brain drain. I believe that statistics such as these are becoming every bit as important as a measure of our national economic performance as our inflation rate and our balance of trade. Certainly investors think so and that is why our dollar is falling. Like the Chief Scientist, it is my goal to make ordinary Australians aware of the importance of knowledge creation to our nation's future. What are the problems in this bill? Firstly, there is no extra money. The major problem with this bill is that it commits no extra funding for research at a time when an increase is needed desperately. One of the key recommendations of the Innovation Summit Implementation Group was the doubling, over a five-year period, of the competitive research grant schemes administered by the ARC. As the report indicates, because of funding shortfalls the ARC is currently able to support only 20 per cent of applications for its grants, compared to 31 per cent in the United States by an equivalent institution and up to 41 per cent in the United Kingdom. The report found that grants are currently totally inadequate to meet the full direct costs of research. In the US, the average size in Australian dollars of successful grants is $169,000, and in the UK, between $192,500 and $432,500. Here, the average is $55,000. The report also found that one of the most pressing concerns facing universities is the lack of investment being made in research infrastructure. Public research agencies and universities are finding it difficult to attract grants that can be used beyond day-to-day research staff costs and overheads. The proportion of R&D money spent on infrastructure has declined from 15 per cent 10 years ago to an estimated five per cent today. This, too, has to be addressed. Despite these calls from its own summit, the government has put forward a proposal to not put any more money into university research. It is another wasted opportunity. The Minister for Industry, Science and Resources has been quoted as saying that the government is currently considering a series of measures to increase university research funding and to address the problems holding back our move to a knowledge nation. We have now had numerous reports and statements, green papers, white papers, summits, commentaries from world exports and 4½ years of government. How long do we have to wait? One of the outcomes of this bill will be that universities will have to compete with a wider rage of institutions for existing funds. Universities will now possibly have to compete with private sector organisations like Telstra, BHP and others for research dollars. While we recognise that competition can be a spur to excellence, the result of this will be to further drain research funds from our already excellent universities without raising the overall level of research and development taking place. Boosting research in the private sector should be addressed by government measures to improve business investment in R&D, not by raiding our underfunded universities but perhaps by putting a few incentives in place for business based on a willingness on their part to cooperate with universities. Another aspect of this bill is that it will result in the removal of research training places from our regional universities. Many of our excellent regional universities currently choose to top up their postgraduate research places with additional places liable for HECS. The minister has decided that the universities will now be forced to use their HECS-liable places for undergraduate and postgraduate course work places or to put the funds into a pool to be distributed by DETYA on a competitive basis. That has two implications. Firstly, it means that the government funding is funding fewer research places overall, which is a crazy thing to do when we need to produce more knowledge workers than ever before. Secondly, regional universities will have to compete for research places with big research universities like those in the group of eight. We on this side applaud the research excellence of the group of eight universities, which already get around 80 per cent of the research dollars going to our universities. We should be increasing the research done at our elite institutions, but not by raiding the coffers of others. We believe that, if Australia is to become a knowledge nation, all of our communities must be involved in the knowledge creation process. We believe that university research is one of the keys to building a future for our regional centres. The experience in the United States, the UK and elsewhere is that more and more these days new businesses develop around universities and university research activities. If you deny a university in a particular area access to research funds, you deny that community the capacity to exploit the product or the knowledge that comes from those universities to create broader employment. We have made the following analysis, based on information handed to us by DETYA, of the number of research places our regional universities may lose as a consequence of this bill: the University of Western Sydney, 341 places, which is 46 per cent of total postgraduate research places; the University of Ballarat, 31 places, 40.8 per cent; Central Queensland University, 45 places, 34.6 per cent; the University of Southern Queensland, 69 places, 46 per cent; Edith Cowan University, 157 places, 46.6 per cent; Deakin University, 224 places, 42.7 per cent; and James Cook University, 76 places, 18.6 per cent. Our regional centres understand that their future lies as part of the knowledge nation and they will understand what these effective cuts will mean to them and their capacity to participate. The next election will be a contest between our plans to create a knowledge nation and the coalition's policies of the past. We have already made a number of policy commitments. We will raise business expenditure on R&D at least to the OECD average by 2010. We will tackle the brain drain by doubling the number of Commonwealth research fellowships and by adding a significant number of elite fellowships worth $200,000 a year. We will significantly increase university research funding. We will abolish the enrolment benchmark adjustment and establish education priority zones to channel additional resources into communities where too few young people are completing year 12 and getting a skilled job or going on to TAFE or university. We will improve the standard of our teachers and address the maths problems that have been identified by offering teacher excellence scholarships to high achieving school leavers to enter teaching and by offering intensive courses to our existing teachers to upgrade their skills. Studies have shown that making sure teachers are experts in their subjects is the best way to raise standards in schools. Those policies are just the start. To help me build on them I have established a task force on the knowledge nation under the chairmanship of Barry Jones to advise us on additional measures next year. Between now and the next federal election I will be announcing fully costed policies to boost Australia's potential as a knowledge nation. We are throwing down the challenge to the Prime Minister to respond. Already we are having an effect. After all the blather we heard earlier in the year about the next election being fought around the government proposition on tax cuts, what did we see yesterday? Finally, that having been dimmed down, as we said it should be, a priority was assigned to national investment. Priority must be assigned to national investment in this area—to the skilling of our young people, to the skilling of all our work force and to investment in research and development—if we are to maintain a productive and prosperous nation during this century. The productivity gains that have been made—and they have been substantial—during the course of the last decade have all been made off the back of the restructuring and opening of our economy that occurred in the 1980s. But there is a very interesting statistic which suggests that the increase in the productivity of our work force in the last year has slowed dramatically. What is quite evident is that we are now bumping up against the capacity to improve the productivity of our work force based on this micro-economic reform. Increasingly, that productivity is going to be based on the sorts of things that we have been talking about here in connection with this legislation. So our productivity gains are now starting to bump up against the ceiling which this government has cemented in instead of breaking open. The time has come for them to change. We look forward to a contest between us and them. They understand that they are going to have to do something. The problem is that they do not understand what they have to do, and their ignorance on this will carry right down to the next election, when we will deal with them. (Time expired)13:34:0021842Hoare, Kelly, MPMs HOARE83YCharltonALP00—I am pleased to be able to speak in this debate on the Australian Research Council Bill 2000 and I am more than pleased to join the eminent group of speakers we have had from this side. I have been pleased to hear the valuable contributions made by all of those speakers. Interestingly, there has been a long list of speakers on research and development and investment in knowledge in our country from this side of the House, yet there were only two names from the other side of the House. I do not know whether this reflects commitment—or non-commitment—from the government in relation to investment in knowledge, or whether it just reflects perhaps the embarrassment of the backbenchers in the government about their government's non-commitment and non-dedication to investment in research and development and investment in knowledge. It is also good to have this debate in the national parliament this week when science does meet parliament. I had the pleasure of meeting quite a few of our eminent scientists last night at a reception and met another couple this morning. We discussed, amongst other things, issues ranging from the level of government investment in research and development and in our higher education institutions to other issues regarding genetically modified organisms—or genetic engineering—the promotion of crops which are going to be able to resist viral strains, which will make our agricultural industry a lot more viable, to a whole range of other issues. It also shows that the funding of R&D and government investment in knowledge is high on the political and community agendathat it is something that we are not going to be able to get away from, and certainly not something that this government is going to be able to get away from. Some may believe that, by introducing this bill into the parliament, the coalition government is taking heed of Labor's comment on and commitment to the knowledge nation as has just been outlined by our leader. Nothing could be further from the truth, and I will take some time shortly to substantiate that comment. This legislation has been introduced following the discussion paper `New Knowledge and New Opportunities', which was released in June last year, and following the government's white paper `Knowledge and innovation: a policy statement on research and research training', released in December 1999—as the member for Lalor pointed out—just prior to Christmas by one of Santa's elves.The white paper's proposals regarding the Australian Research Council included, as outlined in the Bill's Digest, an enhanced role in the provision of strategic advice to government regarding research in the university sector, increased responsibility for the administration of research funding programs to which funds will be appropriated under the new act, a reformed governance and organisation structure reflecting the need to link university research with the innovation system, an enhanced capacity to identify and respond to emerging areas of research excellence, and an accountability framework emphasising transparency and performance. However, in reality these recommendations are tempered by the changed relationship between the council and the minister, and the reduced accountability by the minister. Under this proposed legislation, the minister will actually have new powers to disregard or vary the council's advice regarding funding of research proposals. The council will not be able to initiate advice to the minister; it will only be able to respond to his or her request. The minister will no longer be able to table directions to the Australian Research Council.As has also been stated by many speakers before me, this legislation does not provide any new funding for research and development; it does not provide any new funding for innovation; it does not provide any new funding for investment into our higher education institutions; and it does not provide any new funding at all for the future generations of this country. In the outline of this legislation in the explanatory memorandum, the first sentence reads: The Australian Research Council Bill 2000 will implement a number of initiatives announced in the Government's 1999 policy statement Knowledge and Innovation: A policy statement on research and research training.But if you turn over the page in that explanatory memorandum, under `Financial Impact', the final five words say that there is no financial impact. That just emphasises the statements that I have made that this bill provides no new funding for innovation.The government would like to have the public believe that it has good intentions, but one need look only at the history of this government in relation to investment in knowledge—this has been mentioned before and I wish to reiterate it because I think it is something that needs to be emphasised time and time again in the community—and look at the list of speakers on this bill from the government side to see its non-commitment. The record of this government since its election in 1996 highlights its non-commitment to investing in our future. Since 1996, a billion dollars in government funding has been taken from our universities. Funding for higher education has fallen to 0.8 per cent of GDP, the lowest ever since Commonwealth funding of higher education commenced over 25 years ago. The average level of investment has been 1.15 per cent of GDP. If it had remained at that level, an additional $2.08 billion of Commonwealth investment in higher education would be available. Australia has experienced the second largest drop in funding for higher education amongst OECD nations. The spending downturn has been largely caused by a collapse in business expenditure on research and development, which is the result of the government's reduction in research and development tax concessions. R&D funding peaked in 1996-97 at $4.27 billion and fell for the first time during the following two years. Commonwealth investment in R&D has fallen by almost one sixth, from 0.77 per cent of GDP in 1995-96 to 0.64 per cent in 1999-2000. Since the reduction of the R&D tax concession from 150 per cent to 120 per cent in 1996, business expenditure on R&D has declined from 0.86 per cent of GDP in 1995-96 to 0.67 per cent of GDP in 1998-99. R&D spending has fallen by more than 10 per cent in two years, and this is the worst fall of any OECD nation. The OECD figures place Australia below Iceland, Denmark, Canada and Austria. In 1985, Australia's gross expenditure on R&D was 1.1 per cent of GDP, compared with 1.9 per cent for the EU. By 1996, just prior to the Howard government's destruction of R&D, Australia had improved significantly and was around level with the European Union. That is a dreadful indictment of a nation that should be investing in research and development and in our children's and grandchildren's education. That record is well documented. This does not come just from the Labor Party. These figures are documented from this government's record since 1996. They have been well documented in the media and by eminent organisations that rely heavily on R&D for their research, innovation and their ability to make the impossible possible. This debate is out in the public, and it is a debate that Labor brought forward. I mentioned before the discussions that we had with the scientists who are here for Science Meets Parliament Day 2000 about genetically modified organisms, cancer and AIDS research, genetic engineering, the human genome project and DNA testing and mapping. The community understands the value of governments investing in R&D and the benefits that are going to come to us, to our children and our grandchildren from it. It is because of government investment in R&D that a cure for cancer may be found and that the degradation of our environment might be reversed. On a local level, in my home area of Newcastle scientists are playing a pivotal role in the development of an earthquake prediction program, which is being developed by the Australian Geological Survey Organisation. What they are doing is using information from the 1989 Newcastle earthquake to calibrate a model so that it can be applied to other cities around Australia. The project leader in Newcastle, David Stewart, said that it would help build a database to assess the vulnerability of buildings to other natural disasters such as floods and major storms. He said further: By building up this information our emergency management organisations will be able to better plan for major disasters and our planners and engineers will be able to design safer cities. By knowing the risk we can plan ways to minimise it.I am sure that all of us who are parents or who are grandparents will appreciate the work that is being done to try to minimise the effect of natural disasters. But that work would not be able to be done if it were not for the scientists and highly educated engineers who are doing this work. Some of the community responses to this government's record have also been well outlined. The government's general failure to invest in R&D, to invest in knowledge and to invest in innovation is not going unnoticed. The National Tertiary Education Union said:It is an indictment of Australian education policy that at a time when other nations are recognising the value of increased investment in education, Australia has substantially reduced investment. Eminent scientists and researchers are leaving Australia to pursue their work overseas where available funding and facilities are significantly better. A recent survey of researchers has shown that researchers both at home and abroad fear that a continuing lack of availability of adequate research funds, poor job security and lack of a career structure in Australia will exacerbate the exodus of scientific talent. The report carried out by the innovation summit's implementation committee said that Australia must spend at least $2.6 billion on research and development over the next five years or risk losing its place in the international research effort. Another reporby Robin Batterham, the government's Chief Scientisthas recommended a doubling of research funding by the Australian Research Council to about $500 million and new grants and new scholarship schemes. The Leader of the Opposition, Kim Beazley, has stated that the record weakness in the Australian dollar is due in part to the government's failure to put enough effort into a high technology economy. The poor level of research and development funding is crucial to this. He said: Australia is not a knowledge economy. Unless it is, it will not be a successful economy and the dollar will be valued like it is.In a joint statement, which appeared in the media, leaders in business, industry, education and research said:Over the past few years, nations such as the United States, Britain, Canada, Japan, Germany and France have significantly increased their levels of national investment in research and development. They have thrown down a challenge to any country that intends to remain among the group of the world's prosperous nations. They go on to say: Just as in sport, where we have always known that we cannot rely on greater numbers to compete successfully at the highest level, our effort as innovators and educators must remain above average if we are to compete against the bigger players.Young Australian of the Year, Dr Bryan Gaensler, has stated that he would be `absolutely insane to come back to Australia' to work. That is a tragic consequence of this government's failure to invest in R&D. He went on to say:We have reached that point where the idea of the clever country is not a source of inspiration. It is really tinged with irony about what might have been.An IMF report shows that Australia is the second largest user of new technologies but the second last among advanced economies as an IT producer. The President of the Federation of Australian Scientific and Technological Societies, which has organised today's Science meets Parliament Day, Professor Sue Serjeantson, said that scientists are leaving Australia not only because of low wages but because they are unable to compete internationally because of inadequate research facilities. John Ridge, the President of the Australian Computer Society, has said that government has the responsibility to show leadership and provide R&D incentives which will be an example for the private sector to follow. He goes on to say that it would be a mistake to allow market forces to determine the growth and development of the technological sector. They are just a few comments which have been out there in the media and in the community regarding the government's failure to invest in innovation and knowledge. What this government must do now is take notice of these comments, take notice of the fact that Australia is going to be left behind in the global economy if we do not seriously invest in our tertiary education institutions, in research and development and in the future of our children. In conclusion, I would just like to quote from a letter that was sent to me personally from Professor Ron MacDonald, who is the Deputy Vice-Chancellor of Research at the University of Newcastle. There have been contributions to this debate talking about the number of green papers, white papers and discussion papers the government has received in relation to research and development investment. The University of Newcastle particularly noted with interest The chance to change and Innovation—unlocking the future, which were commissioned by this government. Professor MacDonald wrote to me saying that the university has noted statements from a number of national science and technology organisations supporting the recommendations of the two reports. The basis of that support is the necessity for Australia to maintain and improve its position as a major researcher if the Australian economy is to improve. He goes on: ... Australia must switch its economy from a dependence on export of its natural assets and the provision of services to one in which knowledge-based industry underpins our economic development. The University of Newcastle endorses this view and would urge the Government and all Members of Parliament to accept the recommendations and move quickly to implement the proposals. As you can see, Mr Deputy Speaker, there are many people in the community who are calling out for policies and for decent government funding in research and development. The Labor Party is the only party which has given the commitment of a future Labor government, with Kim Beazley as Prime Minister, to research and development and to investment in the knowledge nation. We have had nothing from this government. The community is asking for it, the electorate is asking for it and the government should deliver it. 13:54:0021846Wilkie, Kim, MPMr WILKIE84GSwanALP00—In recent times we have become used to the government referring to the magical fire-proofed economy which they have heroically created. The problem is that there are two basic points that totally undermine the credibility of their claims. Firstly, any analysis of macro- and microeconomic development in the Australian economy over the past 20 years reveals that the bulk of reform took place under the Labor administrations of 1983 to 1996. It was not the coalition that liberated the financial markets and certainly not the coalition that invested in the future of this country by granting research and development concessions to innovative industries. Labor governments achieved all these things. Indeed, the reforms of the Howard government in this area can be best summarised on half a piece of paper.The second point to note when the government starts beating its chest over its miraculous economy is that, when one looks more closely at the economic statistics across the board, an Achilles heel—or, more precisely, an Achilles leg—is immediately obvious. This government's record on research and development is nothing short of contemptible. At virtually every turn since 1996 the amount of funding being invested in Australia's future has decreased. It is an horrific process which the Australian Research Council Bill 2000 perpetuates. The Labor Party's position on this issue is crystal clear and unequivocal: if this country is to remain internationally competitive in the 21st century, Australia must become the knowledge nation. Education is the biggest asset Australia has. We must tap into this asset before we are completely left behind. The choice is stark: we can either join the global pacesetters and become a vibrant, competitive and high skill, high wage economy or be content to continue being a quarry to the world, shipping raw materials overseas and ignoring innovation and value adding.I refer to a quote from Ireland's Minister for Science, Technology and Commerce, Mr Noel Treacy, from July this year. Ireland is a country which invests more in R&D than Australia does at this stage. The minister stated:The rationale for the investment is that the availability of highly qualified people will help attract high technology enterprises to Ireland in the future and enhance the environment for the creation of more Irish-owned start ups. The investment must be seen for what it is—a vision for the future based on highly skilled people and new knowledge leading to a high quality industrial development.But let us look at Australia. Based on the contents of this bill, it is not difficult to discover which side the government is on. On 7 September, when introducing the bill, the minister said the following:Generating knowledge through research is an essential requirement for Australia's long-term growth and competitiveness. The higher education sector is a key part of Australia's innovation system, performing nearly 30 per cent of Australia's research effort.Our economic and social prosperity depends critically on the outstanding contributions that individuals and teams within universities make to the national innovation system. These contributions are across the full spectrum of the research endeavour, in the natural sciences and technologies and also in the social sciences and humanities.To ensure that the higher education sector is strategically best placed to meet the challenges posed by the changing global environment, last year the government released `Knowledge and Innovation: A policy statement on research and research training'.At its centre was the proposal for a dual approach to funding research and research training in the higher education sector.Firstly, institutions would be supported by performance based block funding to ensure the provision of a high quality environment for research and research training. Secondly, support would be provided for the work of outstanding individual researchers and research teams through competitive grants administered by the Australian Research Council.The minister must be kidding! He is either disingenuous or ignorant of his own policies. I will elaborate on the strategic realities in a minute, but I remind him of the adverse impact these policies have had on the university sector.As I have mentioned on previous occasions, my electorate of Swan is proud to have in its boundaries the Curtin University of Technology. I was at Curtin University recently to open the John Curtin Memorial Library's federation exhibition `Shaping the nation: John Curtin and Australia'—an exhibition not only named after a great Australian but at a great Australian institution. As always, I was impressed by the talent and dedication of the staff and again thank the university for involving me in the ceremony. However, the picture for Curtin and similar institutions is murky. I am informed that the university has received six per cent less funding in real terms than in 1996. I can also remind members of this House that the number of fee paying students has increased 900 per cent at Curtin since 1997.Of course, in Minister Kemp's brave new world, students are paying a higher proportion of the funding for the sector when compared with the proportion of federal government funds. In fact, nationally they have contributed about $1.5 billion, which is roughly the size of the reduction in federal funding. Class sizes and student ratios for the majority of courses have increased by up to 30 per cent over the last four years. For the students and staff, this has decreased the quality of education, seen a reduction in academic options and degradation of resources such as library materials and photocopies of lecture notes. I am led to believe that many students now face the prospect of not graduating on time as courses are having to be extended as units are not available through the whole academic year.10000SPEAKER, MrMr SPEAKER—Order! It being 2 p.m., the debate is interrupted in accordance with standing order 101A and the resumption of the debate will be made an order of the day for a later hour this day.Questions Without Notice218472184714:00:0021847Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Prime Minister. Prime Minister, in light of the pain being suffered by struggling Australian motorists across the country because of your record high petrol taxes—Government members interjecting—10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition has the call and will be heard in silence.DT4Mr CREAN—They think it is a joke, but they know it is not. It is very real, Mr Speaker.10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition will come to the question.DT4Mr CREAN—Prime Minister, can you explain why the fuel tax issue has been left off the agenda of this week's Premiers Conference?21847Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—There is a very easy explanation for that. That is that, under the new Commonwealth-state financial arrangements, the old begging bowl Premiers Conference is meant to be a thing of the past and it is only state premiers that are trying to reverse that forward looking policy decision.DT4Crean, Simon, MPMr Crean—Mr Speaker, I seek leave to table the proposed agenda for the forthcoming Premiers Conference, which shows that petrol is not even on it.Leave not granted.2184714:01:0021847Causley, Ian, MPMr CAUSLEY4K6PageNP10—My question is addressed to the Prime Minister. Has the Prime Minister's attention been drawn to recent comments particularly from state premiers about petrol pricing and its relationship to the Commonwealth budget?R36Albanese, Anthony, MP10000SPEAKER, MrMr SPEAKER—The member for Grayndler!21848Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I thank the member for Page for the question. R36Albanese, Anthony, MP10000SPEAKER, MrMr SPEAKER—The member for Grayndler is warned.ZD4Mr HOWARD—There have been a number of calls made on the Commonwealth government to freeze the excise on petrol. Those calls have come from some state premiers and they have also come from motoring organisations, and I want to take a moment of the House's time to respond to the question asked by the member for Page. All of these calls are based upon the erroneous proposition that the Commonwealth's budget is already clearly in some net windfall position as compared with what was brought down in May of this year. That is not the case. It is true, as I have acknowledged on a number of occasions over the past several months, that the higher price for petrol caused by the almost doubling in US dollar terms of the price of crude oil means that there will be an increase in collections of resource rent tax, although I take the opportunity, based on the advice I have received from the federal Treasury, to reject the estimate put forward today by the Australian Automobile Association.DT4Crean, Simon, MPMr Crean—What figure do you put on it?10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition will have a further opportunity to ask questions.ZD4Mr HOWARD—Moreover, if you are looking at the Commonwealth's net budget position, you have to take all of the outlays and revenues into account. You do not have, as organisations like the AAA have, the luxury of a narrow focus on one issue. You have to take into account all of the Commonwealth's expenditures and all of the Commonwealth's revenues. For openers in that context, I inform the House that it is calculated that, because of the huge success of the campaign to get people back into private health insurance, the private health insurance tax rebate will consume about $400-500 million more in the current financial year than was estimated at budget time. That is because our policy has been even more successful than it was at the time of the budget. The second comment that I would make is that, on current advice I have from the Treasury, it is calculated that the value or the cost, whichever description you wish to employ, of the aged persons rebate for pensioners and self-funded retirees under the new tax system will be in the order of $500-600 million more than was calculated at the time of the budget. In other words, that section of the Australian population is going to be $500-600 million better off as a result of our tax policy. This is not something that concerns the government: that in these two critical areas people are better off is something that gives great satisfaction to the government. We have seen a historic turnaround in private health insurance usage in this country as a result of policies that have been pursued by this government. So, if you are looking at the government's net budget position in advance of the release of the mid-year economic and financial overview, which will be some time in the next few weeks when all of the details will finally be available, and at this stage if you are trying to speculate in some way about the budget position, if you are talking about gains on one side, you have to make allowance on the other side.DT4Crean, Simon, MPMr Crean—So there is a windfall.ZD4Mr HOWARD—Any suggestion at this stage of some kind of net windfall is completely erroneous. I would also remind the House that the lower than expected CPI could have an impact in relation to the half-yearly indexation of excise different from what has been calculated by some of the government's critics. I have made it plain on a number of occasions, and I make it plain again, that the worst and most irresponsible thing this government could do at the present time is embrace a rundown of the Commonwealth budget surplus.The reason I regard that as irresponsible is that it would exert upward pressure on interest rates. Our predecessors ran up huge budget deficits. We have no intention of doing that. The Labor Party talks about pain being felt by Australians. The most painful thing for Australians in the current economic context would be for a government to pursue a policy that put upward pressure on interest rates. If I have to make a choice between avoiding putting upward pressure on interest rates and embracing some ad hoc approach to the level of excise on petrol, I will always opt in favour of reducing pressure on interest rates. Australians are asking of this government that we do not embrace policies that exert upward pressure on interest rates, but that is what we are getting from the Labor Party. What the Labor Party is saying is, `Grab hold of a policy that puts upward pressure on interest rates.' That is also the effect of the policies being pursued by a number of the premiers around Australia, who are calling for either a freeze on or a reduction in the excise on petrol. I would say to all of the states other than Queensland that, if they believe that there is some capacity within the governments of Australia to reduce the price of petrol through a reduction in excise or some kind of subsidy to the consumers in their states, let them look to the example of Queensland. Let them look to their own capacity out of their own revenues to cut the price of petrol in their own states. That is not a course of action that I am initiating. I am arguing why there is no capacity at present to make the sort of commitment being asked of us by the AAA or by the opposition. I am saying to the states who argue that we have the capacity, `First, look to your own capacity.' If you look at the arrangements that were concluded when the new tax system was introduced, it is very revealing that effectively, when you take into account that the new arrangements included the guaranteed minimum amount that the states would receive—and that included a component described as revenue replacement payments, which in effect was the equivalent of the 8.3c a litre of petrol excise collected by the Commonwealth on behalf of the states under the old financial arrangements—there is on that basis an amount of $1.7 billion available to the states of Australia, effectively replacing the excise that we used to collect on their behalf, available for the deployment of subsidies to reduce the price of petrol within their own jurisdictions. In other words, every state in Australia has the capacity to do what Queensland has done. Let me go through it: New South Wales has available $647 million, Victoria $461 million, Western Australia $291 million, South Australia $154 million and Tasmania $47 million. I say to those states: before coming to the Commonwealth in a grandstanding political exercise which is not based on principle but is based on political point scoring, you look to your own capacity to provide relief within your own jurisdictions. I am as unhappy as anybody about the impact of increases in the price of crude oil on petrol in Australia, but I have no intention of embracing the irresponsible calls being made at the moment which will have the effect of driving up pressure on interest rates, and that will cause infinitely greater pain for Australians than any of the concerns that they have regarding the price of petrol.Distinguished Visitors2184910000SPEAKER, MrMr SPEAKER—I inform honourable members that we have present in the gallery this afternoon members of a delegation from Namibia. On behalf of the House, I extend a very warm welcome to our visitors.Honourable members—Hear, hear!Questions Without Notice218492184914:12:0021849Lawrence, Dr Carmen, MPDr LAWRENCEXS4FremantleALP00—My question is to the Prime Minister. Prime Minister, are you aware of figures released today by the Australian Bureau of Statistics which show that building approvals have collapsed, with both private sector housing and total dwellings at their lowest level since you were Treasurer? Are you also aware that private sector house approvals are now 50 per cent lower than at the beginning of the year? Given that even the ABS recognises that this collapse is due to the impact of your GST, what measures will you be introducing to give some hope to the building industry and to those small businesses and workers who are now struggling?21849Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I can say in reply to the member for Fremantle that we will not be introducing policies that put upward pressure on interest rates.2184914:13:0021850Thompson, Cameron, MPMr CAMERON THOMPSON84CBlairLP10—I address my question to the Treasurer. Would the Treasurer advise the House of the result of recent economic surveys? What do these indicate about the performance of the Australian economy? 21850Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for Blair for his question and his interest in economic issues, which allows us to refer to economic issues in the House in the absence of any credible spokesman from the Labor Party on the issue. He is probably aware that the Morgan and Banks survey which was released this morning was headed as follows: `Australia wins gold again: record breaking result for the job market!' Isn't that good news for Australia? It reads:The quarterly Morgan & Banks Job Index released today indicates that 41.9% of Australian organisations will be hiring permanent staff in the next quarter with only 8.4% intending to decrease their employee numbers, giving a net effect of 33.5%. This is the highest level of optimism recorded since the Job Index began in April 1995 ...Isn't that great news? Mr Speaker, as you would be aware, unemployment in Australia peaked at 11.3 per cent when the now Leader of the Opposition was in charge of employment, and it was still 8½ per cent when the government was elected in March 1996. But today it has fallen to 6.3 per cent, which is the lowest in a decade. With good economic management, unemployment can fall further; we can reverse the damage that was done by Labor recessions in the 1990s.Morgan and Banks also had an interesting survey on the new tax system, a survey which was also released today, 1 November 2000. The heading of this survey—it is an interesting one; I think the Prime Minister will find it interesting—was `GST rollback not appropriate'. It reads: A special question formulated for the Morgan & Banks Job Index released today clearly shows that business does not support the ALP proposals to rollback the GST ... A resounding 90.5 per cent of businesses were against roll-back. Roll-back could well be the most unpopular policy invented in the history of the Federation at 90.5 per cent negative approval!ZD4Howard, John, MPMr Howard—They've lost their deposit!CT4Mr COSTELLO—The Prime Minister says that you lose your deposit in a federal election on a 90.5 per cent rate of negative approval. We had the ex-ACTU president down at the Economist Intelligence Unit yesterday giving his presentation. He went in to give his presentation on the economy—what Labor would do if they were elected. Afterwards, I asked the group how he would have explained the roll-back policy, what he would be rolling back on and how business would come to grips with a new GST. After briefing the EIU, he mentioned roll-back not once. There was not one mention in favour of the business taxation reform of roll-back. A total of 90.5 per cent of businesses are against roll-back, and they have not uttered the word `roll-back' since 20 July this year. The person I feel sorriest for is John Della Bosca. Think how old Della feels. Della had his head taken off because he said that the Labor Party should give up their opposition to GST and drop roll-back. Della got decapitated, and what did the Labor Party do? They gave up their opposition to GST and dumped roll-back! Poor old Della! Della ought to be reinstated as the president of the ALP. As for all of those people on the back bench of the Labor Party who actually thought that the leadership of their party was against the GST: you might have actually believed it, yet you are going to run into the next election in favour of GST and against roll-back. Think about it. It is going to be the same on Telstra. The poor old backbench! They tend to believe what they are told by the people down the front here, but it never turns out that particular way. I for one am calling for John Della Bosca's reputation to be reinstated. Della Bosca was the man who told the Labor Party what to do. They did not like that, but by jingo they did it!2185014:19:0021850Evans, Martyn, MPMr MARTYN EVANSN36BonythonALP00—My question is to the Prime Minister. Prime Minister, do you recall saying at the innovation summit that we should judge your government by its actions? Are you aware of recent figures from the Australian Bureau of Statistics which show that Australia's gross expenditure on research and development as a proportion of GDP has slumped 10 per cent in the two-year period from 1996 to 1999? Are you also aware that this represents the worst result of 17 comparable OECD countries? Given that your government has now received five reports in the last 16 months detailing the urgent need for improved research and development capacity in this country, what action will you now take to bring our national R&D effort to acceptable levels? 21851Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I thank the honourable member for the question. Without recalling precisely what I said at the summit, I certainly would have said something to that effect. In relation to public sector R&D—the one for which the government is most directly accountable—I think the performance of that has been relatively better than that of private sector R&D.CT4Costello, Peter, MPZD4Mr HOWARD—Indeed, as the Treasurer reminds me, the public provision of the subject matter of the honourable member's question has been very strong. If you make international comparisons, it is strong. In terms of the government's own actions, I would point to that. But the member does raise a broader question. I think members of the House would be aware that with us today are quite a number of representatives of the science community in Australia, and that is very welcome. I hope that all members on both sides have the opportunity of talking to the men and women who represent the science community in this country. The government has before it the recommendations of the Chief Scientist, and it will have within a short period of time some recommendations from the final analysis of the innovation summit. I have indicated on a number of occasions, after receiving final advice from the three ministers most directly concerned, that we will be indicating the government's forward directions in these areas.It is important to recognise that I do not particularly direct these remarks to the science community but perhaps to some in the broader community who are advocating all manner of changes, particularly in the taxation area, to achieve particular outcomes. It is very important for the government to listen carefully to what is being put and to recognise that some of the arguments being advanced to the government have a great deal of substance and some of the arguments have less substance. I believe that when the government does make a final statement on this issue, we will get the right balance between the need for governments at all times to reject the blandishments of those who would seek the cover of a legitimate advocacy of change and improvement—to secure a benefit which, on a proper examination, they are not entitled to—and separate that out from those who make a legitimate claim for increased government assistance.There is, I would argue, an increased role for government in relation to science and to some aspects of innovation and technology. There is also a very strong role for the private sector. It is very important that we separate the two and that we keep a correct balance. To those in the science community who are with us, I respect very much the contribution you make to our community. I have derived a great deal of personal benefit from the workings of the Prime Minister's Science, Engineering and Innovation Council. I believe that the attitude to be taken by the government and enunciated at an appropriate time in the near future will represent a balanced, forward looking and sensible approach to this very important issue.2185114:24:0021851Bartlett, Kerry, MPMr BARTLETT0K6MacquarieLP10—My question is addressed to the Minister for Education, Training and Youth Affairs. Is the minister aware of recent analysis on the progress of the national literacy plans, particularly in New South Wales? What is the minister's response to this analysis?21851Kemp, Dr David, MPDr KEMPBT4GoldsteinLPMinister for Education, Training and Youth Affairs and Minister Assisting the Prime Minister for the Public Service10—I thank the member for Macquarie for his question. I acknowledge his deep commitment to education, both public and private, in his electorate. These days, parents are rightly demanding that every child should learn fundamental literacy and numeracy skills in the early years of schooling. Australian parents were appalled at the performance of the Labor Party in office when some 30 per cent of young people were found not to be able to read and write properly. As a result of the leadership of this government, there is now agreement between all the state and territory governments and the Commonwealth on national literacy and numeracy standards and on a national plan to deliver literacy and numeracy skills at or above those standards to every child. To achieve this national literacy and numeracy goal, literacy and numeracy need to be top priorities for the education systems in the states. There needs to be evidence of clear progress from year to year. Everyone will be concerned when evidence emerges that a state is not making the necessary commitment and the necessary progress. I have had my department analyse the recently published results of the New South Wales basic skills test taken earlier this year. The results of this analysis reveal the very disturbing fact that in New South Wales literacy and numeracy standards have slipped back this year over last year. If a proper effort to support teachers had been made, we would have expected further significant progress this year under the national literacy plan. In fact, there has been a decline in standards in New South Wales. Across year 3 and year 5 in both literacy and numeracy, the proportion of students in the lowest skills bands has increased. In the higher bands, year 3 literacy fell by three per cent, year 3 numeracy by five per cent, year 5 literacy was down two per cent and year 5 numeracy declined by an alarming eight per cent.It would not be good enough if standards had simply been maintained this year because under the national plan specific progress is required to be made from year to year, but in fact what we see in New South Wales is that standards are actually declining. What is even more disgraceful is that the New South Wales government has been promoting as acceptable literacy levels which are clearly below the national standard. In doing so, Mr Aquilina has branded the Carr government as a government of low educational standards. It has not mandated time for literacy in the curriculum, as Victoria and South Australia have done. It has not instituted a review of literacy teaching as Queensland has done. It has not established pilot programs to evaluate best practice as the Kennett government has done.Opposition members—The Kennett government!BT4Dr KEMP—It has not set out, like the ACT, to improve communication and accountability to parents. The fact is that the Carr government has failed to adequately invest in education in that state. It has failed to match Commonwealth funding increases. It has run down buildings and facilities. It has allowed the New South Wales Teachers Federation to run rampant and it is now persecuting non-government schools. It has sat on its hands as 20,000 students have left government schools over the last four years. Mr Boston, the director of schooling in New South Wales, receives a $20,000 bonus—one dollar for every student who has left public education over the last four years. There is an `ABC of failure' in education in New South Wales—that is, Aquilina, Boston and Carr. That is what they are—an ABC of failure. With declining literacy standards and a failure to make a commitment to what parents and students are most concerned about, we see what the Labor Party means in practice. I urge the New South Wales government to stop its charades, its side shows, and start focusing on the matters of most importance to parents—as this government is doing—proper literacy and numeracy standards for every child.2185214:29:0021852Lee, Michael, MPMr LEEMG4DobellALP00—My question without notice is addressed to the Prime Minister. I refer the Prime Minister to the report by the Federation of Australian Scientific and Technological Societies, which was released last week, entitled Mathematical sciences in Australia: looking for a future. Is the Prime Minister aware of the finding of the report by FASTS that:The economic divide in access to mathematics is now firmly entrenched in our school system, and will become progressively worse unless something is done urgently about teacher supply.Prime Minister, why are you spending scarce education dollars on indoor rifle ranges at King's rather than scholarships for maths and science teachers to address this shortage, like Labor has proposed?21853Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Any sort of hope of having an intelligent debate across the party divide on the issue raised in the first part of the honourable member's question was totally destroyed by the sort of cheap invocation of the class divide. I simply say to the honourable member for Dobell that he knows as well as I do that the policy followed by successive governments in this country over a number of years, inaugurated by the Menzies government back in the early 1960s and built upon by successive governments, and particularly built upon by this government through the abolition of Labor's inequitable, unfair, discriminatory new schools policy, has meant that thousands upon thousands of low and middle income people in Australia now have the possibility of exercising choice in the education of their children. I do think people have a right to choose. I regard the right to choose, invested in parents regarding the education of their children, as one of the most sacred rights in our community. It is very clear from the pattern of questions asked by the Labor Party that they do not believe in freedom of choice for Australian parents. In reality, they seek, under the cover of some kind of class smear, to deny to the generality of Australian parents the right of choice. No matter how you look at the examination of this issue, you find that overwhelmingly the new funding formula provides, in relation to final outcomes, the greatest level of assistance to the most needy independent schools. It is a better formula. It is a formula that has been embraced by the national Catholic education system. It is a formula that has been embraced by other parent bodies. What is going on at the moment is that we are seeing effective competition, and that competition will lift the standards of schools. There has been an exodus of pupils from some government schools into independent schools and that is the result of parents voting with their feet, exercising their choice and expressing a preference for one particular form of education over another. I regard that as a wholly healthy development, not something to be criticised under the cover of a class smear.2185314:33:0021853Gambaro, Teresa, MPMs GAMBARO9K6PetrieLP10—My question is addressed to the Minister for Financial Services and Regulation. Would the minister inform the House of any reports concerning the possibility of rising prices of particular goods and services as a result of the new tax system? Can the minister tell the House how these prices actually performed after the introduction of the new tax system?21853Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Financial Services and Regulation10—I thank the member for Petrie, who has a keen interest in these matters. The ACCC released a very comprehensive review of the price impact of the new tax system. That involved the collection of data from around 10,000 retail outlets in 115 cities across Australia, including 90 towns in regional Australia. The important part of the survey is that it covers the period from May this year to August this year. It covers a very important period, obviously, during the introduction of the new tax system. It is a comprehensive survey and I took the opportunity before question time to check out whether the Labor Party had done any surveys of prices during that period. The most comprehensive survey that the Labor Party did—this is, of course, apart from the contribution of the member for Melbourne—was the Lilley price watch, which everyone might remember. I went to the site and there was comprehensive data from August last year, October last year, November last year, December last year, February this year, March this year and April this year—and then it stopped. I thought there might have been something wrong with the mouse or something wrong with the Internet—but, no, it seemed pretty comprehensive. I would table the survey but it says `copyright Wayne Swan 2000'; it cannot be reproduced without the express approval of the author. I can only presume that all the surveyors had gone off to the electoral inquiry in Queensland, so he did not have anyone to get any data that could have been useful to the Labor Party. If it was not that, I ask the question: why did the Labor Party stop surveying prices after April? Might it be related to the fact that the prices did not match up to their rhetoric? Might it be that they lied to the Australian people about the GST before 1 July? Could it be that roll-back ate up the Lilley price watch? We can only speculate. What became clear when we did a little bit more research was that the rhetoric of the Labor Party did not match reality. Funny that, isn't it? The words of the Labor Party before 1 July did not actually match what happened after 1 July. There was a very obvious case in relation to car prices. I went back over some words. The member for Kingston told radio 5DN in December last year that `people have been told erroneously that the prices of new vehicles'—after July 1 next year—will fall `by several thousand dollars'. Erroneously! The member for Fraser said in a press release on 8 May that it was a myth that cars would be cheaper under the GST. He said it was simply not true that cars would be cheaper after the introduction of the GST. The comprehensive reports from the ACCC state that, in relation to cars, `There has been a general price cut of six per cent for new cars' since the introduction of the GST. I think it is about time the Labor Party apologised to Australian consumers for all its rhetoric and all its scaremongering before 1 July. We wait to hear the details of roll-back. Distinguished Visitors2185410000SPEAKER, MrMr SPEAKER—Order! I inform the House that we have present in the gallery this afternoon a delegation of senators from the Czech Republic. On behalf of the House, I extend to our visitors a very warm welcome.Honourable members—Hear, hear!Questions Without Notice2185483UCox, David, MPMr Cox—Mr Speaker, I ask the minister to table the full transcript from which he has just quoted.4T4Melham, Daryl, MP10000SPEAKER, MrMr SPEAKER—The member for Banks!RH4Kerr, Duncan, MP10000SPEAKER, MrMr SPEAKER—The member for Denison!RH4Kerr, Duncan, MP10000SPEAKER, MrMr SPEAKER—The member for Denison is warned! Was the minister quoting from a confidential document?DK6Hockey, Joe, MPMr Hockey—Yes.2185414:39:0021854Andren, Peter, MPMr ANDRENKL6CalareIND00—My question is to the Minister for Finance and Administration. I refer to an answer that you provided to a question on notice in August 1999 which showed that parliamentarians' staff overtime and travel allowance claims blew out to $1.6 million during the 1998 election. Can you confirm that, despite instructions to all members that these entitlements could be used only for electoral work during the campaign, the claims from the offices of five prominent senators not even up for re-election blew out to $125,000? Are you aware that the Remuneration Tribunal referred my inquiries to the Department of Finance and Administration in August 1999? I am yet to receive a response. Can you explain why I have not heard from your department and why it is not appropriate that an independent body oversee the use of these and other entitlements?21854Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—I do recall the response given to a question asked of me by the honourable member and, of course, referred to the Special Minister of State, who has responsibility under the administrative orders in respect of members' and senators' entitlements. The exact detail of the response I cannot recall at this point, and I think the honourable member did make the point that the original response was made some time ago. I am happy to go into the number of questions I was asked, the reference from the Remuneration Tribunal to the department, some reference to certain senators raised in the honourable member's question and certain information that he indicated he has asked for but to which, despite some degree of time lapse, a response has not yet been forthcoming. There are some detailed questions there. I can only take them on notice and report back to the honourable member in due course.2185414:41:0021854Somlyay, Alex, MPMr SOMLYAYZT4FairfaxLP10—My question is addressed to the Minister for Employment Services. Is the minister aware of media reports calling for a Job Network monitoring authority? Does the Job Network need another layer of Public Service scrutiny? 21855Abbott, Tony, MPMr ABBOTTEZ5WarringahLPMinister for Employment Services10—I can inform the House that the Job Network is already subject to a very high level of scrutiny. It is subject to scrutiny by the parliament, including the Senate estimates committees. It is subject to scrutiny by the Auditor-General and other statutory agencies. It is subject to scrutiny by my department, which has some 150 staff engaged in contract management and which runs the Job Network complaints hotline. This obviously is not enough for the member for Dickson, who wants to invent a new bureaucracy designed to keep Job Network members honest because she trusts bureaucracies more than she trusts the Salvation Army, Mission Employment, Centacare and great private sector organisations like Work Directions. This government believes that Job Network members should be getting people work, not suffocating under red tape.The interesting thing about the member for Dickson is that she never has a good word for the Job Network; yet she tries to have us believe that she supports the system. This week, the member for Dickson claimed that Job Network members were `parking' hard to help job seekers. She claimed that they were failing to provide training. She claimed that they were throwing vulnerable people off benefits. She accused them of profiteering. She did not name anyone. She did not produce a skerrick of evidence. It is a disgraceful smear on people who are doing the right thing by the job seekers of Australia, and it ought to be repudiated by the Leader of the Opposition. All this talk of accountability masks Labor's real agenda, which is to renationalise employment services and to recreate the old, failed CES.2185514:44:0021855Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—My question is to the Minister for Finance and Administration, and I refer to Employment National's loss of $92 million. Minister, did you direct the Employment National board, on 3 December last year, to accept its job matching contracts under Job Network 2? Didn't the board refuse to do so on 14 December, on the basis that the contracts were `not commercially viable'? Didn't you sack the board the very same day and install a new board which, on your instructions, accepted the unviable job matching contracts? Doesn't Employment National's loss of $92 million show that the old board was right, that you were wrong, and that your decision on 14 December last year has cost taxpayers tens of millions of dollars?21855Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—I welcome the honourable member's question, and I refer specifically to his last statement about a loss of tens of millions of dollars. I am sure the House would be fully aware that the master of disaster, when it comes to economic management, is the Leader of the Opposition. When it comes to losing taxpayers' dollars, I simply refer to a couple of points. Firstly, the debt servicing in respect of $70 billion of general government debt increase in the last five deficit budgets under Labor—YU5Tanner, Lindsay, MPMr Tanner—Mr Speaker, I raise a point of order on relevance. The question was asked about Employment National—10000SPEAKER, MrMr SPEAKER—It is a fair observation that the minister's last comment did not bear an immediate relationship to the question, but I noted that he obviously was returning to the question. That is why I did not intervene.HQ5Mr FAHEY—I am more than pleased to return to the question. As I was indicating, when it comes to losses of taxpayers' dollars—which was part of the question—quite clearly the Leader of the Opposition has a record in submarines, in managing employment programs, and in running up deficits, year after year, that no-one will equal in my lifetime or in the lifetimes of my children. In respect of Employment National—Opposition members interjecting—HQ5Mr FAHEY—You clearly do not want to know about Employment National, with all those interjections. The government gave careful consideration to the position of Employment National after the Job Network 2 contract decisions were announced in the latter part of last year. We gave careful consideration to the future of Employment National. In the lead-up to the allocation of those contracts, I had significant consultations of various nature with the board of Employment National. In respect of the bids which they put in for the Job Network 2 contracts, I asked if they had given this careful consideration and they indicated to me that they had. They assured me that they had put in competitive tenders in respect of those contracts and that they had made provision for a minor loss of those contracts. We know that when the contracts were awarded—in a competitive manner and subject to absolute probity—very few of the intensive assistance contracts were awarded to Employment National. Consequently, the revenue and the workload that flowed from the allocation of Job Network 2 contracts to Employment National changed significantly. After careful consideration, the government took the view that there was a role for Employment National in the area of job matching, where it had performed admirably and where it had been awarded a significant increase in the contracts in Job Network 2 compared to Job Network 1.When it came to continuing in the current structure, there were discussions with the board about what they saw as the way forward, and certain advices were given—entirely appropriate advices from a board in that position in the context of their duties under the Corporations Law. The government took the decision that it wanted to proceed with a public employment agency, with Employment National. In taking that decision, the government made it abundantly clear that it was prepared to back the company in the way forward. In the circumstances of all that, a direction was given to proceed with the contracts in job matching. It is still performing those contracts, and the appropriate backup was given. But there was a new phase; it was a restructuring of the company, and the skills for restructuring were necessary. The view, after careful consideration, was that there ought to be a structure in the board that would carry it through that phase. It is as simple as that.2185614:50:0021856Secker, Patrick, MPMr SECKER848BarkerLP10—My question is addressed to the Minister for Trade. Would the minister inform the House of the vital role that exports play in supporting Australia's high living standards? Why are exports good for workers, for education and training, and for business innovation?21856Vaile, Mark, MPMr VAILESU5LyneNPMinister for Trade10—I thank the honourable member for his question. In response to the question, I would like to announce the release today of a document that has been put together by Austrade in conjunction with the University of New South Wales. It is an analysis of the benefits to our economy of trade and exports. One of the opening comments in the document is that `exports are good for workers'. It goes on to say that `the net effect of trade on jobs will depend on both growth rates and structural change in the economy'—both of which our government is providing to our economy. It goes on to say:An open economy that is competitive and growing will produce more better quality jobs than a closed, stagnant economy that is unable to adapt to new technology and changes in world economic conditions. This report, entitled Why Australia needs exports, shows that exporters pay their workers, on average, $17,400 a year more than non-exporting businesses. Exporters are more innovative; they provide their staff with safer, healthier workplaces; they provide more training; and they are committed to career development. The report also shows that exporters use enterprise agreements far more than the award structure and that those agreements are delivering much higher wages and efficiency gains for workers in export industries. Average earnings in export industries are around $46,000 per year compared to $28,000 a year for workers in non-exporting businesses. I remind the House that these flexible enterprise agreements that have been made between individual workers and their employers were given the opportunity to exist by this government but were opposed all the way by the Labor Party, which wants to scrap them. The agreements provide an opportunity for the 1.7 million workers in Australia who rely on export industries for their jobs to earn a better salary.Yesterday the ABS released the export figures for the month of September. They were outstanding, to say the least. We recognise that the great outcome was supported by the Olympic Games. Our economy accrued a lot of benefit from the Olympic Games. The government took great advantage of that, and we ran a number of different programs promoting trade and investment opportunities in Australia during the Olympics. We had about 16,000 visitors through Business Club Australia, who participated in about 97 different functions and networking events. Business Club Australia was a huge success. We set ourselves a target of $1 billion worth of new business. Already, not long after the closing ceremony, we have achieved $700 million worth of new deals—and some very interesting deals. There has been a $150 million investment by Global Switch of the UK to build a leading edge Internet facility in Sydney. The WA based Australian Foods Company Ltd has signed multimillion dollar deals to provide peas and beans to India and the Middle East. The Paris based Infogrames Entertainment is investing $25 million over two years in Melbourne, generating more than 160 jobs. An Australian company that some of the starlets on the other side might be interested in, Vitamen, which is a manufacturer of men's cosmetic products—the member for Hunter might be interested in this one—is expected to secure substantial orders from Europe as a result of its involvement in Business Club Australia. So it has been a great success. We have taken advantage of it with the programs we ran during the Olympic Games. Quite a few of the 41.9 per cent of businesses that intend to put on new employees in the not too distant future—as contained in the Morgan and Banks survey—will be exporters and will be employing people. They will be paying higher wages, and that is why we remain committed to expanding our export effort, as we have, and taking great advantage, as we did, of the opportunities during the Olympic Games.2185714:55:0021857Kernot, Cheryl, MPMs KERNOTXW4DicksonALP00—My question is to the Minister for Finance and Administration. Minister, I refer to Employment National's 2000 annual report, which reveals a massive operating loss of $92 million after a profit of $72 million the previous year. I ask: Minister, how much of this loss was caused by you forcing Employment National to hand back 79,000 lucrative intensive assistance Job Network 1 contracts? How much of this loss was caused by you forcing Employment National to accept non-viable job matching contracts under Job Network 2? Minister, do you accept responsibility for these decisions and the $92 million loss that they helped to create?21857Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—The honourable member for Dickson referred to the annual report which was tabled yesterday in the House. The report confirmed what was stated in the budget. In fact, it confirmed what the government announced in early February this year—that it had made a decision to keep Employment National operational. It recognised that Employment National provided a valuable service in the employment creation area and it provided assistance for people seeking jobs, particularly in rural and regional Australia. That was the basis of the decision earlier this year. The budget this year indicated that there would be a $54 million contribution over a three-year period whilst the company went through the restructuring.XW4Kernot, Cheryl, MPHQ5Mr FAHEY—Oh, just be patient! The honourable member for Dickson asked me whether this loss was a result of handing back the intensive assistance contracts that expired at the end of February this year. When the decision was made to continue on with Employment National, when the decision was made to accept the contracts in December last year—XW4Kernot, Cheryl, MPMs Kernot—Mr Speaker, I rise on a point of order.Government members interjecting—XW4Kernot, Cheryl, MPMs Kernot—It is not a frivolous point of order; it goes to relevance. I asked quite specifically how much of this loss was caused by two specific actions taken by the minister.10000SPEAKER, MrMr SPEAKER—The member for Dickson will resume her seat. By any measure, the minister is being relevant to the question asked, and I call him.HQ5Mr FAHEY—I would have thought I was being too good. The honourable member asked me why the government continued— XW4Kernot, Cheryl, MPMs Kernot—By how much?10000SPEAKER, MrMr SPEAKER—Order! Members are aware that if they wish the standing orders to be amended so that answers are more specific than the standing orders currently require, they can seek to amend those orders. Currently the standing orders are being abided by, just as they have been as long for as I have been a member of this chamber.HQ5Mr FAHEY—Obviously they have little or no regard for those programs of the government that assist people in getting jobs. The question related to the intensive assistance contracts. The question was: why were they handed back; why weren't they continued; how much loss occurred as a result of their being handed back?XW4Kernot, Cheryl, MPHQ5Mr FAHEY—Right. If you are just patient! Quite clearly the advice that was given in respect of those intensive assistance programs, which expired at the end of February this year—in other words, within a very short period of time of when the decision was made—was that, if there had been a continuation of those programs and a running down of those programs past the expiry time at the end of February, it could have led to further losses of between $8 million and $14 million. To suggest that we should have kept those contracts on is plainly ludicrous.As I have said, the government made a decision to continue with Employment National. It gave the necessary support. It assisted the board going through the restructuring, matching its revenue and the work that it was doing to gain revenue, significantly reduced from the Job Network 1 area, and keeping in place a number of the offices of Employment National. To have closed it down at that time would have brought a further 750 job losses, particularly in rural and regional Australia. We believe it has a contribution to make in assisting people to get jobs, and we will continue to back it. The budget showed $54 million, and that $54 million is exactly the same figure that is referred to as the contribution that is coming from the budget in the annual report that was released and tabled yesterday.218582185815:00:0021858Wakelin, Barry, MPMr WAKELINHV5GreyLP10—My question is addressed to the Minister for Agriculture, Fisheries and Forestry. Would the minister outline the benefits Australia can expect to gain from the fisheries convention signed by the Prime Minister in Kiribati? How will the establishment of a commission on highly migratory fish stocks in the Central and Western Pacific assist the Australian tuna industry?21858Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—My thanks to the member for Grey for this important question. I acknowledge the great significance of the fishing industry in his own electorate and the powerful way in which he represents their interests in this parliament. Yesterday the Prime Minister, when reporting on his attendance at the Pacific Islands Forum, referred to signing the important Convention on Conservation and Management of the Highly Migratory Fish Stocks in the Central and Western Pacific Region. This convention has the potential to significantly advance the sustainable management of the fishing resources of the region. The negotiations to this convention have been going on now for six years between Australia, New Zealand and the Pacific islands and, of course, some of the important fishing countries in the region such as Japan, Korea and Taiwan. The fact that this agreement has been reached is certainly a significant milestone. The tuna fisheries in Australia are worth something like $60 million, and we are naturally anxious to ensure that the stocks are sustainably managed so that this industry can continue to contribute towards our economy. The convention will establish a commission into the management of these stocks and will place particular emphasis on issues such as an effective decision making process and dispute settlement arrangements. The commission will aim to sustainably manage the highly migratory fish stocks of the region, particularly tuna and shark, and will look at minimising any adverse environmental impacts from fishing. From our perspective, the next step will be to negotiate and discuss the issues with the relevant parties so that Australia can proceed towards ratification of the treaty at the earliest possible occasion. Under this convention, the Australian east coast tuna fishery can look forward to an improved management regime for marine resources in the region and the setting of allocation, particularly total allocation catches, for all the fishers in the region. It will require vessel monitoring systems throughout the region and, of course, better research into stock numbers and greater certainty about the long-term future of the industry. This is a significant breakthrough, and the fact that the Prime Minister was able to sign this convention on Australia's behalf at this forum demonstrates the great significance that our nation places on fish management issues. I believe that this is a significant step forward for Australia's $60 million tuna industry. 2185915:03:0021859Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Minister for Finance and Administration. I refer to the document tabled yesterday in the Senate by Senator Ellison entitled Protocol followed when an allegation is received of alleged misuse of entitlement by a member or senator. Minister, can you give the House an assurance that this protocol has been observed in full and to the letter by your junior minister, your secretary, your department and the government generally? Did Secretary Boxall personally chair the DOFA committee which investigated the Reith matter, as required under the protocol? And did he seek the advice of the Secretary to the Attorney-General's Department as to whether the Reith matter warranted a referral to the AFP, as required under the protocol?21859Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—The Leader of the Opposition asked me a question in relation to a protocol that is in place in the Department of Finance and Administration in relation to matters that come before it dealing with irregularities or alleged irregularities. I was asked a number of questions following that in respect of actions taken by other people, including the Secretary to the Department of Finance and Administration, and I was asked to confirm to the House whether strict adherence to that protocol had occurred at all times. I can say that, as far as I am aware, that protocol was the protocol under which the various inquiries and investigations were conducted over the latter part of last year and earlier this year by the department of finance—very much at arm's length from the government. As far as I am aware, that protocol was followed and followed properly. I will look again at the detailed questions that were asked. I will take it on board. I am asked to give assurances about other people. I believe it is appropriate, when I am asked such matters, to make appropriate inquiries. As far as I am aware, those procedures were followed meticulously and properly. In fact, the department carried out its duties in a meticulous fashion.2185915:06:0021859Lawler, Tony, MPMr LAWLER834ParkesNP10—My question is addressed to the Minister for Health and Aged Care. Would the minister please inform the House of initiatives recently announced by this government aimed at bringing about improvements in Aboriginal health? Has good progress been made and does this parallel the progress with the John Flynn scholarships?21859Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4CaseyLPMinister for Health and Aged Care10—I thank the honourable member for his question, and I thank him for being a very gracious host two weeks ago in Broken Hill when I took the Secretary General of the World Health Organisation, Dr Brundtland, at her request, to have a look at some things that were happening in indigenous health. It is very easy to be gloomy about indigenous health or think that everything happening in indigenous health is black. In fact, things are working very well in many parts of the country. I mention some examples in the electorate of the member for Parkes that I was able to show Dr Brundtland. The Maari-ma Aboriginal controlled health service was something we funded in 1996. Aboriginal people in Broken Hill had very little access to health services prior to this. They used the local hospital on a sporadic basis. Maari-ma is now employing a GP five days a week, a dentist two days a month and six out of its 10 staff are indigenous. They have a comprehensive primary health care service across the whole Broken Hill area. They have a home visiting service for people with high blood pressure and people with diabetes and they are working actively and cooperatively with the RFDS to provide outreach services for communities in the Broken Hill area. With Dr Brundtland we visited Sydney University's Department of Rural Health. This was something the government promised in its 1996 election platform. It was built in 1997 and today it is employing around 60 people and training a whole range of students, from Aboriginal health workers right through to medical students. This is part of a revolution in health education in Australia. Within five years we will see 20 per cent of all medical education physically located outside capital cities. While the member for Parkes and I were at the university Department of Rural Health we met Aboriginal health workers who were in training. We were told five years ago that there were only three Aboriginal health workers in the area. Today we have 30 in training. Also in the electorate of the member for Parkes we have recently been able to announce funding for the Burke Aboriginal Medical Service to upgrade its infrastructure. This is part of our indigenous health infrastructure program that we brought in in the 1998 budget. The Prime Minister has taken a personal interest in this. It was he who was able to let Burke know that we can provide nearly half a million dollars for them to immediately upgrade enormously substandard facilities. There are a couple of other things, some small, some big, that I think give us reason for optimism. For example, on the Tiwi Islands a program has been run over the last four years that has reduced by 50 per cent the rate of people going on to end stage renal disease. This is an extraordinary achievement. The government, along with Rio Tinto, are jointly funding an expansion of this through the Northern Territory and Queensland, with an idea of rolling it out through all remote communities in Australia. Honourable members who represent these electorates will know how much of a problem renal disease is—and it is growing—in some parts of Australia. We have actively turned it around with intervention. In the member for Grey's electorate in the Pitjantjatjara lands we are trialling new ways of accessing the Health Insurance Commission. Doctors have told us it is absolutely impossible to use normal Medicare facilities to be able to bill for and get access to Medicare services for the indigenous people. Through the Health Insurance Commission we have found a way of using their own identification system. They are accessing Medicare dollars, as they rightly should, but as they have not been able to up till now. In the member for Leichhardt's electorate I have recently signed off on funding for primary health care services in the outer Torres Strait Islands. The thing that perhaps I am most excited about is a letter I got a couple of weeks ago from the Katherine West Aboriginal Corporation that is running the coordinated care trial. This has been going for two years. It is a new way of providing services in an Aboriginal community. I would like to read honourable members part of their letter. They say to me: Emergency admissions have decreased significantly and the planned and elective admissions have increased. These are both good trends. The drop in emergency admissions is likely to be an outcome of better service levels, our increase in clinic staff numbers and putting GPs in remote communities where they have never been before, while the increase in planned admissions reflects people being more conscious of their health status and looking after themselves better. So these are all things that have happened in a relatively short period of time. There is still an enormous amount more to do, but I do believe we have some reason to be optimistic. 2186015:11:0021860Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—My question is to the Minister for Finance and Administration. Minister, I refer you to the Prime Minister's statement yesterday that the protocol requires these matters to be kept at `arm's length from ministerial involvement to ensure that there was a completely objective approach adopted', which you have just confirmed in your previous answer. Is it a fact that under this protocol the secretary of your department was required to make the decision as to whether the Reith matter should have been referred to the Australian Federal Police? Minister, who did make this decision—your departmental secretary, as required by the protocol, or the Prime Minister and Minister Reith, as asserted by them? Had the protocol been adhered to, wouldn't the matter have been referred to the Federal Police eight months earlier? 21861Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—I have had a look at the—DT4Crean, Simon, MP10000SPEAKER, MrMr SPEAKER—Deputy Leader of the Opposition! The Prime Minister has the call. ZD4Mr HOWARD—I have had a look at the Minchin protocol. It appears that this devastating expose coming from the opposition turns upon the proposition that, after getting advice from the Attorney-General, there was something odd about my then—on the Attorney-General's advice—referring the matter to the Australian Federal Police instead of sending it back to the Secretary to the Department of Finance and Administration so that he could refer it to the Attorney-General. I am devastated by that expose. At least it is better than the Evans-Beazley protocol. The Evans-Beazley protocol meant that it never went to the police. DT4Crean, Simon, MP10000SPEAKER, MrMr SPEAKER—The Deputy Leader of the Opposition is warned. 2186115:14:0021861May, Margaret, MPMrs MAY83BMcPhersonLP10—My question is addressed to the Minister for Community Services. Would the minister advise the House of recent tax reforms that have significantly reduced the cost of child care. Is the minister aware of any alternative policies in the area of child care? 21861Anthony, Larry, MPMr ANTHONYXJ6RichmondNPMinister for Community Services10—I would like to thank the member for McPherson, a very fine member and my electoral neighbour. She knows, as do all members of the coalition—it was even in the ABS statistics recently—that child care is becoming substantially more affordable under the Howard-Anderson government. It is interesting that recently ABS statistics were saying that more Australian families are using child care now than ever before. What was interesting in press comments over the weekend was that the largest fall for the CPI recorded in the last three months was a 15 per cent reduction. Where? In child care. We certainly did not see that on the Lilley price watch list, did we?What is even more important is that 94 per cent of families now, according to the ABS, are happy with their formal child-care arrangements. They are happy. Why? Because we are meeting the needs of Australian families. Why is that? Because we have put substantially more resources through the child-care benefit into child care. We are making it more affordable, particularly for low and middle income earners. These are the policies of the new tax system, where child care is GST free and rebatable, but most importantly there is new money. Some $900 million of new money went into the child-care benefit for the next four years, which is part of the $5.6 billion that we are putting into place. In the last four years, we put $4 billion into child care, which was 30 per cent more than the Labor Party did in its last four years of stewardship. You can ask a lot of organisations about this. The national children's services forum came to see me the other day. It is made up of long day care centres, family day care, community day care and after hours school care. All of them were saying that their services are running at maximum capacity—are being used by more families—as a direct result of the child-care benefit. I mentioned once before in this parliament that, even in the electorate of the member for Lilley, St Paul's Lutheran child care—I am sure the member for Lilley knows it well—recently told my office they have seen big differences, that they are now full, that there have been no fee increases, that parents are happy and things are a lot better. What are the comments of the member for Lilley? We know that back on 28 March you were beating your chest in here, claiming how unaffordable child care was. Even back in August you were claiming that we have cut funding from child care. How can we cut it when we put $900 million more in? We have actually increased funding. You are terribly confused, because the only policy the Australian Labor Party have when it comes to child care—well, they do not have a policy or they have rolled it back—is the scare campaign and the damage the Labor Party have done to the child-care industry over the last couple of years in basically claiming that prices have gone out of control. Prices did go out of control when the Labor Party were in government. Why? They accelerated at twice the rate. You had an ad hoc system, you had no quality and planning and you had no control. What the government is continuing to do through our stronger families and stronger communities package is put in more money to allow for more flexibility in child care, particularly for shift workers, particularly for families who have sick children or families in regional and remote Australia who do not have child-care services. That was never done by the Australian Labor Party. My advice to the member for Lilley is this: you should spend more time on the ground in your own electorate than abroad; go along and visit some of your child-care centres. While you are at it, you might take some of your mates from the AWU with you. You could even enrol them. It would be cheaper than attending the CJC inquiry, and they could do with some supervision from what they have been doing in cooking the electoral books. 2186215:18:0021862Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Minister for Finance and Administration. Do you recall taking a question from Minister McGauran on 12 October concerning a Herald Sun article that revealed a May 1998 note on Minister Reith's Telstra computer file saying `Customer not happy. Wants to take the matter to the TIO'? Do you recall saying: The article referred to certain matters which could well have been, from the way in which the article was written, within the records of Telstra. I am happy to take that on notice and to make appropriate inquiries ... and to inform the House appropriately when those inquiries have been made.Will you now advise this House who is the customer in the Reith Telstra file?21862Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—I well remember—Opposition members interjecting—10000SPEAKER, MrMr SPEAKER—The minister will wait until the House exercises the courtesy of listening to him in silence.HQ5Mr FAHEY—I well remember that question that was asked of me on the Thursday of the last sitting week prior to this sitting week. I note that subsequently I issued a press release, the following week, after I proceeded to make due inquiries of Telstra as to what their computer records contained and as to what annotations may have been on the paper print-out of those computer records. The inquiry revealed that there were no computer records that indicated any annotation there in any shape or form. I subsequently made that public the following Friday. I noted, with some degree of bewilderment almost, that the honourable member for Melbourne then accused me of misleading the House for not answering a question I was not asked. I found that an extraordinary statement from the honourable member for Melbourne, as was revealed when he subsequently endeavoured to raise the issue again on one of the Sunday programs. It seems the honourable member for Melbourne believes that ministers should have some degree of telepathy when they come to the dispatch box—YU5Tanner, Lindsay, MPMr Tanner—Just integrity and honesty.HQ5Mr FAHEY—And wonder what the question should be.YU5Tanner, Lindsay, MPMr Tanner—Just integrity and honesty.10000SPEAKER, MrMr SPEAKER—The member for Melbourne is warned.HQ5Mr FAHEY—and wonder what the question should be and answer it in case it should have been something different. I made it abundantly clear that Telstra informed me that there was nothing on their records that related to any particular matter in May 1998, and a search of their records in the information that was provided to me through my department, through my office, indicated there was no substance in the question I was asked on that day in the House.ZD4Howard, John, MPMr Howard—Mr Speaker, I ask that further questions be placed on the Notice Paper. Personal Explanations2186315:21:0021863Swan, Wayne, MPMr SWAN2V5LilleyALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKER, MrMr SPEAKER—Does the honourable member claim to have been misrepresented?MG4Swan, Wayne, MPMr SWAN—I most certainly do.10000SPEAKER, MrMr SPEAKER—The member for Lilley may proceed.MG4Swan, Wayne, MPMr SWAN—During question time, the Minister for Financial Services and Regulation claimed that I had hidden my Lilley price watch results and that they had not appeared since May this year. On the contrary, 50,000 copies of the August result have been distributed to every household in the electorate. The results are here in the electorate newsletter. Secondly—10000SPEAKER, MrMr SPEAKER—The member for Lilley has made his point.Honourable members interjecting—10000SPEAKER, MrMr SPEAKER—The House will come to order! I fear there are members of this parliament with very short memories. Nothing would suit me better than to take action.7T4Crosio, Janice, MP10000SPEAKER, MrMr SPEAKER—The member for Prospect is warned.2V5Swan, Wayne, MPMr SWAN—Secondly, the Minister for Financial Services and Regulation said that these results had been hidden because I was embarrassed—4G4Downer, Alexander, MP10000SPEAKER, MrMr SPEAKER—The Minister for Foreign Affairs!R36Albanese, Anthony, MPMr Albanese—Warn him.10000SPEAKER, MrMr SPEAKER—The member for Grayndler will excuse himself from the House under the provisions of 304A. He was warned some time ago.The member for Grayndler then left the chamber.2V5Swan, Wayne, MPMr SWAN—The Minister for Financial Services and Regulation said that I was embarrassed by the results, because somehow the results would not show the impact of the GST that had been claimed previously.10000SPEAKER, MrMr SPEAKER—The member for Lilley will come to the point on which he was misrepresented.2V5Swan, Wayne, MPMr SWAN—The survey showed that of the 19 items the ACCC predicted would fall in price only two have.15:24:0021863Mr O'CONNOR,MPMr O'CONNORWU5CorioALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKER, MrMr SPEAKER—Does the honourable member claim to have been misrepresented?WU5Mr O'CONNOR,MPMr O'CONNOR—Yes.10000SPEAKER, MrMr SPEAKER—The member for Corio may proceed.WU5Mr O'CONNOR,MPMr O'CONNOR—An AAP report on Wednesday, 1 November, entitled `Opposition says it will not support wool services' quoted:Mr O'Connor said there were also questions about the involvement of the then agriculture minister, now Deputy Prime Minister, John Anderson, in the Cape Wools lawsuit.I have never made such a claim.Questions to the Speaker218632186315:25:0021863McFarlane, Jann, MPMs JANN McFARLANE83CStirlingALP00—Mr Speaker, under standing order 150, I ask that you write to the Treasurer seeking reasons for the delay in answering questions Nos 1518, 1519, 1520 and 1521 I asked on 10 May and No. 1567 on 21 June. On 29 August I asked you to write to the Treasurer seeking reasons. I still have not received answers, so would you follow up, please.21863SPEAKER, MrMr SPEAKER10000PON/A10—I will follow up, as the standing orders provide, the issues raised by the member for Stirling.Business2186321863Motion (by Mr Reith)—by leave—proposed:That the House take note of the Department of Employment, Workplace Relations and Small Business report for 1999-2000.Debate (on motion by Mr McMullan) adjourned. Documents2186421864Reith, 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.Matters of Public Importance218642186410000SPEAKER, MrMr SPEAKER—I have received a letter from the honourable member for Dickson proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the government to properly manage the affairs of Employment National.I call upon those members who approve of the proposed discussion to rise in their places.More than the number of members required by the standing orders having risen in their places—15:27:0021864Kernot, Cheryl, MPMs KERNOTXW4DicksonALP00—Another day, another scandal, and this time a scandal worth 1,840 Reith telecard bills, another scandal which the Minister for Finance and Administration, Mr Fahey, continues to dismiss. It goes to the heart of this government's escalating examples of economic mismanagement and administrative incompetence. 1,840 Reith telecard bills is the equivalent of the $92 million loss sustained by Employment National in the last financial year. The annual report shows us that the company went from making a profit of $72 million in the 1998-99 financial year to recording a massive loss of $92 million this year. That is a $164 million turnaround.HQ5Fahey, John, MPXW4Kernot, Cheryl, MPMs KERNOT—Massive competence, Minister, massive! But what makes this even more appalling is that I believe the evidence is there that this was as a direct result of the deliberate actions of Ministers Abbott and Fahey. We believe that Ministers Abbott and Fahey knew exactly what they were doing when they conspired to take away Employment National's business and to make it unprofitable. The $79 million that Minister Fahey cites as the write-down costs from scaling down Employment National from a large to a small company are the direct consequences of Minister Fahey's decisions.But it goes back earlier than that, and we should ask: why would a government deliberately want to destroy a public provider of employment services? I put it to you, Mr Deputy Speaker, that it is because these two ministers are the agents of one of the most ideologically obsessed governments we have had to endure in this country, not in the tradition of robust debate but in the tradition of the `gleam in the eyes, zealous obsession with destroying and nobbling all things public'. Instead of the `four legs good, two legs bad' mantra of Animal Farm, I have this really vivid picture of Minister Abbott saying every night before he goes to bed, 10 times before he closes his eyes, `All private is good, all public is bad; and the CES is very bad and the AEU is even badder.'We have heard about Minister Reith's manual. Here is the Fahey-Abbott manual on how to destroy public providers. First of all, you very carefully and as secretly as possible pervert the process. This is what Minister Abbott did when he oversaw the construction of the tender process that led to Employment National missing out on virtually all of the lucrative intensive assistance contracts in the second tender round for the Job Network. What is important here is how that process was constructed. The criteria were put in place in such a manner that Employment National and Drake Employment, for that matter, were automatically and unfairly excluded from keeping their share of intensive assistance contracts in round 2. So you can just see the minister sitting there with the gleam in the eye—`I wonder what would happen if I constructed the tender so that we average the performance of the large round 1 providers like Employment National and Drake.'What that means is that you might have had two Employment National offices in a certain region and within that region one of the Employment National offices is in an area of very high unemployment and very few job opportunities. The other Employment National office might have been in an area of low unemployment with lots of job opportunities. But what Minister Abbott's construction of the tender criteria did was to compare the average result of those two offices and then compare this with the result of a rival provider, usually a private provider, that was operating just in the area with low unemployment. You do not have to be a genius to work out the end result of doing that. What it means is that, even if in the area of low unemployment Employment National are doing better than their rival in that region, they still lost the contracts because their result included their other office in the higher unemployment area. So you do not just tilt the playing field, you absolutely up-end it. Employment National was actually penalised for doing its job as a public provider, for making the effort, getting out there, providing a national service and looking after regions that had high unemployment. If the process had been fair, results would have been compared on an office by office basis to start with. But Minister Abbott did not do this. He nobbled it from the very beginning. So for step 1 the agenda is nobble the public provider and pervert the tender process. I mention this because Minister Abbott has been able to evade a fair share of responsibility for this because, unlike Minister Fahey, he is not the shareholding minister. But make no mistake about it: he was there at the conception. On top of this perverting of the tender process we have Minister Abbott further muddying the waters by at the very last minute, just a few weeks before the tenderers were due to submit their bids, asking all of them—and we are talking about multimillion dollar employment contracts here—to take in the GST. They got this last-minute letter saying, `Don't forget to take into account the GST in the price.'DT4Crean, Simon, MPMr Crean—At the last minute?XW4Kernot, Cheryl, MPMs KERNOT—Yes. These were huge contracts—lots of work—and for quite legitimate reasons some companies were unable to meet that.DT4Crean, Simon, MPMr Crean—Dudded them twice!XW4Kernot, Cheryl, MPMs KERNOT—Employment National was one of those companies and, as the Deputy Leader of the Opposition says, they dudded them twice. So you have up-ended the playing field and you have perverted the tender process. What do you do then?DT4Crean, Simon, MPMr Crean—You sack the board.XW4Kernot, Cheryl, MPMs KERNOT—No, you appoint your own board.DT4Crean, Simon, MPMr Crean—I see.XW4Kernot, Cheryl, MPMs KERNOT—You say, `Labor didn't know how to do this so we're going to appoint a board with unquestioned business expertise because out there in the private sector they always know it all.' But what happens when that business expertise board then gives you financial advice contrary to your ideological objective? You sack it. Minister Fahey did this in two ways. First of all, on 3 December he directed the board of Employment National to accept job matching contracts in the second round, even though they had received virtually no intensive assistance contracts. Usually, Job Network providers need to cross-subsidise by taking the lucrative intensive assistance contracts to prop up what they are doing with the less lucrative job matching contracts. On 14 December last year the board of Employment National refused to take the minister's direction, stating that the contracts were not commercially viable. This is the business expertise board telling the minister, `We don't want to do this. This is taxpayers' money. This is not a commercially viable thing to be asked to do.' Minister Fahey's response was to sack the board on the very same day. So, Minister, I do put it to you—through you, Mr Deputy Speaker—that the loss of $92 million was an inevitable consequence of Minister Abbott's first actions and of those two specific directions to the old board and the new board.Secondly, I want to point out to the minister, who talks about writedown costs being the main reason for the loss, that he should look at the cost of handing back 79,000 intensive assistance contracts. Do you know how much each of these is worth? They range from $2½ thousand to $9,000 each, and there are 79,000 of them. What did Minister Fahey think it was viable to replace them with? Job matching contracts, which work out at around $350 each. So we have $2½ thousand to $9,000 traded off for around $350, but somehow Employment National was supposed to accept that and become viable. Minister Fahey did this without even undertaking a full financial analysis of the cost to the company. I think that he has further shown some of his administrative incompetence with the IT outsourcing debacle. Minister Fahey is the sole shareholder in Employment National. These shares are kept by him on behalf of the Australian people and it is his responsibility to represent the taxpayers' interests in the management of Employment National. I put it to the minister that those interests include the collective responsibility that we all owe to assistance for the unemployed, particularly in areas of high unemployment. For the $92 million that was lost, here is what you could get just in the narrow area of intensive assistance. For $92 million, you can get 25,500 long-term unemployed intensive assistance contracts. That is 25,500 people who could be given meaningful assistance on the way to employability. So it is really the unemployed of Australia who will share in the consequences of Minister Fahey's and Minister Abbott's ideological obsessions.Let me finish by pointing to why Labor believes we need a public provider. I do not think it would have been recorded, but I heard the Prime Minister say by way of interjection when Minister Fahey was answering, `The government should have withdrawn from Employment National earlier.' So that is the real agenda of this government. That is what has motivated the decisions that have been taken to take away the contracts and to sack the board. Why do we need a public provider? Because we are a country that is divided along geographical and economic fault lines. We do have our centres in our major cities where unemployment is not as much of a problem at the moment as it is in our regional areas, but there are 235 regional areas in this country which have unemployment of over 10 per cent. This is where competition from Job Network providers is virtually non-existent. Why? Because there is no profit to be made there. That is why we need a public provider to do the job of government, to make sure that there is equity of access for all unemployed in this country.Today in question time we had several questions to Minister Fahey—DT4Crean, Simon, MPMr Crean—But no answers.XW4Kernot, Cheryl, MPMs KERNOT—I thank the Deputy Leader of the Opposition. But one of the major parts of this matter of public importance is about Minister Fahey's administrative incompetence and the government's failure to manage properly the affairs of Employment National. On top of mismanagement of foreign exchange arrangements that have cost taxpayers nearly $3 billion in the Department of Defence alone, there have been massively inflated fees and artificially low prices in the first Telstra share float, IT outsourcing that is seriously behind schedule and the management of which has cost taxpayers nearly three times the $13 million original budget, breaches by his department of the government's protocol for acting on allegations of misuse of Minister Reith's telecard to the tune of $50,000 and yesterday's revelation that he has turned an Employment National profit of $72 million into a loss of $92 million this year. I say it may have taken a while, it may have been a little esoteric to begin with and Employment National's difficult future may have been temporarily secured only as a result of public outrage, but the evidence is there. Ministers Fahey and Abbott have completely failed to manage the administration of Employment National in the interests of Australian taxpayers. What is more, they have deliberately mismanaged it in their own narrow ideological interests.15:42:0021866Fahey, John, MPMr FAHEYHQ5MacarthurLPMinister for Finance and Administration10—I can only describe the contribution to this supposed matter of public importance by the member for Dickson as being colourful. I note that it was of such consequence that only 24 of the 67 members of the Labor Party bothered to remain in the chamber to listen to the honourable member for Dickson make her particular statement on this matter. It all hinges around an alleged conspiracy. The honourable member for Dickson endeavoured to make out a case of conspiracy driven by some ideological bent and masterminded by me and my colleague the Minister for Employment Services. Of course, nothing could be further from the truth, when you look at the origins of this particular issue that led to trading at a loss, which was confirmed in the budget and reconfirmed in the same figures. I think I said there was a contribution of $54 million that was mentioned in the budget to ensure that Employment National continues, subsidised by the taxpayer, to deliver those services, particularly in regional and rural Australia, over the next three years. I think the correct figure is $56 million. If I have misled the House with that $2 million difference I now correct it. The origins of what has occurred here go back to December or thereabouts of last year, when the second round of employment contracts under the tender process was announced. The announcements were made through a very proper process, and a competitive tender and an assessment at arm's length from government were ticked off by a probity auditor as being totally aboveboard and operated in a way which had no contact whatsoever with any ministers. That was confirmed in the other house by Dr Shergold, the Secretary to the Department of Employment, Workplace Relations and Small Business, sometime earlier this year. The outcome was that the significant amount of work which Employment National had been awarded under Job Network 1 did not materialise. They had failed, under the competitive tender, in Job Network 2. They had not received the sort of outcomes that they as a board had hoped for. Look at the responsibilities of a shareholder minister—I think it is important to mention this. The responsibilities of a shareholder minister are: firstly, to appoint a board; secondly, to receive and comment on reports that are made available from time to time by the board; thirdly, the minister has the capacity to put to any board any questions that may be relevant to their administration of the board and to put to them matters relating to policy that the government may have determined. It does not include micromanaging the day-to-day operations of any particular operation. That is the responsibility of the board, independent of the shareholder, under the Corporations Law and under the corporate governance rules.In the context of the lead-up to the award of these contracts, which, sadly, Employment National was not successful in, I should perhaps canvass a little bit of the history. Throughout the course of the middle and latter part of last year, I had several contact points with the board, particularly with the chairman. I attended on the board on one occasion and spoke to them at length. Because of information that had become available to me, I asked them to assure me that they were putting sufficient effort into the intensive assistance programs. In surveys that had been done by the Department of Employment, Workplace Relations and Small Business, it seemed that they were not having the same sort of outcomes that other employment providers were achieving. I was assured that, whilst they had slipped a little behind, they had taken appropriate steps to improve their performance in that area and had put resources into place to achieve that outcome. I asked them whether, in the context of putting together the tender, they had put the appropriate resources into it, whether they had given it the appropriate attention and whether it was competitive. I was assured that a very competitive bid had been put in place and that they were confident of achieving a fair degree of success when it came to the award of the tenders. We now know the history. Clearly, they were not successful under an arm's length approach; there were others who had a significantly better performance record.We are told by the honourable member for Dickson that all this comes back to conspiracy, that there was an intention on the part of the government to have them fail. This defies my imagination—it certainly has no logic attached to it. It is all apparently part of a process whereby this government wants to scale down the public sector and ensure that the private sector does it all. The outcomes of the contracts that were awarded make for some fairly interesting reading, because the outcomes ensured that in rural and regional Australia, through the award of the Job Network 2 contracts, there were provisions and services in 1,100 sites, compared with 600 sites in Job Network 1. So rural and regional Australia, through the contracts awarded for the second round, benefited significantly, with almost a 100 per cent outlet to assist people in getting jobs. Overall, the result of Job Network 2 contracts was some 2,000 sites across Australia—an increase on the previous 1,400 sites of Job Network 1. The government's sole purpose in all of this is to ensure that the unemployed in Australia are given every opportunity, through whatever the program might be, to get back into the work force and that they are given every support, through the nature of those programs, to achieve that outcome. No-one could argue that there has not been a success there. It simply makes Labor's programs when they were in government pale into insignificance. We know that their employment programs had little or no outcomes in terms of assisting anybody to get jobs, and we saw the figures that resulted from that, particularly in the early part of the 1990s. The success of Job Network in delivering good outcomes for job seekers has proved to be about 50 per cent better than what the CES had provided.I undertook my role appropriately. I did not micromanage. I asked the appropriate questions; I received the appropriate assurances. In fact, I asked at a meeting with the board how they had set their forward budget program in place. They said to me that they had made provisions for a small downturn in successful bids from their application to the competitive tender for Job Network 2 contracts—something like a 30 per cent reduction. However, from memory, they were receiving about $200 million under Job Network 1; this was reduced to $35 million. What choice does the government have? The first step I took was to ask the board to please give me advice as to what they thought went wrong and what they thought the way forward was. I would have thought that was an appropriate step to take, and I am sure any objective person would agree. I was given a number of reasons why they thought they went wrong in the context of their application for contracts under Job Network 2. Around that time, I was also given an explanation of why they had failed to add a figure, calculated and given to them by the tax office, of the GST component.XW4Kernot, Cheryl, MPHQ5Fahey, John, MPMr FAHEY—If it was not from the tax office, it was from the Department of Employment, Workplace Relations and Small Business, which I am sure would have done some appropriate checking to provide the figure. That figure had only to be simply added on to the bids. It was going to be a factor; this was going to go past the point—XW4Kernot, Cheryl, MPHQ5Fahey, John, MPMr FAHEY—This was to everybody. It was given to everybody. Notwithstanding that, they failed to put the correct amount in their bid. It did not matter in the end, because they did not meet the criteria elsewhere. As one sees in retrospect in the ratings that were carried out, they were very much at arm's length in the government's decision as to who should be awarded the contracts. The problem became apparent to me when I asked them why they thought they had failed. They had gone on an all-or-nothing basis. They were not prepared to take a small amount here or there; they wanted to do certain things only if they got other contracts. In other words, if they did not get certain contracts, they would not take others which they qualified for. I can only say that, despite the assurances that were given to me, when the full facts came forward it was fairly clear that this had not been the best of the bids submitted. So they failed. I asked them why and I asked them the way forward.As I would have expected, they did say to me that they did not believe, with the revenue that was going to come forward as a result of the contracts awarded, that they could continue to trade. They have an obligation under the Corporations Act to make a decision whether there is a capacity to trade on and, if not, what steps they are prepared to take or are going to take. They made it fairly clear that they did not believe that they could continue on. I took the view, obviously after consulting with my colleagues in this matter, that because of the time frame it was necessary for the government to secure the contracts that Employment National were awarded. Legal advice was obtained and a direction was given until such time as there could be a proper look at how the company might operate and a true picture could be obtained from the company in view of the information that was now available to the government. There was the time frame, `Do you accept or do you reject?' I made obvious inquiries in terms of whether we would continue on with certain contracts or whether we would not. The government needed time and needed expert advice. It certainly got the company to bring in people with expertise to have a look at how the restructuring might occur. The government then gave serious consideration during January and early February as to what it would do. The choice was close the company down or keep going. There had been a number of contracts given in the job matching area for which Employment National had a very good record of performance in the past. The government also took the view that Employment National provided a very important link, a very important part of employment services throughout Australia, particularly in rural and regional Australia. In that context, the decision of the government was to keep Employment National going and to ensure that there would be sufficient financial backup for it to trade through. Provisioning was made—some $56 million was announced in this year's budget. It is anticipated that the first amount that will be required by Employment National will come towards the end of this financial year and in the subsequent two financial years. That decision was announced somewhere around the end of the first week of January and, as I say, provisioning was made in the budget. Consequent to that, there is clearly support which the government wants to give to Employment National. It is seeking for that company, through the restructuring process—and there was a great deal of disruption through the earlier part of this year as it restructured—to see whether the board and senior management are focusing on areas where they may well be able to expand their operations in a way in which there is a lesser tax subsidy as time goes on. I would hope that they can achieve that. The government will give them every support to do that.What the member for Dickson wanted the government to do in the statement she made here today was to have the intensive assistance programs kept going. The advice I got is that that would cost an additional $8 million to $14 million. The member for Dickson finished with a flurry in terms of economic competence. The member for Dickson spoke about foreign exchange. The member for Dickson should listen to this: at least half of the time which that report in respect of foreign exchange related to occurred during the period of the Hawke government—$1.5 billion during the early days of the Hawke government on one particular matter. There will be a response to that and I think it will show, firstly, that Labor's efforts in the context of hedging make up the great bulk of the amount that the Audit Office spoke to. We will give you some significant information on that.The member for Dickson had a spray in respect of information technology out-sourcing. What is the argument? What do I overhear from the spokesman in another place? `You haven't made the savings you said you would.' You did nothing; we got savings. The government will support Employment National as it has indicated through-out this year.10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Before calling the next speaker, the chair would like to observe that I deliberately did the member for Dickson the courtesy of not interrupting her while she was speaking. However, for the benefit of all members on both sides of the House, I must point out that the practice of referring to ministers as `Minister Reith', `Minister Abbott' or `Minister Fahey' is totally out of order. The standing orders provide that members should be referred to by their seats and ministers should be referred to by their offices.15:57:0021869Corcoran, Ann, MPMs CORCORAN009CWIsaacsALP00— What we saw in question time today was a very evasive performance by the Minister for Finance and Administration. There is a very good reason for that—that is, he is in a lot of trouble on this issue. Ninety two million dollars of taxpayers' money have been lost and there are two ministers responsible for this—at $46 million each, if you like. I prefer not to think of it in dollars and cents. I prefer to think of it in terms of the human cost. I prefer to think of it not as $92 million lost but, as my colleague the shadow minister for employment and member for Dickson has noted, as 25,500 unemployed people who could have been helped with that money and who will miss out because of this government's incompetence. As my colleague the member for Dickson has already said, none of that has happened by accident; it happened by design, by a pair of government ministers who share the same prejudices. Put simply, they do not believe that the public sector can do anything right. They believe that the private sector is always superior. That is why they set out to do what they did and what they have done with Employment National. I have to give them this: they were very successful, beyond their wildest dreams. They were so successful that they managed to lose 25,500 unemployed Australians their access to assistance. In any government other than this government, losing $92 million when you are the responsible minister would have been a hanging offence. But we know there are no hanging offences in John Howard's government. It makes you wonder what ministers would need to do for there to be a hanging offence. Let me recap briefly what we think are the most important elements of the government conspiracy in this matter. Let me begin with the minister who was meant to be the one looking after Employment National's interests, the Minister for Finance and Administration. This is really one of those cases where, with friends like the minister, it is a wonder that Employment National needed any enemies. The point I want to focus on is the minister's decision on 14 December last year to sack the Employment National board and to replace it with one of his own choosing. Why did he do this? He did this because he had a serious difference of opinion with the old board of Employment National. After Employment National had been through the wringer of Minister Abbott's skewed tender process, it came out with virtually none of the lucrative intensive assistance contracts but with quite a number of the less lucrative job matching contracts. This was of some concern to the board. They knew the job matching contracts were not commercially viable without cross-subsidy from intensive assistance contracts—contracts which they did not win. Being diligent directors, they knew that they were responsible for making sensible commercial decisions about Employment National's future. They did their own analysis and they informed the minister for finance that signing the contract for job matching could result in trading losses of approximately $72 million. This was not something that the minister for finance wanted to hear, so much so that on 14 December last year he sacked the board and appointed a new one which would do his bidding.It is a funny thing, when you look at the membership of the new board that the minister appointed, that three members were from the Department of Finance and Administration and a deputy secretary from the Department of Transport and Regional Services. They were instructed to accept the contracts that the previous board had refused to accept. This is an important issue. This is a government minister responsible for billions of taxpayers' dollars. He has an argument with a board made up of a mix of public and private sector expertise—people you would think he would listen to—and he decides against all the evidence that they are wrong and he is right. He sacks that board and appoints his own people—and what do we find some 10 months later? There is a $92 million loss. The minister cannot duck responsibility for that result. He took the decision out of the board's hands. You would have to hope that he was pretty sure of his facts.Let me turn to the actions of the other minister in this affair, the Minister for Employment Services. The House has already heard from my colleague the member for Dickson about Minister Abbott's role in designing the tender process which saw Employment National unfairly penalised and lose virtually all of its lucrative intensive assistance contracts. But it is worth recalling something else as well because it goes to the motives of the Minister for Employment Services. There was a good indication in the headline of an article by Laura Tingle in the Sydney Morning Herald in December last year, which read `Marginal Seats Get Job Search Windfall'. That would not be so bad if it was talking about my seat, but I would wager that it was not. Members will be shocked and amazed to hear that it was not talking about Labor marginal seats benefiting from this government's decision. As Laura Tingle's article puts it: A Herald survey of some of the most marginal regional electorates held by the coalition and Labor shows a big increase in Job Search resources in a number of coalition seats, but only marginal gains in Labor seats held by similar margins.Elsewhere in the article it makes the point that towns in the marginal electorate of Eden-Monaro have gained 21 extra Job Network outlets in the Job Network 2 round. This reinforces the argument made in a letter to the Minister for Finance and Administration by Dr Denise Fleming, a Sydney businesswoman and former Employment National board member. In this letter she comments on the decision to strip Employment National of most of its intensive assistance contracts in the second Job Network round, saying:These decisions are obviously not commercial. I can only assume they are political as they appear to be focussed on putting funds into rural and remote areas.Further on she writes:As a director I do not really have any idea as to what the government's long-term plans for this business were. Was it the plan to do what has been done—move the business to the private sector and close Employment National? If so, the directors should have been told. We would not have set up leading edge communications technology to run a national business for 20 months. Was it the government's plan to sell off the business in the short term? If so, our approach would have been very different.These are very good questions. They show exactly how this $92 million has been lost and they show why, too. They show that wasting money which could have assisted 25,500 unemployed Australians was the political price this government was prepared to pay to gain itself a bit of an advantage in its marginal seats. This a disgraceful neglect of this government's responsibility to some of the most vulnerable people in our community, the unemployed. It shows just what this government's priorities are. Its own ideological view of the world and its chances of electoral survival matter far more than its duty to govern properly for the people of Australia. The government stands condemned by this result. It is condemned by the 25,500 unemployed Australians who will miss out. It is doubly condemned by the fact that this was no accident; it was a product of deliberate design by two ministers of this government who should be ashamed of themselves.16:05:0021871Hull, Kay, MPMrs HULL83ORiverinaNP10—Employment National as a partner in the government's Job Network is about getting people jobs. It is that simple. Since the establishment of the Job Network, the government has turned a bureaucratic system into a workable enterprise that is finding jobs for people, yet the member for Dickson wants to bring back that lumbering bureaucracy with her Job Network Monitoring Authority Bill 2000. I am standing here this afternoon defending a network of employment opportunities in the face of another Labor member of parliament wanting to take us back to the days of high unemployment and a slow and inefficient job finding system. For instance, in the early nineties one CES office, under the previous Labor government, had 3,500 job seekers registered with the same name, the same address and the same date of birth. That is what the member for Dickson wants to bring back into play. Another office regularly recorded 1,000 referrals to and placements with the town's largest employer in order to increase its monthly performance statistics. Again, that is what the member for Dickson wants to impose on us. Another office created so many phoney referrals and registrations that the staffing formula indicated 35 staff should have been required to run the office. In fact, I think there were about four in there. Is this really what the member for Dickson wants to reinstate? Surely not. But, then again, stranger things have happened with the member for Dickson.It was good for me to do the research to support the minister on this MPI because it gave me a great sense of satisfaction and pleasure to be a part of such an effective government, led by this Prime Minister and our Deputy Prime Minister. I inform members on this side of the House how well we have done: yes, coalition members of government, we have done good. Let me go back a little to the 13 years of Labor rule, when unemployment averaged 8.7 per cent. Under the coalition, unemployment has averaged just 7.8 per cent. But in my electorate of Riverina, maximum unemployment was 13 per cent in January 1993. Currently, unemployment in my electorate of Riverina is 7.1 per cent. Government members—Hear, hear.83OHull, Kay, MPMrs HULL—Hear, hear indeed. My electorate of Riverina has benefited directly from the introduction of Job Network. The Job Network has outperformed the old CES by close to 50 per cent in putting unemployed people into work and by nearly 100 per cent in putting job vacancies onto the Australian Job Search database. What is more, Job Network programs have consistently outperformed Working Nation programs in putting harder to help job seekers back to work. Job Search Training has been 50 per cent more effective than Job Clubs, at under half the cost. We talk about cost. Intensive assistance has been nearly 20 per cent more effective than the full suite of Working Nation programs at scarcely half the cost. This government has created new structures to empower community organisations rather than central bureaucracy. This government has turned service recipients into active citizens again. By funding a range of community organisations on a strict performance basis, government becomes an enabler rather than a director.XW4Kernot, Cheryl, MP83OHull, Kay, MPMrs HULL—Not only does Job Network assist the unemployed, the member for Dickson might take note; it indeed assists employers. We assist employers by providing experienced recruitment professionals; by saving employers time and money; by offering a service—no task is too big or too small for Job Network members; and employers can work with one Job Network member who really gets to know their business and the kind of employee that business requires to enable them to entrust their operations in their employees' hands. As far as this government is concerned, what matters is getting people back into work. How Job Network members bring this about is almost entirely up to them. This government is a virtual silent partner in the Job Network, and so it should be. The government stakes the capital and reviews the performance; otherwise, it leaves community agencies alone to run themselves. One thing the government has done, however, is to conduct a full study of Job Network and Australia's other employment service and labour market arrangements. In addition, this government has released comprehensive data on the performance of employment services generally over the past 12 months.The government will continue to release this data every quarter. These measures will further boost public confidence—and I hope they boost the confidence of the member for Dickson—in Job Network. It will perhaps serve to dispel unjustified suspicion that the government might be seeking to avoid scrutiny. This is an open and transparent Job Network and an open and transparent government. The Job Network is not just a better way of delivering employment services; it is also a new way of conceptualising employment services. It is a shift from standard private and public sector approaches, because Job Network members are largely paid on performance. It ensures employment services work hard to find their clients work. I ask you: `Isn't that what they are supposed to do?' Isn't that what unemployed Australians are entitled to? Unlike the Labor Party, who would have the long-term unemployed stay at home and collect benefits, this government, through its Job Network, has provided training and opportunity to enable the long-term unemployed to play a worthwhile role in society.XW4Kernot, Cheryl, MPMs Kernot—Have you heard of Employment National?83OHull, Kay, MPMrs HULL—I am so confident in the Job Network, and in particular in Employment National, that, under the management of Paul Morgan, I choose to do my employing through that agency in the Riverina. In the face of the statement that the government has poorly managed the affairs of Employment National, I ask the Labor Party to look at the levels of unemployment now, compared with the levels under the previous Labor government, and to look at the substantial number of programs the Job Network has created. Just look at today's unemployment figure. Just to remind you: in the Riverina in 1993 we had 13 per cent unemployment. Now in the Riverina it is 7.1 per cent unemployment. Those figures speak for themselves. Then we have the code of conduct of Job Network. What an impressive code of conduct it is. You could not find a more impressive code of conduct. The six principles in the code of conduct are: Principle One: Ethical, respectful and fair treatment(The quality of the relationship with the customer)—a very important principle—Principle Two: Accurate, relevant assistance(The quality of information, advice and assistance provided by the Job Network member)Principle Three: Prompt, courteous service(How a Job Network member delivers service to job seekers and employers)Principle Four: An accessible, effective complaints process(Providing a complaints process for all job seekers and employers)Principle Five: Privacy and confidentiality(Meeting all job seekers' and employers' privacy requirements)Principle Six: Responsible advertising(Advertising in a responsible manner)This book here contains an admirable code of conduct. I stand here today quite proud of the fact that a code of conduct exists to enable the people of Australia, and the people of my electorate of Riverina, to become employed, to have self-esteem and to have their own valuable place in this society. This is what this government provides, this is what this government will continue to provide and this is what the previous Labor government always failed to provide.10000Jenkins, Harry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The time for the discussion has concluded.Personal Explanations2187316:15:0021873Ms KERNOT,MPMs KERNOTXW4DicksonALP00—Mr Deputy Speaker, I wish to make a personal explanation.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—Does the honourable member claim to have been misrepresented?XW4Ms KERNOT,MPMs KERNOT—Yes.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—Please proceed.XW4Ms KERNOT,MPMs KERNOT—In the member for Riverina's remarks—which were supposed to be about Employment National and the loss of $92 million—she said that Labor wanted to reintroduce the CES and that I, the member for Dickson, wanted to reintroduce the CES.Government members interjecting—10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—To assist the honourable member for La Trobe and the Chief Government Whip, as they jumped, the honourable member for Dickson went to where she was personally misrepresented. She knows that she can go only to those matters and not debate the question.XW4Ms KERNOT,MPMs KERNOT—Thank you, Mr Deputy Speaker. It was a reference to the member for Dickson and `what she wanted'. I just need to say for the record, and I will do so every time I am misrepresented on this, that Labor will not reintroduce the CES; we will just improve the workings of the Job Network.Government members interjecting—10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—The honourable member has indicated where she has been misrepresented, and that concludes the matter.Bills21873R97621873A message from the Senate has been received advising the House that the Senate has considered the Health Legislation Amendment Bill (No. 4) 1999 and has divided the bill and made certain amendments. The message returns the bill as divided and amended, and requests the concurrence of the House in the action taken by the Senate and in the amendments made by the Senate. The message also informs the House that the Senate has taken other action in respect of part of the bill originally transmitted by the House. Ordered that consideration of the message be made an order of the day for the next sitting.Bills21874R116221874Bill returned from Main Committee with amendments, appropriation messages having been reported; certified copy of bill and schedule of amendments presented. Ordered that the bill be taken into consideration forthwith.Main Committee's amendments - (1) Clause 4, page 6 (after line 9), after paragraph (b) of the definition of marketing amounts, insert: (ba) amounts a person is liable to pay under subsection 7(1) of the Primary Industries Levies and Charges Collection Act 1991 and received by the Commonwealth on or after the transfer day; and (2) Clause 4, page 6 (line 20), paragraph (e) of the definition of marketing amounts, after “(b),”, insert “(ba),”. (3) Clause 4, page 8 (after line 4), after paragraph (b) of the definition of research and development amounts, insert: (ba) amounts a person is liable to pay under subsection 7(1) of the Primary Industries Levies and Charges Collection Act 1991 and received by the Commonwealth on or after the transfer day; and(4) Clause 4, page 8 (line 15), paragraph (e) of the definition of research and development amounts, after “(b),”, insert “(ba),”.Amendments agreed to.Bill, as amended, agreed to.21874Bill (on motion by Mr Fahey)—by leave—read a third time.Bills21874R116121874Bill returned from Main Committee with amendments, appropriation messages having been reported; certified copy of bill and schedule of amendments presented. Ordered that the bill be taken into consideration forthwith.Main Committee's amendments - (1) Page 13 (after line 18), after clause 19, insert:19A Operation of GST Law (1) For the purposes of the GST Law, a transfer to a person or body under section 16 or 17 of this Act is taken to be consideration provided by the Commonwealth to that person or body for: (a) in the case of a transfer under section 16—entering into obligations under the deed of agreement by the industry services body; and (b) in the case of a transfer under section 17—entering into obligations under the deed of trust establishing the Dried Fruits Trust by the trustees of that Trust. (2) Expressions used in this section have the same meanings as they have in the A New Tax System (Goods and Services Tax) Act 1999.(2) Clause 22, page 15 (line 29), paragraph (b) of the definition of levy, omit “7(2)”, substitute “7(1) or (2)”.Amendments agreed to.Bill, as amended, agreed to.21874Bill (on motion by Mr Fahey)—by leave—read a third time.Committees21874218742187416:21:0021874Charles, Bob, MPMr CHARLESOT4La TrobeLP10—On behalf of the Joint Committee of Public Accounts and Audit, I present the committee's report No. 378 entitled Defence acquisition projects: Debt management; Plasma fractionation: Review of Auditor-General's reports 1999-2000—Second quarterof 1999-2000. Ordered that the report be printed.OT4Charles, Bob, MPMr CHARLES—by leaveThe committee held a public hearing in May this year to discuss these issues with the relevant Commonwealth agencies. I will briefly discuss each issue in turn. In the committee's review of Defence's management of major equipment acquisition projects, it found that the overall management of acquisition projects had experienced systemic problems arising from Defence's traditional top-down management. The review identified several areas where Defence could improve the management of acquisition projects through better planning, programming and budgeting.This report focuses on a number of issues arising from the audit report, including Defence's output management framework, capability management framework and personnel management. In the audit report, the ANAO recommended that Defence consider the benefits of allocating capability output budgets to the relevant output managers, who in turn would fund the functional groups through purchaser-provider agreements designed to achieve capability outputs. Initially, Defence agreed to this recommendation with qualifications; however, since the public hearing Defence has varied its position on recommendation 1 in the audit report and announced that the new output structure and a new group structure would take effect from 1 July 2000. The committee welcomes the new output and group structure that Defence has undertaken.The committee was particularly interested to hear about improvements made to Defence's capability management in light of the committee's reviews of Defence's Jindalee Operational Radar Network project, JORN, and the Collins class submarine project. Previous reviews emphasised that the problems of Collins go back to the specification of capability. Defence agreed that in the past they had not tightly enough defined the capability requirements from the very beginning of the proposal. Defence informed the committee that they need to take a new approach to their capability management framework by being more specific in their outcome requirements.The committee was also informed that Defence is proposing to open up the tender process to government at an earlier stage in order to receive feedback on various options for Defence capability rather than simply presenting the government with a single recommendation for consideration. The JCPAA has continued its efforts to encourage an open and positive relationship with Defence; however, the committee was outraged to learn that Defence's Audit and Program Evaluation Committee had neglected to monitor or review ANAO and JCPAA reports. In this report the committee makes a recommendation to ensure that JCPAA reports and ANAO reports are followed up and reviewed in a timely manner. ANAO and JCPAA review of Defence administration is essential to good governance and accountability. We will not be ignored. The committee concluded that overall there was considerable scope for Defence to improve its higher level management of major projects. The committee recommended that the ANAO consider carrying out a follow-up audit in the next 18 months to two years on the management of major Defence acquisition projects.In the second report in this series, the committee reviewed the ANAO's report on Commonwealth debt management, for which Treasury was responsible until July 1999. The Office of Financial Management has now assumed that responsibility. The audit report found that the Commonwealth was exposed to a number of significant risks in its debt management operations. The Commonwealth issues a wide range of debt instruments to finance its expenditure programs. Treasury uses the domestic market as its primary funding source and has not issued physical debt securities in offshore markets since 1987. However, Treasury is an active participant in the over-the-counter derivatives market, entering into interest rate and cross-currency swaps to manage the cost and risk of the Commonwealth debt portfolio. By June 1999, despite the fact that there was a relatively low level of $722 million of securities denominated in foreign currencies, Treasury had entered into 332 swap transactions with a notional principal value of around $38 billion. At 30 June 2000, the value of the swap book was around $30 billion. The committee is concerned that Treasury does not use swaps to hedge existing exposures but creates new exposures to try to reduce debt costs for an acceptable level of risk. Because of the large falls in the value of the Australian dollar against the US dollar, and the dramatic narrowing of the 10-year bond differential in the last five years, at 26 June 2000 the swap book was out of the money by $2.134 billion. The debt portfolio benchmark currently has a stated objective to have between 10 per cent and 15 per cent of the market value of the portfolio denominated in US dollars. The committee notes that the AOFM is currently reviewing its five-year-old benchmark and awaits with interest the outcome of the review.The committee was not convinced that Treasury should be using financial derivatives. However, if Treasury continues to use derivatives, there must be a good control framework for the process. It seems clear from the audit report and the committee's own inquiries that Treasury is only now looking to introduce systems, procedures and expertise for an activity already under way. The committee endorses the recommendations made by the ANAO in relation to the AOFM's risk management of derivatives. The committee has also recommended that the AOFM take action to obtain and maintain the high level of in-house experience and expertise required to enhance its own management and to retain control and exercise judgment over external adviser inputs.The final ANAO report the committee reviewed in this quarter was Commonwealth Management and Regulation of Plasma Fractionation. The Commonwealth government, through the Department of Health and Aged Care, funds the domestic production of plasma derived products, which are provided to the Australian community free of charge. DHAC is also responsible for the regulation of the industry, undertaken through the Therapeutic Goods Administration within the department.In May 1994, the Commonwealth Serum Laboratories were sold by means of a 100 per cent public float. Ahead of the sale, the Commonwealth and CSL signed the Plasma Fractionation Agreement. The PFA is one of the largest long-term Commonwealth contracts outside the defence area. The committee considers that, while the PFA contract may have had shortcomings, the department displayed a total lack of appreciation of the size and complexity of the 1996 PFA review. Without the benefit of any legal, accounting or expert assistance to inform its negotiations with CSL, the committee considers that the Commonwealth had insufficient information available to it when it entered into the review process.The PFA ends on 30 June 2004 but may be extended a further five years or longer at the Commonwealth's discretion. DHAC has acknowledged that the audit report contained some useful lessons to draw upon for the upcoming PFA extension review. The committee recommends that DHAC assesses the skill base and training of its contract managers and ensures that appropriate legal and technical advice is readily available to them. The committee also recommends that the ANAO undertakes a timely performance audit of DHAC's handling of the PFA extension review.The committee sought explanations from DHAC as to why, from 1994 to 1999, the department paid out more than $400 million of Commonwealth funds under the PFA without a formal process in place to confirm that the product it was invoiced for had been received by the designated recipients. The committee rejected the implication in DHAC's view that the risk of fraud was considered to be fairly low and agreed with the ANAO that the fundamental issue is that control mechanisms must be in place to protect the Commonwealth's funds. DHAC has assured the committee that there will be no recurrence of the inertia that followed earlier ANAO recommendations on the payment control system.The final issue is product safety regulation. In September 1996, the Therapeutic Goods Administration and CSL reached an agreement whereby CSL would provide TGA with plasma master files for any plasma obtained from overseas. Under this agreement, CSL provided master files for the five countries with which CSL then had contracts. Plasma provided by volunteer donors in each of these countries is fractionated by CSL into a range of plasma products for a fee and then returned to the relevant national blood service. In September 1998, the TGA, by a chance discovery, became aware that CSL had imported from a United States company plasma from high risk commercial donors without TGA's knowledge. The plasma product was then exported to two other foreign countries. Despite assurance form DHAC that there was no risk of contamination of the Australian product by the overseas sourced plasma, the committee has made three recommendations aimed at improving TGA's regulation of plasma fractionation. May I conclude by thanking on behalf of the committee the witnesses who contributed their time and expertise to the committee's review process. I am also indebted to my colleagues on the committee who have dedicated their time and effort to reviewing these Auditor-General's reports. As well, I would like to thank the members of the secretariat who were involved in the inquiry: Dr Margot Kerley, the committee secretary, Ms Jennifer Hughson, Ms Rebecca Perkin and Ms Maria Pappas. I commend the report to the House.16:31:0021877Cox, David, MPMr COX83UKingstonALP00—by leave—The report by the Auditor-General on Commonwealth debt management is one of the most damning I have seen him hand down while I have been Deputy Chair of the Joint Committee of Public Accounts and Audit. The report has revealed that the Treasury's strategy for reducing the public debt interest costs through the use of interest rate and cross-currency swaps has been compromised by the failure of this Treasurer's macro-economic management. Treasury has been involved in these types of transactions for more than 12 years, since the Commonwealth ceased its former practice of borrowing overseas. Between May 1998 and June 1999, the Treasury entered into 332 swaps with a notional value of around $38 billion. The Auditor notes that in 1995-96 the realised gain from those swaps was $1.33 billion. The government changed and the fortune of the swaps portfolio changed with it.In his report the Auditor notes on page 16 that the 1997-98 result was a loss of $1.97 billion. The Auditor does not say why he published the specific gain and loss figures for those financial years, but there they are and you can draw your own conclusions. On page 18, the Auditor notes that, as of 30 June 1999, the market value of the swaps portfolio was estimated to involve an unrealised loss of $1.297 billion. It is certain, if the Commonwealth has maintained its exposure in that area, that with a substantial devaluation of the Australian dollar the unrealised loss on the portfolio will have increased substantially since then. The cause of these losses is of course the devaluation of the exchange rate from US77.93c in March 1996—the month in which the government changed—to a new historic low yesterday of 51.1c. This is of course not the only period in which the dollar has been low in the period of this Treasurer's stewardship. As the Auditor notes on page 57, the dollar had reached a previous post-float low of 55.3c in August 1998. I spoke last night on the adjournment of the Treasurer's non-performance on management of Australia's external accounts, and I will not repeat that. However, it is important to note in the context of tabling this report that Commonwealth debt management is an area where the low exchange rate is costing Australia dearly. I will put a question on the Notice Paper asking the Treasurer for an accurate assessment of the losses on these swap transactions as of 31 October 2000—the day when the Aussie dollar reached its latest historic low. It is also important to point out that the Treasurer is not just some passive victim of this unfortunate turn of events. The Treasurer, of course, has ministerial responsibility for the administration of the Commonwealth's debt management program. As the Auditor notes on page 19 of his report, the Treasurer provided annual endorsement of the annual swaps strategy. Those strategies included a stated objective to have between 10 and 15 per cent of the market value of the portfolio denominated in US dollars. The Auditor also notes on page 20 that the departure of the debt portfolio from the mid-point of the benchmark target ranges between 2 July 1997 and 1 July 1998, resulting in additional debt costs of $362 million relative to the benchmark. I am not of the view that Treasury should behave like a market player and change positions on a daily or hourly basis to maximise the Commonwealth's position. Given the size of the Commonwealth's debt portfolio and the way the market operates, that kind of activity would quickly become obvious to the rest of the market and be interpreted as signalling the Commonwealth's view about future interest and exchange rates. That would compromise the conduct of monetary policy and have wider implications for macro-economic management. For that reason the Commonwealth is not a normal player in the market. It must set a benchmark position and stick to it with infrequent periodic reviews. However, it seems incredible that, given the poor performance of the dollar over such a lengthy period, this government's first review of the benchmark is happening only now. The JCPAA felt constrained in making recommendations to await the outcome of that review. I can only say here that, in the light of the poor performance since March 1996, that review should be as wide as possible, including the desirability of maintaining the swap program.16:36:0021878Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—by leave—Report No. 378 is the outcome of the review by the Joint Committee of Public Accounts and Audit of the 13 Auditor-General's audit reports for the second quarter of 1999-2000. Due to time limits, I will focus on Audit report No. 13: Management of major Defence acquisition programs. Defence has been going through hard times in relation to the high level management of major acquisition projects. Given that Defence is responsible for over 200 major acquisition projects costing over $43 billion, this is an issue that warrants serious attention. There is a litany of substantial project management deficiencies of which Collins and JORN are the best known examples. But the difficulties with the amphibious transport ship project indicates the systemic problems being encountered: a lack of adequate contract design and capability risk assessment, schedule slippage, program office staff inexperience, incomplete or non-existent life cycle contingency plans and massive cost blow-outs. Despite an initial estimate of $120 million, the amphibious ship project will cost around $400 million and an envisaged 14-month refit turned into 44 months. Those three projects amounted to $7.5 billion. The result is no fully operational Collins class submarines as yet, no fully operational over-the-horizon radar capability and one problematic amphibious transport ship. There is room for improvement. Prior to the public hearing, Defence announced a simplified output and group structure to take effect from 1 July 2000 `to clarify the lines of responsibility and accountability within the department'. Defence informed the committee that serious improvement was about to be initiated, including a `program of acquisition reform involving just about everything that Defence does in the way of acquiring capital equipment'. Serious reform is needed. The committee noted that the Defence Audit and Program Evaluation Committee had failed even to monitor or review either the ANAO or JCPAA reports. The committee received assurances from Defence that recommendations from both bodies would be followed up much more rigorously in the future and it has recommended that the defence audit committee ensure that ANAO and JCPAA representations are monitored and reviewed in a timely manner. JCPAA also noted Defence's attempts to improve the management of acquisition projects by initiating a series of reforms, many of which are still in transition. These include the yet to be completed shift to accrual budgeting, obviating the need to spend annual budget allocations, proposals to improve risk management, the redefinition of `capability' as a `through-life' issue involving acquisition, staff, logistic support, staff command and industry, and the recognised need to vastly improve the skills and opportunities of project managers. The JCPAA supports positive change in all these areas and encourages Defence to learn from previous projects. Rather than leave this to an act of faith, however, the JCPAA has recommended that the ANAO consider a follow-up audit in the next 18 months to two years of the management of the major Defence acquisition projects. This will give a further opportunity for all stakeholders to evaluate the performance of Defence in its management of major equipment acquisitions to see if systemic problems have been addressed in an effective manner. 21879Charles, Bob, MPMr CHARLESOT4La TrobeLP10—I move: That the House take note of the report. I seek leave to continue my remarks when the debate is resumed. Leave granted; debate adjourned. 218792187916:40:0021879Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Proposed CSIRO Energy Centre at Steel River, Newcastle, NSW.The Commonwealth Scientific and Industrial Research Organisation proposes to construct a new research laboratory complex to be known as the CSIRO Energy Centre and to be located at the Steel River Eco-Industrial Park at Newcastle in New South Wales. The proposed works will provide new research and support facilities for the CSIRO Division of Energy Technology, capable of accommodating a total of 110 research and support staff. Existing staff will transfer from accommodation at North Ryde and Lucas Heights, also in New South Wales, and new staff will be appointed to expand research activities. The research resources of the division are presently located on four sites in three states: North Ryde, New South Wales, the division headquarters; Lucas Heights, New South Wales; Pinjarra Hills, Queensland, the Queensland Centre for Advanced Technology; and Clayton, Victoria. CSIRO proposes to terminate all of the operations of the division at the North Ryde site and relocate all activities to the centre at Newcastle. Research associated with most of the pilot scale energy projects presently undertaken at Lucas Heights will also be relocated. The establishment of the CSIRO Energy Centre in Newcastle will provide a focal point for research excellence, particularly in the fields of cost-competitive and environmentally acceptable coal production, sustainable energy, including energy storage and renewable energy, and the environmental impacts of energy, particularly those associated with greenhouse gas emissions. The CSIRO Energy Centre will provide a venue for collaboration among the CSIRO, universities—particularly the University of Newcastle—government agencies, resource companies and associated technology suppliers and providers in Australian energy industries. This centre will include chemistry and dry laboratories, equipment and instrument rooms, offices for management, and other research related work areas.Amenities will include a display space highlighting advances in energy technologies, an auditorium, meeting rooms, library and a canteen. It will also incorporate large process bays which are high, open plan, industrial type buildings for research conducted at a semi-industrial pilot scale. Research support areas such as stores, workshops and sample preparation areas will be provided. The proposed development will also include siteworks, roadworks, hardstands, carparking, engineering and communication services and landscaping. The CSIRO Energy Centre will uniquely demonstrate leading edge but commercially practical examples of reduction in building energy demand and environmentally realistic energy supply options. The establishment of the CSIRO Energy Centre in Newcastle will provide benefits to current and potential customers of CSIRO, to the Newcastle region and to CSIRO staff. Customer benefits of the relocation include better access to world-class facilities for conducting research into energy generation using hybrid energy systems, closer collaboration with existing power generation and coal companies which are located in the Newcastle region, scope to demonstrate the capabilities of new energy technologies and how they can be integrated into existing energy supply systems and the possibility of working with small and medium companies in a technology park environment at the Steel River site as these companies emerge to develop new products for the sustainable energy market. Benefit to the Newcastle region will be threefold. Firstly, economic benefits will consist of the initial construction cost of the buildings and the ongoing direct and multiplier effects of the salary and operating cost of the division. Secondly, social benefits will arise from the jobs created during the construction phase and the injection of a trained work force into the growing knowledge economy of the region. Thirdly environmental benefits include the opportunity to demonstrate energy efficient building construction techniques and leading edge energy generation within the same complex.Community consultation with local federal and state representatives, city councillors, industry leaders and residents has been continuous. A number of community presentations seeking input have been made to keep the community apprised of development of the proposal, with ensuing strong support. City councillors, led by the Lord Mayor of Newcastle, have been extremely supportive of the proposal. Staff benefits will include a new focused working environment and new capabilities, together with lower cost housing, reduced commuting times and increased amenity as a result of the regional environment. Formal consultation has taken place with all staff, the majority of whom are happy to relocate. There has been no vocal dissent from staff.CSIRO has secured sufficient land on the Steel River Eco-Industrial Park to accommodate its anticipated requirements for the proposal and for future second-stage development. The estimated out-turn cost of the proposal is $28 million, of which $10 million will be provided as a grant by the government of New South Wales. In its report, the committee has recommended that the project proceed subject to the implementation of its recommendations. CSIRO agrees with those recommendations and has confirmed that the construction of the proposed centre will not commence until land title to the site has been transferred to it. Subject to parliamentary approval, tenders are scheduled to be called early next year, with completion of the works in 2002. I would like to thank the committee for its support and I commend the motion to the House.16:47:0021880Morris, Allan, MPMr ALLAN MORRISFI4NewcastleALP00—I would like to add my words of support to those of the Parliamentary Secretary to the Minister for Finance and Administration. Firstly, I would like to thank the Joint Statutory Committee on Public Works for a very good report and also for inspecting the Lucas Heights and Ryde locations of CSIRO and allowing me to accompany them. It was an extremely useful day, and I certainly came away very impressed with CSIRO's capacity and also by the great difficulties under which they were working. There is no doubt that there is an urgent need for this relocation, and the committee has been extremely positive in facilitating that. The committee also conducted a hearing in Newcastle, and I was delighted to see the support of state and local government colleagues and the local business community for this project. This project, as the parliamentary secretary has pointed out, is extremely important. It completes a grouping of energy research capacity in the Newcastle region, which includes BHP's old central research laboratories, the University of Newcastle itself and the Pacific Power advanced technology centre. These come together as a major base for energy development. In the process of all this, the Lord Mayor of Newcastle, the state member for Newcastle and I have cooperated in bringing together these organisations with the hope of developing an energy network which can maximise the synergy that is available. This for us is an extremely exciting project. I have said once before that, as the smokestacks fade a bit from Newcastle, people can more readily see the science that sat behind them. We have always had a very strong science base. It was not always so obvious. In conjunction with this project, the CSIRO has also been working with White Industries to locate a coal separation unit in the Hunter, in Newcastle or one of the adjoining areas. This project is part of the ultraclean coal project. From a national point of view, this is an extremely exciting project. There is potential to more than double the value of coal exported through the ports of the whole country. We have often been concerned that coal was being sold at a low value. Ultraclean coal is a major advance and a very exciting prospect for adding value to our exports and, in the process, using our science to great advantage and generating activity and employment.I would like to thank the people of Newcastle who have contributed to this. I particularly thank Dr John Wright from CSIRO and his colleagues. They are a very impressive group of people. I want to pass on to them the appreciation of those who attended the hearings in Newcastle and were also impressed with the exercise. This has been an extremely exciting project and an extremely important project, not just for my community but for the whole of the country. I look forward to the CSIRO Energy Centre contributing greatly to the nation. In conclusion, it is extremely timely that this motion is passed on the day when many dozens of scientists have been in the parliament explaining to us the importance of science to the nation. I hope that all members will pick up the challenge that has been given to us. Certainly this is one positive way in which we can do so.Question resolved in the affirmative. Bills21881R1150BillsR114921881Debate resumed. 16:52:0021881Wilkie, Kim, MPMr WILKIE84GSwanALP00—I continue from before question time. Students in my electorate are now being effectively sealed at postgraduate diploma level due to the introduction of fee paying masters courses. This government must encourage HECS for masters and PhD level courses. The consequence of such short-term thinking—or no thinking at all on the part of the government—is an overall reduction in our country's knowledge base. I noticed this morning in the Age, on page 17, an article that dramatically highlights the sorts of things that we have been talking about. The article is entitled `Why we may come to see The Dish as an epitaph'. Part of that article goes on to say:Universities are closing departments as we revert to an economic and intellectual colony.Last week, as The Dish, a film loosely based on the story of Australian astrophysicists' role in the space race, achieved international acclaim, Monash University announced it had been forced to dissolve its department of physics.This is budget time in universities and each year it gets worse as inflation, the collapsing dollar and salary increases widen the funding gap between what government gives universities to carry out their core activities and what teaching and research actually cost.The statistics relating to research and development investment in Australia reveal in graphic detail the extent to which the coalition has allowed the level of public funding in all areas to fall. Everywhere one turns, there is a decrease under this government. This whole sorry saga began in the 1996 budget when the government reduced Labor's 150 per cent R&D tax concessions as a cost cutting measure. At the time, they assured us not to worry because extra investment by the private sector would come in and fill the gaping hole that was left by their penny pinching. Four years later the statistics tell a totally different story. Funding for public universities has fallen from 0.94 per cent of GDP in 1996 to just 0.82 per cent in 1998. In the same period, funding for science and innovation fell to a lamentable 0.64 per cent. If the government believed, as it told us all in 1996, that the slack would be picked up by its beloved private sector, the figures reveal that its own miserly attitude has been replicated rather than reversed. Private investment in innovation was just 0.7 per cent in 1998 and it would seem that the government's policy of slash and burn has actually influenced business to stop spending on R&D. That is disgraceful and must be remedied before funding dries up completely. Despite the important contributions made by private investment, the cauldrons of research and innovation in Australia are still our public universities as well as the dedicated institutions devoted to technological development. As well as containing Curtin University of Technology, a prominent research and development institution in its own right, the electorate of Swan has a technology park, an innovative precinct primarily devoted to the discovery and application of new technologies. Talking to the dedicated people who work at these institutions, I can see quite clearly the devastating effects of this government's apparently neo-Luddite attitude to R&D in Australia. One group naturally worried about the continuing threat to R&D funding in Australia is the National Tertiary Education Union, which is currently conducting an audit of higher education. The results of the audit's first phase have already shown deeply disturbing trends in regard to innovation investment by the government. An article in the Australian by Dorothy Illing dated 4 October 2000, entitled `Spending fall hits danger zone', outlines the findings of the NTEU. It makes for sobering reading. The article states that the findings of the NTEU reveal that, although Australia's public spending on tertiary education as a percentage of gross domestic product is average by OECD standards, it has fallen dramatically in recent years. Another damning statistic highlighted by the article refers to Commonwealth outlays on universities as a percentage of GDP since 1974-75. The article states:The period from 1989 to 1994 saw a rise to 1.2% but by 1998-99 it fell to its lowest point in the period of Commonwealth funding, with outlays at 0.80% of GDP.The NTEU's own press release, also dated 4 October 2000, reveals more figures demonstrating the appalling state of research in this country. The main thrust of the press release indicates the following. Australia experienced the second largest decline in public spending on tertiary education in the OECD. Our tertiary education system is one of the most heavily dependent on private sector contributions in the OECD. Australia's gross expenditure on research and development, or GERD, ranks 12th out of 17 reporting OECD countries, at 1.49 per cent of GDP, which compares unfavourably to innovation leaders such as Japan at 3.06 per cent, Finland at 2.9 per cent and the United States at 2.74 per cent. Of the 17 reporting countries, Australia experienced the largest drop in GERD between 1996-97 and 1998-99. Australia was one of only four nations to report a drop relative to GDP.If removing enormous chunks of funding for R&D in Australia was not bad enough, the government also seems to be tinkering with existing projects and agencies by yet again attempting to force outsourcing upon an area where it simply does not fit. In a press release dated 3 October 2000, my colleague the shadow minister for industry, innovation and technology made some very relevant points concerning the chaos which is reigning at the moment within Australia's research and innovation industries, and the government's ignorant attitude towards it. The press release read:... Dr Lawrence said that while the Government remains content to talk up the importance of research and innovation, its actions betrayed a complete lack of commitment to increasing Australian research and innovation funding.“The record of this Government is abysmal”, Dr Lawrence said.“They have attacked tertiary education, slashed R&D funding, destroyed the intellectual property built up over years by public sector agencies by outsourcing their technology functions. In the key area of information technology, they continue to cling to the myth that simply being high users of information technology somehow translates into economic growth and higher productivity.The shadow minister then expanded upon this last point:“The Howard Government's policy of stripping agencies and departments of their in-house IT knowledge has contributed greatly to the drain of highly skilled IT sector workers leaving Australia to work for multi-national IT giants. Outsourcing forces such staff to leave the public sector, taking their knowledge and skills with them. This is a very serious brain drain from the public sector, which the government is doing nothing to halt and, indeed, is continuing to exacerbate.Not only is the government removing funding from research innovation in a fashion akin to tearing meat off a bone; it is also destroying large catalogues of knowledge and experience by ham-fistedly attempting to force outsourcing onto a sector where it just does not belong. Therefore it is obvious that Australian research and development funding needs to receive a large boost very quickly to remedy its present state of anaemia. Instead, the government seems happy to allow R&D investment to slowly taper off into oblivion. If that does occur, then this government will be guilty of committing the greatest public policy error Australia has ever known.I will make one more critical point before I conclude. This government seems totally aghast at the thought of anything but applied and subsequently industry linked research. Research is more than seeking a practical outcome. By its definition, research needs to embrace conceptual applications. Many great changes have been the product of less than practical research modelling, where a mere thirst for knowledge has resulted in incredible discoveries that changed the world. Examples that spring to mind are radiography and bacteriological studies, where what was begun as pure conceptual research resulted in important medical breakthroughs, such as X-rays and also vaccines. I emphasise that these discoveries came about through conceptual research rather than practical study. The government would be wise to remember that.The broader parameters of advances in society come not with a predefined outcome but with a hypothesis. An excessive reliance upon applied, practical research is very dangerous for Australia. If we pursue this path, in time Australia's scientists will be hamstrung by the need to relate everything they do to a specific industry related objective. This country cannot afford such a narrow-minded view. In conclusion, I can but lament the decline in research and development. At a time when computer speed doubles every six months and when more new patents are registered every five years than in the previous century, we have seen a decline in investment in the programs that will position us as an advanced nation for the next century. This government has retarded education and reduced research. For that, its policies can only be described as a total failure, and the government should be condemned. This government truly belongs at the bottom of the class.17:02:0021883Lawrence, Dr Carmen, MPDr LAWRENCEXS4FremantleALP00—I am very pleased to take the opportunity to speak on the Australian Research Council legislation. It is very timely given that in Canberra this week we have a large number of scientists, working both in the public and private sectors, speaking to parliamentarians. They are trying to convince members of this place that we need to invest more in research and development, that we need to invest more in our public institutions and that we need to provide support for the private sector to engage in research. They are trying to communicate a sense of urgency; a sense of urgency which I must say is sadly lacking in the government.I was interested recently to take part in a seminar which included, amongst other speakers, Mr Ashley Goldsworthy, who heads the business higher education roundtable. He urged the government—and he is a long-time supporter of the parties that form the government—to get out of denial mode. He urged them to help create a culture of innovation, to proclaim a vision, to identify niches for Australian companies and researchers and, in doing so, to restore our global credibility. I wish the government would listen.It is clear that we need to recognise as a community the importance of our intellectual assets. The government need to support them. Unfortunately, as we heard again today, they seem more interested in either preserving the surplus for more tax cuts or not providing sufficient funding at all in this area. They do not appear to appreciate the need to accelerate research and development. To give you an example of what the decline has been, in the early nineties there were around 100 major companies which were members of the Australian Industrial Research Group. Today only 45 remain. Industry leaders have been saying things to me like, `They don't appear to be listening. They don't appear to get it. They don't appear to understand the urgency of these tasks.' The scientists who have been with us in Canberra this week are sending the same message. It would appear that even the minister for communications has belatedly understood that there are some problems. Just last week he was reported as saying the government are lagging and need to re-examine their priorities. Hear, hear! The government should be listening to the Chair of their own Innovation Summit Implementation Group, David Miles. He has outlined in detail and in general what is required. In his report Innovation: unlocking the future, to which we have yet to see a response from the government, he says very clearly what the task is for this nation:We must begin by grappling with what I regard as an area of past neglect, namely engendering a broad understanding of, and support for, the value of innovation, research and development. We can only achieve our goals of national prosperity and sustainable economic growth by understanding what innovation can do for us, openly acknowledging and rewarding those who achieve it, and by celebrating those achievements as a nation.Secondly, we must have a world-class research base that will sustain long-term generation of ideas, the lifeblood of innovation.And not sustained cuts! He goes on to say:And lastly and most importantly, we must be internationally competitive by translating our ideas into tradeable products, processes and services. With such commercialisation, Australia will be an enviable innovative nation.That is the agenda that has been set for the government, and they have been urged by as many people as possible to take action. Indeed just recently we saw the extraordinary circumstance where a range of business and science leaders got together to write to the government a public letter urging them to take action, again trying to underline the importance of investment in these areas. These are not costs—I hope the government understand that. Investing in education is a benefit to the Australian community. Amongst other things, these business and science leaders said:We agree that if Australia is to sustain growth, increase the number of jobs and improve living standards—all outcomes that I hope we support—we have to develop and implement urgently an innovation action plan to underpin growth in existing and emerging industries and be a “knowledge-based society'.It almost appears as if the government do not like to use the word `knowledge'. They think we have actually claimed that territory—and that is right in terms of policy—but we are quite happy for them to claim it too, and Australia simply has to do better. The Chief Scientist's report The chance to change might, in my view, be renamed `The last chance to change', because this is a very urgent matter. Sadly, when we look at the provisions of this bill, we do not see any of that. There is not one new research dollar provided for in this legislation—not one extra dollar for university research, which since 1996 has been cut by $800 million from the operating grants arrangements. This bill simply rebadges existing funds. There is not one extra dollar, despite all of these urgings. Despite both the criticisms and constructive recommendations of a range of organisations and individuals, some of whom I have mentioned, and despite some rhetoric from those opposite—although not much enthusiasm, you would have to say—the government have not been able to find one extra dollar to invest in university research. The Prime Minister boasted today that he has found half a billion dollars extra to put into private health insurance, but there is not one extra dollar for research. Just think what the universities and research institutions could do with half a billion dollars—they would faint with excitement.Secondly, this bill spreads the existing amount of money across a broader range of institutions, thereby reducing the net benefit to each institution. The government is talking about competition here. It is introducing a wider range of institutions to compete for the funds without one extra dollar. In fact, it is inviting the private sector to get into the public funds, so that the institutions which have previously been funded from the public purse have to compete with organisations which should, with appropriate government policy, be funding their own research and development. Ironically, after the disastrous impact of the Howard government's decision to cut the tax incentives for private sector research and development, the potential impact of the provisions of this bill will be to force universities to compete with organisations such as Telstra for the same set of funds. That will only drain research funds from our universities, forcing them to engage in commercial competitive practices which at the margin are important, but they should be focusing on what universities do best—learning, teaching and researching, and working with industry to commercialise those research findings where relevant. Universities, colleges, TAFEs and schools around the country need more funding, not less. This is simply another case of the Howard government's attitude which we are now hearing repeated on a number of occasions: learn to do less with more. It only applies to some sections of the community, mind you, but to the education sector, to the research sector, the message is: learn to do less with more. Under the government's policy, regional universities may eventually be disadvantaged by the government's approach, which only guarantees three years of stability for such institutions. It is impossible to plan under those circumstances. As Kim Beazley has stated, if Australia is going to become a knowledge nation, all in the Australian community must be able to access quality education and educational facilities. There appears to be a view amongst members of the government that if you put more money into elite institutions, elite universities and elite schools, that is a use of which we should approve. But basically what it does is put money where it will do least good. If you put the same dollar into the struggling institution, the poorer school, the effect of that dollar will be far greater in terms of individual and community benefit. We believe that research, particularly that done by regional institutions, is one of the primary keys to building a brighter future for regional centres.The bill also represents an admission that the number of funded Australian research students is likely to fall relative to the general student population, which is not a message we should be hearing at the beginning of the 21st century. The policy will fund only `up to' 25,000 postgraduate HECS exempt positions, and there are already 25,000 postgraduate students in the system, so it is a no-growth policy.Lastly, the bill appears to afford—I worried about this, particularly given the current minister—a greater degree of government, for which read ministerial, influence as to the proper `destination' of research funds. We want peer review; we do not want review by the minister. This reduces the independence of the public research sector and runs the risk of stifling innovative use of scarce funds. It will be the government's agenda, not the research agenda.Generally speaking, as I said at the outset, the government needs to be urged to greater action. This criticism is meant to get action—it is not criticism for criticism's sake. There is an extraordinary amount of consensus now in the community, as I mentioned earlier. Higher education, education, business and research are all speaking with the same voice. The only ones who are out of step are the government. Research and development investment in general has fallen dramatically since the Howard government came to office. Just to give you some examples, cuts to university operating grants of more than $800 million—some say closer to $1 billion—since 1996 have reduced Commonwealth investment in research by more than 11 per cent. That comes from their own budget statements. As a result, the government itself has had to concede that eight regional institutions are now operating at a deficit. The government is going to force our universities to close unless something is urgently done. We have all had representations of that kind. Every member of this place will have had universities come to them and make those claims. Things are stretched to the absolute limit. The general research spending slump has been largely caused by a collapse in business expenditure on R&D, which was caused by the winding back of tax breaks with no replacement policies. If they want to argue that that is not the best policy, they have to substitute some others. We have just seen a dramatic decline through the absence of policy—a policy vacuum. After reaching a record high of $4.27 billion in 1996, expenditure then fell for the first time, and has continued to slide since then. And the government has been prepared to sit back and take no notice of it. Under Labor, Commonwealth spending on universities as a proportion of gross domestic product grew by 1.2 per cent between 1989 and 1994. It took a lot of effort to achieve that result and policy. Under the coalition, spending dropped to the lowest point since the commencement of Commonwealth funding for universities, at 0.8 per cent of GDP. What is clearly called for, as I have tried to indicate, is a radical approach to dealing with change and the development of effective policy initiatives to ensure that all Australians, regardless of where they live or work, have an equal opportunity to share in the benefits that are conferred by a high skill, high wage economy. The government does not seem to want to hear that. It is quite happy, as Mr Miles said, to have us become a `branch office economy' where all the major work is done elsewhere. The Howard government's lack of understanding of this imperative can been seen in such actions as its budget cuts to R&D, its attacks on the tertiary education sector generally and its abolition of agencies such as the Energy Research and Development Corporation. Innovative programs have been cut back and most of the policy is ad hoc—a little bit added here to patch over a crack, a little bit there in response to industry, but not much response in general. In particular, cuts to the vocational education and training sector are significantly affecting the capacity of our education system to provide adult and life-long learning opportunities, let alone to provide for the growing number of secondary school graduates entering TAFE and vocational education and training institutions. Yet we will hear the minister boast about the increased funding and increased number of places. I do not know where he gets those figures from—I think they are entirely constructed in a fantasy world which only he inhabits. All the independent data show the opposite.The recent report of the Chief Scientist, The chance to change, confirms the damage done to science and innovation by these policies, which have left an Australia perceived by the world to be floundering as an old economy and in desperate need of re-invention—and it is not just the Chief Scientist who sees it that way. Australian investment in research and higher education is out of step with those economies with which we like to compare ourselves and with which we are being compared. That is one of the reasons that the dollar is on the slide—not just for our current performance but for our anticipated performance. All of those other countries are investing heavily in education and research and development; we are conspicuously being seen not to do that, and we are being marked accordingly. Governments of nations such as the United States, Britain, Japan, Canada and South Korea have provided very significant increases in their education and research budgets. As I have indicated, Australia's expenditure, by contrast, has declined significantly, and all the international indices show it. The evidence is now there; the government cannot hide behind fudged figures.Total Commonwealth spending on science and innovation over the past four years has fallen well behind productivity growth, and productivity growth is also slowing, after a decade of improvement. Indeed, spending on science and innovation is now 0.64 per cent of GDP, compared with 0.77 per cent in the last year of the Labor government. As the Chief Scientist's paper shows, we lie third last amongst the developed nations, the OECD, in investment in knowledge as a percentage of our gross domestic product. In the intensity of business research and development in domestic product, we are well down the list at 19th. Government expenditure on higher education has been cut substantially, and public sector institutions are being robbed of funds to provide extra funding for wealthy private schools. That makes no sense at all. It is extremely poor public policy. As a result, the proportion of those graduating from higher education and from our schools is falling for the first time in a decade. Fewer young people are going into science and engineering as a career path, yet we cannot have innovation in the new technologies without them. We are already facing serious shortages of people with information technology skills. They are being poached and taken overseas, and many of them will never come back. Tertiary institutions, particularly TAFE colleges, face enormous financial pressure and often find themselves unable to invest appropriately in the information technology needed by students and educators alike. Our libraries, particularly with the declining dollar, are under enormous pressure. Those resources cost a lot and are usually in US dollars. The government appears to think that all we need to do is to allow the migration of workers from elsewhere to meet the shortage. However, I believe this is very short-sighted and not likely to happen. Why would they come here at the moment, when we do not have the resources to back them up? The research and development is not going on; the excitement is not here for bright young brains.Let me give you some examples of that. Many people will be familiar with the name of a young man called Bryan Gaensler, who was the Young Australian of the Year in 1999. I think he gave the government and the Prime Minister a bit of a shock with the speech that he gave on that occasion. In an address at the time, he said:It's almost as if the Government has announced a “Going Out of Business” sale, and the results have left our higher institutions in crisis—typical across the country are forced redundancies, major staff reductions across the board, increased class sizes, and the merging, and even closing, of various research departments. Enthusiastic and talented students are starting to look elsewhere, because there are no stipends or scholarships available to support them through their postgraduate studies. And an increasing fraction of those who do get the necessary qualifications to pursue a research career are subsequently getting out of the game, in search of a more lucrative and satisfying career path than the frustration of being one of hundreds competing for the few research positions on offer.Game, set and match. About the same time, he said that he personally, and others like him, would be `absolutely insane to come back to Australia'—and this is a man who loves this country deeply. He said:Money is not what drives scientists, but you are making a huge sacrifice to come back to Australia.He also said that the future for Australian science was bleak unless urgent measures were taken. He made this comment nearly two years ago, and still nothing has happened. I think the following comment is a great insight. He said that when we talk about the `clever country', it is tinged with irony about what might have been. We do not really mean it anymore; it is about what might have been. He points to the squeeze on university research and the slashing of research and development tax initiatives as being at the root of these problems.He is not alone. There are case studies like this all around the country—not just in our universities but also in associated institutions and in industry. One Western Australian researcher that I know well and respect, Professor Konrad Jamrozik, has moved to London. He works in the health area, and he has left Australia because he believes that the resources for researchers and the administrative burdens placed on them made his role here unmanageable. He points out the following contrast:With the Blair Government in Britain there is a major influx of resources into both higher education and the national health system at a time when the screws are being screwed very tightly in Australia.You will find many examples of that kind here at the moment. There is clearly a brain drain going on from our universities, and we cannot rely on filling the gaps we have in our skills base with people coming into Australia. We may get some, but they will not replace the high quality intellects that we are losing right now. All of this, I hope, should send a very clear message that science, technology, innovation and research and development—however obvious they may be to everybody else as absolutely central to our becoming the knowledge nation—do not rate highly with the government. These statements demonstrate why organisations here feel they have no choice but to reduce their spending on innovation and to take their ideas for innovation offshore. No-one appears to care. The government have squandered the opportunity presented by the introduction of this bill at this time, after those many reports and the urging of the science and business communities. They should have taken this opportunity to improve the direction of funding of research investment in Australia. The Minister for Industry, Science and Resources has been heard to say that the government is currently considering a series of measures to increase university research funding. And what do we see in this bill? The same old Howard government line: learn to do more with less. Let me translate this for the House before I conclude. What the squandered opportunity of the bill actually says is not `learn to do more with less' but simply `less learning, not more'. Despite the growing number of voices calling for urgent action in this area, the government has simply reshuffled the deck of funds. It is doing nothing to meet the urgent needs outlined by the many people who are now concerned about the direction that this nation has taken. It is time for some action.17:22:0021888Hall, Jill, MPMs HALL83NShortlandALP00—It is most appropriate that we as a parliament should be debating the Australian Research Council Bill 2000 today as it is the annual visit to parliament by our scientists. Earlier today, I met with two very passionate scientists who visited me in my office. Professor Melvyn Dickson from the University of New South Wales and Evan Leitch from the University of Technology, Sydney, are men consumed with a love of science, who are convinced that we must invest in both science and knowledge as a nation if we are going to be successful and prosperous. It is our key to success. It is the key to the future. They emphasised to me the importance of independent scientific thought and research and the role it should play in the future of Australia. I think we should all think about that for a moment. Without it, we really do not have a future. We will become a second-class nation and will be left behind.On the positive side of this visit by the scientists, it was a wonderful experience meeting the scientists and exchanging ideas. It is always stimulating to discuss subjects and ideas with such learned, creative men. But on the negative side it was really sad that these scientists came to us here in this parliament to try to convince us that we should spend money on science, on research, on our future and on education—the success of Australia as a nation. Surely, as members of parliament we should know that. We should embrace it and be willing to expend that money on our future. Unfortunately, the government has really failed in that area. They have not been prepared to invest in our future. I will go back to that later.This legislation will establish the Research Council as an independent agency while at the same time abolishing the National Board of Employment Education and Training. It also puts in place the structure of the council, the funding mechanisms and appropriate reporting procedures. Unfortunately, the legislation fails to deliver additional funds for research expenditure. There is not one extra dollar for research and not one extra dollar for our future—not one extra dollar. That is very unfortunate. The other part about this legislation that I am very unhappy about is that I feel it could erode the independence of the Australian Research Council as the legislation does not require the minister to accept the recommendations of the council. This is a real change. The council evaluates the research projects of its peers—it is a council of peers. It looks at the proposals put before it. They evaluate the projects on their merit. I see with the change that is signalled in this piece of legislation that the minister may be able to influence the direction of research: political interference and loss of independence of the council. That is a real worry.We could end up having a minister who directs the council along a politically expedient course, with proposals and research projects that meet the government's needs, not the needs of the nation. If the government believes that we need special projects or special research in one area, then that should be done separately, but the Australian Research Council has always been an independent body and I fear that could change under this legislation. The real danger facing science, research and our future as a nation is the failure of the Howard government to invest in research and development, which is a failure to invest in our future. Our financial commitment to research and development has declined under this government, as has the government's commitment to education for ordinary Australians. The government has cut expenditure to universities, to public schools and to TAFE colleges. It is investing in the private sector rather than investing in education and in our future. When you look at research and development, the GDP shows that in 1996-97 the percentage of GDP going to research and development was 1.65 per cent. It declined to 1.49 per cent in 1998-99. During that very short time, the decline has been consistent. The private sector has had a decline in research and development over three consecutive years. Without a strong commitment to education at the most basic level, our future in Australia is bleak.Australia is part of a global economy. It is a changing economy and a changing world. Unless we as a nation embrace that change and go to the forefront as leaders, then we are going to be left behind. To do this, we need to make sure that every Australian child has access to a good quality basic education. We need good and highly qualified teachers to be able to do this. Currently in Australia we have a massive shortage of maths and science teachers. Invariably, our children are being taught by teachers who are not qualified to teach them in science and maths. Rather than science and maths being the cream of education, it is the area that misses out, which affects our future as a nation.What we need to do—and what this government has failed to do and continues to fail to do—is to attract the good graduates to do the maths and science courses and to teach our children in our schools, inspire them with the love of science that those scientists I was speaking to today have and then direct them into research so that we get good graduates, graduates who are involved in research and graduates who are going to secure a sound future for Australia. Education is our future and an educated work force is our future. We must have choice for all Australian students, but it starts in the school and it is about time this government realised that and made a commitment. The opposition realise the importance of education, the importance of investing in maths and science teachers and the importance of making sure that we get the best graduates to teach maths and science in schools. We are not like the government; we do not attack teachers. We believe that the teachers are our future and that, unless we have quality teachers, our children are the ones who will miss out.Recently I attended a luncheon in Newcastle called `Life and learning', which was an initiative of the Newcastle University and the Newcastle City Council. In mentioning the Newcastle University I might say that it is one of the finest regional universities in the country. Sir Gustav Nossal was the guest speaker and he emphasised the importance of investing in research, development, science and our future. The one point that he made was that since 1996—since the Howard government came to power—the money invested in universities has declined by 20 per cent. Just think of that—a 20 per cent decline in education over four years. When you think about what that means to our future as a nation, it is very disturbing. Our future as a nation will be determined by our investment in knowledge. That investment should be in education and research, and then in the development of that research. We are not investing in our education, and that is the very basic level of investing in knowledge. If we are cutting funds to that, we are failing as a nation.Because of the government's failure to invest in research, its failure to invest in education and its failure to invest in a knowledge nation we have this brain drain. All of our young researchers who are unable to get funding for their research, our young researchers who do not have the commitment of a government behind them, are going overseas. The Young Australian of the Year in 1999, Dr Bryan Gaensler, said in the Sydney Morning Herald on 18 November 1999 that he would be `absolutely insane to come back to Australia'. The article says that Dr Gaensler highlighted how the government had slashed funds to education, and went on: He pointed to the squeeze on university research and the slashing of research and development tax incentives for business ...Every article I have read on this subject starts with business, academics or the research community calling on the government to invest more money in education and to invest more money in research and technological development. Dr Gaensler goes on to say that `the clever country is not a source of inspiration' anymore and that it is `tinged with ironies'. You could say the same about the past talk of Australia being a lucky country, because the irony is that, if you do not invest in education, you cannot be a clever country. This is really sad. This government obviously does not value education and the knowledge and innovation that that education can provide; otherwise the dollars would be there. If it did I would not be standing here today saying please, please, please make an investment in our future. Nothing could make me happier than to stand here and congratulate the government on having the foresight to make that investment. But, unfortunately, I believe this government is caught in the past. Australia will be a victim of the Howard government's inaction and failure to invest in the knowledge nation. What will end up happening is that our quality of life will decline. No longer will we be able to enjoy the lifestyle and the quality of life that we have now. I call on the Prime Minister to be just as visible in his support for innovation, science, technology and research as he was for the Australian team at the Olympics. He was very visible in his support for our athletes at the games, and that is very commendable. Like him, I enjoy sport immensely. He reinforced our image as a great sporting nation and showed that he valued our athletes' success by pledging extra dollars to sport. As I said, like the Prime Minister, I enjoy sport. I like playing it and I like watching it. But, unlike the Prime Minister, I recognise the importance to Australia of education and of embracing knowledge. That is why I believe that we should have extra money for research, extra money for education and extra money for science. I call on the Prime Minister to make that commitment to our future and to invest in education and research, which are Australia's future. We have to embrace change. I know it was wonderful back in the 1950s. I know that those are the values that the Prime Minister holds so dear to his heart. But it is a changing world. It is a time when we have to recognise that things have changed. The white picket fence and coming home to the wife cooking the dinner are gone. Now we have to look at innovative, new ways of doing things.I think the fact that we have failed to embrace the knowledge nation to some degree explains the decline of our Australian dollar. The record low that our dollar has reached in recent times is very sad. I believe this really reflects the government's failure to invest in and embrace new technologies, research and knowledge. The valuable commodities in the new millennium are knowledge and intellectual properties. If we have to buy knowledge, if we have to continually buy those intellectual properties, we are behind the eight ball right from the start. Once again, if you go back to look at the fall in the Australian dollar, you will see the effect it has just at that level. We want to be leaders. We do not want to be followers. We do not want to buy the technology from the US. We want to be able to say, `This is Australian technology. We can do it just as well as anywhere else in the world.' The US economy is booming at the moment, and that is because it has made massive investment in research and development. It is not afraid. It is a new economy. It is out there taking on the world and showing leadership. Unlike the United States, we are not prepared to take that risk. We have been labelled as an old economy, a 1950s economy. We are back in the 1950s. We are not prepared to make that change. Prime Minister, please, for the sake of Australia, look at embracing change.We have to have some imagination and preparedness to accept and embrace the new economies and the changing times. We cannot be backward looking. We cannot look back to the 1950s any longer for inspiration. As a nation we need to embrace a culture. We need to become a culture that values education and the benefits that can be gained from that education. It is this government's role to show leadership and invest in research and development and in our future, not just by establishing the research and development council as a stand-alone agency but by making some real change, making some real investment in our future. Australia needs Australian researchers working in Australia, coming up with Australian solutions to be used in Australia, rather than importing technologies from countries like the US. They design technology for the United States and the United States environment. The best technologies we can have will be the technologies that are created here. The low Australian dollar is increasing the cost of importing equipment and knowledge into the country. I was talking to one of the scientists this morning. The University of New South Wales bought equipment in 1989 worth half a million dollars. If you look at the increase in the cost of that equipment in terms of the Australian dollar, that equipment would now cost them a million dollars. That just shows how, as a nation, we cannot afford to continue the way we are. The countries investing in research and development are the countries that are thriving economies, new economies. They are countries whose currencies are performing really well against the Australian dollar. I would like to finish with the thoughts of the scientists who visited parliament today. They called on us as members of parliament to invest in ideas, to invest in the budget of the Australian Research Council, to invest in people and to double the number of people who are doing Australian postdoctoral fellowships. We need to invest in infrastructure. We need to make sure that we have good public research institutions. We need to invest in private sector research and development. Finally, and most importantly, we need to invest in future generations, because that is what it is all about: investing in future generations and in Australia.17:42:0021891Horne, Bob, MPMr HORNEUU5PatersonALP00—I rise to speak to the Australian Research Council Bill 2000 and the Australian Research Council (Consequential and Transitional Provisions) Bill 2000. Before I start to address the bills directly, let me say that one of the comments, which I am sure many members of the House have received as a result of the Olympics being held in Sydney, is something to the effect, `I didn't believe Australia could do it so well.' That is the sort of sentiment that I have had expressed to me, and I am sure other members have had that expressed to them. Let us try to consider why it was done so well. We certainly spent money on it. We opened the purse. We said, `As a country, this is an unparalleled opportunity for us as a nation to be centre stage of the world for three weeks and to show the world exactly what we can do.' And we did it. Every Australian takes pride in that fact.But let us have a look at how that compares with the record of this government on expenditure on research and development. I will go back to earlier today when I had the pleasure to speak to the Wool Services Privatisation Bill 2000. After I spoke, the next speaker, the member for Eden-Monaro, gave the Australian Labor Party a massive serve. He said, `Two speakers from the opposition! It shows how much they think about wool research.' We actually had two speakers out of a total of six. When you consider the number of electorates that are represented by the Australian Labor Party and that are actually in wool growing areas, then, I guess, it is not surprising that two out of six was the ratio, because I would say we exceeded the ratio of people who have a direct interest in the wool industry. But when I consider the speakers list for these particular bills—and I am sure that everyone in this House agrees that the number of speakers from each side directly represents the interests of each side in the bill being debated—I see that it is 15 to two. Fifteen members of the opposition are speaking on this bill and two from the government. We have three frontbench members from the opposition and the Leader of the Opposition. There is not even a single minister or parliamentary secretary, let alone the Prime Minister. It reveals the lack of interest by the Howard government in research and development. That is what the speakers list tells me about this bill. I was very proud to be present in the chamber earlier today when the Leader of the Opposition, the Hon. Kim Beazley, spoke about the commitment of the Australian Labor Party to the knowledge nation and about his vision for the role of research and development in the development of quality jobs for Australians. As I said, every picture tells a story: not one minister and not one parliamentary secretary is here to address this bill. This is a significant day in the history of the federal parliament, because it is a day when scientists are visiting, and many of us are wearing badges. This morning I, like many other members, sat and talked with some of the scientists. I do not mind admitting that, in a former life, I was a head teacher of science in the New South Wales secondary school system. I am very proud of that. I sat with a former geologist and also with an associate professor in physics at Newcastle University, and we chatted about some of the things we had in common. It was a very pleasant social occasion. But, when we really got down to the nuts and bolts of research and development in Australia today, there was not a lot to smile about. Indeed, that is when the conversation became very serious.One of the documents we discussed was a graph of business expenditure on research and development, comparing Australia with other countries. From that graph we can see that Australia spends 0.7 per cent of its GDP on research and development, and that places us 18th on an international scale. But that is not the most depressing feature. As a small country of only 18 million people, I suppose you might be able to mount a case to say that if we are 18th on the list that is not too bad. There are obviously some giants up there, like Sweden, Switzerland, the United States, Germany, France, the United Kingdom, Ireland, Norway, Austria, Taipei and Belgium—all ahead of Australia. We might be able to accept that. But, if you graph this over time and compare the amount of money that Australian business has expended on research and development with the average spent by the top 20 OECD countries, you find something very interesting—and it tells a political story about the significance of research and development to the different sides of politics in Australia. While we have always been behind, from 1983 there was a change in the amount that Australian businesses spent on research and development. It actually started to accelerate in 1983, and it continued to increase until 1995. From 1995, it has been declining at a fairly constant rate. In that time, the amount of money expended on research and development has dropped by 20 per cent. I am sure that the significance of those dates is not lost on the minister opposite. In 1983, the Hawke government came into power and, of course, in 1996 the Howard government came into power. The significance of research and development to a Labor government is shown quite dramatically by the graph. It indicates that while Labor was in office expenditure escalated. With the advent of the Howard government and the determination of the current Treasurer to slash and burn, that is also reflected in a drop in investment. There was a decline of 20 per cent in three years. That is a disgraceful record for any government, but for a country such as ours, where research and development has given many of our export industries an edge, the cut in research and development expenditure will leave a legacy that will take decades to remove.I do not believe that anyone in this House does not believe in the importance of science to our economy, to our international standing, and to our way of life. It is there. As a young and small country, we are very proud of the way we use technology. But, unfortunately, under the Howard government we have become a major importer of technology. That is the tragedy, and that tragedy is accelerating. I must admit that I was rather bemused in question time today when the minister for education tried to score a few political points over a dorothy dixer related to numeracy and literacy. He got up in his usual very charming manner and admonished Mr Aquilina, the minister for education in New South Wales, and Bob Carr. I was bemused because, as I said, I had just spent an hour with a professor of physics discussing how the cutbacks of the Howard government are affecting the ability of universities to perform. The quality of students going to university, particularly to study science subjects, is affected by the compulsory cutbacks in face-to-face teaching, and the lack of funding is causing students to shy away from science subjects. That is the sort of thing that the Howard government refuses to face up to. One of the things that really worries me—and, as I indicated earlier, I was a teacher of science—is that these days universities are accepting students of lower and lower ranking to become maths and science teachers because the encouragement is not there for others. Universities are accepting students who have not gained a pass in the sciences—in physics and chemistry in particular—to train to teach science to the up-and-coming generation. They will teach subjects in which they did not gain a pass in the Higher School Certificate. I thought, `If you are going to get a dorothy dixer, why don't you get a dorothy dixer on something that really is at the sharp end of our education system—on something that is relevant to the future generation of Australian students?' That is what this government has been directly responsible for, and this bill does nothing to address it. It will be a legacy of the Howard government, and it will last for generations. Unfortunately, this is a government with an obsession for budget surpluses at the expense of everything else. I regard it as a tunnel vision that neglects our nation's future.Over recent months, there has been plenty of comment—not from this side of parliament but from scientists and news commentators—about how this government is neglecting the needs of Australia. We have the dominance. There is no doubt about that; it shows through. Everyone would agree that the Treasurer is a very good political performer. I have no doubt that in cabinet he is equally as dominant and that he holds sway. The man that would be the next Prime Minister of Australia, if he has his way, holds sway. Unfortunately, his background is not a scientific background, and his determination to get his economic policies through—where he allows the economic environment to dominate all others—is a tragedy for science and science related industry, which is very important to Australia's future. It has been a very important part of our past, but under this government it is becoming of declining importance to our future. That is the tragedy, and that is what this Treasurer will have to live with because, scientifically, I see him as a person with no vision.There are many critical comments we could make about this government and its performance with respect to research and development. I will not use examples of political people; I will try to use examples of people whose independence is recognised and whose integrity is unquestioned. Professor John Niland is the Chairman of the Australian Vice-Chancellors Council. When the green paper went out, before this bill went out, he said:This takes us to the heart of the problem with the Green Paper—the preoccupation with moving the pieces of pie around the deck, whereas what we need is a bigger pie.Does this legislation give us a bigger pie? No, it does not. Professor Konrad Jamrozik is a researcher into stroke and vascular disease. He is going to London after 16 years of working with Western Australia's public health arena. He said:With the Blair Government in Britain, there is a major influx of resources into both higher education and the national health system at a time when the screws are being screwed very tightly in Australia.How many times do we see that sort of story in our papers? He is not a political person; he is a scientific researcher being lost to Australia, probably forever. I refer to a comment by the government's own appointed Chief Scientist, Robin Batterham, who warned that Australia is lagging in research and innovation. He added:We have been too lucky in the past. If our dollar is halved—and he means our research dollar—in one generation, what does it matter? We have a pretty good life. But don't expect your children to eat as well as you do or to have the same sort of accommodation you have.The list goes on. Dr Bryan Gaensler, only the second Australian to be awarded the NASA sponsored Hubble Fellowship, claimed he would be insane to work in the `clever' country. He has gone to the United States. Regardless of the parameters we use to measure the performance of this government in promoting research and development, we are falling behind. We are spending less. We are exporting our scientists, the sort of people we need to keep here. We are encouraging foreign ownership. This is one of the problems with the low dollar—everything in Australia is for sale at fire-sale price. Research and development companies are being taken over increasingly by foreign interests. Okay, we keep the scientists here, but what does it mean when they make an invention—when they develop a new process? It means that that technology is not owned by Australia, and that it will be developed because it is owned offshore.I will refer to a comment by Brian Anderson and Tim Besley, leaders in science and technology. It was a well-documented comment and it leads us on to something else. We all know Alan Greenspan, and I am sure the minister at the table is aware of Alan Greenspan's relevance to the United States economy. In a way, he is the economic driver of the world economy because he has been the mastermind of the development of the United States economy. When the Chairman of the United States Federal Reserve, Alan Greenspan, was asked about the single factor that determined the rapid growth of the United States economy, he said that the remarkable run on economic growth in his country appears to have its roots in advances in technology.I would like to leave the minister and our Treasurer in particular with one final thought as they juggle figures to put a positive spin on any set of economic data that comes to hand. Our relationship to the United States has been a relatively unchanging one. It is a country with which we have always experienced a trading deficit, and I guess we always will. The minister might correct me, but I think our deficit with the United States last year was of the order of $13 billion. The things that we import from the United States are the high-tech things that we do not make here such as aircraft and caterpillar diesel motors. Every time you see a bulldozer or grader building a road or something like that, it came from the United States. Those high ticket items are the things that we do not build in this country but have to import. We have never had the determination, I suppose, to develop the industry to develop the technology. It is not that Australian scientists cannot do it; it is not that Australian technicians do not work in those industries—they do. We never encouraged the development of those industries. So we are prepared to continually run a $13 billion deficit with the United States. Alan Greenspan says that it was technology that has given the United States economy an advantage. That is the message that must come to us from Greenspan. We must follow his advice. We must develop technology, we must encourage science and we must encourage research and development if this country is to have the future that we expect of it.18:02:0021894O'Byrne, Michelle, MPMs O'BYRNE84SBassALP00—Sir Isaac Newton said:If I have seen further it is by standing on the shoulders of giants.This statement is as true today as it was when written by Isaac Newton. Our current view of the world, and indeed our economic viability as a nation, is based upon the research of previous giants and, consequently, our future national wellbeing and view of the world will be largely based upon research being undertaken today. It is only through a strong and growing research effort that, as a nation, we will further opportunities for future generations. The importance of science and technology to our economic development and national wellbeing cannot be doubted. Through the 20th century there were amazing scientific developments which have had undeniable impacts upon all Australians—developments which have in large part been based upon research undertaken in universities. It is only through research that we will continue to develop technologically and humanely in the future. Interestingly, this is a view which is strongly held internationally. It is a point most clearly made in the recent discussion paper from the Chief Scientist:Many governments are reacting to the pressures of globalisation and the transition to the knowledge based economy primarily through policies designed to improve their domestic innovative capacity. To this end they are: investing to create a vibrant research base; investing in people and promoting the development of a highly skilled labour force; addressing any systematic failures that prevent different parts of the innovation system from working together; improving the environment for the flow of knowledge from the research base to business; and enhancing the conditions that govern the commercialisation of research from the science, engineering and technology base through the creation of spin off companies.That is the international scene. In Australia the picture is somewhat different. Instead of recognising that the bulk of research is undertaken in the higher education sector and that there is therefore a requirement that this sector is adequately funded, we have continual attacks on the funding of higher education and, consequently, our national research effort. The government's reaction to this truism is to have removed a billion dollars from our universities—a fine commitment to the future wellbeing of our national research and development effort. Cuts of this size can only diminish our capacity to research and consequently innovate. This is just pulling on the handbrake when, as a nation, we should be shifting into top gear.There is a real link between our higher education sector and those who will one day be undertaking the research which our future will depend upon. Unfortunately, to the detriment of our collective future, this is not a link which the government believes is sufficiently important to ensure the strength of higher education in Australia. This point has also been made by Dr Bryan Gaensler, formerly Young Australian of the Year, who is quoted in an article in the Sydney Morning Herald as saying:Universities are the absolute foundation upon which all scientific output is based, but it is almost as if the government has announced a `going out of business sale' and the results have left our higher institutions in crisis.I believe that the words of Dr Gaensler ring true when considering the campus of the University of Tasmania located within my electorate, the Launceston campus. From a purely economic point of view, appropriate investment in research and development is not just an option but a necessity. The chair of the US Federal Reserve, Dr Alan Greenspan, has said of the US economy:Something special has happened to the American economy in recent years ... A remarkable run of economic growth that appears to have its roots in ongoing advances in technology.I do not think it is a coincidence that this `remarkable run' took place. In 1998-99 the gross expenditure on R&D in the US, as a proportion of gross domestic product, was over 2.5 per cent, while Australia's expenditure was languishing at around 1.5 per cent of GDP. Quite clearly, the US has invested and enjoyed the associated economic benefits.The government has neglected our higher education sector, and the resultant impact of this neglect can very clearly be seen at the Launceston campus of the University of Tasmania. This campus is a regional campus of the only university in the state and is the educational hub for the whole north of Tasmania. It is a campus which, due largely to the economic and social circumstances of the community from which it draws its students, caters for a high proportion of students who are the first in their family to attend a higher education institution. It also has a high level of mature age and part-time students, for whom relocation to another university is not an option. This is a campus which is benefiting north Tasmania not only educationally and economically but also socially and culturally; it is a campus, as you would be aware, Mr Deputy Speaker Quick, which is also under threat. Core university courses and functions are being lost or, more to the point, stripped away through insufficient funding by the federal government. Due in large part to the impact of government cuts, the School of Applied Science, located in Launceston, has closed—an indictment of the commitment of this government to not only a regional community but the contribution that that school was making toward the national research effort. This school, which contains both undergraduate and postgraduate research students often undertaking research in a collaborative way with industry, is being wound up. The current course is to be taught out, with future students being able to undertake only the first year of a Bachelor of Science degree in Launceston. Following that year, their studies will need to be completed at the Hobart campus of the university. The loss of this scientific research facility will be sorely felt in northern Tasmania. No longer will students of the School of Applied Science be able to undertake research projects which benefit the north of my state. For example, one student I have met is investigating heavy metal sediments in a local river—just the sort of project that will no longer be investigated in northern Tasmania if students are not studying locally. I believe that the administration of the university has been short-sighted in the closure of this school but that the lion's share of the blame rests with the federal government. If you take away the funding, you will inevitably reduce the research output and the future research potential. I can assure all honourable members that this closure is opposed by local bodies representing businesses, students and local government authorities. Instead of recognising that the activities undertaken in applied scientific research by staff and students of this school provide an educational and economic benefit to northern Tasmania, the government, through its neglect of higher education, has caused the closure of a research focused school. This is the local context in which I, and many in the community of Bass, view the government's lack of attention to and funding of research, especially research undertaken in regional areas that benefits local economies.One thing which I particularly want to point out is that, if you will pardon the pun, this is not rocket science. It is not possible to provide the research that we require if we do not provide appropriate funding and support. Indeed, it is the trick of this government, and not a very good trick, that it attempts to ensure that actions it takes are not placed in any appropriate context. This shabby trick will certainly not work in this case.This brings me to the detail of the bills currently before the House, the Australian Research Council Bill 2000 and the Australian Research Council (Consequential and Transitional Provisions) Bill 2000. The history of the Australian Research Council is one of providing professional, independent advice to government on the appropriate allocation of grants to universities for research funding. Initiated in 1988, the council was a subsidiary structure under the National Board of Employment, Education and Training. Importantly, the Australian Research Council, unlike other sections of the National Board of Employment, Education and Training, had a direct and influential role in the funding of higher education and the educational institutions undertaking that research.A number of inquiries have made recommendations on the operation of the Australian Research Council. These range from the December white paper `Knowledge and Innovation' to a discussion paper in June 1999. It is most interesting to note the increased and expanded role that the white paper envisaged for the council. The white paper's recommendations regarding the Australian Research Council were: an enhanced role in the provision of strategic advice to government regarding research in the university sector, increased responsibility for the administration of research funding programs for which funds will be appropriated under the new act, a reformed governance and organisation structure reflecting the need to link university research with the innovation system, an enhanced capacity to identify and respond to emerging areas of research excellence and an accountability framework emphasising transparency and performance—in short, an expanded role with greater responsibility, both strategically and administratively, to ensure that our research effort as a nation is both appropriately targeted and coordinated.As further background, there is the recently released discussion paper from the Chief Scientist entitled The chance to change. It is a most interesting paper. While some of the data contained in it is from some time ago, it nonetheless shows that Australia's investment in R&D is not good enough. The recommendations in this discussion paper are most interesting. I wish to highlight a few of those recommendations: over five years, significantly increase funding for the Australian Research Council's competitive grants and related infrastructure activities consistent with the commitments already made for increased funding of health and medical research, expand the funding for university research infrastructure, expand the CRC program to encourage greater SME access and to facilitate stronger networks between the science, engineering and technology base and industry, nationally and internationally. I am concerned, however, that the ability of the council to act independently so that it can instigate possible research options in a manner which will not impact on its ability to undertake investigations at the behest of the Minister for Education, Training and Youth Affairs may be reduced. This is no small thing. The reason why a council such as the Australian Research Council exists in the first place is to ensure that the actions of the government are based on professional recommendations relating to the allocation of federal funding. To limit the ability of the council to undertake independent investigation just does not make sense. Surely the minister cannot assume that he is the repository of all knowledge regarding the most effective use of research funding. There is the potential for a reduced level of appropriate accountability on the part of the minister. In effect, the relationship between the minister and the Australian Research Council becomes one for which there is little or no oversight.The minister will have new powers to disregard or vary ARC advice regarding the funding of proposed research. There will no longer be a requirement for the minister to table directions to the Australian Research Council. This greatly reduces the accountability and transparency of the process. This sort of change will mean that the confidence in announcements made regarding research grants will be reduced. It is very important that there is confidence in the process. It is just as important to our national wellbeing for there not to be any question over the validity of the funding proposals which are successful.The only way for us to be internationally competitive as a nation is through ensuring that we are appropriately investing in the future. The future is clearly through a greater effort in scientific research. The inadequate allocations that the ARC is currently receiving limit its ability to fund research proposals. Only 20 per cent of proposals to the ARC are funded. In this environment, one could have been safe in assuming that the government would at least have attempted to increase the level of funding of the ARC. But there is no additional funding in this bill.There is currently a genuine deficit in our research effort and no additional funding going to research. This bill does not address this shortfall. If I can return to the quote with which I commenced this contribution, `If I have seen further, it has been from standing on the shoulders of giants.' This government does nothing to nurture our future giants.18:12:0021897Plibersek, Tanya, MPMs PLIBERSEK83MSydneyALP00—As the honourable member for Bass said, essentially in Australia at the moment we have a shortfall in research and development funding. In fact, I think it is fair to say, as many scientists have been saying over the last couple of years, that we have a funding crisis in this country. We have had five reports on science and technology or research and development in the last 16 months. At the core of each of these reports was a call for greater resources for research and development and for science and technology. Yet the legislation we are considering today—the Australian Research Council Bill 2000 and the Australian Research Council (Consequential and Transitional Provisions) Bill 2000—does not increase the amount of money that will be available for research and development in any way. There will still be ideas that go begging for funding in Australia. We read in today's Sydney Morning Herald a quote from Professor Vicki Sara, who, after the announcement yesterday of the $210 million Australian Research Council grants, said that `four out of five good scientific ideas are being lost to the nation because of inadequate funding'. That comes from the head of Australia's funding body. We are losing ideas. They are not being developed. They are not being commercialised. It means that we are losing jobs in Australia. I am afraid that this legislation does not address that problem at all. There are a number of concerns with the bill that are concerns specifically with this legislation. I will deal with them first and then I want to deal with some of the more general concerns relating to research and development in Australia at the moment. Firstly, this bill transfers some funding provided under the Higher Education Funding Act from general university operating grants to specific research grants. There is no way that the government can claim that this is an increase in funding. The immediate problem as well is that this comes after years of cuts to universities. In fact, since 1996 this government has cut almost $1 billion from university operating grants. Professor John Niland, who is the chair of the Australian Vice Chancellors Committee, has said:This takes us to the heart of the problem ... the preoccupation with moving the pieces of pie around the deck whereas what is needed is a bigger pie.That is something of a mixed metaphor but his meaning is clear: there is no point in restructure after restructure if what is actually needed is a commitment to investing more dollars in research in this country. The second problem with the bill is the controversy between the government and research and student groups over what are called gap students. This bill sets up the research training scheme, providing 21,500 HECS exempt scholarships for postgraduate research. At the moment there are 25,000 Australian postgraduate awards which are scholarships for postgraduate students to undertake professional research in their field of expertise. APAs do not provide a great amount of money, but they do provide some assistance for our brightest academic stars to continue their work. These students make their own sacrifices to undertake academic research, and the APAs are one way of providing the necessary support for students to develop their skills and undertake innovative new work. The gap between the 25,000 APA students and the 21,500 HECS exempt students is 3,500 students. The government says that it will renegotiate the number of research places with each institution and the institutions will be expected to meet the gap in funding for these 3,500 places. Of course, universities are already pretty strapped for cash and will be forced to convert these higher degree research places to undergraduate non-research load places. This reduces the number of higher degree research places available in Australia by 3,500 at a time of crisis in research and development. Another matter of concern in the bill is the alteration of the relationship between the Australian Research Council and the Minister for Education, Training and Youth Affairs. Many speakers before me have expressed the concerns that Labor has over the narrowing of the independence of the ARC and the change in the relationship between the Research Council and the minister. Essentially, the minister has new powers to disregard ARC advice. That is certainly of concern when you consider the track record of the current Minister for Education, Training and Youth Affairs. It is a very dangerous proposition. Likewise, the ARC is no longer able to initiate advice; it can respond only to the directions of the minister. The minister is no longer required to table directions to the ARC, only to publish them in the annual report. This whole change in structure between the ARC and the minister has been criticised by the Australian Vice Chancellors Committee and the National Tertiary Education Union. An example was given that the conflict between political imperatives and science and research imperatives has become obvious in the fallout from the mad cow disease outbreak in the United Kingdom. Concerns have been raised that political instructions given at the time have not been clear; indeed, there are still ongoing attempts to get clear answers about what political instructions were given at the time. I was very fortunate today, as were many other members of parliament, to receive a visit in my office from two scientists, in my case Dr Michael James and Mark Wilcox. They came today as part of the science meets parliament visit that FASTS organises each year. Part of the very interesting information that they dropped off today was graphs that show the decline in funding of research and development in Australia over the past few years. It is interesting to see particularly the fast downward trend from 1996 onwards. Each of the graphs shows a marked decline from 1996 onwards. Once again we see the figure that concerns so many of us—Australia towards the bottom of the list of countries in the OECD when it comes to business expenditure on research and development. It is worth recapping some of the figures. Total gross expenditure on research and development has fallen as a percentage of GDP from 1.65 per cent in 1996-97 to 1.49 per cent in 1998-99. Australia's gross expenditure on research and development puts us 12th of 17 reporting OECD nations. Of those 17 countries, Australia experienced the biggest drop in gross expenditure on research and development between 1996-97 and 1998-99, with a drop of almost $1 billion. Australia was one of only four countries to report a drop relative to GDP. Commonwealth investment has fallen by one-sixth, from 0.77 per cent of gross domestic product in 1995-96 to 0.64 per cent of gross domestic product in 1999-2000. Australia's business expenditure in research and development has dropped every year under this government. Business investment has fallen in the last three years, due particularly to cuts to the research and development tax concession. It had never fallen before. This completely reverses the trend.Universities do 60 per cent of Australia's research, a much higher proportion than in most other OECD countries. Almost $1 billion in government funding has been taken from our universities by the Howard government since 1996. These cuts reduced by 11 per cent of GDP the level of Commonwealth investment in higher education research. In key areas, Commonwealth higher education research grants have fallen. Australian postgraduate awards have fallen since 1996. Research fellowships have also fallen. Research infrastructure has fallen considerably at a time when scientists are facing troubles because of the high cost of equipment and resources, from almost $101 million in 1996 to only $86 million in 2002. It is particularly worth noting that the relative changes in cost of equipment and overseas publications has had an enormous impact as well on what research scientists are able to buy with their funding. The poor performance of the Australian dollar in recent times has meant that, when scientists are buying journals or equipment from overseas, the task becomes that much more expensive.There is a current crisis in innovation in Australia. It is a real crisis, and its effects will not be felt next month or possibly even next year but in five years time or 10 years time. Whatever we do not imagine, invest in, create, develop or produce here today we will be buying in the future. Australia cannot afford to continue to look overseas to buy elaborately transferred goods. While Australian research languishes because of the government's failures, we lose potential successes for the future. Of even more concern, we possibly lose whole new industries that have not even been developed yet. There is no reason for this terrible waste of Australian ideas to occur. Thinking Australians know that money spent on research and development is an investment in Australia's future success, domestically and internationally. They see it as an investment, not just an expenditure. There is statistical proof; measures over the years have shown that research spending is an investment. Estimates on the return of private research and development investment range from seven per cent up to 43 per cent and the social rate of return is much higher because of the spin-off benefits to other scientists and other projects that are going on.Since the Commonwealth assumed responsibility for higher education 25 years ago, the average level of investment in universities has been 1.15 per cent of GDP. Had funding been maintained at that level in 1998-99, an additional $2.08 billion would have been available for investment in our universities and research in those universities. Yet Dr Kemp's research white paper will continue to slash the number of PhD candidates starting next year. This is against the considered and expert advice of the government appointed Australian Chief Scientist, Robin Batterham, who in his report The chance to change recommends the establishment of 500 new HECS exempt scholarships and a doubling in the number of Commonwealth postdoctoral scholarships. This government attempts to suggest that it is providing funding through the restructuring of the way grants are handled by the ARC. Most people are not fooled by simple restructuring replacing increased funding. Recently, a group of leading business people, inventors, educators, researchers and scientists became so deeply concerned about the future of Australian ideas that they placed a statement in a national newspaper which read in part: We have come together to voice our support for the government to take decisive steps recommended in—the report of the Chief Scientist and the Innovation Summit Implementation Group. It continues:These include:· improving the incentives for business to invest in research and development;· appropriate levels of public investment in competitive research and world-class equipment and facilities; and· encouraging better links between researchers and industry;for the economic, social and environmental benefit of Australia.It went on:Early action is needed so results can flow soon and we can compete effectively.This statement followed the National Innovation Summit in February, which called for an additional amount of $5 billion over five years to boost research and development. Similarly, Toss Gascoigne, the Executive Director of the Federation of Australian Scientific and Technological Societies, who were the organisers of the Science Meets Parliament Day today, said:We coasted when other countries put their foot on the accelerator. We are on the path towards becoming irrelevant.Australian researchers and inventors are enthusiastic about their work. They are imaginative, dedicated and willing, yet they receive so little support from the Commonwealth that a new phenomenon has arisen. It is commonly referred to—and we hear lots of references to it—as a brain drain occurring in Australia at the moment. A survey of 270 researchers of the Australian Society for Medical Research released in Australia in September found that most Australian scientists working abroad wanted to return home but believed that the country is losing touch with the frontiers of international research. Researchers at home and abroad fear `a continuing lack of availability of adequate research funds', `poor job security' and `lack of a career structure' in Australia. They were the reasons they cited.This confirms the story of one young medical researcher in my electorate. Medical research, particularly biomedical research, is one of Australia's best areas for research. We have had some world firsts in this area and some things that we should be very proud of. Yet this young man will be leaving science upon completion of his PhD in a few months time, very sadly, because he does not see a future for himself in the area of science research. After eight years of tertiary academic endeavour, he has made the very difficult decision to leave research because the wages are low, the equipment is old, there is no support for researchers and their work, he has no job security and it is extremely difficult to undertake a career in an environment where education and research cuts are savage and continual. It is the same story as told by Dr Brian Gaensler, a former Young Australian of the Year, who in many ways brought this discussion about the state of research in Australia to prominence again recently.The problem is not just confined to specialist laboratories and academic institutions. For the first time in many years, government high school retention rates are slipping, from 79 per cent to 66 per cent. The number of university students is in decline. The $1 billion cuts in university funding have left overcrowded labs and lecture halls, and teachers and lecturers desperate. We are trailing in research and development, compared with many other countries. The examples are endless. Countries like Iceland are leaving us for dead. We rank just above the Czech Republic. Ireland, with a population about the size of the city of Sydney, has revolutionised its economy through investment in education, research and development. In fact, Ireland has recently become the world's largest exporter of computer software through a vigorous targeting of this particular sector of its economy. The National Tertiary Education Union paper on international research levels says: It is an indictment of Australian education policy that, at a time when other nations are recognising the value of increased investment in education, Australia has substantially reduced investment.It is indeed an indictment of Australian education policy. It is also an indictment of the minister for education's and the Prime Minister's backward looking government.In contrast to the Howard government, Labor have developed a comprehensive and coordinated approach to creating a successful future for Australia through innovation and invention. We know that Australia's future depends on building a knowledge nation. We are already committed to doubling the number of research fellowships for Australian academics when we return to government. These will be early career fellowships aimed at keeping our best and brightest researchers in Australia. The brain drain of our quality researchers has been a key point made by every person concerned about the current emergency in research and development, and Labor are committed to addressing it through these fellowships. Labor will also create a new category of elite research fellowships. The elite fellowships will be awarded to outstanding academics and will span a period of five years. In this way Australia can support our experienced researchers and academics and tempt them home from overseas. The combination of these fellowships will retain Australian ideas and innovators and support researchers throughout their professional lives.We have also made a commitment to reach the OECD average of business expenditure on research and development as a percentage of GDP by 2010. We have made a number of other commitments in relation to early school and tertiary education which are aimed also at ensuring that Australian students are studying science and that the teachers who are teaching them are trained properly to teach science rather than being generalists. I conclude by saying that Labor actually have a plan for Australia's future and we are committed to increased investment in research and development, not just shifting around the pieces of the pie.18:32:0021901Rudd, Kevin, MPMr RUDD83TGriffithALP00—I rise in this debate on the Australian Research Council legislation because it, together with other bills on education, training, research and development, is probably one of the most important bills coming before the parliament of this country. Such bills are critical to social equity. They are critical to economic growth. They are critical to our national future. I find myself completely endorsing the remarks just made by my colleague the member for Sydney.Two years ago, when the member for Sydney and I entered this parliament, I remember that, in making my first speech, I made some reference to education and observed that what the nation needed was not simply a reform of our education system but a revolution, a revolution in its resourcing, a revolution in the sorts of material incentives we provide to our teachers and a revolution as well in terms of the rigour of the system which we have across this country. As a new member in this place, I have waited for two years to see what sort of response we would have from government to the core challenges which education, training and R&D present to the modern Australian nation. I am still waiting for that response. In fact, what we have seen is not even inertia on the part of the government. Inertia, in fact, would be preferable to what we have seen. We have not been marking time; what we have seen is a system in radical reverse throttle.If we look at the basic data on this question, we see it makes for some stark reading. School education, higher education, R&D expenditure—for all three we see reversals in the overall commitment of the government resourcing effort. As far as R&D in particular is concerned, let us look at the two classical measures, GERD and BERD. GERD is gross expenditure on R&D, which incorporates government outlays. BERD is business expenditure on R&D. On the GERD measure, the source to which I would refer the House is the ABS and its series released on 28 August this year, which states: Australia's GERD/GDP ratio is low compared with other OECD countries. Australia is ranked well below leading industrialised countries such as Japan, United States of America, Korea, Germany and the United Kingdom. Australia's ranking reflects the low R&D expenditure to GDP ratio of the Business sector.If you look at the individual country aggregations, you see that the comparative picture for Australia in the period under review is a disturbing one indeed. The ABS series measures the relative GERD/GDP ratios of various OECD countries between 1996-1997 and 1998-99, the period in which various policy initiatives of this government came to fruition. What we find is that in practically all OECD countries the GERD/GDP ratio has gone up—in Japan up to 3.06 per cent of GDP, in Finland 2.9 and in the US 2.74—and there are many other such increases as well registered across the OECD. There were a couple of decreases but they were relatively insignificant in overall number and in the overall magnitude of the specific decreases which were registered. Out of this entire table of OECD countries, where do we find Australia? We find Australia having registered the worst performance over the period under measurement. The decline is some 0.16 per cent of GDP. In 1996-97, the GERD/GDP ratio of Australia was 1.65 per cent. By 1998-99 that had fallen to 1.49 per cent. Australia is heading in one direction and the rest of the developed world is heading in the other direction.The source for this observation is the cold, cruel, hard data of the ABS. To my knowledge, the ABS is not yet a sub-branch of the Australian Labor Party. This is empirical data provided to the nation at large, and the ABS has no particular axe to grind on behalf of any particular political party. This is a most disturbing set of numbers, and one which should give the government pause in framing any policy response to the crisis that we now face.So much for GERD. What about the other measure, BERD, business expenditure on R&D? Let us remember that today the Prime Minister's response to a question on this matter was that the government was responsible for public outlays as far as R&D expenditure was concerned, and we have seen what the ABS series registers in terms of overall government performance on that measure. Leaving that to one side and going to business outlays, we have seen a parallel collapse in business R&D spending during the period under review. It has fallen in every year since 1996. Again, the source is not the great and glorious Labor Party; the source is the ABS. I refer particularly to the research and experimental development series of the ABS, 8104.0. If you look at that data, you find that it makes for quite sobering reading. In 1994-95, in the latter period of the last Labor government, business R&D funding as a proportion of GDP came in at 0.75 per cent of GDP, rising to a height of just on 0.85 per cent of GDP in 1995-96. Where were we by 1998-99? Back to 0.65 per cent of GDP—a significant slide. Where does Australia come in the table of OECD nations in terms of R&D as a proportion of GDP? We come in at something in the order of 12th, somewhere south of the Czech Republic. The problem with these numbers is that, taken together, they represent an overall erosion of the nation's R&D effort. Why has this occurred? In part it is a response to the sort of policy initiatives that have been undertaken by the government. What we have seen is business in particular respond to the price signals which the government has sent out through its changes to the tax regime as it affects R&D tax concessions and the abandonment of Labor's previous position of a 150 per cent tax rebate for R&D outlays. I am not as persuaded as was an earlier contributor to this debate, the member for Werriwa, about the impact of this R&D concession on specific activity by firms. The member for Werriwa's view, I believe, is that there is no empirical linkage between R&D tax concessions and specific R&D investment. I would suggest that there is a body of empirical data which suggests there is a close connectivity and a positive one. Where I would agree with the member for Werriwa, however, is that what we are seeing is not just a response by the business community over a five-year period to these new and negative price signals sent out by the government because of its changes to the R&D tax concession regime. We also see the confluence of that with an historical problem in Australian business culture which is that the business culture in this country remains fundamentally risk averse. There is a body of literature on this subject. Most recently I had discussions on the subject with David Hale, the US economist, and others about why we have such a pronounced culture within our business community of risk aversion, whether it is something deeply cultural or what the source of that particular aversion might be. But it is a factor nonetheless. When we find the captains of industry around this country, those representing the BCA, the AIG or other peak business bodies, constantly saying that the future of this nation's economy lies exclusively in drawing another drop of blood out of organised labour or further reducing wages and conditions for organised labour, as if no productivity gain could be achieved through a greater entrepreneurial effort on the part of business leadership, frankly, it is not just we on this side of the House who are left puzzled by that sort of description. Serious international commentators who are long-time observers of business performance in this country ask the same question themselves. In fact, the challenge could be levelled at Australian business leadership, `Physician, heal thyself,' when it comes to their performing a proper function in the total economic equation. There is an entrepreneurial deficit in this country which has been here for a long time. Something was done by way of redressing that deficit in terms of the direct incentives given under the R&D tax concession regimes introduced by Labor, but what we have seen is still a residual effect of that risk averse culture within Australian business. It is something which the nation needs to do something about resolving in the long term and something which business in particular must address. What have the commentators been saying about the various numbers to which I have referred? I cite, for example, correspondence in the Financial Review from David Charles of Allen Consulting in Melbourne, a former secretary to the Department of Industry, Science and Technology, dated 13 October this year. Dr Charles states:In 1985, Australia's gross expenditure on R&D (GERD) as a percentage of GDP was 1.1 per cent compared with 1.1 per cent for the EU. By 1996—that is, the end of the Labor period—Australia's position had improved sharply and was broadly on a par with the EU. Since then the gap has opened up again. What is worse, the gap with the countries of northern Europe (Sweden, Denmark, Finland, France, Germany and the Netherlands), all of which spend more, and in some cases much more, than two per cent of GDP on R&D and have per capita incomes higher than Australia's, is very significant.Dr Charles goes on to make parallel observations between Australia's performance in terms of R&D investment and that of Canada as well. His conclusion overall is that there was a significant upturn in Australia's R&D performance in the first half of the 1990s and, again based on the cold, hard numbers, a significant and parallel downturn in that performance, both from the government sector and from the private sector, in the latter half of the 1990s. These things do not happen by accident. We have also had the contribution of Australia's Chief Scientist, who is not an appointment of the Labor government. Chief Scientist Robin Batterham has made a stinging critique of the government's R&D performance and laid out a range of measures which he believes government should embrace if this is to be put into the reverse direction.We have also had a remarkable contribution to the debate from Dr Bryan Gaensler, a young 25-year-old astronomer who is now on a scholarship in the United States. His remarks were reported in the Sydney Morning Herald on 18 November 1999. From my reading of his remarks in the article, he castigates totally the government's R&D policy performance. His overall conclusion is simply this: if you are a young scientist emerging from university in Australia, precious few opportunities exist for you to sustain your career in this country—to sustain your career opportunities, you must instead go offshore. However, probably the most serious of the contributions from the commentators on this question is found in the Age newspaper and other national newspapers on 3 October this year. It is an open letter signed by the BCA and other peak bodies right across the country, and it is basically calling upon the government to radically lift its game as far as overall R&D performance is concerned. It politely notes the contributions which have been made to the debate by the Chief Scientist and by the Innovation Summit Implementation Group in their various reports, but it states very clearly that it is awaiting an outcome of concrete government action. What is being asked of government is very clear: we see the problem defined in the ABS data and we see the call to arms being issued by serious commentators across the spectrum of the Australian scientific and business community. What is the government doing about it?What we have by way of government response is the bill before the House at the moment. What does it contain? Essentially two elements. The first is no new money—not a single extra dollar, despite the equivalent of $1 billion having been sucked out of the R&D sector over the last five years. I would describe the second element contained in the bill as simply a grand administrative fiddle. It is a fiddle in the sense that what we have is a restructuring of the ARC, in a way which may make sense to some and does not make sense to others and which, from the perspective of other commentators, represents a dangerous new precedent in the potential for the minister to exercise direct political intervention in the allocation of specific R&D grants. In my argument, it does not go anywhere near seizing the nettle about the quantum of funding which is needed to redress the R&D deficit in this country, both public and private, nor does it go about creating what I would describe as appropriate and creative new partnerships between business and academia, along the lines of the previous Labor government's CRC model, to make a much more solid, creative and innovative R&D effort, drawing upon Commonwealth funding.The consequences of policy failure are most serious for the Australian nation. As the Leader of the Opposition said this morning, this has ceased being an issue for policy wonks; it has become an issue for mainstream Australia. Why has that occurred? It has occurred not just because of the contribution from the Chief Scientist to the debate but because out there in Middle Australia people have seen the collapse of the Australian dollar and its partial attribution to the conclusion of the foreign exchange markets that this country now exhibits all the characteristics of an old economy as opposed to a new economy. When commentators like Wolfensohn and Hale are making those conclusions, the community sits up and takes notice. These are friends of Australia; these are people who have spent a long time examining the entrails of the Australian economy and who bear it no ill will at all. But their sober, analytical conclusion is that we exhibit continuing characteristics of an old economy, and, as a consequence, currency markets and financial markets have turned dim, in part, in their evaluation of the Australian dollar. When we put together the calculus of a financial market or a currency market in what constitutes the credentials of an economy these days, new variables are entering into the equation. It is not just the usual mix of GDP, inflation, unemployment, the BOP and the BOT. It is also about measures of productivity, but you now see in the calculus used by those who work in the dealing rooms things like measures of GERD and BERD—that is, the overall R&D effort of a particular nation in terms of whether they are installing new grunt for the future, grunt necessary to deliver the characteristics of a new economy. What they have reluctantly concluded in the case of Australia is that no such evidence is to be found.The opposition, in contrast to the government, has a clear policy as far as this is concerned. The challenge which opposition leader Kim Beazley has issued for the Labor Party after Labor wins the next federal election is that by 2010 Australia will achieve the GERD ratio of the average of the OECD. That is a significant undertaking, a significant goal, a significant ambition, given the attrition which has already occurred on that measure over the last five years. But it is a goal which the nation must set if we are to do something about not just arresting the decline in the Australian dollar but equipping this economy with the fundamental new infrastructure necessary to generate the new jobs for the new economy. We have also articulated other elements of policy as it relates to the Commonwealth government's research scholarships: education priority zones, increasing the standards of teaching, especially in the areas of maths and science, and much, much more. However, it raises an important question when we look at schools and school education—that is, are we managing the school education system effectively in terms of the transition from school into higher education and through to R&D? I will make some personal observations at this point about matters which I believe are worthy of further consideration by the Australian community at large. How do we actually go about managing our national examination system for students at year 11 and year 12 on their point of departure from the school system into the universities and on to R&D? In this country we do not have a single examination system; we have six—possibly eight, if you include the two territories. That in itself is passing strange, given that we are supposed to be encouraging increasing labour market mobility and flexibility across the country, yet we have this complete dog's breakfast of an examination system, which actively discourages families from moving from one jurisdiction to another because of the direct impact on their children, as they would have to go through differences in examination systems at critical junctures in their lives. Broadly, there seem to be two systems of assessment. My comments on this reflect remarks I made recently in Brisbane at a conference of the Queensland Association of Student Advisers. We have what I describe as option 1, which is the `apocalypse now' model. The `apocalypse now' model is a bit like the New South Wales HSC, with all the eggs in one basket. There is one particular set of exams, and if you perform well that is terrific, and if you do not you are in deep trouble. Option 2 is what I describe as the `death by a thousand cuts' model, which tends to be the system of rampant continuous assessment that we have in jurisdictions like Queensland.What we have across the country is one or either of those two systems and sometimes a cocktail of both. I think there are flaws in both examples. In Queensland, for example, I believe what we are seeing is something like a suffocation of students through an excessive pattern of continuous assessment with tests, essays and assignments due every week or so. This possibly denies some children the opportunity effectively to learn because of the impending threat of a new test or assignment that week stressing our young people out to the point where they are not learning and are not performing. In fact, it leads to a whole bunch of social problems as well, causing children to go on antidepressants and the like. We need to rethink these things. It is time for bodies, even bodies like COAG, to have a look at them so that we can get a better mix of how we examine our students which would fall between the two extremes of examination systems that we have at the moment. (Time expired)18:52:0021905Hatton, Michael, MPMr HATTONLN6BlaxlandALP00—To paraphrase a great President of the United States, who was a candidate in the 1992 elections, `It is the economy, Stupid.' In this debate, we could say, `It's the knowledge economy, Stupid.' What we see before us in this cognate debate on the bills concerning the Australian Research Council is a lack of vision and innovation and a government lacking the touch for what Australia needs in future R&D development and support. Instead, we have the Australian Research Council Bill 2000, which goes a very small part of the way to redressing some of the massive damage that has been done to research and development in Australia since 1996. The core of my concerns in relation to this bill goes to the changes that the minister has made to the relationship between the minister and the Australian Research Council. Instead of there being a position where those who know best how to allocate funds for research in science, engineering and technology are trusted to do their job, this minister does not now trust them to do that. Previously, the National Board of Employment, Education and Training were trusted to use their expertise and scientific understanding and to use the peer review mechanisms to best distribute research funds to the most competitive research programs in universities Australia wide. In this bill, we see a series of mechanisms where the minister can actually determine the outcomes of the funding process and can completely and utterly disregard the advice that he is given by the Australian Research Council. This is a bill in which the past modalities between ministers and the organisation, which entrusted them to make clear, concise and proper funding decisions, have been utterly turned around. This is very dangerous. This comes from a minister who is really ideologically driven, who has sought day after day to harangue not only the opposition but also the country at large from a very narrowly focused basis. It is a dangerous approach because it takes it out of the hands of a reference group which does not have a vested interest in the outcome, a reference group that we should be able to trust to do the job they have been asked to do in the past, and it puts it in the hands of the minister. I intend to go into that in detail tomorrow in the last part of my speech. At this point, I would like to open up some general considerations. `It really is the knowledge economy, Stupid.'At the start of this century—we are still in the 20th century, which will not finish until 31 December this year—Australia and Argentina were at the very top of the ranking in per capita income and in quality of living. That was primarily because we could get a great deal in other countries for the commodities we produced—wool, wheat, coal, and so on. We had more than a century before that for the development of those industries. Despite the fact that they are primary industries, they were built only by innovation and research and development. They were made strong only because people like Farrer went out and did the work, developing different forms of Australian wheat, drought tolerant wheat which was resistant to rust—drought and rust are our two chief problems in Australia. The quality of the wheats that we produced meant that we could command good prices. We still face that situation now with all our primary product. We need innovation, we need research, we need development and we need government and private funds poured into producing better and smarter products which people want to buy. Our great problem currently is due to the fact that, where in the previous 30 years we had a collapse of only one half to one per cent per year in commodity prices, in 1986 we faced the situation over a couple of months where commodity prices collapsed by 25 per cent and they have continued to decline since then. When Herman Kahn visited Australia in 1974, I remember he gave a seminar to our political science group at the University of New South Wales. He was a great futurologist. In particular, he dealt with the problems that Australia would face as a commodity dependent country. He argued that in the mid-1980s to the 1990s, Australia's position would collapse because the terms of trade for us would collapse. Why? Because so many people would be producing the commodities that we had relied upon. He was pretty spot-on. That underlines the fact that we must continue to put money and resources into things that we can flog to other people, not only primary products but the products of our secondary industries. Most importantly now, because of the changed fabric of the Australian and world economies into what we regard in the tertiary sector as the knowledge based economy—the knowledge economy runs through every sector, primary, secondary and tertiary—its enhancement is dependent upon the support of government and business, remarkably lacking through most of our history, and its willingness to invest in product that will give a return both to businesses and to the country. All of those things need to be pursued at all of those three levels. It is not enough to say—to use Andrew Denton's phrase, `As long as we beat New Zealand.' If we look at the money being poured into our research efforts by business and government, New Zealand is down the table of rankings, but Australia is ranked 19th of the OECD countries. That is a pretty dreadful situation. Debate interrupted. Adjournment2190710000SPEAKER, MrMr SPEAKER—Order! It being 7 p.m., I propose the question:That the House do now adjourn.2190719:00:0021907Andren, Peter, MPMr ANDRENKL6CalareIND00—I wish to draw the attention of the House to an answer provided by the Minister for Transport and Regional Services to a question on notice which I think suggests why the credibility of the National Party and, through it, the government is in question in much of rural Australia. On behalf of Orange district fruit growers I asked the minister whether, prior to the 1998 election and during the campaign, he gave a commitment to a group representing local growers that the coalition, if re-elected, would hold an inquiry into the fresh produce, including apple, industry. Several people attending that meeting say that such a commitment was made. That meeting was attended by at least half a dozen producers, the state National Party member and the National Party candidate.My question was placed on notice in June this year, a reasonable time you would think after the 1998 election for such an inquiry to take place. After seeking your help, Mr Speaker, to obtain an answer, I received it this week. The answer from the minister says:I have been advised that a review to examine the options for the apple juice industry for expansion and value adding in response to increasing apple juice imports, will be undertaken under the auspices of the national component of the FarmBis program.Maybe the minister or his Sir Humphreys misread the question and thought it was the same one I asked the Minister for Trade, also in June, about the alleged dumping of apple concentrate in this country from China. The answer bears no resemblance to the question because the minister does not want to answer it. He gave that assurance to the meeting, according to my contacts, and he now walks away from that assurance at a time when the apple industry in my electorate is in crisis. Let me tell the House and the minister something about that crisis. Let us start with apple juice concentrate. According to some accounts, the amount of Chinese apple juice concentrate imported into Australia increased from almost 5.6 million litres in 1993 to 14.2 million litres in 1999. The Department of Trade, through the minister, provided dramatically reduced figures to those to me, but the one indisputable fact is that the amount of imports has increased by between six and 10 times over the past six years. The US department of commerce has levied duties of almost 55 per cent on Chinese apple juice concentrate imports in response to a dumping complaint lodged by the US industry. Australian producers, including several from Orange, are meeting the Minister for Justice and Customs next week to mount their own argument on the damage being caused to the local industry. I hope the minister is more frank in her answers than the minister for regional services and that a thorough inquiry is launched into the material injury the imports are causing to the local industry.Elsewhere, the Orange apple industry is appalled at the draft import risk analysis on apples from New Zealand. Despite the case mounted and evidence provided on the potential risk to the local apple and pear industry from exposure to the devastating fire blight disease, Biosecurity Australia has proposed that the risk posed by fire blight could be effectively managed. Despite the evidence of the spread and devastation caused by this disease around the world and despite the ban on imports from New Zealand stretching back 70 years, the dictates of world trade acceptable risk rules mean that we risk giving up the last of our trade advantages—strict but fair quarantine barriers against importation of disease. Biosecurity Australia argues that New Zealand apples could be imported from controlled export blocks but admits also that the bacterium causing fire blight occurs widely in New Zealand. This year between 350,000 and 450,000 trees have been lost to this disease in the state of Michigan at an estimated cost of $US42 million. No wonder apple growers in my electorate have grave concerns about a recommended system largely managed by New Zealand, whose scientific community remains under suspicion over the discovery of fire blight outbreaks in Melbourne and Adelaide a few years ago, just prior to an earlier draft import risk analysis by AQIS. The third part of the crisis facing growers is apple marketing. Growers around Orange have virtually become peasant suppliers to a market dominated by three supermarket chains. The wholesale area is corrupted, and many orchardists have been screwed down by a system that treats them with absolute contempt. This government must give its retail code of conduct real teeth by mandating marketing practices. A voluntary code is a nonsense, a sop to the powerful retail sector. There is little or no confidence among producers that this government is listening and, judging by the response from the Deputy Prime Minister to my question on notice, they are dead right.2190819:05:0021908Jull, David, MPMr JULLMH4FaddenLP10—Papua New Guinea recently celebrated its 25 years of independence. It has been 25 years of mixed results and, while Papua New Guinea remains a robust parliamentary democracy, it has endured tough economic times, appalling government mismanagement—especially during the Skate regime—and serious internal conflicts and tensions such as the rebellion on Bougainville. It is a tribute to the remarkable resilience of the 4½ million people of Papua New Guinea that they have maintained their faith in parliamentary democracy, even though their faith and tolerance must have been sorely tested. But the most sinister and most disturbing development, especially in recent years, has been the growth of massive high level corruption. This corruption, accompanied by gross mismanagement and abuse, has eroded the financial standing of some of Papua New Guinea's key state owned institutions.The nation's largest bank, the Papua New Guinea Banking Corporation, has been placed under the administration of the Reserve Bank of Papua New Guinea. But there are even more disturbing examples. The two state owned entities which have suffered worst of all from corruption and mismanagement are the National Provident Fund, set up in 1980 to provide a pension scheme for workers, and Motor Vehicle Insurance Ltd, which is the sole provider of compulsory third-party motor vehicle insurance. Until recent years these entities were well managed and had abundant funds, more than adequate to meet worst case scenarios. Today Motor Vehicle Insurance Ltd is in receivership. There is real doubt that it has any capacity to meet payments arising from death or injury in motor vehicle accidents. Only a few years ago the insurance company had assets of around 200 million kina. The National Provident Fund has suspended the payment of benefits to contributors, including those to workers who retire or the families of workers who die, at least until the beginning of 2001. It has also been widely reported in the PNG media that the funds of contributors will be written down by up to 50 per cent.Papua New Guinea has no social service benefits systems. The National Provident Fund was set up as a compulsory superannuation or pension fund for workers. It derives its funds from compulsory payments by both employees and employers. The current Prime Minister, Sir Mekere Morauta, has been left with the unenviable task of cleaning up the corruption, mismanagement and incompetence in virtually every state owned business or corporation, incurred during the administrations of his most recent predecessors, Bill Skate and Sir Julius Chan.He has set up a commission of inquiry into the National Provident Fund, headed by a highly respected Australian lawyer and former PNG judge, Mr Toss Barnett. Last week, the inquiry heard direct evidence about massive high level corruption. One of Japan's largest and most respected companies, Kumagai Gumi, was contracted by the NPF to build an office tower in Port Moresby. The cost of the building blew out massively, and it is only about 10 per cent occupied. Executives of Kumagai Gumi were called before the inquiry to explain why the cost had blown out, which has contributed significantly to the NPF's financial problems. The evidence they gave exposed alarming high level corruption. In December 1998, the executives were called before the newly appointed chairman of the NPF board—a prominent Papua New Guinea lawyer—who told them that he needed money urgently and asked them for around 1½ million to two million kina. The executives asked for time to consider such an extraordinary request, hoping the chairman would forget about it. But a month later he called them again and threatened to stop work on the building project. He then demanded 2½ million kina, which, regrettably, Kumagai Gumi paid, and they tacked the amount onto the cost of the project for the National Provident Fund to pay. At a time when the new Prime Minister is trying to clean up this mess, I believe some assistance can be given by the Commonwealth and the states of Australia to try to bring Papua New Guinea to some state of normality. Both the Commonwealth and the states have available resources that Papua New Guinea desperately needs. I believe we need to offer the full assistance of the Australian Securities Commission, the Australian Federal Police and officers from other agencies who can help trace the apparent investment of corrupt and defrauded funds in real estate and in other areas in Australia. The states should be asked to offer assistance as well. ICAC in New South Wales and the CJC in Queensland have the resources that Papua New Guinea obviously desperately needs. It is vital that the government of Papua New Guinea be asked to advise what assistance it does need, but that should not stop us from making offers now. Not only is it overwhelmingly in our interests for Papua New Guinea to be a stable democracy but also corruption needs to be detected and punished, for it is political and bureaucratic corruption that poses the greatest threat of all to Papua New Guinea's stability, democracy and future. The government of Papua New Guinea is making tough decisions to restore integrity to government. I believe it is our job in Australia to give whatever assistance we can.2190919:10:0021909McFarlane, Jann, MPMs JANN McFARLANE83CStirlingALP00—Today is Science Meets Parliament Day, and I was pleased to meet with, and be briefed by, two of the visiting scientists, Professor Tony Tate, from Murdoch University, and Dr Alison Garton, Chief Executive Officer of the Australian Psychologists Society. As representatives of the science community and of their peak body, the Federation of Australian Scientific and Technological Societies, FASTS, they were excellent advocates. Their letter offering to brief me caught my attention with the statement:Science is of increasing importance to Australia. It creates high-wage, sustainable jobs, and provides solutions to our environmental problems. Science has extended the human lifespan and created a healthier society. Australians are proud of our national achievements in science, and increasingly aware of the need to commercialise the results.At a time when Parliamentary representatives are required to make decisions about complex and difficult science-based issues, it is important for scientists and technologists to be prepared to explain the processes and effect of their work.I agree with this outlook, and I was impressed by the case they have put together about what the parliament could be doing that would benefit all Australia. The scientists say:Australia needs to:INVEST in ideas - double the ARC budget for competitive grant funding as recommended by the Chief Scientist and Innovation Summit reports.INVEST in people - double the number of Australian postdoctoral fellows as recommended by the Chief Scientist's report.INVEST in infrastructure - $500 million for public research institutions as recommended by the Chief Scientist and Innovation Summit reports.INVEST in private sector R&D - enhance R&D incentives as recommended by the Innovation Summit report.INVEST in future generations - improve the quality and quantity of mathematics and science teachers as recommended by the Chief Scientist and Innovation Summit reports.I draw the attention of the House to a booklet entitled Innovation: Unlocking the future, which came from the Innovation Summit. I am saddened by the parlous state of research and development in Australia. Page 13 of the Innovation Summit report shows Australia listed 18th out of 24 countries, and it shows our business expenditure on research and development as a percentage of GDP. The international comparison is between 0.5 and one per cent, and that has been declining for the past 10 years. The scientists are concerned about it and we in the House should be concerned about it too. The 10 top issues facing us, according to the scientists, are: 1. Invest in the future2. Science for the bush3. More science and maths teachers4. Brain drain becomes express train5. Keeping Australia in touch6. Establish the future of the CRC program7. Bringing the boys (and girls) [our overseas scientists] back home8. A national map and compass9. Reversing the decline: Industry investment in R&D10. Changing the culture through science awareness.To do this, of course, requires money. The scientists, the Australian people and the opposition see that we will not be a knowledge nation unless we greatly increase Australia's contribution to science, particularly to research and development. Research funding has decreased over the past 10 years. In business, investment in research and development has declined since 1995-96. The scientists attribute a lot of that to the cut in the 150 per cent tax concession for research and development. If we are going to unlock the future, we also need to look at the models we are developing and that operate in Australia, which underpin our future scientists and the development of future scientists. That includes looking at the school model, particularly the year 12 model.Focusing on the international benchmark of year 12 retention as a sign that things are happening has proven to be not justified. The number of children in year 12 who intend to go on to university are a minority. We need to focus on alternative models like the one in Mandurah, where after year 10, years 11 and 12 are incorporated with TAFE on a university campus on a separate site, so that young people can explore the career or job they want, particularly with science, through alternative kinds of education. This has proved much more productive in keeping enthusiastic young people involved in science and going on to get science degrees.The other thing we must do with the knowledge nation is to move away from short-term funding. The scientists are very concerned that we have continued a pattern of funding things for no more than three years. If we are going to develop big picture ideas and visions, and if we are going to commit to long-term research, this is the path we must follow. (Time expired)2191019:15:0021910Lloyd, Jim, MPMr LLOYDIK6RobertsonLP10—It is with pleasure that I rise tonight to highlight a story that happened in my electorate. About 12 months ago, a gentleman named Mr Ray Tooby approached me seeking federal funding to support an operation for his granddaughter, young Beth Tooby. I was certainly interested and keen to assist the family. Young Beth, who is now two years old, was suffering from a rare condition called bladder exstrophy. Whilst it can be treated in Australia, the success rate has been fairly poor, and the family were very keen to have Beth treated at the Johns Hopkins Hospital in Baltimore, USA.I made representations to the Minister for Health and Aged Care, Dr Michael Wooldridge, and he was of course very interested in trying to support the family in getting Beth to America. There were some difficulties in that there was some conflicting advice given to the minister. The Central Coast community got behind the campaign to help Beth go to America, and I was very pleased that they rallied behind the cause. I was also pleased that the Minister for Aged Care, Bronwyn Bishop, supported the cause and acted as patron for the Beth Tooby medical appeal, and that the member for Gosford in the state parliament, the Hon. Chris Hartcher, acted as a co-patron.The Central Coast community raised in excess of $100,000 to enable Beth to travel to the Johns Hopkins Hospital in Baltimore, USA, which is the leading hospital for treatment of this particular condition. A travel agent on the Central Coast, First Choice Travel, which is run by Colin Shedden, donated $10,000 worth of return air fares to enable the family to travel to America. Of course, this amount of money was not enough to cover Beth's medical expenses, and we continued to put representations to the federal government to assist with the funding to allow Beth to have this operation in America and to be treated by the world's best specialists. I am very pleased to announce tonight that we have received approval from Dr Michael Wooldridge to fund up to $350,000 to enable young Beth Tooby to receive the world's best treatment for this very rare condition. She is now in Baltimore in America; I spoke to her parents at 1 a.m., their time, yesterday to inform them of the decision, and they were delighted and were virtually in tears over the decision. It means that they can now concentrate on being with Beth through the operation and her full recovery, without the continuing concern of having to raise a very large amount of money to fund the operation. This is what parliament is all about: to be able to make representations for people. It has not been easy. There was some conflicting advice in relation to this case, and it has been a long, hard battle. It was only with the support of the Central Coast community, the Minister for Aged Care, and many other people that we have enabled this family to, hopefully, give Beth Tooby a long and normal lifestyle after this operation is performed on, I believe, 10 November. The prayers of everyone on the Central Coast are with Beth. We believe that the operation will be successful and that she will be back on the Central Coast in a few weeks time, looking forward to a normal, happy, healthy life, thanks to the contributions of the Central Coast community, the dedication of her family, and the support of the federal government through the Minister for Health and Aged Care. (Time expired)2191119:20:0021911Hatton, Michael, MPMr HATTONLN6BlaxlandALP00—Today is Science Meets Parliament Day. One of my colleagues just alluded to some of the information presented to us when two scientists came to see us earlier today—different scientists for different members. It was my pleasure to speak to Dr Barry Conn, from the Royal Botanic Gardens in Sydney, and Dr Fiona Stapleton, who is linked to the University of New South Wales in the field of optometrics. One of the key elements that they dealt with today is investment in future generations. There is a great problem in that the quality and number of people trained in mathematics and science has fallen dramatically over time. I want to link this notion with a recent article in the Australian IT section, in which Ericsson, the largest private R&D investor in Australia, has argued against increasing the R&D concession from 125 per cent back up to something else. With the changes in the taxation system, to get an equivalent bang for the buck you would have to look at something in the order of 230 per cent, and possibly to 250 per cent, in the R&D concession. Ericsson has argued that the government should not be looking at that; they should look at something entirely different, and that is to invest in basic competencies and skills. I will go to the paper that was given to us by the scientists today. They argued that we should invest in future generations to improve the quality and quantity of mathematics and science teachers, as recommended by the Chief Scientist and Innovation Summit reports. They quote from an American group which looked at the same sort of problem. It was entitled `Before it's too late'. They said:The teaching pool in mathematics and science is inadequate to meet our current needs; many classes in these subjects are taught by unqualified or underqualified teachers. Our inability to attract and keep good teachers grows. As a result, newer, technologically oriented industries are having trouble finding enough qualified employees from among the teachers' students. Worse, creativity atrophies and innovation suffers.What is true of America is absolutely true of Australia; probably more so. The fundamental point that the Leader of the Opposition made today in regard to the Australian Research Council Bill 2000—and, as a former teacher, I brought this up in a Dip. Ed. program many years ago—was that, unless you have a passion for your subject matter, as has been demonstrated by research in one of the states of the United States, you have nothing to teach anyone. Karl Marx had a wonderful phrase for this. He called it `craft idiocy'. Essentially he said that, unless you are so utterly wrapped up in a field of knowledge or a field of endeavour that you put your own interests aside in order to devote yourself to the craft, to the profession or to the trade that you are involved in, you will not actually achieve much. Unless we have mathematics and science teachers trained in mathematics or science, those who are inspired by and passionate about those subjects have nothing to communicate to their students. They cannot spark the desire for knowledge in those areas. For the future, Australia needs a really strong mathematics and science sector, and it needs to be based in the schools. To go to the point in the Australian article, Ericsson argued that the government would be a lot better off not increasing R&D because in the past we have not got the best value out of our R&D. The tax concession for R&D was 150 per cent; it is now at 125 per cent and regarded as uneconomic. Instead, the government should invest in competencies and skills and should provide industry in Australia with well-trained people. If you start at kindergarten and primary level and run it through the high schools, TAFEs and universities, we can employ those people. Currently Ericsson have 500 engineers on their payroll. They need another 40, but they cannot find them because there are not adequately skilled people here in Australia. So I think there is great merit to that idea. The two ideas should be twinned. There is a lack of mathematics trained and science trained people. For teachers in schools who are not trained in those disciplines, teaching adequately is almost impossible.2191219:25:0021912Gash, Joanna, MPMrs GASHAK6GilmoreLP10—Tonight I rise to speak on the federal government funding of state government and non-government schools in my electorate of Gilmore. I do so in order to see the facts presented without untrue influences. Naturally parents and P&C associations are anxious about funding for their schools—education of their children should be their number one priority. Many lies have been perpetrated through the schools by the teachers union and backed up by the Labor Party, so much so that the perpetrators have pitted family against family. It is something that I find unforgivable. It is happening only in New South Wales, a Labor state. Every other state has accepted the fairness of the new system. I am horrified at the example we are setting for our children, all because of politics.In Gilmore, a non-government school wants to hold a community event to celebrate Christmas and has invited all the schools from the district to join in and participate. Normally these schools would have come, but now these state government schools have refused, saying they would not be associated in any way with this school. This is the really frightening part: they have told their students not to mix with the private school kids. If that is not enough, they have sent home letters to all the parents suggesting that they too boycott the event. How is that for education? Parents who are working two or three jobs, going without holidays and making sacrifices to place their children in non-government schools are being targeted as greedy and as stopping other children from getting an education. This political action is being perpetrated by the same state government that objected to my sending a letter of support to all HSC students in my electorate, on the grounds that it must be a political act. What a load of codswallop! What hypocrisy!Let me make the first point very clearly: funding to state government schools is being increased, and funding to non-government schools is being increased. No school is missing out, and no school is losing funds to the other. In fact, the federal government is increasing funding to the state government schools by 4.4 per cent. Let us not forget that state government schools are supposed to be looked after by the state. It is not the role of the federal government, and the state are very quick to pass the buck for their own shortcomings. The New South Wales state government are increasing funding to their own schools by only 1.9 per cent. I repeat: 1.9 per cent. It is their responsibility, yet we are funding a 4.4 per cent increase.I am sure many here have heard the term `EBA', which stands for enrolment benchmark adjustment, and how the federal government is ripping off the state government schools and giving the money to the rich private schools. It is true that the federal government does take back almost 50 per cent from the EBA, but let me explain why. Every state government school is allocated roughly $6,000 per student. Every private student is allocated roughly half of that. When a student leaves a state government school during the year to enrol at a non-government school, that funding does not go with the student to the new school. In fact that school continues to receive the funding for that student for the rest of the year. That means that the school continues to receive $3,000 for a student who does not go to the school. What does the state Labor minister want? He wants the full 100 per cent of funding for a student who is no longer there. That is how the system works, but this is not what my constituents are being told. One must ask the question: why. Let me tell you why. In the last four years, almost 20,000 students have left the New South Wales state government school system to enrol in the non-government system. This has not happened anywhere else in Australia. So, under the EBA system, the New South Wales government received about $40 million last year for students who were not at the state schools. What a windfall! We asked for about $17 million of that back—less than 50 per cent; $40 million a year. Does anyone wonder why the New South Wales government is screaming to keep it? Why isn't the New South Wales government matching the increase in federal funding of state government schools, given the savings it is making? It could almost be worth its encouraging students to leave, if it is still going to get the money.No-one is asking the question why the students are leaving the state government school system. Well, I did. The answer is always the same: discipline, choice and quality of education. No-one is blaming the teachers, but I do blame the state minister and the state Labor government for taking away the autonomy of the teachers and the schools. Let me also say how much funding has gone into the state schools in my electorate of Gilmore. In the last two years, Callala Bay public school— $2.1 million; Ulladulla public school—$2.15 million; North Nowra public school, Havenlea—$4.15 million; Sanctuary Point public school—$188,000; Kiama public school—$2.65 million, plus the West Nowra campus—$6 million; the West Nowra TAFE campus—$5 million. That totals $22.1 million for all state facilities. 10000SPEAKER, MrMr SPEAKER—Order! It being 7.30 p.m., the debate is interrupted.19:30:0021913House adjourned at 7.30 p.m.Miscellaneous219132191321913Ferguson, Martin, MPMr Martin FergusonLS4BatmanALP00 asked Mr Speaker, upon notice, on 3 October 2000: (1) What is the basis of the practice of changing the Australian flags that hang in the House of Representatives each sitting day, what is the cost of each flag and how much has it cost for each of the last five financial years. (2) Is he able to say whether the same practice of changing the flags applies in the Senate; if so, what has been the cost of changing the flags for each of the last five financial years.21913SPEAKER, MrMr SPEAKER10000PON/A10—The answer to the honourable member's question is as follows: On 18 April 1997 Speaker Halverson agreed to a program to provide to Members, for presentation to eligible community groups, National Flags which have hung in the House of Representatives Chamber. It should be noted that the flags are flown outside the Chamber at the Member's Hall entrance and not actually in the Chamber. The four large National Flags hanging at each corner of the Chamber are flown permanently. Each sitting day two new flags are flown and at the commencement of the next sitting day the flags are removed and replaced with new flags. The flags that have been removed are then made available to Members together with a certificate signed by the Speaker. With the current number of sitting days, approximately 150 flags will be available for distribution to Members each year. DOFA administers the Constituents Flag Request Program, which allows for both Senators and Members to obtain flags on behalf of their constituents. The program operating within the House of Representatives is part of the DOFA administered flag program. The following information concerning the cost of the flags distributed through the House of Representatives program since the program commenced has been provided by DOFA. The total cost of the flags since 1997 is $45,855.00 with individual flags costing, $83.00. More specific information is as follows: Date of PurchaseQuantityCost23 March 1997160 flags$12,655.0014 January 1998100 flags$8,300.0030 November 1998100 flags$8,300.0025 August 1999100 flags$8,300.0012 April 2000100 flags$8,300.00 Advice received from the Clerk of the Senate indicates that the Senate displays two National Flags in the Senate Chamber, pursuant to the order of the Senate of 8 October 1992, which are not changed. A copy of the Clerk of the Senate's advice is attached.Notices21914The following notice was given:7V5Williams, Daryl, MPMr Williams to present a bill for an act relating to the jurisdiction of courts, and for other purposes.2000-11-01—————Mr DEPUTY SPEAKER (Mr Nehl) took the chair at 9.40 a.m.Statements by Members219152191509:40:0021915Ellis, Annette, MPMs ELLIS5K6CanberraALP00—In the brief time available to me this morning, I want to congratulate a local primary school in my electorate. Mount Neighbour Primary School, in the suburb of Kambah, is celebrating its 25th anniversary this year. The relevance from my perspective and from that of the community is that the Mount Neighbour school was the first primary school to be built in the Tuggeranong Valley, an urban part of Canberra that is now home to 90,000 people. The school opened at the beginning of the school year in 1975. It was officially opened in June of that year by a previous member of this House, Mr Kep Enderby. It took only a very few years for the population at Mount Neighbour Primary School to reach the figure of 600. That was back in the days, and leading into the period, when the Tuggeranong Valley was affectionately known locally as `nappy valley'. The growth rates in that area for some years were maintained at a record level for Australia—in fact, topping the urban growth rate for the country for some years. Mount Neighbour obviously had a very strong role to play in that regard.The current school population is about 200. There is a wonderful community spirit surrounding the school. The school program includes peacekeeper roles for students within the playground. They have an enrichment program for all students, whereby people from the outside community come to the school and involve the students in activities ranging from mechanics, at one end of the spectrum, to ballet and craft at the other. There are two classes at the school which specialise in teaching children with disabilities. I understand there are 14 children in the integration program within the school. The advice I have is that the way that these children are taught is to the absolute credit of the staff and the community at the Mount Neighbour school. Recently, four children from the disability class group participated in Wakakirri, a national dance festival. I know that the people who ran the national dance festival were more than impressed by the ability of that school to include four children from that special area of the school.The school community has celebrated their 25th birthday very well, with a range of activities and special celebrations which included students, staff, the P&C, parents and the general community around the school. Some people do not realise that, in looking at Canberra, our history is now beginning to really take hold. Mount Neighbour Primary School is very much part of that history. As it was the first primary school in the Tuggeranong Valley, a very vital part of my electorate, I take this opportunity to congratulate the community then and the current community, and to wish Mount Neighbour, that wonderful school, ongoing success.2191509:43:0021915Stone, Dr Sharman, MPDr STONEEM6MurrayLPParliamentary Secretary to the Minister for the Environment and Heritage10—I take the opportunity today to put on the official parliamentary record the extraordinary success and hard work of a group of people on the Tragowel Plains, in the heart of my electorate, the place from where my soul springs, where my family have farmed for the last 130 years. Ten years ago, the Tragowel Plains Land and Water Management Group tackled the most extraordinarily difficult problem of irrigation-associated salinity. For many people in that area, this problem had been a blight on their family farms for over three generations. They took it upon themselves to address the problem, with the strong support of the state government agency of the day, the department of agriculture, and with state and federal funding. Ten years later, they provide an example to the rest of Australia, showing how communities can be empowered; how they can take on planning to overcome salinity on a regional scale—in fact, this must be done if the problem is to be successfully overcome; how the landscape can be changed; and how, at the end of the day, the future can be changed. With respect to the landscape in that area, which has always been known as a treeless plain, there is now a waving sea of trees along roadways. Domestic gardens have come back. In particular, the natural vegetation, which was once found only along the creekways, has regenerated so that the biodiversity, the birdlife, the native flora and fauna, are once again flourishing. How did this all come about, because it was only the other day that our Prime Minister announced a $700 million salinity plan for all of Australia? The Tragowel Plains plan engaged the people and gave them the skills and the technical support to produce an outcome that, in just 10 years, resulted in only 31 per cent of the watertable being less than one metre from the surface, compared with 83 per cent of the watertable being less than one metre previously.Over 470 kilometres of community service drains are now in place and over 414 kilometres of farm drains have been constructed. Around 95 per cent of irrigated land on the Tragowel Plains has been surveyed for its salinity—soils are graded as A, B, C or D class—and in fact 75 per cent of all the land was surveyed in the first five years of the plan. In 1988, 30 per cent of the land across the area was classed as C and D class soils. Later surveys have found that only 20 per cent of the area now contains C and D class soils—because of the different land management systems in place and the drainage systems that have been put in.Over one-third of the whole irrigated area has now been whole-farm planned. Four hundred thousand trees have been planted across the landscape, work that has been done tirelessly by the men, women and children for over a decade. As I said before, this area now has a biodiversity that a lot of other regions would be proud of, yet it was an area that for 100 years suffered the degradation of irrigation induced salinity. This is, of course, the oldest irrigation district in Australia—it commenced in 1886. I am proud of this area. I think the people deserve enormous congratulations. (Time expired)2191609:46:0021916Gillard, Julia, MPMs GILLARD83LLalorALP00—I rise today to refer to an announcement that the Deputy Prime Minister and Minister for Transport and Regional Services made in the course of question time yesterday. It relates to the Essendon Airport. The Deputy Prime Minister said:So, in the face of this—that is, lobbying from country Victorians—the government has decided that Essendon Airport will remain open as an operational airport. We will sell our shares in Essendon Airport Ltd. EAL, the company, has a 50-year lease over the airport, and the purchaser will be required to continue operating the site as an airport.I would have to say that one would hope that, in making major decisions of this kind, the government was engaged in pursuing a rational strategy that had been the subject of widespread community consultation. Unfortunately, that cannot be said of the decision announced yesterday.Let us just be clear about the process here. It is an issue that is of particular concern to me because the Point Cook Air Base in my electorate has been caught up in the same process. That process was that the Minister for Finance and Administration wrote to the Premier of Victoria in January this year and indicated that the Commonwealth intended to dispose of both sites—that is, the Essendon airport site and the Point Cook site—and sought the Victorian government's views about the disposition of those sites. Indeed, so keen was the Commonwealth to sell these sites that the Minister for Finance and Administration came and had a look at the two sites in autumn this year, obviously appraising them as he wandered around, for their potential value if sold for residential development or whatever. The Victorian government was responding to the Commonwealth's inquiry about its views by developing an aviation strategy for Victoria, because it had taken the very rational view that one would not deal with the closure or maintenance of airports outside having a comprehensive strategy for Victoria in relation to aviation. Out of the blue, whilst the Victorian government is still involved in that process, the minister made the announcement yesterday. We are entitled to ask against this background: is this the final announcement from the Howard government about the Essendon Airport or is there going to be another change of heart? What is the Howard government's aviation strategy for Victoria, or is there none? Is it not a fact that, in reality, this decision was just about a desperate attempt to save votes in the countryvotes it knows it is losing because of the petrol price crisis?Finally, let me say that, if decisions of this magnitude are made solely on the basis of community pressure, I trust the Howard government is aware of the very many groups that are lobbying to save Point Cook and keep it open and in the hands of a not-for-profit company as an educational, tourist and aviation precinct. I suggest to the Howard government that it take some interest in what stakeholders in the Point Cook site are saying and respond to our calls to keep the site open. (Time expired)2191709:49:0021917Thompson, Cameron, MPMr CAMERON THOMPSON84CBlairLP10—I would like to continue with the aerospace theme this morning by congratulating the area consultative committee at Ipswich on the excellent work it has put into developing the aero team proposal for Amberley Air Force Base in my electorate. The aero team proposal is a proposal developed locally to see the ushering in of a real aerospace industry in south-east Queensland. The Amberley Air Force Base has been there since the 1930s and it has always had a pre-eminent role in the military in Australia. But now it faces a new opportunity with the commercial development of RAAF based work, such as the overhauling of F111s and that kind of work. It involves a lot of potential earnings and it has attracted a lot of interest not only from huge aerospace companies, such as Boeing and Lockheed Martin, but also from smaller types of SME aerospace companies. One of those, for example, is Ball Aerospace, which has a certain level of expertise in a particular area. But then we could go right down to just local people who are involved in the development of avionics or equipment to assist small light aircraft as well. All of those types of things can be developed at the Amberley Air Force Base. It can be developed there now because of AeroTeam, which is this local consortium involving not only representatives of Boeing and Lockheed Martin and those sorts of companies but also the smaller ones. AeroTeam has been put together and has been very active in lobbying and trying to attract those small operators onto the Amberley Air Force Base so that they can get involved in some of this commercial activity.Last Thursday, the Minister for Employment Services, Tony Abbott, came to Amberley Air Force Base to launch the AeroTeam concept and to announce that $330,000 of Commonwealth money would be going in from the Regional Assistance Program to assist this organisation. AeroTeam over the next three years is going to be funded by the Commonwealth to get out there and attract this business. Of course, what it is proposing to do over that time is to become self-sufficient so that by the time the three years are up the organisation will have its feet on the ground and will be self-funding. It will be able to continue to attract major enterprises to the area. This is an ideal area for development because, although it has been a RAAF base for many years, the whole of the western part of that base is developed but the whole of the eastern part of the base remains undeveloped. So there is tremendous opportunity there for industry, and there is a tremendous opportunity for us to build a future for south-east Queensland. The potential value of that work could be up to half a billion dollars a year. (Time expired)2191809:50:0021918Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—I wish to protest in the strongest possible terms against the decision by Email to close the Chef factory in Brunswick. I wish to protest about the shabby treatment by Email of 520 workers and their families, its shabby treatment of me and its shabby treatment of the Victorian state government. It is shabby treatment of those 520 workers and their families. The workers have served loyally, worked hard and engaged in no industrial disputation for the past 30 years. It is shabby treatment of me by a company which has not yet had the courtesy to come and talk to me about its proposals, even though I visited that factory on a number of occasions both before and after becoming the member for Wills. It is shabby treatment of the Victorian state government, giving them no practical opportunity whatsoever to discuss ways by which that factory could be allowed to continue in Brunswick.This is a good plant which has been making money, and I have to say that I think that the practice of buying up factories in order to close them down is a disgraceful and deplorable practice. Most people, and certainly most men, recall the character played by Julia Roberts in the film Pretty Woman, but if you remember the character played by Richard Gere, Edward Lewis, he was a corporate raider who bought up companies in order to strip their assets, sack their work forces and flog them off to someone else. It is part of his turning from a cold, callous predator into a functional human being, by discovering his humanity—not the only part—that ultimately he becomes involved in running a company that actually does something worth while.So I say to Email: this was a perfectly good factory which had been operating on this site since, I think, 1912. It was making good quality cookers and wall ovens until you came along 18 months ago. If you did not want it, why did you buy it? Why couldn't you just leave it alone? Governments used to have most of the power and companies used to have little power. Now it is the other way around. But with that power comes responsibility. If Email acts with cavalier disregard towards its work force, it invites community outrage. It is regrettable that the Howard government has been taking the most cursory of interest in research, development and innovation. What we really need with industry policy is support for innovation and skills formation, strategic intervention and cost competitiveness. (Time expired)2191809:55:0021918Elson, Kay, MPMrs ELSON6K6FordeLP10—It is a great honour to speak today about a unique memorial that was dedicated and consecrated in my electorate last Sunday. This remarkable memorial is a testimony to the many special Australians who have served our nation in peacekeeping forces since 1947. I understand it is the first one of its kind in Australia. Many Australians may not be aware that our peacekeepers have served in more than 26 different areas of operation since the Second World War, most recently and at present in East Timor. Some have paid the ultimate sacrifice and others no doubt continue to suffer as a result of their service. It is very fitting that we have a memorial dedicated to them that will be a lasting reminder to the community of the debt of gratitude we owe to these brave men and women. I am indeed honoured and privileged to have been able to assist the local residents who worked so tirelessly to make the memorial a reality. I am very proud that it is located within my electorate, at Carl Heck Boulevard in Windaroo Park. There is not the time today to mention all the people who have been involved in this project, but there is a special man who has been the driving force behind the memorial. I have had the honour of knowing Bob Whiley for quite a few years. He is an ex-serviceman and a volunteer member of many local organisations. When his son was one of those brave men who headed to East Timor last year, Bob naturally spent a lot of time thinking about him and his mates, as many Australians did. That was when he set upon the idea of creating a memorial for all Australian peacekeepers, just as we have memorials all around our nation to those who have served in war.Bob received support and advice from many along the way, and I do apologise if I miss any here. There were the Australian Peacekeepers and Peacemakers Association, which is based at Enoggera in Queensland, and the Gold Coast City Council. The major donors who made the construction possible were Mr and Mrs Mark Paul, Mr and Mrs Greg Burns, Denice and Phil Connolly, Tony and Gail Stephens, Mr and Mrs Allan Harbour, Brian and Helene Gassman, Mr and Mrs Grealey and Mr and Mrs John Jarrett. Along with them were other local businesses: Albert Crane Hire, Kennards Beenleigh, Trades and Labour Beenleigh and Mount Warren Nursery.The special guests at Sunday's dedication included Major General Simon Willis, Commander Ken McBryde, Brigadier Pat McIntosh, Air Commodore David Dunlop, and Mark Ney of the Federal Police, amongst many others. It was a very moving ceremony, and the memorial and park setting are absolutely stunning. I am sure the memorial will serve as a lasting reminder that world peace will only be achieved through the ongoing efforts of free and democratic countries such as ours. I congratulate and thank all local residents involved, especially Bob and Sandra Whiley.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER (Mr Nehl)—Order! In accordance with standing order 275A, the time for members' statements has concluded.Bills21919R1162BillsR116121919Debate resumed from 5 October, on motion by Mr Truss:That the bill be now read a second time.09:59:0021919O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—It gives me great pleasure to speak in the House today on the Horticulture Marketing and Research and Development Services Bill 2000 and the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000. These are very important pieces of legislation that set the framework for the future development of the horticultural industries in Australia. I commend the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry for her efforts in negotiating these bills with the industry. I understand it has been a long and difficult process for her. Whilst I intend to move a second reading amendment criticising the government for its failure to provide information in a timely manner, at the same time I acknowledge the effort that has been put in by the parliamentary secretary and the deep and abiding interest that she has in the horticultural industries of Australia. At the outset I have to confess my personal interest in this particular industry. I was raised in the Western District of Victoria in a little township called Alvie at the base of the Red Rock Crater Lakes. My father owned a farm at the base of Red Rock which had rich black volcanic soils, an area that produced horticultural products as well as dairying. I have very fond memories of the industry in my formative years growing up on the farm. In those days we were onion and spud growers as well as dairy farmers—we had a mixed farm—and I can recall bagging onions by hand. I drove the trucks that brought the bags in. They were stacked in very long onion stacks and we would put the shutters on those stacks. We did not have internal storage as many farms do these days and, as the market could accept the produce, we engaged in picking the onions over and getting them to the marketplace. It was a very rich upbringing. I have fond memories of that onion harvesting operation, certainly in the summer months, and of the introduction of mechanical harvesters. A mechanical harvester was introduced to our home property, and it gave me great pleasure in the summer months of those days to join my uncles and other farm workers in what I would say was a very dirty operation and which, probably today, would be classed as an unsafe working environment, but in those days it was a case of getting the onion crop off to the marketplace.It was a very labour intensive industry in those days. As members would appreciate, horticultural industries generally are. There was no irrigation—we relied on rainfall—and of course yields varied considerably. There was no use of chemicals. In those days you got down on your hands and knees with a hand hoe and went up and down the rows to get the weeds out of the crop and give the onions a chance to grow. There was no bulk handling in the sense that we know it today. Today, harvesters go through the paddocks putting the produce in bulk bins. It is then processed by some very sophisticated machinery for a very sophisticated market. The varieties that we were able to plant were Golden Globe and Spanish onion; some people got into growing reds and whites, depending on the market, but that was about it. It was labour intensive with little irrigation and no use of chemicals, little bulk handling and a limited number of varieties that growers could choose from.How things have changed in Australian horticulture! Today horticultural industries cannot survive without irrigation. They may well still be labour intensive, but the use of chemicals is now of particular concern to the industry because of the way in which consumers have become aware of the use of chemicals in food production—and how discerning they are. Life was fairly simple on the farm in those days, and the Irish clans were heavily into spud and onion growing, and when times got tough on the farm somebody would say, `None of us will starve as long as the Delahuntys are growing spuds.' It was a bit like that!JT4Bailey, Fran, MPFran Bailey—You could shoot a few rabbits.WU5O'Connor, Gavan, MPMr O'CONNOR—Yes, we did have a rabbit problem that certainly did cause great difficulty for the farms in those days. The honourable member for McEwen just raised that issue. I can recall the days when rabbits were herded into fenced-off areas and disposed of in a way that I think would certainly excite the Australian community today, but in those days it was a necessity.They are very fond memories of my upbringing in a horticultural production area, and of the people. They were quite extraordinary people. My family lived through the era of statutory marketing, the drive to establish the Onion Marketing Board in Victoria, the black marketing that went on when growers did not market through the board, and the waiting for your cheque from the centralised marketing agency—that was always a concern for our family. An interesting history evolved in the Colac area with the rise of vigilantes, who were very much proponents of the board and who were willing to defend it by what I would say were fair means or foul. This particular part of our rural history is one that interests me because it involved my father, uncles and other people that I grew up with. Members might be interested to know that that interest, when I retire from this place, will obviously become the subject of some more intensive writings. Let me go to the potential of Australian horticulture, before I move to a detailed consideration of the bills. The opposition recognises the important value of these industries to Australian agriculture, and we recognise the employment generating potential of it. When we come to power in just over a year's time, when the Prime Minister calls the election, we will most certainly—and I can give this assurance to these industries—do all we can in government to encourage their development and to encourage their employment generating potential.In 1998-99, the value of Australian horticulture was in the region of $5.6 billion. The number of growers was about 80,000. Of course, in the value adding chain, just in fruit and vegetable processing—with which the honourable member for McEwen is well acquainted—there are some 11,500 people in that alone. This is an exciting industry that has enormous potential that has not been realised. It is very pleasing that, in the process of establishing this new entity, I understand that some 28 industries have come together for the very first time to ponder their future and to see a collective future under this structure. As I have said before, I commend the Minister for Agriculture, Fisheries and Forestry, and the parliamentary secretary for her patience, in dealing with a very fragmented part of Australian agriculture but a very significant one for Australia's economic future.I do have another interest in this particular industry from the point of view of my own electorate. In the Geelong region, we have identified the value adding task as one that we ought to aim for in our economic development. Of course, value adding to food and fibre is already a strong part of the manufacturing economy of Geelong and it is one that we intend to encourage. In my electorate, we do have a very significant asset—Avalon airport. It is an asset that is underdeveloped. I will recall a little of the history of this particular asset, because it relates very much to how we, in government, viewed the future potential of this industry.We targeted, before the 1996 election, the transport task as a motivator of economic development, and Avalon was earmarked as one of six regional air hubs around Australia that would be involved in the direct export of agricultural produce, amongst other products. Avalon airport lies at the juxtaposition of the Princes Highway, the national standard gauge rail network that runs through Geelong, the Port of Geelong—which is the largest bulk handling port in the Southern Hemisphere—and, of course, an airport with thousands of acres around it, an airport that can carry the biggest air freighters.Our objective in establishing that facility was to give a massive boost to horticulture, floriculture and aquaculture products: to bring them through this facility, set up a dedicated air freight operation that downstream—in Victorian communities, in Tasmania, South Australia and the Riverina—would give an enormous impetus to primary producers, in the horticultural area particularly, who sought to place their products on time and in a good quality state in very lucrative markets to our near north and in the Middle East. So from those two perspectives I have a very deep and abiding interest in horticultural industries.I did note in the wool debate last night that the honourable member for Corangamite alluded to my horticultural background, and I must say I am proud of it. He did raise it in a derogatory sense by saying, `What would an onion grower know about the wool industry?' I could very well say, `What would a retired wool grower'—that is what the honourable member for Corangamite is: a retired wool grower—`know about horticulture?' I thought it was a bit cheeky of him, because his Prime Minister is, I think, a lawyer from Sydney who dons the Akubra and goes out into the bush: he knows a lot about horticulture and the wool industry! The Treasurer, who has imposed this enormous GST burden on the horticultural sector, is a lawyer from Melbourne. Well, he would know a lot about it! And, of course, the current minister under the spotlight has allowed a rort to occur with his phonecard to the tune of $45,000—probably in excess of the income earned by many horticultural producers. So I think it was very naughty of the honourable member for Corangamite to raise those matters, and I do thank the Deputy Speaker for the licence he has given me to respond in this debate to that unwarranted attack on my— 10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—It was a very minor attack.WU5O'Connor, Gavan, MPMr O'CONNOR—Well, a very minor attack, but it is significant that I set the record straight regarding my horticultural upbringing.The bills that we are discussing here today create a horticultural industry service company which will operate under Corporations Law and will provide marketing, research and development services to Australian horticultural industries. This particular entity will replace three statutory authorities: the Australian Horticultural Corporation, the Australian Dried Fruits Board and the Australian Horticultural Research and Development Corporation. It will be a `not for personal profit' company that has industry representative bodies as its members and voluntary funding contributions.I commend the industry for opting for the not for personal profit type of corporate structure. I will have some words to say conceptually about what is being done here and the reservations that we as an opposition have, but let me say that opting for a not for personal profit company is a particular development that we are more disposed to live with than some other models that have been proposed for the privatisation of agricultural research and development in debates and bills that have been before the parliament only yesterday. A very important function of this particular body will be its power to exercise the export control function which was previously administered by the Australian Horticultural Corporation, and I might turn to a discussion of that particular matter as we move through this piece of legislation.Of particular concern to the opposition was the way in which this privatised body, and others that have functions that are being privatised, would be accountable to the Commonwealth. We understand that there will be a deed of agreement which will be entered into between the Commonwealth and the company to ensure that accountability to the Commonwealth. This has been a particularly contentious point for us, and it gives me no pleasure to move this second reading amendment. I move:That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the Bill a second reading, the House condemns the government for failing to provide key documents detailing how the new company Horticulture Australia Limited is to be held accountable for public moneys provided for research and development in a timely manner”.I have moved that second reading amendment because at the 11th hour, after we had indicated to industry that we would oppose this bill, the government came forward with the memorandum of understanding that governs these accountability measures, a copy of the constitution of the new entity—which we had not seen up until I think Monday night—and, of course, a copy of the deed of agreement. This was a very serious omission by the government. If the government seeks our cooperation in getting these very momentous structural changes through for particular agricultural industries, it ought to take on board the fact that it needs to be as open as it can be—not only with the opposition but with non-government parties—on these matters. We will not sign up to structures which we might have significant reservations about in a philosophical sense and where we do have not access to at least some basic detail that goes to the heart of how these bodies will be accountable for the public funds that they receive. For example, in the case of the wool industry, last night we debated the Wool Services Privatisation Bill 2000 which the opposition has opposed because the Minister for Agriculture, Fisheries and Forestry has not brought to the opposition some of the very basic details about the privatisation that is being proposed for that industry. After some requests to the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, she did supply the opposition with the working draft of the deed of agreement. That was the last document we received. The memorandum of understanding was received I think on Monday evening and the draft constitution of the new body was received at that same time.The opposition needs time to consider a structural change of the significance that is presented in this bill that we are debating here today. The key to the second reading amendment—and it is the point that we want to make—is that the government failed to provide this information in a timely manner. It is symptomatic of a government that cannot get ahead and cannot get on top of its legislative program that we have seen this situation emerge, not only in agriculture. A particular point that is made by other shadow ministers in dealing with the legislative program of this government is that members of the government are not on top of their own legislative program and the way they treat the processes of this parliament borders on arrogance. It is symptomatic of a government that is, in political terms, in a terminal state of decay: it becomes arrogant and out of touch. The Prime Minister is certainly arrogant and the Treasurer is arrogant and out of touch.At the end of the day, the parliamentary secretary, who has carriage of these industries for the government, presented these documents to the opposition, and I publicly thank her for doing that. She did the right thing. The regrettable thing is that it was not done in a timely manner. We will put that particular fact on the public record. The industry was horrified that, when we contacted them—I think it was as late as Monday at the death knock—when we thought this legislation was coming into the parliament on either the Monday or the Tuesday, we had not seen the drafts of these particular documents.The opposition does have some grave reservations about the models that are being proposed here for this particular industry. We will put our concerns on the public record in these debates and in debate in the Senate. We have here the amalgamation of marketing and research and development functions in a corporate entity, which now lies directly outside the scrutiny of this parliament. I think that is an important point to make. I know the industry has come together in a rather unusual collective effort and opted for this type of structure. I acknowledge that. I acknowledge the effort that the parliamentary secretary put in to get the industry around the table and to agree.But the simple reality is this: the entities that are being created in this industry and others will be responsible for the expenditure of tens of millions of dollars of taxpayers' money. At the end of the day, they will be outside the direct power of scrutiny of this parliament. There are stipulated mechanisms within this piece of legislation that might lead some to the conclusion that the industry is being held even more accountable than it already is for those public moneys. In making this point in this debate here today, I in no way cast aspersions on the leadership of the horticultural industries of Australia. I have dealt with a lot of industries in my time as shadow minister. I have dealt with a lot of people in rural industries. As the parliamentary secretary would know, I think these are very honest people with great integrity. The comments that I make here really relate conceptually to how this body has been structured. There are dangers in combining in the one entity the marketing and research and development functions. This is one that the board of the new entity will have to consider with a great degree of care. In the past, when in government back in the 1980s when many of these horticultural corporations were established, we opted for a separation of the marketing and promotion functions from the research and development functions. We instituted mechanisms to get appropriate linkages between those functions without actually combining them in the one organisation. It is something that the directors of this new company will have to pay heed to in a very real sense to ensure that, in particular, some of the smaller industries reap the benefits of the initiative that is enshrined in the legislation here today.Time eludes me to speak in detail about this bill, but there are a couple of things that I need to say. I am very pleased that in this legislation the rights of employees have been taken into account. The bill provides for the transfer of employees to the new entity and for those employees to be engaged by the new company on transfer day on the same terms and conditions and accrued benefits as they are entitled to with the statutory authorities. It is very important for the personnel, who have worked on behalf of industry in those statutory corporations, to have those benefits transferred. I commend the government and the industry for the view they have taken on this.That is not a view that is shared in the wool industry, for example. Of course, the wool industry takes a different view of this matter for different reasons. It is very important that, when these transitions are made, the rights of employees are protected. The honourable member for Mitchell, who has just arrived, knows a lot about sheep. There are a lot of sheep on the backbench of the coalition. He comes into this chamber, and the first thing he does is sit down and have a shot at me. I can take that from the honourable member for Grey. I was in his electorate recently, and they speak very highly of the honourable member for Grey in South Australia. I can cop a bit of criticism from him. But the honourable member for Mitchell really stretches the bow when he comes in here and has a shot at me. I did not quite hear what it was he said.10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER—He was questioning your relevance to the proceedings of the House.WU5O'Connor, Gavan, MPMr O'CONNOR—But if it alluded to the comments made by the honourable member for Corangamite in the debate last night, I would certainly challenge it again.Industry groups believe that this new structure will deliver greater industry ownership, accountability and control of the investment of industry funds that are made available for research and development; that it will provide an integrated approach to research and development and marketing services, which is very much desired and needed in the horticultural industries of Australia; and that it will provide the opportunity for each sector of the horticultural industry to create an industry advisory committee. This committee will oversee the expenditure on research and market services, provide them with an opportunity for more market relevant and market focused investment and, at the end of the day, lower costs and increase efficiency. They are indeed very noble objectives, and we wish the industry well in the path they have chosen to follow.In my concluding remarks, once again, despite the second reading amendment we have moved—to make the point we want to make in this whole area—I acknowledge the role of the parliamentary secretary in getting industry together to discuss collectively its future and the enormous personal investment that she has made in the horticultural industries of Australia. I am sure that that contribution is appreciated by all sectors of the industry, and I hope that in debates honourable members will acknowledge the role of the parliamentary secretary in that regard. The opposition will not be opposing this legislation. However, we have moved the second reading amendment in this chamber. 10000Nehl, Garry (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Nehl)—Is the amendment seconded?3J4Sawford, Rod, MPMr Sawford—I second the amendment and reserve my right to speak.10:28:0021925Bailey, Fran, MPFRAN BAILEYJT4McEwenLP10—It was very entertaining and interesting to listen to the member for Corio; 20 minutes into his speech he noted that he did not have time left to speak about the legislation. However, it was very pleasing to hear the member for Corio give credit where it is due in praising the Parliamentary Secretary for Agriculture, Fisheries and Forestry for the enormous effort she has put into achieving this outcome and getting the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000 and the Horticulture Marketing and Research and Development Services Bill 2000 into this chamber today. I also want to commend the work done by the parliamentary secretary.I cannot actually share the childhood memories of the member for Corio of growing up on the farm, especially amongst the onion patch. What I can share with the member for Corio is that I represent a very large and diverse electorate with a very diverse range of horticulture and the emphasis on value adding and marketing is, of course, as he rightly mentioned, extremely important for those most important industries.However, we are here today, and I am very pleased to be here, to speak on the Horticulture Marketing and Research and Development Services Bill 2000 and the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000. I would like to begin by noting that one of the most important outcomes of this legislation is that it will streamline the current horticulture marketing and research arrangements. This will serve to make them more efficient and responsive to industry needs and requirements with resulting benefit in terms of increased innovation and technical expertise. At present, there are three separate statutory authorities that have responsibility for horticulture marketing and research: the Australian Horticultural Company, the Horticultural Research and Development Corporation and the Australian Dried Fruits Board. With the introduction of this bill, one company, Horticulture Australia Ltd, will assume this role and, most importantly, it will transfer ownership and responsibility for horticultural issues to the industry and its members. In addition, there will also be considerable operational savings by the streamlining of the current AHC and HRDC arrangements. With industry representative bodies and voluntary funding contributors as its members, the new company will not only work in accordance with industry but, most importantly, it will be responsive to the needs of industry.This government has worked closely with the horticultural industry through the Horticultural Industry Alliance Steering Committee to ensure that the establishment of this company is geared towards working to the needs of industry, in terms of both marketing, and research and development requirements. Indeed, the government will continue to match R&D funds provided by the horticultural industries. This rate will be up to 0.5 per cent of the gross value of production. This is no less than that which applies to other rural industries. The establishment of the Australian Dried Fruit Trust will also allow previously accrued funds to be released from the trust to meet the marketing needs of the export of dried fruits.Horticultural industries form one of the main areas of economic activity in which this country has a real comparative advantage. I know that in my electorate I have a broad and diverse horticultural industries base—industries that include fruit and vegetable growing as well as floriculture. These industries are among some of the most efficient and productive in Australia and in many instances they are engaged in export activity. In order for them to experience continued growth and for greater efficiencies to be realised, a single industry owned marketing, research and development company will be best placed to contribute and support such achievements and activities. The horticultural industry is as complex and involved as any other industry. In important research areas such as plant health, there are many and varied disciplines including entomology, mycology, bacteriology, virology and nematology. Coupled with this is the need to develop integrated strategies in order to deal with such issues as pest and disease management. More focused and responsive R&D programs can lead to increased productivity and quality for growers, improved capacity to meet market requirements and reduced pesticide load and residues on produce and the environment.A critical role for Horticulture Australia Ltd will be to assist producers and processors to develop the skills and knowledge needed to achieve world's best practice by utilising the latest research and the latest market information. At this very moment there are emerging market trends in the international apple, potato and cut flower industries. It is imperative Australian horticultural industries are in a position to capitalise on these exciting opportunities. A marketing and research development company will also greatly enhance the process of innovation in horticultural industries. It is vitally important for such a marketing and research development company to bring together the undoubted expertise and knowledge that exist currently in the horticultural industries. Innovation is what makes industries and companies competitive, not only in the domestic market but also in an international setting. Considerable export opportunities exist, particularly in Asian countries that lack the expertise and technology that is so abundant in our Australian industries. There are horticultural companies in my electorate that have made considerable inroads into that Asian market, establishing valuable and profitable niches. In order for them to capitalise on this they need support in the areas of research and development and marketing. We all know that a growing export industry not only means better trade figures but also has strong benefits for the domestic economy in terms of job and wealth creation, and provides that much needed growth for so many of our regional communities.Research and development and marketing arrangements will now be determined by the industry, allowing it to have the flexibility with which to best address its own particular circumstances and needs. There will be tremendous scope to improve and to sustain the competitiveness of Australia's horticultural industries by combining effective R&D and marketing activities. The further development of the horticultural industries will comprise cooperation and coordination of R&D, technology transfer, marketing, education and training, and commercialisation. There are many small individual growers and harvesters who do not have the benefits of economies of scale. This bill will ensure that these small businesses will gain access to a significantly wider array of research and development and marketing services, services that may otherwise be out of their reach and which may detract from their competitiveness.It is not the role of government to try to tell industry what it already knows. This government recognises that private industry is the most effective gauge of future trends and directions. As the most important stakeholder it must have significant input and responsibility for its development and future prosperity. I believe that these bills will help to galvanise an already flourishing industry into one that will promote and reinforce the image of Australia as a world leader and innovator in the area of horticulture. I commend these bills to the House. 10:38:0021927Zahra, Christian, MPMr ZAHRA84HMcMillanALP00—I welcome the opportunity to participate in this very important debate on the Horticulture Marketing and Research and Development Services Bill 2000 and the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000. In general terms, as outlined by my colleague and friend the member for Corio, we support the thrust of this legislation and commend the government on its initiative in bringing together all the disparate elements of the horticultural industry. In essence, the legislation is basically to enable a company limited by guarantee to be established as the single horticultural industry services body to provide both marketing and research and development services, replacing the Australian Horticultural Corporation, the Horticultural Research and Development Corporation and the Australian Dried Fruits Board.This structure has strong support from all sections of the horticulture industry and has been the subject of significant consultation over the last few years. Industry groups believe that the new structure will deliver greater industry ownership, accountability and control of the investment of industry funds, an integrated approach to research and development and market services, the opportunity for each sector of the horticulture industry to create an industry advisory committee to oversee the expenditure on research and market services, an opportunity for more market relevant and market focused investment, and lower costs and increased efficiency. These are all objectives which we support.We believe that the support for the industry by way of this legislation is significant, for the reasons outlined earlier by the member for Corio; that is, we have the highest respect for the individuals and groups involved in this industry. A significant saving is to be delivered by this restructure. It is estimated that administrative savings will be in the vicinity of $550,000 per year. The opposition would rather see those funds put into horticulture research, marketing and development as opposed to just being spent on administrative services, which ultimately do not benefit those people who put in their labour day in, day out, as well as investing large amounts of their own money to advance the horticultural sector in Australia. But in general terms, we welcome the bill and we support the approach which has been taken, subject to the second reading amendment which has been moved by the member for Corio and seconded by the member for Port Adelaide.It is important to place in context what we are talking about when we are discussing the Australian horticulture industry. We are talking about an industry which is estimated to be worth about $5.6 billion per year. This is no rinky-dink industry; this is a substantial industry and a substantial employer—there are about 80,000 growers involved in the sector. There are estimated to be about 11,500 workers employed in the horticulture sector. So it is a substantial industry, a substantial exporter and it has the potential to be a substantial adder of value in Australia, which is something that all members of this House hold dear. We would like to see more value added to Australia's horticulture, and we would like to look closely at ways in which we collectively can support that endeavour. The bringing together of these different groups contained in the bill represents one important step towards seeing more value added to Australian horticulture and the greater encouragement of Australian horticulture to explore export markets.I would like to give a few local examples in order to add a local flavour to the debate. In my constituency, in the Latrobe Valley, there is a company called Hazelwood Roses. Hazelwood Roses is a great example of what you can do in terms of horticulture. Hazelwood Roses is a state-of-the-art hydroponic rose growing facility. With over nine acres of multispan hothouses, Hazelwood Roses is the largest geothermally heated, specialist hydroponic rose grower in the Southern Hemisphere. It has no less than 27 per cent of the Victorian fresh-cut rose market. This is a substantial industry which employs close to 100 people in my constituency. For those people who have knowledge of my constituency, the idea of roses being produced in the Latrobe Valley is not something which people automatically assume would take place there. The Latrobe Valley is perhaps best known for its power stations, coal mining and forestry operations. But we have been able to use the Hazelwood pondage—which is a part of the Hazelwood power station—with its warm water, to produce roses which are now having a substantial impact on the Victorian market, as well as being a substantial export earner for Australia. It is a fantastic development which has taken place there. It is the type of thing which we want to support and encourage. We want to see more investments along those lines and more jobs created in rural areas like the Latrobe Valley. So I commend what Hazelwood Roses has been able to do in terms of generating local employment.When we talk about horticulture we should not forget the apple and pear industry, or fruit growers more generally. Many fruit growers in my constituency have contacted me in relation to fire blight, which they are extremely concerned about. This is a sensitive issue which requires a great deal of consideration. We are talking about people's livelihoods, about investments which families have made, not over 20 or 30 years but, in many cases, two or three generations. To say that apple and pear growers in my district are alarmed about the developments in the threat of fire blight would be to substantially understate the level of concern which they have. I have received presentations of material which sets out exactly what fire blight, as a disease, is capable of doing to the Australian apple and pear industry.AQIS has produced a draft import risk assessment in relation to allowing apples in from New Zealand. I know that the people of AQIS do the best job they can, but in my view they have not been able to demonstrate adequately why there is zero risk from allowing those imports to come from New Zealand. In my view, there is not zero risk, and in allowing such imports we create a substantial risk for the apple and pear growers in Australia who have made such a substantial investment, over many years, in that sector. We owe them better than exposing their industry, their livelihoods, to that type of risk.In this discussion of the provisions of the bill in relation to horticulture, I want to mention the hydroponic tomato industry in Warragul. Who would have thought, even 10 years ago, that growing hydroponic tomatoes would employ 100 or so people in my constituency there? Warragul is best known for its rich dairying land and the efficiency of its dairy farmers. It is probably one of the best-known and best-regarded dairying areas in Australia. But not far out of the town we have also a hydroponic tomato plant which has substantially increased the number of jobs associated with it. The member for Corio—the shadow minister for agriculture—and I were able to visit the plant less than four months ago.One of the key issues holding the plant back at that time was the lack of a natural gas pipeline to the plant to enable it to take advantage of that energy source and so reduce costs. I am pleased to be able report that, thanks to a grant made by the Bracks Labor government in Victoria, the plant will now have access to the use of natural gas, which will have a substantial impact on its business and will enable it to pursue new horticulture opportunities. This is the type of investment, and the type of focus on value added and more refined product, which we like to see. We would like to see a greater involvement of the federal government in achieving such opportunities for companies like the hydroponic tomato plant in Warragul. I commend the Bracks Labor government on that initiative in putting in the natural gas pipeline to that plant.In the context of this discussion of horticulture, and agriculture more generally, it is important to consider the impact of transitional arrangements. The bill does so in considering the transitional arrangements which must exist in terms of the staff and also of the direction of the new structure. That brings me to the importance, in communities such as in West Gippsland, in my constituency, of assisting with restructure more generally when the nature of the industry in those areas changes. Take, for example, the closure of the Bonlac Dairy Plant in Drouin in West Gippsland, right next door to Warragul. That took place eight or nine months ago and had a substantial impact on the town. There were 180 people who lost their jobs at that dairy manufacturing facility, and that is in a community of around 5,000 people. In Melbourne, I suppose, the loss of 180 jobs has very different ramifications than it does in a community like Drouin. As I have been around and spoken to small business people in the district, they have told me, unprompted, that that loss has led to a substantial loss of confidence amongst small business people in the town. And when small business people are not doing well, when the town's wage and salary earners are not doing well, it casts a dark shadow over the whole community.It is for this reason that the Baw Baw Shire Council and others made approaches to the federal government to get assistance through the dairy structural adjustment package. I remind members present for this debate that this package was an amount of money which we in the Labor Party fought very strongly to get as a part of the package that went through the federal parliament to compensate dairy farmers for the impact of dairy deregulation. It was $45 million over three years. We had a lot of confidence in the importance of getting this money. We certainly fought very hard to get it in the hope that, when there were things like what has happened in Drouin, there would be some money made available to the community so that they could get new jobs in the town, create some confidence and optimism, and move away from the closure and on to the next big employer that would be able to generate the prosperity and growth to ensure the success of small business and related service providers.Unfortunately, we have just had the announcement of those projects which have benefited from the Dairy Regional Assistance Program in Gippsland. Whilst there have been announcements for three important projects, they are quite small projects and none of them relates to the Drouin community. I think that is a great lost opportunity. We have a very clear example of something that has happened in West Gippsland as a result of dairy deregulation, in the lead-up to dairy deregulation, with the loss of those 180 jobs. But even though this package was specifically put in place to assist dairy dependent communities to make the transition away from dairy as the dominant supplier of income and wealth in a town, there has been no money provided to this town to help compensate for that loss and to generate new jobs and new economic prosperity for this town. I think this is a substantial oversight by the Minister for Agriculture, Fisheries and Forestry and the department, because I cannot think of an example in any other dairying region in Australia where there has been a closure of a dairy manufacturing facility which has had such a substantial impact on a community as has happened in Drouin. So I urge the minister to reconsider that and to intervene in this case and provide some money to assist the Drouin community to attract new industry so that new jobs and opportunities can be provided there.It is worth considering the difference in approach which has been taken by the federal government in relation to Drouin as opposed to the approach which they took in relation to Eden in New South Wales. At Eden, when there was—SD4Cadman, Alan, MPMr Cadman—I raise a point of order, Mr Deputy Speaker. These bills deal with the horticultural corporations. I understand the honourable member has a feeling of concern about his electorate with regard to the dairying industry, and he has had a pretty good run on that. I would have thought he ought to come back to the subject of this legislation. 10000Hawker, David (Mr DEPUTY SPEAKER)Mr DEPUTY SPEAKER (Mr Hawker)—Yes, I am sure that the honourable member will come back to the legislation.84HZahra, Christian, MPMr ZAHRA—This is a very important point to make, Mr Deputy Speaker, and it is incredibly relevant in the context of the provisions of this bill. We are talking about transition from an old structure to a new structure, from an old way of running horticulture to a new way of running horticulture. What is most important in that debate is that people who are affected by that transition are not left behind and are not forgotten about. That is why it is important to consider what has happened in similar areas elsewhere.As I was mentioning in relation to Eden, when that community went through a transition—and they lost 200 jobs at their cannery—appropriately there was a response by the federal government and the provision of $3½ million as an adjustment package to help that community get on with creating new jobs and new prosperity. Unfortunately, even though 200 jobs were lost in a town of about 5,000 people in Eden and about 180 jobs lost in a town of 5,000 people in Drouin, the responses were extremely different. Unfortunately for the people of Drouin, they have not been able to recover as quickly as the people of Eden.SD4Cadman, Alan, MPMr Cadman—I rise on a point of order. Mr Deputy Speaker, I would like to point out that there are a number of avenues available for the member to raise these matters: grievance debates, private members business and the adjournment debate. I suggest that he should deal with the issues there or move an amendment and turn this into the dairy adjustment bill.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—The member for Mitchell makes a valid point of order. I ask the member for McMillan to—84HZahra, Christian, MPMr ZAHRA—The member for Mitchell might not like it but this is an important issue, Mr Deputy Speaker.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—I ask the member for McMillan to come back to the bill.84HZahra, Christian, MPMr ZAHRA—I am being relevant to the bill, Mr Deputy Speaker. This is an important issue and it is important to make a comparison with what has happened in other sectors. The member for Mitchell might be well advised to visit some of these affected dairy regions so he actually learns a bit about the debate and then he will understand the significance of it in the context of talking about horticulture.10000DEPUTY SPEAKER, MrMr DEPUTY SPEAKER—I ask the member for McMillan to come back to the bill on horticulture.84HZahra, Christian, MPMr ZAHRA—I would argue, Mr Deputy Speaker, that I have not strayed very far away from the bill but I am happy, as always, to abide by your ruling to the best of my ability. As I was saying, it is important always to bring people with you in these debates and to make sure that those who are affected are not left behind. In the context of the provisions of this bill, I am confident that the efforts of the people in the horticulture industry in Australia have been to make sure that people are not left behind and that this industry can look forward to the new export opportunities which are abundant for horticulture in Australia.We are fortunate and blessed, indeed, to have an industry in Australia which had enough vision to realise that its structures were no longer adequate and that they had to come together to pool resources to make those administrative savings of around $500,000 per year to take advantage of the opportunities that exist in a rapidly globalised world. As my colleague and friend the member for Corio has mentioned, we have nothing but respect for the integrity of the people involved in the horticulture industry in Australia. We know of their labours and their efforts. We know of the substantial investment which they and their families have made over many generations. That is why we are very pleased to support them, and I am very pleased to support those people in horticulture, including the apple and pear growers, the cut flower producers at Hazelwood, and many others. (Time expired)10:58:0021931Cadman, Alan, MPMr CADMANSD4MitchellLP10—I am pleased that there is general agreement about the value of this legislation that the House is discussing today: the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000 and the Horticulture Marketing and Research and Development Services Bill 2000—complicated titles which really mean that we are setting in place a new structure. We are repealing some legislation and putting new legislation in place.As previous speakers have said, the horticultural industry in Australia has doubled its output over the last 10 years and has now reached a peak of something over $5 billion. That is rather exciting because 10 years ago the Australian horticultural industries were not so oriented towards export markets, not so committed to quality production, not so aware of market shifts and their need to shift with market and consumer taste, and so the changes of the last 10 years in the horticultural industries have, in my view, been almost a revolution. At the same time as there has been a change in marketing and cultural practices, the details and the application of research have meant that those cultural practices have also been hugely varied and improved. Previous speakers have spoken about the development of hydroponics, which certainly is an innovative way of growing horticultural crops. In certain areas, such as in the production of flowers, tomatoes, lettuce and a range of other plants, hydroponics has been able to give the consumer something fresher, younger and more tender. Though some would contend that the product is not quite as tasty as plants grown traditionally, it is still a product that has filled a hole in the market for a quality product.The changes in the horticultural marketing processes have not been confined to the products we normally think about in this regard—that is, fruit and vegetables. There have been massive changes in the production of fruit and vegetables—that is certain—but there has also been a revolution in the production of flowers, cut flowers in particular, and nursery material. The Australian nursery industry is one of the best informed in the world. It comprises gifted individuals who have a very complex business to operate in many instances, some being exporters, wholesalers and retailers within the same business. That takes a great deal of skill and careful management.In my own electorate I think of the huge contribution that the Swane family has made, over three or four generations, to horticulture and the nursery industry. There are many others, but I know that Ben Swane in particular, his sister Elwyn, and Geoff deserve a mention in the context of this bill, because they have been the heart and soul of the nursery industry of Australia, holding executive positions from the very top of the industry but at the same time making a huge local contribution to the employment, training and inspiration of young people. Families like the Swanes have been the driving force behind changes to the industry—those who have been innovators, who have sought opportunities to export, who have sought the prospect of new techniques and who have used current research and the development of that research to advance the quality and extent of their business, primarily, and of the industry, secondarily.The marketing factors that are covered by this legislation are also significant, in my view. What is happening in this legislation is that the Australian Horticultural Corporation and the Horticultural Research and Development Corporation are being bonded together into an almost privatised organisation—a company which will look at and deal with marketing and research and development for the members of Australian horticulture who have signed up to be part of this process. To sign up you need to be sure that your industry is going to pay a levy, and that levy for research will be matched by the government. Not all sections of Australian horticulture have signed up but some very significant ones have. I think that the proposals the government has developed for those industries which are enthusiastic to do this sort of thing are very good indeed. It should always be a matter of choice for those who participate, whether or not they pay a levy and whether or not they join up with a corporation such as this. The wool industry, which I know you know something about, Mr Deputy Speaker Hawker, is an example of the same sort of thing that has been put in train. The democratic rights of industries cannot be overlooked, nor are they overlooked by this government, which is very conscious of the democratic processes within industries to make sure that the will of the majority of growers or producers is observed.The funds in the new body will partly come from the levies, as I have indicated. All of that part of the levy which is allocated to the research and development of techniques within horticulture will be matched by the government with an equal amount of money. So the government is putting its hand in its pocket and is supporting the advance of the industry—not picking winners but leaving it to the industry and the board of the new body to select those projects that it thinks are significant for further research and development.There are a number of factors in the bill regarding the future of the industry that I would like to give some attention to. First of all, I have received an indication that there may be a need for some sort of amendments to clarify the meaning of marketing amounts and research and development amounts. There is also the omission of the references payable by selling agents—first purchase and buying agents. I do not know whether the government have it in mind to make those changes but I would think that, from an industry point of view, they would be very keen to get whatever money they could out of any of the subsidiaries attached to the production. That includes agents, onsellers and forestallers—if we use that word—and buying agents. They ought to be making their contribution if it is envisaged that that is part of the levy procedure.The structure of the new company is quite a good one. It allows maximum freedom and good choices to be made in the marketing, development and research of projects. It seems to me that one of the problems of the past has been the appropriate identification of research. The consultative process used by corporations in the past has overlooked some really significant areas of production. My area in the Sydney Basin is one of those. We have one of the largest cut-flower producing areas in the Commonwealth; we have one of the largest nursery industries in the Commonwealth; until recently, we had 90 per cent of the mushroom production of Australia within the electorate of Mitchell; and, in addition to that, we have significant fruit and berry production. So the electorate of Mitchell does provide a glimpse—as does the fringe of Sydney, where there is fertile soil and water available—of very high quality fresh produce, whether it be in nursery, floriculture or fruit and vegetable production.This area provides a huge amount of produce, running into the $2 billion to $3 billion value mark, according to the New South Wales Department of Agriculture, for the city of Sydney—and some going out, of course. This is a very difficult area to consult in, because it tends to comprise smaller growers with highly intensive production. They are very technically advanced in what they do and are therefore hard to contact—because there are a few scattered right around the fringe of Sydney. They do have their organisations, however, and they meet on a regular basis. The consultative process needed to identify the research that is relevant to them should not be beyond the prospect or possibility of organisations such as this company; it has not been the case to the extent that I would like to have seen in the past.The use of water is a critical thing—the conservation of Sydney's water supply. The valid use of run-off water collected by dams is now under some sort of legislative process between the Commonwealth and states, which means that the construction of dams and the use of water for irrigation in dry times have become more of interest to conservationists than to farmers. That is an extremely worrying thing, particularly when you get a proactive government, like that in New South Wales, which one day can shoot horses and the next day can be involved in rubbishing small farmers dependent on a water supply caught locally on their property for the continuance of their crop. There seems to be a huge inconsistency in this approach. Farmers in my area cannot understand that inconsistency and that failure to appreciate how reliant they are on water supply. That is a research project on its own. The residue of sprays and fertilisers in product is an ongoing concern to the consumer and study of that must always be continued. The development of new marketing and packaging processes is also something that Australians have to study carefully. World trends are very quick to change and we must really meet those consumer needs.Another area that I think is developing is the fresh-from-farm market—and it is not an insignificant market. It is a process which we tend to leave to anybody who wants to get into it—stick up a sign outside your property and hope people will come in and buy your stuff. There is, I believe, a more comprehensive approach to that. There is nothing better than to give children the opportunity of seeing how produce is grown and how it is processed and then to buy that product fresh from the person who grows it. That is an educative thing as well as a chance to buy high-quality produce, at the peak of its maturity, that has all of the nutritional value that families look for. That is a process that takes place around the fringes of all of our cities and, when you add it together, it is a very significant part of horticultural production. That, I believe, deserves attention also. So research and development and the marketing process are not simple things that are matters for consultation with just broadacre, large-area farmers in Australia. The whole industry needs to be considered. The part that tends to be dismissed but that deserves attention is that of smaller farmers with their families producing high-quality products and eking out an existence—very successfully in some circumstances. If we neglect that part of the market, a very significant supply of high-quality produce, often on farm, goes out of the system. And so what do we do? We tend to move the whole production to those areas where maturity is always a problem because product must be picked two or three days ahead of other areas, where the quality and nutritional value of the product has got to be considered, and where the cultural practices are quite different from those in coastal belts, particularly those close to cities. So I would like to encourage the new company to look widely at the way in which it consults with industry. I know that many areas of Australia have been most active in producing awareness of horticultural crops. I have here the Queensland Fruit and Vegetable Growers' publication, which is a really well-prepared promotion of the advantage of the production of fruit and vegetables in that state. This is the old COD organisation in a different guise, but it has done the growers of that state a great service in presenting their fruit and vegetable crops in proper form. My colleague Sharman Stone was good enough when I visited her area to draw to my attention the promotion of the fruit and vegetables—the horticultural produce—of the Shepparton area. All of this, from a tourism, a national and even from an export point of view, is invaluable material. There is not a page in this book on Shepparton that does not draw on the produce of the area, particularly the fruit and vegetable processes. The fringes of our cities are the same. That is also part of marketing.There is one feature of the bill that makes me a little concerned, and that is the greater centralisation of the export control process which exists alongside the export control powers of the current process. The company will have the sole responsibility for the export control process after the two-year period. Under the new process, the secretary to the Department of Agriculture, Fisheries and Forestry will have the power to determine by written order which horticultural products and which markets will be regulated and hence will require export licences before those products can be exported. So that is a very tight control right in the middle of this process. I want to see, as do the opposition, how that develops. This is a matter that horticulturists raise with me. They say, `It looks really good. The only question is: what are the centralised powers and how are they going to be developed and exercised?' That is something that will be revealed over time as this moves ahead.It is not so much the control factor that worries me, because I think a great deal of commonsense will be exercised. What worries me is the prospect of putting restrictions on Australian producers when at the same time we have open doors to produce from overseas. I believe that if there is a regulation on the way in which people must present or produce fruit or vegetables for sale in Australia then those very same rules must apply to any imports. The prospect of blocking out produce from overseas because of a risk of pest or disease but also because it would be illegal for Australians to grow produce in that manner I think is a very significant step that we ought to advance and consider.Flower growers in my electorate are always concerned on Mother's Day, Easter and Christmas, when suddenly there is a huge influx of roses which have been grown in India or somewhere else. A jumbo arrived last Easter full of roses from India. The quality looked good but they fell apart within 24 hours. The consumer would have been very unhappy with that. I have been told that they went through the normal AQIS process, but cultural practices need to be developed because I have been told that they were cultivated with human waste, which would not be acceptable in Australia. If such a cultural practice is acceptable for imports then it ought to be accepted in Australia. If that cultural practice is accepted in Australia then imports should be forced to comply with that rule. I think this type of regulation is sensible. I do not see how we can have a loaded gun at the head of Australian producers forcing rules that we like on them, but allow people to bring into the country produce which is developed, grown, produced and marketed under quite different rules.11:18:0021934O'Byrne, Michelle, MPMs O'BYRNE84SBassALP00—The horticulture industry involves a range of activities—as we have already heard today—from growing, harvesting, handling, storing, transporting, processing and supply through to the marketing of horticultural products. The Tasmanian and Australian horticultural industry is facing many challenges in the new century. These challenges have been and continue to be the process of ongoing rural adjustment, managing the biotechnology revolution, building stronger supply chains, managing and sustaining our natural environment, cultivating a skilled labour force, and the further liberalisation of world trade.Tasmanian growers have seen the impact of rapid market changes due to the economic instability of Asia into the late 1990s and the increasing trend towards globalisation of markets. Increasing Asian economic stability facilitated by continued strong growth in China and India is presenting Tasmanian growers in particular with significant market opportunities. I congratulate both the Tasmanian government, and in particular David Llewellyn, for recognising this and for the support that he has shown for the industry which will lead hopefully to further job growth and increased economic benefits for Tasmania.Growth in world demand for agricultural products is the impetus for the expansion of trade and potentially firmer international prices for horticultural products. All of these factors are, if you will excuse the pun, ripe for the taking by the Australian horticultural industry. The industry is one of Australia's most important ones. It alone accounts for a marked proportion of our total exports to overseas markets. This sector now accounts for approximately 20 per cent of the production value of Australian agriculture. The total export value for fresh and processed horticultural products in 1998-99 was $1.17 billion. Tasmania plays a significant role in this and, in the 1997-98 period, contributed $54.4 million by way of horticultural products to this export industry. That is because we enjoy several competitive advantages in Tasmania. We have off-season opportunities to supply to the Northern Hemisphere; a cool temperate climate; good water resources; an association with hospitality and tourism industries; a stable work force; cool storage, transport and port facilities to support the processing sector; and a ready supply of a diverse range of quality horticultural products for processing. We are optimistic, as is the horticultural industry, that the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000 and the Horticulture Marketing and Research and Development Services Bill 2000 will assist the industry in addressing the challenges of the 21st century. The framework was developed by the industry for the industry, thereby giving the horticultural industry greater input, flexibility and direction in the industry's future development. I note the role of the Parliamentary Secretary for Agriculture, Fisheries and Forestry in bringing the diverse industry representatives together. The conception of this new structure had its inception with the green paper by the Horticultural Industry Alliance Steering Committee. In 1999, they identified the need for a corporate structure that would develop better industry ownership and involvement in research and development for horticultural industries and allow adequate expansion of all marketing, research and development programs. Extensive industry consultation resulted in the white paper that recommended the current form of the bills. The aim of the horticulture marketing and research and development services bills is to create a single horticultural industry services company to provide marketing, research and development services to the industry. Information provided to the industry would largely be made up of advice from industry advisory committees. The company will replace the three existing statutory authorities; namely, the Australian Horticultural Corporation, the Horticultural Policy Council, and the Horticultural Research and Development Corporation. These bodies have existed since around 1987. The Australian Horticultural Corporation's role is essentially one of marketing—primarily facilitating and coordinating the effective marketing of Australian horticulture for export markets and also assisting in the development of Australian horticultural industries domestically. The functions of the Horticultural Research and Development Corporation are to identify research and development needs in the horticultural industry and to fund or carry out such research and development. The Australian Horticultural Corporation as well as the Horticultural Research and Development Corporation do not receive any direct departmental or administrative appropriation from the Commonwealth government. Both receive significant funding from industry levies. The Horticultural Research and Development Corporation also receives almost twice the amount of industry levies in matching Commonwealth contributions. The Australian Horticultural Corporation supplements its funding by the commercial sale of its products and services.As part of the 2000-01 budget, the government announced its intention to amalgamate the Australian Horticultural Corporation and the Horticultural Research and Development Corporation into a single horticultural services company to be called, much more simply, Horticulture Australia. This company will administer marketing, research and development. The Australian Dried Fruits Board will also be abolished and its functions integrated with those of the new company. The aims of the amalgamation are to develop better industry ownership and involvement in marketing and research and development, to allow the synergies between marketing and research and development programs to be fully exploited by the industry and to allow administrative savings that are approximately $550,000 per year. The amalgamation is designed to result in the one company being able to provide pertinent advice to the entire industry. The new combination will hopefully also eliminate the duplication that existed in the previous system. The industry services body, the corporation, is to use its funds to provide marketing, research and development programs to the horticultural industry. It will also devise the most cost-effective delivery of these marketing, research and development plans. The funding for this function comes from both levies and from the Commonwealth. Due to the nature of Commonwealth funding, the corporation, as a non-personal profit company, is required to act in accordance with the deed of agreement. This deed is to impose obligations on the corporation and contains details of the corporation's accountability to the Commonwealth. The deed is to contain details of the corporation's accountability to the Commonwealth regarding use of statutory levy funds, the administrative export control powers and the use of assets and liabilities transferred from the previous organisations under the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000. It is intended that the deed of agreement will provide consequences for breach of the deed. On that subject, accountability is vitally important, which is why it is concerning that the government withheld copies of the deed of agreement from the opposition until late last night. This parliament must always be satisfied that an appropriate level of protection is provided to taxpayers, and the government seems prepared to ignore that role. Despite the envisaged levels of accountability, I still have some concern that the second level of accountability may not be as extensive as possible. But I suppose it could be argued that these are always issues that we face in the privatisation process.The regulatory mechanisms that the Minister for Agriculture, Fisheries and Forestry can instigate in a bid to direct the corporation include the ability to issue ministerial directions in exceptional and urgent circumstances, the ability to obtain injunctions and the power to revoke the declaration that the corporation is to be the industry's service or export control body. These issues appear to be a little more reactive than proactive in terms of the minister's involvement. But I hasten to add that the industry has confidence in the process negotiated with the parliamentary secretary and that my local industry is also fully committed to a proper process.The corporation is responsible for administering the export control powers on behalf of the industry, issuing export licences and charging associated fees. Section 116 of the Australian Horticultural Corporation Act 1987 states that the object of the export control powers is `to enable the Corporation and Product Boards to be given the powers necessary to ensure that the Australian horticultural industries achieve their full potential in overseas markets'.The December 1999 industry-government working party review identified several market circumstances operating overseas where the use of export control powers could potentially provide net public benefits. The effectiveness of these export control powers is especially important to Tasmania, which produces a diverse range of horticultural products for both the domestic and overseas markets. The relatively small size of the Tasmanian market makes it imperative that the Tasmanian horticultural industry develops good markets both interstate and overseas. I hope the new corporation will be well placed to further facilitate this and identify new markets for Tasmanian produce. The new marketing potential offered by the corporation will hopefully redress the deficiencies in marketing at the farm enterprise level in Tasmania and will result in better coordination and realisation of export opportunities. Agricultural exports make up approximately a quarter of all of Tasmania's direct exports to overseas destinations; therefore an accountable export control body is essential to both Tasmanian and Australian exports.In the 1998-99 period, Tasmania exported nearly $24 million worth of onions, over $400,000 worth of potatoes, nearly $4 million worth of carrots and turnips, over $300,000 worth of fresh/chilled vegetables, nearly $300,000 worth of frozen beans, nearly $130,000 worth of mixed frozen vegetables, over $14 million worth of fresh apples, nearly $300,000 worth of fresh cherries and nearly $160,000 worth of frozen berries—raspberries, blackberries, mulberries, loganberries and red currants. The Tasmanian industry audits of agriculture, aquaculture, fishing, food and beverages put out by the Tasmanian Department of Primary Industries, Water and Environment has forecast that, by 2005, the value of fresh vegetables to Tasmania will increase by around $10 million. It is envisaged that this will be achieved due to Tasmania's production capacity, skills base and private sector growth.There will be three levels of accountability built into this proposed framework. Firstly, the members of the corporation are the representative bodies of the horticultural industries. These members then make up the board of directors. The board is then directly accountable to the members and shareholders of the corporation. Each industry body has its own advisory committee and is responsible for developing its own program after the annual levy payers' meeting. Secondly, the corporation is accountable to the Commonwealth government through the deed of agreement. The corporation also has to report to the government with a strategic plan and an annual investment plan and report in its annual report how many strategic objectives are achieved. The third level is via the Corporations Law. The corporation is responsible to the Securities Commission as to the proper use of corporation funds. The corporation is subject to an annual independent audit and has to show that its funds are spent appropriately.These bills will also see the transfer of assets to the value of $20 million from the existing statutory authorities. An Australian dried fruits trust will be established to hold the reserves of that industry. Funds will be available to be released from that trust for the purpose of marketing in the dried fruits export industry. The other very important transferral will be provision of transferred employees to be engaged by the new company on the same terms, conditions and accrued benefits. That is a significant and an appropriate protection for those employees' entitlements.Mr Deputy Speaker, as you would be aware, we are not opposing these bills that the industry so fully supports. As I have already said, we are hopeful that the Horticulture Marketing and Research and Development Services Bill 2000 and the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000 will assist the industry in addressing the challenges of the 21st century.I will conclude by spending a few moments talking about process. Until late last night, the government had failed to provide the key document that would detail how the new company, Horticulture Australia Ltd, was to be held accountable for the public moneys provided for research and development. This was despite requests to the appropriate departments. The deed of agreement was not signed until around 5 o'clock last night. This parliament, as I have said, must always be satisfied that an appropriate level of protection is provided to taxpayers, and it is disappointing that this vital information was not shared until so close to the debate on these bills. 11:30:0021938Hull, Kay, MPMrs HULL83ORiverinaNP10—It gives me great pleasure, as chairman of the government agriculture, fisheries and forestry horticulture subcommittee, and particularly as the member for Riverina, to support the Horticulture Marketing and Research and Development Services Bill 2000. From the outset, I would like to take the opportunity of congratulating the Horticulture Industry Alliance Steering Committee for managing this significant transition. The committee members, David Cliffe, Jon Durham, Rod Dalton, Silvio Favero, Bob Granger, Mike Macnamara, James McGeoch, Lindy Hyam, Bob Seldon and Mark Napper and committee chair Denis Byrne, together with the secretariat, Tony Harman, have fulfilled an enormous workload in consulting with the industry all over Australia. I would also like to thank Denis and his committee for their efforts in keeping me informed of the entire process.The comprehensive consultation and evaluation process began in the middle of 1998 when the HIASC was developed by Australia's horticultural industries. The brief was to explore options to create a new single service delivery entity for horticulture. Not only did it explore the options; it actually achieved the objectives, with full support and consent from the various industries and stakeholders—a task that some thought to be absolutely impossible. There would be obvious awareness among my colleagues that there are others that have not been so successful in their endeavours to bring one single industry together, let alone many industries, under the one banner. I cannot help but admire the leadership displayed by all players in this task. I would like briefly to highlight some of the benefits this bill represents for the horticultural industry. As I have mentioned previously, since Horticulture Australia Ltd was first proposed in 1998, it has undergone a rigorous process of review, research and consultation. Industry has had a direct input into all phases of the consultation process through membership of a number of steering committees concerned with the drafting, review and refinement of the proposal. Industry was consulted during the release of an initial green paper report with an extensive number of grower meetings in all major regions. I attended the grower meetings, and one in Griffith in particular, a wonderful city in my electorate of Riverina. I was certainly impressed with the process of democracy that was undertaken. A great deal of time was taken to ensure that all of my growers that were in attendance were informed of the entire process. In fact, Denis Byrne, Bob Granger and Jon Durham were extremely courteous and diligent in keeping me informed of all of the issues. These meetings were followed by a final white paper report that was presented to the Howard-Anderson government in July 1999. A summit of industry leaders in Sydney during August in 1999 endorsed the final report's recommendations. Following cabinet's decision to endorse the proposed formation of the new company in May of this year, negotiations have begun which again included industry involvement and consultation. Successful passage of this bill will allow for greater industry ownership, accountability and control of the investment of industry funds. The establishment of Horticulture Australia Ltd, comprising memberships of industry representative bodies, means growers who are members of the representative groups will have a direct say in funding and investment plans.With the introduction of this bill, Horticulture Australia Ltd will be able to administer export controls which are currently available to the Australian Horticultural Corporation and the Australian Dried Fruits Broad. These export control powers were the subject of a review by an industry-government working party that assessed the export controls and their effectiveness under the dreaded national competition policy. However, this time, the review stacked up to benefit the industry. That is rare in my book, but it happened all the same. The review's conclusion was that the horticulture industry's use of these powers would generate net public benefits, and that these benefits would be substantially eroded or lost if the powers were removed. The industry regards the retention of these export powers in the new company as extremely important. I turn briefly to the benefits that the bill represents for increasing industry ownership. Horticulture Australia Ltd will comprise industry representative bodies. Growers who are members of industry groups will have a direct say in funding and investment plans through their organisations. The company's membership will be entitled to vote at all general meetings and the extent and class of funding contribution will determine all of the voting. Levy payers who do not belong to an industry body will have the opportunity for a direct say in how their levies are struck and expanded through specific accountability requirements for an annual levy payers meeting. Through the establishment of Horticulture Australia Ltd, it is expected that almost $600,000 will be saved per year in administration costs. The support behind this bill has been strong. I reiterate that Senator Troeth, on behalf of the government, has ensured that countless hours have been spent consulting a wide array of industries. That is why the final bill has such strong industry support, and bipartisan support here in the House. I am confident that Horticulture Australia will deliver integrated research, development, marketing and promotional services to the Australian horticulture industry, with increased industry ownership, accountability and flexibility.My electorate of Riverina is rich in horticulture. It is one of the most efficient producers for this nation's economy. People in my electorate have had no handouts and have developed their skills by the sweat of their brow. I am pleased that horticulture is one of the fastest growing sectors in my electorate and also in the Australian rural economy. Horticulture offers significant opportunities for export growth, regional development and employment. However, industries like my citrus industry are currently in crisis, and I look forward to the benefits that this new structure may be able to provide for them in the future.The horticulture industry recommends this bill; I recommend this bill. I congratulate Senator Troeth, Minister Truss and the dedicated committee responsible for the delivery of this excellent bill. We look forward to continued growth in the horticulture industry.11:37:0021939Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—I thank honourable members who have contributed to the debate on the Horticulture Marketing and Research and Development Services Bill 2000. I think all speakers acknowledged the importance of the horticulture industry to Australia. It is certainly one of the industries that is contributing substantially to the growth of employment in rural and regional Australia and to the development of a vibrant economy in many rural communities.The horticulture industry has a capacity to contribute significantly to the social and economic development of our nation. The wonderful thing about the horticulture industry is the large number of people that it employs. Those jobs are almost all created in rural and regional centres. So at a time when we, as a government and as a community, have concerns about balancing the development of our nation to ensure that those who live outside the capital cities get a fair share of our progress and achievements, the horticulture industry offers tremendous potential in that regard.There has been an enormous amount of innovation in the industry. People have been prepared to back new crops and new products. As a result, Australia is developing a reputation internationally as a quality supplier of clean and green fruit and vegetables. Those industries that are growing strongly are those that have a very strong export culture and are seeing themselves as suppliers to the world rather than just suppliers to their local town or even as suppliers to Australia. It is that outward looking approach, the desire to develop an industry with a much stronger focus on future development and the opportunities that might arise, that have led to this legislation being introduced in the parliament. This groundbreaking legislation demonstrates a truly remarkable level of cooperation between a wide variety of industries. Industries which often have had a history of disputation, both internally and between them, are now working cooperatively and have signed on for this new horticulture marketing and research and development operation. As a result of these changes, I believe, the industry can look forward to continued growth and development, but most particularly to achieving it in a cooperative and efficient way. This bill puts in place the new arrangements for the horticulture industry. The purpose of the bill and the accompanying repeals and consequential provisions bill is to create the new horticultural services company that will deliver more effective marketing and research and development programs to horticulture.This is a growth industry. The gross value of horticultural production in 1998-99 was $5.5 billion, providing almost 20 per cent of the gross value of production by all of agriculture. It directly employs 80,000 people, with a further 11,200 employed in the processing of horticultural products. It is the government's intent to improve the market focus, commercial viability and competitiveness of horticulture, and this company will be a very important building block in that process. The formation of the new company has strong industry support and is the culmination of over two years of planning and consultation by the industry, in partnership with the government. May I join the honourable member for the Riverina in paying tribute also to Senator Troeth, as the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, for her work in driving the development of this new structure.The proposed approach has a strong focus on accountability built into it at three levels—firstly, between the company members, the 28 horticultural industries and the levy payers who are providing the majority of the funds for the company programs. Levy payers will have the opportunity to consider, at an annual levy payers meeting, the investment plans developed by an industry advisory committee for each horticulture industry. The company will then arrange the most cost-effective delivery of these marketing and research and development plans. Each industry body, or others contributing funds to the company through the statutory levies or by voluntary contributions, will hold voting rights in the company in proportion to the level of funds they contribute.Secondly, the company has to sign a deed of agreement with the government to fulfil its industry and public accountability roles. The deed of agreement specifies the accountability requirements by the government from the company. It includes provision for the company to prepare a strategic business plan and an annual business plan within six months of establishment. It defines what R&D expenditure is eligible for matching funds under the government's matching policy for R&D, up to 0.5 per cent of GVP by horticulture, and requires an annual audit to be undertaken of the use of matched R&D and marketing funds. Copies of the audit will be provided to the government.The company's annual report, which is intended to be tabled in parliament, is required to provide a comprehensive accounting for the use of funds, outcomes achieved for both marketing and R&D funds, public benefits achieved and the extent to which the company's plans are being met. It will also include full financial accountability, including balance sheet and cash flow position. The deed also provides for the company to give consideration to Commonwealth R&D priorities and to have in place a fraud control, intellectual property and risk management plan. Every three years, the company is required to conduct an independent review to consider the company's effectiveness in meeting its plans and the value for money of its performance. The government has also built strong accountability into the company's use of export control powers. This includes the process for declarations, and revocations of declarations, of specific products and markets that will be regulated under the export control powers, including application and consultation, review of the application by the company board, assessment and approval by the Commonwealth Department of Agriculture, Fisheries and Forestry, decision by the secretary to the department, and a timetable for the review of individual export control arrangements and of the entire scheme.Thirdly, accountability is built into this approach by the controls provided by the Corporations Law. If the company changes its constitution in a manner considered unacceptable to the government, becomes insolvent or fails to comply with the legislation or the deed of agreement, the legislation provides for the government to retain the right to declare another body as the industry services body, or the export control body, or to transfer the assets and liabilities to another suitable body. These safeguards have been provided in the legislation to ensure the company delivers what the industry and the government expect of it. The board will be required to meet Corporations Law requirements for financial and fiduciary responsibility, and the company directors will be accountable in the normal manner, as are those of any commercial company.I strongly support the legislation because it will deliver a new and more commercial approach to the delivery of marketing and research and development services for the horticulture industry, one which is driven and controlled by them, but with strong accountability for performance built in—to the horticulture industry, which will be its members; to levy payers, who will be the substantive funders; and to the government, which is providing matching R&D funds on behalf of taxpayers. I would like to emphasise that this legislation is strongly supported by the 28 horticultural industries which have worked with the government to create the new company.I note that the opposition are proposing an amendment to the legislation. In their contributions to the debate they have raised concerns about elements of the content of the memorandum of understanding, the constitution and the deed of agreement. These have all been provided to the opposition this week at their request. The documents are not crucial to the legislation which provides the framework for the new company. The deed of agreement is between the government and whatever company provides R&D and marketing services to the industry. It is a document that can be revisited or renegotiated. It will be signed off by the first board of the new company and the government.The industry representatives have made a concerted effort to get opposition support for the legislation. They have provided them with all the information that they have asked for in relation to this matter. I know that some people in the opposition have a hang-up about the idea of industry taking control of its own destiny. There are still some people on the opposition benches who believe that the government knows best and that the government should make decisions about horticultural development and maintain control. We believe that it is important for industries to not only take control of their own destiny to get the benefits that the provision of industry services can provide to the members of the company but also take responsibility if decisions are made which, with the benefit of hindsight, are not wise. It is important for industries to feel that they are controlling their own destiny. That is the kind of concept that has underpinned this government's approach to giving industry more say and control in their own affairs. That is the approach that we are taking in relation to the wool industry, which has just been the subject of debate in the other chamber. It is the approach that has been in place in relation to the meat industry affairs for some time and which is being used as a model for a number of other industries where restructuring is proposed. I would encourage the opposition to respond to the industry's clearly expressed will that this legislation should be passed promptly by the parliament and that the spirit of industry cooperation, which has been so evident in the development of this legislation, allows it to receive the unanimous support of this parliament to give the industry the confidence that it needs for the future. It was not until recent days that the opposition sought information from the government in relation to some of these matters and we have endeavoured to respond as quickly as possible. The suggestion by the opposition that the information has not been provided in a timely manner is indeed a matter of their own unwillingness or decision not to seek that information until very late in the piece.I reject the opposition amendment. I would encourage them to respond to the clearly expressed wishes of the industry to support this legislation and give it a prompt and smooth passage. I certainly commend the legislation to the Main Committee.Amendment negatived.Original question resolved in the affirmative. Bill read a second time.Message from the Governor-General recommending appropriation for the bill and proposed amendments announced.21942Bill—by leave—taken as a whole.11:50:0021942Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—by leave—I move government amendments Nos 1 to 4:(1) Clause 4, page 6 (after line 9), after paragraph (b) of the definition of marketing amounts, insert: (ba) amounts a person is liable to pay under subsection 7(1) of the Primary Industries Levies and Charges Collection Act 1991 and received by the Commonwealth on or after the transfer day; and (2) Clause 4, page 6 (line 20), paragraph (e) of the definition of marketing amounts, after “(b),”, insert “(ba),”. (3) Clause 4, page 8 (after line 4), after paragraph (b) of the definition of research and development amounts, insert: (ba) amounts a person is liable to pay under subsection 7(1) of the Primary Industries Levies and Charges Collection Act 1991 and received by the Commonwealth on or after the transfer day; and (4) Clause 4, page 8 (line 15), paragraph (e) of the definition of research and development amounts, after “(b),”, insert “(ba),”.The new company will be formed when the assets, liabilities and staff of the existing Australian Horticultural Corporation and the Horticultural Research and Development Corporation are transferred to the new company. A trust is also to be established to hold the reserves of the Australian Dried Fruits Board, which is to be abolished under the legislation. The purpose of the government amendments to the Horticulture Marketing and Research and Development Services Bill 2000 is to provide complete certainty in the transfer of levy funds to the new company. The need for the amendment has arisen because three important categories of agents liable to pay amounts collected under levies were not explicitly included when the legislation was drafted. The three categories of payments to be covered by the amendment include: selling agents, a first purchaser of horticultural products or a buying agent. The amendment requires a change to the definition of `marketing amounts' and `research and development amounts' in the definitions contained in clause 4 of the bill to include reference to subsection 7.1 of the Primary Industries Levies and Charges Collection Act 1991. I present the supplementary explanatory memorandum, which deals with these changes. Amendments agreed to.Bill, as amended, agreed to.Ordered that the bill be reported to the House with amendments.Bills21943R116121943Consideration resumed from 5 October, on motion by Mr Truss:That the bill be now read a second time.Question resolved in the affirmative.Bill read a second time.Message from the Governor-General recommending appropriation for the bill and proposed amendments announced.21943Bill—by leave—taken as a whole.11:54:0021943Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—by leave—I move government amendments Nos 1 and 2: (1) Page 13 (after line 18), after clause 19, insert:19A Operation of GST Law (1) For the purposes of the GST Law, a transfer to a person or body under section 16 or 17 of this Act is taken to be consideration provided by the Commonwealth to that person or body for: (a) in the case of a transfer under section 16—entering into obligations under the deed of agreement by the industry services body; and (b) in the case of a transfer under section 17—entering into obligations under the deed of trust establishing the Dried Fruits Trust by the trustees of that Trust. (2) Expressions used in this section have the same meanings as they have in the A New Tax System (Goods and Services Tax) Act 1999. (2) Clause 22, page 15 (line 29), paragraph (b) of the definition of levy, omit “7(2)”, substitute “7(1) or (2)”.The new company will be formed when the assets, liabilities and staff of the existing Australian Horticultural Corporation and the Horticultural Research and Development Corporation are transferred to the new company. A trust is also to be established to hold the reserves of the Australian Dried Fruits Board, which is to be abolished under the legislation. The purpose of the government amendments to the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000 is twofold.The first amendment is to ensure that the new company is able to receive an input tax credit to meet its GST liabilities when the assets of the existing statutory corporation are transferred to it. This will ensure it is not financially disadvantaged by the assets transfer. Clause 19A provides for the necessary legislative basis for the input tax credit to be provided. The second amendment ensures that a selling agent, a first purchaser of horticultural products or a buying agent cannot escape their obligations to pay the amount of a levy on behalf of a producer. This would have the unintended effect of substantially reducing the funds available to the new company for marketing and/or research and development programs. The amendment to clause 22 of the bill will ensure the definition of levy correctly captures all the categories of levy payments due to the new company. I present the supplementary explanatory memorandum in relation to these matters. Amendments agreed to.Bill, as amended, agreed to.Ordered that the bill be reported to the House with amendments.Main Committee adjourned at 11.57 a.m.Answers to Questions in Writing21945The following answers to questions were circulated:21945(Question No. 1740)174021945Thomson, Kelvin, MPMr Kelvin ThomsonUK6WillsALP00 asked the Minister for Financial Services and Regulation, upon notice, on 14 August 2000: (1) When did the Centre for Global Financial Services change its name to Axiss (2) What was the reason behind the name change (3) What benefits does the Government expect from the name change. (4) Were consultants used to determine the name change; if so what were the costs and names of consultants used for the name change (5) Did the name change involve signage, letterhead and other related costs; if so what were the costs of those changes. (6) What was the total cost involved in changing the name from Centre for Global Financial Services to Axiss. (7) What is the cost of developing the Australian Financial Services Training Alliance (AFSTA) (8) What is the cost of developing the AFSTA website. (9) From where are the funds for the AFSTA coming (10) Will members of AFSTA be charged or pay a fee for being part of AFSTA and having access to the AFSTA website; if so (a) what will be that fee (b) who will collect it and (c) how will it be collected 21945Hockey, Joe, MPMr HockeyDK6North SydneyLPMinister for Financial Services and Regulation10—The answer to the honourable member's question is as follows: (1) The name change from Australian Centre for Global Finance to Axiss Australia -The New Centre for Global Finance, occurred in mid June 2000. (2) The previous name was only ever intended as a temporary name for the organisation, and was in any case found to be difficult for the public to remember or to relate to. (3) Axiss Australia is derived from a combination of access - denoting access to the Asia Pacific region from Australia and axis - denoting the hub around which regional financial markets rotate. The name, logo and associated marketing materials provide a contemporary and forward looking image for Australia. (4) Consultants were engaged to develop marketing materials including brochures , presentation folders and a video CD ROM presentation. As part of their contract they agreed to work with Axiss staff to devise a new name and logo. There was no separate charge for the development of the name or logo. The consultants employed are INSTO Pty Ltd (ACN 093 106 524). The total cost to the consultant for concept development, design and production of marketing materials is as below : Presentation Folder AUS$18,200 Fact Sheets (x3 versions) AUS$13,500 Brochures/Booklets (x3 versions) AUS$62,000 Video CD-ROM Presentation AUS$75,000 Logo and Name Redesign included in the above package (5) The Australian Centre for Global Finance had not developed signage or hard copy stationery so no costs were involved in this area. (6) There was no cost involved in the actual name change . (7) There are no costs involved in developing the Australian Financial Services Training Alliance (AFSTA). The alliance is a voluntary grouping of 14 of the peak industry and industry training bodies in the Financial Services Sector. AFSTA has no infrastructure, secretariat or staff. (8) The total cost of developing the AFSTA website to date has been $2400. (9) There is no funding needed for AFSTA. (10) The next (3rd) meeting of AFSTA will be considering the possibility of membership fees.21946(Question No. 1765)176521946Hatton, Michael, MPMr HattonLN6BlaxlandALP00 asked the Treasurer, upon notice, on 14 August 2000: (1) Is the Minister's Department and agencies within the Minister's portfolio compliant in respect of the Goods and Services Tax. (2) What action did the Minister's Department and agencies within the Minister's portfolio take to ensure that they were GST ready by 1 July 2000. (3) Is the Minister able to guarantee that no agency within the Minister's portfolio will suffer negative impacts on its budget or services due to the GST; if not, or if the guarantee was subsequently proved incorrect, would the Minister be prepared to resign.21946Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honourable member's question is as follows: (1) In June 2000, the Chief Executives of all agencies within my portfolio were asked to provide me with written confirmation that they would be able to comply with The New Tax System from 1 July 2000. I received such assurances from each agency. (2) Through a timely process of internal reviews of existing processes, inter-agency consultation, liaison with the Australian Taxation Office, and consultation with the GST Implementation Unit of the Department of Finance and Administration, Treasury, and portfolio agencies identified areas of their systems requiring modification to ensure GST compliance, implemented these modifications, and provided staff with relevant training. (3) The implementation and ongoing management of tax reform by agencies is the responsibility of their respective chief executive officers or boards of management (as applicable). While the Government will continue to monitor the impact of the implementation of The New Tax System, the reforms are not expected to reduce the level of funding of agencies in this portfolio in real terms.21946(Question No. 1807)180721946Thomson, Kelvin, MPMr Kelvin ThomsonUK6WillsALP00 asked the Minister for Transport and Regional Services, upon notice, on 15 August 2000: (1) Has his attention been drawn to a report by Alan Kohler in the Australian Financial Review of 10 and 12 June 2000 which states that five tea-tree plantations started over the past couple of years will by 2004 dump 16000 tonnes of tea tree oil each year into a global market and last year amounted to 300 tonnes, and as a result the price has collapsed from $55 a tonne to $20. (2) Is he able to say whether the statements made in that article are correct; if so, what is the objective of the $100,000 Government grant which his media release of 28 June 200 says will develop a national strategy to grow the industry21946Anderson, John, MPMr Anderson4K4GwydirNPDeputy Prime Minister10—The answer to the honourable member's question is as follows: (1) Yes, my attention has been drawn to the report by Alan Kohler in the Australian Financial Review of 10 and 12 June 2000. The tea tree industry has been going through a period of change and has recognised a need to address this change. (2) The $100 000 Federal funding to help grow the tea-tree industry, and to Australian Tea Tree Industry Association (ATTIA), was for a 10-year strategic plan that covers the development of: . An industry marketing plan - particularly to assist small producers to gain access to markets; . A research and development plan to obtain a better knowledge and understanding of the potential uses of tea tree oil for example industrial and agricultural uses; and. A promotional and development plan that will identify potential domestic and export opportunities, and promote Australian tea tree oil and its benefits and uses. As the peak organisation for the tea tree industry, the ATTIA knows all of the issues for the tea tree oil as well as the potential for growth. They have recognised a need for a strategic approach for the success of this industry. This is why they were funded. 21947(Question No. 1815)181521947Hollis, Colin, MPMr HollisDH4ThrosbyALP00 asked the Minister for Foreign Affairs, upon notice, on 16 August 2000: What are the (a) names, (b) qualifications, (c) nominating states and (d) terms of the present members of the (i) Committee on the Elimination of Racial Discrimination established under the 1965 International Convention on the Elimination of All Forms of Racial Discrimination, (ii) Human Rights Committee established under the 1966 International Covenant on Civil and Political Rights, (iii) Committee on Economic, Social and Cultural Rights established under the 1966 International Covenant on Economic, Social and Cultural Rights, (iv) Committee on the Elimination of Discrimination against Women established under the 1979 Convention on the Elimination of All Forms of Discrimination against Women, (v) Committee against Torture established under the 1984 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, (vi) Committee on the Rights of the Child established under the 1989 Convention on the Rights of the Child and (vii) International Humanitarian Fact-Finding Commission established under the 1977 Protocol I Additional to the 1949 Geneva Conventions. 21947Downer, Alexander, MPMr Downer4G4MayoLPMinister for Foreign Affairs10—The answer to the honourable member's question is as follows: (i) Committee on the Elimination of Racial Discrimination(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresMahmoud ABOUL-NASRLawyer/DiplomatEgypt19/1/2002Michael Parker BANTONAcademic (Sociology)UK19/1/2002Marc BOSSUYTAcademic (Law)Belgium31/3/2004Brun-Otto BRYDEAcademic (Law)Germany19/1/2002Regis DE GOUTTESLawyer/JudgeFrance19/1/2002Ion DIACONULawyer/DiplomatRomania31/3/2004Francois Lonseny FALLDiplomatGuinea31/3/2004Patricia Nozipho JANUARY-BARDHILLManagement ConsultantSouth Africa31/3/2004Carlos LECHUGA HEVIADiplomatCuba19/1/2002Gay MCDOUGALLLawyerUnited States19/1/2002Peter NOBELLawyerSweden19/1/2002Raghavan Vasudevan PILLAIPublic AdministrationIndia31/3/2004Yuri A. RECHETOVDiplomatRussia31/3/2004Agha SHAHIDiplomatPakistan19/1/2002Michael E. SHERIFISDiplomatCyprus19/1/2002Luis VALENCIA RODRIGUEZLawyer/DiplomatEcuador31/3/2004Mario y Jorge YUTZISAcademic/TheologianArgentina31/3/2004Deci ZOULawyer/Govt OfficialChina31/3/2004(ii) Human Rights Committee(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresAbdelfattah AMORProfessor of LawTunisia31/12/2002Nisuke ANDOJudge/Professor of LawJapan31/12/2002Prafullachandra Natwarlal BHAGWATIJudge/ Chief JusticeIndia31/12/2002Christine CHANETJudgeFrance31/12/2002Elizabeth EVATTJudgeAustralia31/12/2000Pilar GAITAN DE POMBOAcademic (Political Science)/ Public ServantColombia31/12/2000Louis HENKINPresident US Institute of Human Rights/ Academic(Law), Political ScientistUSA31/12/2002Eckart KLEINJudge/AcademicGermany31/12/2002David KRETZMERLawyer/AcademicIsrael31/12/2002Rajsoomer LALLAHLawyer/JudgeMauritius31/12/2000Lord John Mark Alexander COLVILLELawyer/Judge, M.P.UK31/12/2000Cecilia MEDINA QUIROGAAcademic (Law)Chile31/12/2002Fausto POCARAcademic (Law)Italy31/12/2000Martin SCHEININProfessor of LawFinland31/12/2000Dr Hipolito SOLARI YRIGOYENPolitician/ Doctorate in LawArgentina31/12/2002Roman WIERUSZEWSKILawyer/ AcademicPoland31/12/2000Maxwell YALDENDiplomatCanada31/12/2000Abdallah ZAKHIALawyerLebanon31/12/2000(iii) Committee on Economic, Social and Cultural Rights(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresMahmoud Samir AHMEDDiplomatEgypt31/12/2002Ivan ANTANOVICHDeputy Minister of Foreign Affairs of Belarus Belarus31/12/2000Clement ATANGANASupreme Court JudgeCameroon31/12/2002Virginia BONOAN-DANDANAcademic (Professor of Fine Arts, University of Philippines)Philippines31/12/2002Dumitru CEAUSUDiplomatRomania31/12/2000Oscar CEVILLEAcademic (Economic Law)Panama31/12/2000Abdessatar GRISSAAcademic (Economics)Tunisia31/12/2000Paul HUNTAcademic (Law)New Zealand31/12/2002Maria de los Angeles JIMENEZ BUTRAGUENOPublic Servant (Ministry of Labour and Social Security)Spain31/12/2000Valeri KOUZNETSOVAcademic (International Law)Russian Federation31/12/2002Jaime MARCHAN ROMERODiplomatEcuador31/12/2002Ariranga Govindasamy PILLAYJudgeMauritius31/12/2000Kenneth Osborne RATTRAYSolicitor General and Principle Legal Adviser too the Government of JamaicaJamaica31/12/2000Eibe RIEDELAcademic (Law)Germany31/12/2002Waleed M. SA'DIDiplomatJordan31/12/2000Philippe TEXIERJudgeFrance31/12/2000Nutan THAPALIAAcademic (Law/Political Science)Nepal31/12/2002Javier WIMER ZAMBRANODiplomatMexico31/12/2002 (iv) Committee on the Elimination of Discrimination Against Women(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresCharlotte Charity ABAKADental SurgeonGhana31/12/2002Emma AOUIJJudgeTunisia31/12/2002Carlota BUSTELO GARCIA DEL REALEditor, Writer, Political ScientistSpain31/12/2000Silvia Rose CARTWRIGHTJudgeNew Zealand31/12/2000Ivanka CORTIAcademic (Literature)Italy31/12/2002Feng CUIDiplomatChina31/12/2002Ayse FERIDE ACARTurkey (Sociologist)Turkey31/12/2000Yolanda FERRER GOMEZGeneral Secretary of the Federation of Cuban WomenCuba31/12/2000Naela GABRDiplomat Egypt31/12/2002Aida GONZALEZ MARTINEZDiplomatMexico31/12/2000Savitri GOONESEKEREAcademic (Law)Sri Lanka31/12/2002Rosalyn HAZELLEPublic Servant (Ministry of Health)Saint Kitts and Nevis31/12/2002Salma KHANPublic Servant (Economist)Bangladesh31/12/2000Yung-Chung KIMLawyerRepublic of Korea31/12/2000Rosario G MANALODiplomatPhilippines31/12/2002Mavivi MYAKAYAKA-MANZINIPoliticianSouth Africa31/12/2002Ahoua OUEDRAOGOSocial WorkerBurkina Faso31/12/2000Zelmira REGAZZOLIDiplomatArgentina31/12/2002Anne Lise RYELLawyerNorway31/12/2000Hanna Beate SCHOPP-SCHILLINGPublic Servant, Federal Ministry for Women and YouthGermany31/12/2000Carmel SHALEVLawyerIsrael31/12/2002Kongit SINEGIORGISDiplomatEthiopia31/12/2000Chikako TAYAPublic ProsecutorJapan31/12/2002 (v) Committee Against Torture(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresPeter Thomas BURNSProfessor of LawCanada31/12/2003Guibril CAMARALawyer, MagistrateSenegal31/12/2003Sayed Kassem EL MASRYDiplomatEgypt31/12/2001Felice GAERHuman Rights WorkerUSA31/12/2003Alejandro GONZALES POBLETELawyer, Academic, Human Rights WorkerChile31/12/2003Antonio Silva HENRIQUES GASPARJudge, Government ProsecutorPortugal31/12/2001Andreas MAVROMMATISDiplomatCyprus31/12/2003Ole Vedel RASMUSSENMedical Doctor, SurgeonDenmark31/12/2001Alexander M. YAKOVLEVAcademic (Law)Russian Federation31/12/2001Megjia YUDiplomatChina31/12/2001 (vi) Committee on the Rights of the Child(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresJacob Egbert DOEKLawyer/ Judge, AcademicNetherlands28/2/2003Amina Hamza EL GUINDIAcademic (Sociologist)Egypt28/2/2003Francesco Paolo FULCIlawyer/diplomatItaly28/2/2001Judith KARPDeputy Attorney-General Israel28/2/2003Esther Margaret Queen MOKHUANEPsychologistSouth Africa28/2/2001Awa N'deye OUEDRAOGOAcademic (Linguistics), diplomatBurkina Faso28/2/2003Ghassan Salim RABAHLawyerLebanon28/2/2001Marilia SARDENBERGDiplomatBrazil28/2/2001Elisabeth TIGERSTEDT-TAHTELADiplomatFinland28/2/2003 (vii) International Humanitarian Fact-Finding Commission(a) Names(b) Qualifications(c) Nominating State(d) Term ExpiresFrits KALSHOVENAcademic/ Navy OfficerNetherlands2001Prof. Ghalib DJILALISurgeonAlgeria2001Sir Kenneth KEITH QCJudgeNew Zealand2001Prof. Paulo Sergio PINHEIROLawyer/Political ScientistBrazil2001Dr Santiago Torres BERNADEZJudgeSpain2001Dr Erich KUSSBACHDiplomatAustria2001Prof Luigi CONDORELLIAcademic (Law)Italy2001Dr Valeri KNJASEVDiplomatRussia2001Dr Marcel DUBOULOZMedical ConsultantSwitzerland2001Dr Arpad PRANDLERDiplomatHungary2001Hernan Salinas BURGOSAcademic (Law)Chile2001Dr Pavel LISKADiplomatCzech Republic2001Mihnea MOTOCDiplomat Romania200121951(Question No. 1833)183321951Tanner, Lindsay, MPMr TannerYU5MelbourneALP00 asked the Minister for Finance and Administration, upon notice, on 16 August 2000: In 1999-2000 in the Minister's Department, what was the (a) average salary paid in each Australian Public Service salary band and (b) average staffing level (average number of employees) for each band.21951Fahey, John, MPMr FaheyHQ5MacarthurLPMinister for Finance and Administration10—The answer to the honourable member's question is as follows: APS CLASSNAVERAGE SALARYAVERAGE STAFFING LEVELAPS1$27,462.0814.00APS2$32,203.11101.00APS3$35,692.41105.08APS4$39,730.4585.25APS5$44,505.2583.50APS6$52,502.45124.00EXE1$62,878.90124.92EXE2$76,380.85119.75SES1$90,297.9729.33SES2$108,493.138.42SES3$128,369.544.67Grand Total$52,709.68799.92 The above information has been provided by PriceWaterhouse Coopers based on figures available as at 30 June 2000.21951(Question No. 1843)184321951Sciacca, Con, MPMr Sciacca6J4BowmanALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 17 August 2000: (1) Since the introduction of the Temporary Protection Visa (TPV) category how many illegal immigrants have arrived by (a) air and (b) sea. (2) How many of these persons have been deported. (3) How many are undergoing refugee determination. (4) How many asylum seekers have been granted TPVs since the establishment of the category. (5) From which countries do these TPV holders come. (6) How long have they been held in detention since the positive determination of their refugee status. (7) From which detention centres have they come. (8) How many TPV holders have relocated to each of capital cities as at August 2000. (9) What basic relocation payments and services have been provided to TPV holders upon their release. (10) Has his Department received any correspondence from either State Governments or community/charity/ethnic organisations objecting to the lack of Commonwealth support services for released TPV holders.21952Ruddock, 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: (1) The TPV category was introduced on 20 October 1999. For the period from 1 November 1999 to 31 August 2000, there were 1406 arrivals by air refused immigration clearance at Australia's international airports. (Data for unauthorised arrivals by air is only held on a monthly basis.) From 20 October 1999 until 31 August 2000, there were 3556 unauthorised boat arrivals. (2) Of the 1406 arrivals by air refused immigration clearance between 1 November 1999 and 31 August 2000, 1203 were removed within 72 hours. Data on the numbers of unauthorised arrivals by air who may have been removed after 72 hours is not readily obtainable. As at 31 August 2000, 282 of the 3556 unauthorised boat arrivals who arrived between 20 October 1999 and 31 August 2000 had been removed. (3) As at 31 August 2000, 1597 TPV applicants were awaiting final determination of their protection visa applications. (4) As at 31 August 2000, 2283 TPVs had been granted. (5) As at 31 August 2000, the breakdown of TPV holders by citizenship was: CitizenshipTotalAFGHANISTAN1110ALGERIA1ANGOLA1IRAN34IRAQ1046KOREA, DEM. PEOPLES1KUWAIT4PAKISTAN2PALESTINIAN AUTHORITY4SOMALIA5SRI LANKA34SUDAN1SYRIA7TURKEY16STATELESS17Total2 283(6) There is only one point at which protection obligations are decided by officers of my Department and that is when a decision is made to grant or refuse a protection visa. Once a person is granted a protection visa they cease to be in immigration detention and released.(7) As at 31 August 2000, 2283 TPV holders had been released from the following immigration reception and processing centres (“IRPCs”) and immigration detention centres (“IDCs”): IDC/IRPCTotalCURTIN IRPC793Woomera IRPC694Port Hedland IRPC630VILLAWOOD IDC120Perth IDC30Maribyrnong IDC16Total2 283 (8) As at 31 August 2000, 2283 TPV holders had been released to the following capital cities and Launceston: CityTotalSYDNEY120MELBOURNE376BRISBANE458ADELAIDE393PERTH785CANBERRA57DARWIN29HOBART28LAUNCESTON17MISCELLANEOUS*20Total2283 * This includes persons granted TPVs and who are still in prisons, gaols and/or hospitals. (9) On release, TPV holders without adequate personal means of support are provided with cash assistance equivalent to one week's Special Benefit and one week's Rent Assistance (currently up to a maximum of $215 per adult and $65 per dependent child) to cover the period until they receive Special Benefit payments. Transportation costs from the IRPCs to release destinations are covered by my Department. On arrival at their destination, the Department of Immigration and Multicultural Affairs facilitates the introduction of TPV holders to Centrelink, who inform them of the services to which they are entitled. The TPV holders are also provided with State/Territory-specific information, including community groups who are willing to provide support. In accordance with Australia's international obligations, persons granted a TPV have access to a basic package of services. This package includes the right to work and access to Medicare, Special Benefit, Rent Assistance, Family Allowance, Maternity Allowance, and Family Tax payment. TPV holders are also able to access the Early Health Assessment and Intervention Program funded through my Department, which includes, if required, short-term intervention to address torture and trauma issues. (10) Yes.21953(Question No. 1850)185021953Danby, Michael, MPMr DanbyWF6Melbourne PortsALP00 asked the Minister for Foreign Affairs, upon notice, on 17 August 2000: (1) Has his attention been drawn to a special report in the South China Morning Post in January 2000 claiming that patients from Hong Kong had obtained liver transplants at San Yatsen Hospital in Guangzhou in June of 1999. (2) Has the Governments Human Rights Dialogue with China raised this with its Chinese counterparts or has it independently verified the report of the doctor quoted in the South China Morning Post article who worked at the Guangzhou Hospital. (3) Can the Government confirm that the transplant team openly admitted that the livers came from executed prisoners in the Peoples Republic of China where consent was not an issue. (4) Has he or the Chinese Human Rights Dialogue team established with the doctors at Guangzhou that five individuals from Hong Kong travelled to the San Yatsen Hospital to receive liver transplants at a cost of HK$300 000 or AUD$66 000. (5) Can he confirm that San Yatsen hospital has performed transplant operations for more than 40 patients from the mainland and several other Asian nations, and is regarded as the main transplant centre in Guangzhou. (6) Can he confirm the existence of an official document released by the Chinese Supreme Court, Supreme Peoples Procuratorate, Ministry of Justice, Ministry of Public Health and Ministry of Civil Affairs, entitled Provisional Regulation on the Use of Dead bodies or organs from Condemned Criminals that officially provides reason for this attitude of the Peoples Republic of China to the use of transplants from executed criminals. (7) Has the China Human Rights Dialogue verified and or questioned these violations of human rights in the Peoples Republic of China; if not, why not.21954Downer, Alexander, MPMr Downer4G4MayoLPMinister for Foreign Affairs10—The answer to the honourable member's question is as follows: (1) No. (2) No. (3) No. (4) No. (5) The First Affiliated Hospital of the Zhongshan Medical University (also known as the Sun Yatsen Hospital) performs organ transplants. It has a reputation as the main centre for transplants in Guangzhou. It performs transplants for fee-paying patients from outside China (not including Caucasians) for prices starting from CNY250,000 (about AUD50,000). (6) A document with this title was issued on 9 October 1984 and came into immediate effect. (7) Our delegation to the second round of the bilateral human rights dialogue held in Canberra on 10-11 August 1998 raised concerns about trafficking in organs of executed prisoners. The Chinese responded that consent was always obtained before.21954(Question No. 1851)185121954Danby, Michael, MPMr DanbyWF6Melbourne PortsALP00 asked the Minister for Defence, upon notice, on 17 August 2000: (1) Is he able to say whether India has acquired Russian SU-27 aircraft; if so, when. (2) How many aircraft have been purchased by the Indian Government. (3) Has India announced plans to purchase the Russian built SU 30; if so, how many and when. (4) What are the merits of these two aircraft vis a vis Australia's F-18s. (5) Has India announced that it will be purchasing an aircraft carrier in addition to its existing aircraft carrier Viraat. (6) Has India announced that it will stage naval exercises in the South China Sea in October and November 2000; if so, (a) what ships will be deployed, (b) what is the reason for the exercises and (c) has the Australian government indicated an attitude to these exercises. (7) Did the Prime Minister raise any of these matters during his recent state visit to India.21954Moore, John, MPMr MooreEI4RyanLPMinister for Defence10—The answer to the honourable member's question is as follows: (1) and (2) India has not purchased the Russian SU-27 aircraft. (3) India signed a USD1.8 billion contract for 40 Russian-built SU-30 aircraft in 1996, with an option for licensed production of up to 150 aircraft. India ordered a further 10 Russian-built SU-30 aircraft in 1998. Deliveries began in 1997 and India currently operates 16 Russian-built SU-30 aircraft. (4) (a) See answer to (1) and (2) above. (b) The SU-30K (the model currently operated by India) has a far greater range capability than the F/A-18 and is more maneouvrable. Some of the weapons fit on the SU-30K are less capable than that of the F/A-18. The current version of the SU-30K cannot support air-to-ground operations. (5) Yes, India is seeking to purchase the Russian aircraft carrier, ADMIRAL GORSHKOV. In addition, India has announced it intends to construct an aircraft carrier indigenously to an undisclosed foreign design. (6) (a) (b) and (c) The Indian Government has not released any details of any naval exercises in the South China Sea in October and November 2000. India will send four ships on a good-will deployment to East Asia in August-October 2000. The ships are a Destroyer, 2 Light Frigates and a Fleet Replenishment Ship. They will visit Singapore and ports in China, South Korea, Japan and Vietnam. (7) The Prime Minister did not raise any of these matters during his visit to India in July this year.21955(Question No. 1856)185621955Ferguson, Laurie, MPMr Laurie Ferguson8T4ReidALP00 asked the Minister Assisting the Minister for Defence, upon notice, on 17 August 2000: (1) How many separate retention bonuses are currently payable to serving members of the Australian Defence Force. (2) In respect of each bonus (a) what are the eligibility criteria, (b) what duration of additional service is required for payment, (c) what is the amount of the bonus, (d) what penalties apply if the additional service is not performed, (e) how many personnel received the bonus in the last year for which data is available, and (f) what is the estimated cost of provision in 2000-01. (3) Since March 1996 has the Government withdrawn any existing retention bonus; if so, what was the reason for withdrawal and the date that it took effect. (4) Since March 1996 has the Government created any additional bonuses; if so, what was the reason for doing so and the date that it took effect. (5) Has Defence conducted an evaluation of the effectiveness of any of the retention bonuses referred to in Part (1); if so, when was the evaluation completed and what were the conclusions and recommendations.21955Scott, 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: (1) There are currently 8 bonuses payable to members of the Australian Defence Force. (2) Air Traffic Control Retention Bonus. (a) Open to all serving Air Traffic Control Officers, who have completed No 121 Basic Air Traffic Control Course or an earlier course, and who have been awarded an approach rating by 31 December 2000. (b) A 5-year Return of Service Obligation. (c) $70 000. (d) The bonus is required to be repaid on a pro-rata basis if the recipient subsequently ceases to render continuous full-time service other than because of death, medical injury, involuntary redundancy or retrenchment. (e) For Financial Year 1999/2000 - 16 (f) $140 000. There are some eligible officers who have not yet indicated their intention.Pilot Retention Bonus. (a) Open to all Army, Navy and Air Force pilots up to and including the rank of Lieutenant-Colonel and equivalent. Lieutenant-Colonel and equivalent may be offered the bonus having regard to high performance, currency or prospective appointment in an aviation command position, and the need to fill certain critical ADF aviation positions. (b) A Return of Service Obligation of 3, 4 or 5 years, depending on the amount of bonus an applicant elects to receive. (c) 3 years - $50 000, 4 years - $75 000, and 5 years - $120 000. (d) The bonus is required to be repaid on a pro-rata basis if the recipient subsequently ceases to render continuous full-time service other than because of death, medical injury, involuntary redundancy or retrenchment. (e) For Financial Year 1999/2000: Navy - 1 x 3-year 1 x 4-year 7 x 5-year Army - 17 x 5-year Air Force - 1 x 3-year 19 x 5-year (f) $960 000. There are some eligible officers who have not yet indicated their intention.Medical and Dental Officers Completion Bonus. (a) Open to all medical and dental officers who have completed the Return of Service Obligation accrued from their training in either the Graduate or Undergraduate Medical Scheme, plus all direct-entrant officers. The bonus is usually offered at or near the expiry of a member's short-service commission. (b) A 3-year Return of Service Obligation. (c) $90 000. (d) The bonus is payable on completion of the Return of Service Obligation. A pro-rata payment may be made where the recipient subsequent to making the election either dies, becomes medically unfit for operational duty under circumstances (usually either medical or for Service reasons) that are outside the member's control, or is retrenched. (e) For Financial Year 1999/2000 Navy - none offered. Army - 1. Air Force - 2. (f) No offers have been or are expected to be made during 2000/2001.RAN Observer Completion Bonus. (a) Open to all RAN Observers holding the rank of Lieutenant or Lieutenant-Commander, and who are qualified as an Embarked Mission Commander, or who achieved this qualification on or before 30 June 1999. (b) A Return of Service Obligation of 3, 4 or 5 years, depending on the amount of bonus an applicant elects to receive. (c) 3 years - $40 000, 4 years - $65 000, and 5 years - $100 000. (d) The bonus is payable on completion of the Return of Service Obligation. A pro-rata payment may be made where the recipient subsequent to making the election either dies, becomes medically unfit for operational duty under circumstances (usually either medical or for Service reasons) that are outside the member's control, or is retrenched. (e) The offer of a bonus was valid only if accepted by 30 June 1998. A total of 38 offers were made, of which 37 were accepted. (f) The first payments will not be made until Financial Year 2000/2001 and will be 3 x 3-year for a total of $120 000. 34 x 5-year bonuses will be paid during Financial Year 2002/2003 for a total of $3.4million. No four year bonuses were taken up.RAAF Flight Engineer Completion Bonus. (a) Open to all RAAF Flight Engineers who hold or who have held Category A or B status. (b) A Return of Service Obligation of 3, 4 or 5 years, depending on the amount of bonus an applicant elects to receive. (c) 3 years - $45 000, 4 years - $70 000, and 5 years - $105 000. (d) The bonus is payable on completion of the Return of Service Obligation. A pro-rata payment may be made where the recipient subsequent to making the election either dies, becomes medically unfit for operational duty under circumstances (usually either medical or for Service reasons) that are outside the member's control, or is retrenched. (e) The offer of a bonus was valid only if accepted by 30 June 1999. A total of 48 offers were made, all of which were accepted. (f) Payments will not be made until Financial Year 2001/2002 and will be 3 x 3-year for a total of $135 000. The 45 x 5-year will be paid in Financial Year 2003/2004 for a total of $3.52million.RAN Technical Sailors Completion Bonus. (a) Open to: . members in the rank of Leading Seaman or Petty Officer qualified to perform the duties of a Marine Technician on a DDG, and . members in the rank of Able Seaman, Leading Seaman, Petty Officer or Chief Petty Officer on a FFG who completed the Mark 92 Fire Control System Maintainer's Course before 1 July 1999. (b) Two years effective service between 1 July 1999 and 30 June 2001. (c) $35 000. (d) The bonus is payable on completion of the Return of Service Obligation. A pro-rata payment may be made where the recipient subsequent to making the election either dies, becomes medically unfit for operational duty under circumstances (usually either medical or for Service reasons) that are outside the member's control, or is retrenched. A pro-rata payment may also be made where a member is currently serving an Undertaking for Further Service for having received the Military Superannuation Benefit Scheme Retention Benefit. (e) 169 offers were made, of which 139 acceptances have been received. (f) Nil. All payments will be made in Financial Year 2001/02. The liability for acceptances totals $4.865million.RAN Submariners Completion Bonus. (a) Open to all RAN submariners holding the substantive rank of Commander or lower, with a continuing liability for sea or shore posting in the Submarine Arm and who meet further Collins-class training criteria. (b) A 2-year Return of Service Obligation beginning 1 January 2000. (c) $35 000. (d) The bonus is payable on completion of the Return of Service Obligation. A pro-rata payment may be made where the recipient subsequent to making the election either dies, becomes medically unfit for operational duty under circumstances (usually either medical or for Service reasons) that are outside the member's control, or is retrenched. (e) 588 offers were made, of which 511 were accepted. (f) No payments will be made during Financial Year 2000/2001. The liability for Financial Year 2001/2002 totals $17.885million. RAAF Engineers Completion Bonus. (a) Open to all members in the Armament, Aeronautical and Electronics specialisations who hold the substantive ranks of Flight Lieutenant or Squadron Leader, and to selected Wing Commanders. Members who are promoted to the rank of Flight Lieutenant during the currency of the scheme may apply for a pro-rata payment. (b) A 2-year Return of Service Obligation from 1 June 2000 to 31 May 2002. (c) $30 000. (d) The bonus is payable on completion of the Return of Service Obligation. A pro-rata payment may be made where the recipient subsequent to making the election either dies, becomes medically unfit for operational duty under circumstances (usually either medical or for Service reasons) that are outside the member's control, or is retrenched. (e) 525 offers have been made, of which 504 have accepted. (f) Payments will not be made until Financial Year 2002/2003. The liability for acceptances currently totals $15.12million. (3) The following bonuses have been withdrawn since March 1996: . The Air Traffic Controllers Retention Bonus will close with effect 31 December 2000. The bonus was effective in retaining the services of many Air Traffic Control officers who would otherwise have resigned to take up employment with external agencies. . The Pilot Retention Bonus was closed with effect 30 June 2000. The bonus was of only limited success in retaining pilots. . The Medical and Dental Officers Completion Bonus has not been offered this calendar year, and is in the process of being closed. Specialist advice from the Director-General of Defence Health Services is that it has not been effective in retaining the services of medical and dental officers. . The RAN Observers Completion Bonus closed on 30 June 1998. The high acceptance rate would appear to indicate that the bonus was successful in stemming resignation amongst Observers. . The RAAF Flight Engineer Completion Bonus closed on 30 June 1999, and was successful in retaining the services of many Flight Engineers who would otherwise have resigned to take up employment with civilian airlines. . The RAN Technical Sailors Completion Bonus closed on 30 June 1999. The high acceptance rate would appear to indicate that the bonus was successful in retaining the services of eligible members. . The RAN Submariner Completion Bonus closed on 31 December 1999. The high acceptance rate would appear to indicate that the bonus was successful in retaining the services of submariners during the period required to resolve the issues with the Collins-class submarines. . The RAAF Engineers Completion Bonus closed on 31 May 2000, with certain extension for specific personnel to 1 June 2001. At this stage no judgement can be made on its effectiveness. (4) The following bonuses have been created since March 1996: . The Pilot Retention Bonus came into effect on 10 December 1996. The bonus was designed at a time of aggressive recruitment from civilian airlines, in particular, Qantas, Cathay Pacific, and Air New Zealand, to retain pilots who might otherwise have resigned to take up civilian employment. The loss of pilots at the time of introduction was impacting on operational capability. . The Medical and Dental Officers Completion Bonus came into effect on 1 January 1998, in an effort to stem the flow of medical and dental officers who were resigning upon completion of their Return Of Service Obligation incurred through their sponsorship in the Undergraduate Scheme. . The RAN Observers Completion Bonus came into effect on 1 March 1998. The Bonus was offered in an attempt to halt the flow of resignations amongst Observers. The potential loss of observers at the time of introduction would have impacted on operational capability. . The RAAF Flight Engineer Completion Bonus came into effect on 2 February 1999. It was introduced to circumvent an aggressive recruiting campaign from overseas, notably Japan Air Lines. The potential loss of flight engineers at the time of introduction would have impacted on operational capability. . The RAN Technical Sailors Completion Bonus came into effect on 21 May 1999. There was a requirement at the time to retain personnel who would otherwise have elected discharge, thereby jeopardising personnel levels on the DDGs, which were nearing the end of their service. . The RAN Submariner Completion Bonus came into effect on 15 September 1999. This was part of a package to retain qualified submariners during the rectification of problems associated with the introduction into service of the Collins-class submarines, aimed at stemming the flow of personnel who had advised that they would seek either discharge, or reversion to service in the surface fleet. . The RAAF Engineers Completion Bonus came into effect on 11 April 2000. It was introduced in an attempt to stem the outflow of qualified engineers to civilian employment. (5) Retention and Completion Bonuses are introduced to combat specific situations where the exodus of qualified personnel would have an adverse effect on the operational capability of the ADF. Those ADF personnel in highly technical trades are attractive to civilian employers who do not have to conduct expensive training over long periods of time, and they are targeted, frequently aggressively. In general, they are successful in persuading suitably-qualified personnel to remain. The two bonuses which have not been successful are the Pilot Retention Bonus, and the Medical and Dental Officers Completion Bonus. In the case of the former, the attraction of continuing to fly in a well-paid airline position, when considered against the possibility of further military service in non-flying roles, is sufficiently strong to overcome the short-term financial benefit of a bonus. The RAAF, which is the major stakeholder in this matter, has conducted an examination of resignation rates amongst pilots, and has concluded that a pilot retention bonus is not an effective tool. Formal advice regarding this conclusion was received from RAAF in July 1999. The other Service Headquarters were unable to reach agreement, and the matter was referred to the Chiefs of Staff Committee in April 2000. The committee agreed to cancellation of the bonus. Because the bonus had no legislated close date, and timely notice had to be given to members, some of whom were serving in areas such as East Timor and Bougainville, the bonus could not be closed before 1 July 2000. This was conveyed to members by message dated 8 May 2000. The Medical and Dental Officers Completion Bonus has not been successful, because practitioners can be better paid and gain greater experience in their fields outside of the military environment. The military demographic is basically between 17 and 57 years of age, and in good to very good health. The low take-up rate of the bonus is evidenced in the figures quoted above. The Director-General of Defence Health Services recommended closure of the bonus on 9 November 1999, and final Service Headquarters agreement was given on 25 August 2000. No offers of the bonus have been made this calendar year.21959(Question No. 1897)189721959Ferguson, Laurie, MPMr Laurie Ferguson8T4ReidALP00 asked the Minister Assisting the Minister for Defence, upon notice, on 31 August 2000: (1) Prior to the commencement of the Australian Defence Force (ADF) Enterprise Bargaining Arrangement 1999-2002, (a) how many Service personnel were in receipt of the Isolated Establishment Allowance, (b) what was the annual cost of the Allowance and (c) which specific Defence bases were designated as isolated establishments for the purposes of the Allowance. (2) Has the Government decided to abolish the Isolated Establishment Allowance; if so, (a) what is the reason for doing so, (b) is the abolition of the allowance subject to phasing in provisions and (c) what are the details. (3) Has the Defence Force Remuneration Tribunal expressed concern that the abolition of the Allowance will have a detrimental effect on the serving members concerned and involve a significant adverse impact on take home pay in some areas. (4) Has the Defence Force Remuneration Tribunal also questioned whether the Enterprise Productivity Arrangement `no disadvantage test' can be said to have been met because of the abolition of the Isolated Establishment Allowance.21960Scott, 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: (1) (a) The allowance is paid on the occurrence of a member attending duty, so the number of personnel in receipt of the allowance varies from week to week. Personnel are not required to submit claims at regular intervals, so claims can be for varying periods. Therefore, the number of members in receipt of the allowance at any one time is not easily determined. On average 2673 personnel were paid the allowance each fortnight during the period 1 November 1998 to 31 October 1999. (b) The cost of the allowance for the 12 months 1 November 1998 to 31 October 1999 was $12.2 million. (c) The following establishments attract payment of the Allowance: Australian Capital Territory Beecroft Range - Observation Post Jervis Bay, HMAS CRESWELL Majura Field Firing Range RAAF FairbairnNew South Wales Denman, Myambat Barracks Kapooka Military Area Nowra, Army Parachute Training School Nowra, HMAS ALBATROSS Orchard Hills, Defence Establishment RAAFTUS Bringelly RAAFTUS Londonderry RAAF Williamtown Singleton Military Area Tamworth Airport Albury Airport Bankstown Airport Broken Hill Airport Dubbo Airport RAAF Richmond Schofields Airport Sydney Kingsford Smith Airport Wagga Airport RAAF WaggaNorthern Territory Humpty Doo Tracking Station Jindalee, 1RSU Shoal Bay Radio Station RAAF Tindal Palmerston, Robertson Barracks RAAF Darwin Tennant Creek AirportQueensland Cabarlah, 7 Signal Regiment (EW) Canungra, Land Warfare Centre Ipswich, HQ Airfield Defence Wing Macrossan, 2 Field Supply Battalion Detachment Mount Stuart Range Complex and Ammunition Depot Oakey, Army Aviation Regiment Wallangarra, Logistic Company Archerfield Airport Brisbane Airport Bundaberg Airport Cairns Airport Coolangatta Airport Cooktown Airport Horn Island Airport Mackay Airport Maryborough Airport Mount Isa Airport Normanton Airport RAAF Amberley RAAF Townsville Rockhampton AirportSouth Australia Murray Bridge Range Nurrungar - 1 Joint Communications Unit Port Augusta, El Alamein Range Port Wakefield Proof and Experimental Establishment Woodside Military Airport Adelaide Airport Kingscote Airport Parafield Airport RAAF EdinburghTasmania South Arm, Fort Direction Wynyard AirportVictoria Avalon Airport, Geelong Bonegilla Military Area Flinders, West Head Gunnery Range Graytown Proof and Experimental Establishment Mangalore, Ammunition Platoon, Southern Logistic Battalion Monegeeta, EDE Trials Wing Newborough Training Depot Puckapunyal Military Area RAAF East Sale RAAF Williams (Point Cook) Somerton, RAN Armaments Depot Essendon Airport RAAF Williams (Laverton) Moorabin Airport Bandiana Military Area Command and Staff College, Queenscliff HMAS CERBERUSWestern Australia Exmouth, Harold E. Holt Communications Facility Garden Island, HMAS STIRLING Karratha, Pilbara Regiment Northam Military Area Port Headland, Pilbara Regiment RAAF Curtin RAAF Learmonth RAAF Pearce Tom Price, Pilbara Regiment Albany Airport Broome Airport Carnarvon Airport Halls Creek Airport Jandakot Airport Kalgoorlie Airport Perth Airport Port Hedland Airport (2) (a) The ADF Productivity Based Remuneration Arrangement 1997-99 included a commitment for the ADF to undertake a comprehensive review of IEA. The review concluded that the circumstances, which led to the introduction of the allowance many years ago, had changed substantially over time to the extent that the allowance could no longer be justified. Moreover it was replete with anomalies and any attempt to rectify those anomalies only created other new anomalies. The ADF Enterprise Productivity Arrangement 1999-2002 provided for abolition of the allowance with transitional arrangements. (b) Yes, phasing out over three years commenced on 12 November 1999. (c) Phasing out over three years saw members who were in receipt of the allowance at 11 November 1999 (the date of the DFRT Hearing of the EPA case), continuing to receive the allowance for a period of twelve months at the rate payable on 11 November 1999. The allowance is not payable for those who are posted to the establishment after that date. The Non-urban rates of the allowance are predicated on distances between the Urban/Non-urban boundary and the establishment in question. These have been based on data that came from the 1986 Census and have not been updated since. These rates continue until 11 November 2000. On 12 November 2000, the data from the 1996 Census is to be applied to determine which establishments remain in a Non-urban area and the distance between the boundary and the establishment. Based on this information new rates will be struck which will then apply until 11 November 2002. On and from 12 November 2002 the allowance is abolished in its entirety. Personnel who were in receipt of the allowance on 11 November 1999 and who have remained at an establishment which attracted IEA, will continue to receive the allowance while they remain so posted. Anybody who is posted out will cease to be entitled. (3) Isolated Establishment Allowance is determined and varied under the authority of the Minister for Defence. The Defence Force Remuneration Tribunal is responsible for determining salary and salary-related allowances. The Defence Force Remuneration Tribunal discussed the abolition of Isolated Establishment Allowance in the context of determining the overall pay rise to be awarded in the Australian Defence Force Enterprise Productivity Arrangement on 11 November 1999. During the discussions, changes were made to improve the phase out provisions for Australian Defence Force personnel currently receiving the allowance. (4) At a hearing on 6 September 1999, the Defence Force Remuneration Tribunal raised the issue of the applicability of the `no disadvantage test' to the Australian Defence Force. The `no disadvantage test' is applied in a global sense in that whilst individual components of a package might have detrimental aspects, the overall package must not result in an overall decrease in conditions. At the subsequent hearing on 11 November 1999, the issue was addressed in the Australian Defence Force submissions on the overall effect of the Enterprise Productivity Arrangement, including the abolition of Isolated Establishment Allowance. The Defence Force Remuneration Tribunal expressed reservations that the `no disadvantage test' could be said to have been met in regard to Isolated Establishment Allowance, but accepted the overall benefit of the package of conditions, including a significant salary and allowance increase.21963(Question No. 1903)190321963Latham, Mark, MPMr LathamK26WerriwaALP00 asked the Minister representing the Minister for Family and Community Services, upon notice, on 31 August 2000: (1) How many retired grandparents in Australia have full-time custody and care of their grandchildren? (2) Does the Government recognise the special financial burden and lifestyle issues faced by grandparents in these circumstances; if so, what support does the Government provide through the social welfare system.21963Anthony, Larry, MPMr AnthonyXJ6RichmondNPMinister for Community Services10—The Minister for Family and Community Services has provided the following answer to the honourable member's question: (1) FaCS and Centrelink do not have data on the number of retired grandparents who have full-time custody and care of their grandchildren. However, Centrelink records indicate that there are around 5,500 customers aged 60 years and older receiving Family Tax Benefit. This would include grandparents receiving payment to assist them with the costs of raising their grandchildren. (2) The Government acknowledges the valuable role that grandparents with the care of children play in the community. The Commonwealth provides a variety of payments to assist people in this situation, including Family Tax Benefit which helps families with the costs of raising children. Family Tax Benefit is equally available to natural parents, and to relatives who assume the care of children. Grandparents receiving Family Tax Benefit may also qualify for a Health Care Card for the children in their care. Grandparents who have primary care of their grandchildren can access Child Care Benefit which allows them to put children in care for up to 50 hours per week per child while they work or study. They can use child care for voluntary work and are eligible for up to 20 hours per week per child for non-work related purposes. Entitlement to Child Care Benefit is assessed using the grandparents' income. Grandparents may also be eligible for Double Orphan Pension in cases where one of the children's parents are dead and the other parent is either in gaol, a psychiatric institution or their whereabouts are unknown. Grandparents may also be able to access other forms of income support, such as Parenting Payment and Carers Payment. 21964(Question No. 1910)191021964Burke, Anna, MPMs Burke83SChisholmALP00 asked the Minister representing the Minister for Family and Community Services, upon notice, on 31 August 2000: (1) On the most recent data, (a) how many people residing in the Chisholm electorate have applied for the aged care savings bonus and (b) how many have received the full $1000 and $2000 bonus respectively. (2) How many complaints about the bonus have been lodged with Centrelink. (3) How many Centrelink clients have had their bonuses topped up through the review process.21964Anthony, Larry, MPMr AnthonyXJ6RichmondNPMinister for Community Services10—The Minister for Family and Community Services has provided the following answer to the honourable member's question: (1) Information for individual electorates is not available. (2) In July 2000, the Centrelink customer relations line received 179 complaints in relation to the Aged Persons Savings Bonus and Self Funded Retirees Supplementary Bonus. Numbers for August are not available at this time. (3) On 8 September 2000 a total of 20,622 Centrelink customers had received a top up of their savings bonus payment.21964(Questions Nos 1931 to 1933)1931 to 193321964Theophanous, Dr Andrew, MPDr TheophanousQJ4CalwellIND00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 5 September 2000: (1) Does the Minister stand by the definition of a refugee used in the 1951 Convention Relating to the Status of Refugees as a person owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership in a particular social group, or political opinion, is outside the country of his nationality, and is unable to or, owing to such fear, is unwilling to avail himself of the protection of that country. (2) Are refugees being accorded treatment as favourable as possible with regard to education, as Australia committed itself to do in Article 22 of the Convention; if so, how does this correlate with the Temporary Protection Visa provision to deny access to basic English classes. (3) Is the policy of mandatory detention consistent with Australia's commitment to Article 31 of the Convention which forbids imposing penalties on illegal entrants. (4) Do the Government's actions meet the criterion stated in Article 31 of the Convention that refugees should be given a reasonable period and all the necessary facilities to obtain admission into another country. (5) Did the Minister abide by Article 45 of the Convention, which provides an official process for revision of the Convention, rather than publicly criticising and ceasing cooperation with the treaty bodies created by this Convention; if not, why not.21964Ruddock, 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: (1) Yes. (2) Yes. Article 22 requires “treatment as favourable as possible, and, in any event, not less favourable that that accorded to aliens generally...”. An “alien” in the same circumstances would be a temporary entrant. Temporary entrants are not eligible for Government-funded English language tuition. (3) Article 31 prohibits penalties being imposed on refugees unlawfully in the country. In Australia all unauthorised arrivals are detained, whether or not they make claims which prima facie may engage our protection obligations. Such detention is administrative, not punitive. The distinguished refugee law commentator, Guy Goodwin-Gill in his text “The Refugee in International Law” (Clarendon Press, Oxford, page 305) expresses the view that the term “penalties” comprehends prosecution, fines and imprisonment but not administrative detention. Similar advice has been received from the Australian Government Solicitor. (4) Article 31(2) refers to movements of people who are refugees and Australia does not remove such persons to other countries. It does not refer to those persons whom we have determined are not refugees. Those not requiring protection face removal, and my Department seeks their cooperation, where possible, in arranging it. (5) Article 45 is not relevant to any of the actions I have undertaken. The Government has expressed no intention to revise the Refugees Convention, rather, the Government's aim is to clarify the obligations undertaken by parties to the Convention and to review the Convention's interpretation and implementation. There are no treaty bodies created under the Refugees Convention. Australia does not intend to cease cooperation with the UNHCR structure and its Executive Committee. Australia has, however, expressed a view, shared by other states, that the UNHCR structure and its Executive Committee should be closely examined to ensure that they are working effectively.21965(Question No. 1934)193421965Theophanous, Dr Andrew, MPDr TheophanousQJ4CalwellIND00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 5 September 2000: (1) Given the condemnation Australia has received from various UN treaty bodies, how can he maintain in his “Meet the Press” media interview on 3 September 2000 that the Government adheres to Australia's treaty obligations. (2) Is his recent announcement of Australia's position with regard to the UN Treaty bodies in contravention of Article 35 of the Convention which ensures Contracting States undertake to cooperate with the Office of the UN High Commissioner for Refugees.21965Ruddock, 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: (1) Australia has an outstanding record on human rights issues. Treaty Committee interaction with Australia is hampered by their inadequate resources and the insufficient time devoted to extremely complex issues. Given the overlap and lack of coordination between the bodies, their opinions may also be contradictory. Adverse Treaty body opinion is advisory in nature and is not `proof' of government failure to adhere to UN obligations. (2) No. Australia continues to operate closely with UNHCR in Australia and internationally in addressing the plight of refugees around the world. 21965(Question No. 1935)193521965Theophanous, Dr Andrew, MPDr TheophanousQJ4CalwellIND00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 5 September 2000: (1) In reference to his “Meet the Press” media interview on 3 September 2000 and his claim that people whose claims would not be accepted as refugee claims elsewhere are accepted in Australia, is he able to say which other Western nations are in this position and what are these tougher criteria. (2) Is it an acceptable argument to reject UN submissions about individual refugees who have met international criteria, simply because some other countries may not accept them. 21966Ruddock, 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: (1) My comments on `Meet the Press' reflected my understanding that many of the asylum seekers who are being found to be refugees in Australia were not, or would not, be found to be refugees if assessed by UNHCR in their countries of first asylum. As an example, approval rates by UNHCR for Iraqis in Turkey and Jordan are in the 20 per cent range, compared with a 76 per cent primary approval rate in Australia. (2) We have a robust and exhaustive refugee determination process to ensure that genuine refugees are afforded Australia's protection as required under the Refugees Convention. This system includes the opportunity for people found not to be refugees to seek merits review of that decision by the Refugee Review Tribunal. All cases of failed asylum seekers are also assessed against my public interest intervention guidelines, which includes an assessment against the Convention Against Torture (CAT), the International Covenant on Civil and Political Rights (ICCPR) and the Convention on the Rights of the Child (CROC).21966(Question No. 1936)193621966Theophanous, Dr Andrew, MPDr TheophanousQJ4CalwellIND00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 5 September 2000: In reference to his “Meet the Press” media interview on 3 September 2000 and his dislike of the practice of photographs being taken in detention centres due to possible acts of retribution that may be taken against family members residing in the home country, why does he refuse accepted refugees from reuniting with their spouse and children, which gives rise to similar and more serious human rights threats to their families.21966Ruddock, 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: Separation from family members in these circumstances results from the decision of individuals to travel across the world and enter Australia unlawfully. It is not a decision of the Australian Government. The practice of protecting the privacy of individuals in detention has no bearing on Australian policy on family reunion for refugees who travel to Australia without authority. 21966(Question No. 1937)193721966Theophanous, Dr Andrew, MPDr TheophanousQJ4CalwellIND00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 5 September 2000: Given that the vast majority of the Kosovar refugees have been returned and the drastic circumstances of the 18 refugees remaining in detention in Australia, eight of whom are children, and all of whom come from Preshevo in Southern Serbia, which the UNHCR has reported cannot return to their home villages, will he immediately release these 18 refugees to the care of the Kosovar Community and support groups of Australia, pending further determination of their permanent residence status.21966Ruddock, 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: A small number of those Kosovars who were not allowed to make a further visa application, refused to go home. As unlawful non-citizens, they were taken into detention in accordance with the requirement of the Migration Act 1958. Thorough provisions are in place to monitor world developments to ensure that people are not removed from Australia where that would result in a breach of our international obligations. 21967(Question No. 1938)193821967Danby, Michael, MPMr DanbyWF6Melbourne PortsALP00 askedthe Minister representing the Minister for the Environment and Heritage, upon notice, on 5 September 2000: (1) What programs or grants administered by the Minister's Department provide assistance to people living in the electoral division of Melbourne Ports. (2) What was the level of funding provided through these programs or grants in (a) 1996-97, (b) 1997-98, (c) 1998-99 and (d) 1999-2000.21967Truss, Warren, MPMr TrussGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—The Minister for the Environment and Heritage has provided the following answer to the honourable member's question:The following table relates to particular grants that are being delivered to the electorate of Melbourne Ports:' PROGRAM/GRANT1996-971997-981998-991999-20002.5mFederation Cultural andHeritage ProjectsProgram (this was a oneoff program and is nowClosed)Commemoration of3,200Historic Events andFamous PersonsTax Incentive' for485,891Heritage Conservation(3 FinalScheme (from 1 JulyCertificates1999 this scheme wasvalued atConverted into an outlay$404,892,program and added into$74,706 &the Cultural Heritage$6,293Projects Program).issued toindividualtaxpayerswho areentitled toclaim a20% rebateon thevalue ofeach FinalCertificate)Coastcare12,15017,916Clean Seas25,00028,000Coastal and Marine5,100Planning*Bushcare - The15,000Sandringham RailwayCorridor SustainableManagement Project bythe City of Port Phillipon behalf of itself andtwo neighbouring urbancouncils)**Australian BiologicalResources StudyParticipatory ProgramDr M Duretto, Royal16,744Botanic GardensMelbourne - SystematicStudies of BoroniaDr T Entwisle, Royal11,4739,165Botanic Gardens,Melbourne - Taxonomicrevision ofBatrachospermalesDr T May, Royal Botanic30,00030,000Gardens, Melbourne -Catalogue andBibliography ofAustralian micofungiDr N Walsh, Royal4,000Botanic Gardens,Melbourne - Revision ofCentipeda (Asteraceae)in AustraliaDr J A Jeanes, Royal30,000Botanic Gardens,Melbourne This project was only partly in the electorate of Melbourne Ports. Grants under this program are to the organisation and to researchers who work there, not to individuals who live in the electorate.21968(Question No. 1939)193921968Danby, Michael, MPMr DanbyWF6Melbourne PortsALP00 asked the Minister for Sport and Tourism, upon notice, on 5 September 2000: (1) What was the level of funding provided through programs or grants administered by her Department to provide assistance to people living in the electoral division of Melbourne Ports in 1999-2000. (2) What level of funding provided through these programs or grants has been appropriated for 2000-01.21969Kelly, Jackie, MPMiss Jackie KellyGK6LindsayLPMinister for Sport and Tourism and Minister Assisting the Prime Minister for the Sydney 2000 Games10—The answer to the honourable member's question is as follows: (1) Nil. (2) The programs available are the Regional Tourism Program and the Regional Online Tourism Program. Only one application was received for the 1999-2000 funding round. No funding has been appropriated for the electorate of Melbourne Ports in 2000-01.21969(Question No. 1944)194421969Theophanous, Dr Andrew, MPDr TheophanousQJ4CalwellIND00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 6 September 2000: (1) What is the procedure for the determination of the refugee status of temporary protection visa holders after the three year period has concluded. (2) Will these genuine refugees be subject to another temporary visa, or be given permanent visa status. (3) If these refugees will be eligible for a permanent visa, (a) what specific process will be put in place for the provision of these visas and (b) will these refugees be required to go through the whole refugee determination process again.21969Ruddock, 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: (1) Under the Migration Act and Regulations, temporary protection visa (TPV) holders may apply for a permanent protection visa which will enable their protection needs to be assessed again. Once the relevant period has elapsed, a permanent protection visa may be granted to a TPV holder who still requires protection. (2) Legislation makes it clear that the protection visa is granted initially for a period of three years but that the TPV holder may be granted a permanent protection visa after the relevant period if they still need protection and meet the criteria. (3) All applications for a protection visa will be dealt with under Australia's protection visa process.21969(Question No. 1958)195821969Murphy, John, MPMr Murphy83DLoweALP00 asked the Minister for Immigration and Multicultural Affairs, upon notice, on 7 September 2000: (1) Further to the answer to question number 1655 (Hansard, 5 September 2000, page 18217) concerning former Senator Colston, did he exercise his power under subsection 488(2)(e) of the Migration Act 1958 to authorise a member of the Australian Federal Police (AFP) to perform for the purposes of law enforcement one or more of those actions in subsection 488(1) of the Act; if so, what were the particulars of that authority; if not, why not. (2) Is he able to say whether the movement records of former Senator Colstonis information relevant to the charge of defrauding the Commonwealth made against former Senator Colston. (3) Is he also able to say whether the movement records of former Senator Colston is information relevant to protecting the public revenue. (4) If he has not given an authority pursuant to subsection 488(2)(e), will he give such authority to a member of the AFP.21969Ruddock, 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: (1) I have exercised my power under subsection 488(2)(e) of the Migration Act 1958 to authorise certain members of the AFP to perform for the purposes of law enforcement one or more of those actions in subsection (1) of the Act. The authority covers the occupants of specific positions located in areas of the AFP where frequent checks of movement records are required as part of law enforcement activities, and there has been no specific authority given to the AFP in relation to former Senator Colston. (2) No. (3) No. (4) See response to (1).21970(Question No. 1962)196221970Brereton, Laurie, MPMr Brereton5T4Kingsford-SmithALP00 asked the Minister for Defence, upon notice, on 7 September 2000: (1) Does his Department have proposals to sell-off its extensive Bundock Street site in the electoral division of Kingsford-Smith. (2) Does the Bundock Street site include premises leased to The Children's Garden Rudolf Steiner School by his Department. (3) Is he aware of the very valuable educational role of this school and its reputation for excellence. (4) Is he able to say whether the school spent tens of thousands of dollars on the rehabilitation of the buildings it occupies and regularly spent further monies on extensive remediation of the surrounding land. (5) Did his Department commit itself to allow the school to continue in its premises as part of the proposed development of the Bundock Street site. (6) Did his Department indicate to the school that it would be offered a new lease so that it would not be left homeless and its existence not threatened by his Department's desire to sell off the Bundock Street site. (7) Has his Department reneged on its commitments and is now threatening the school with eviction upon expiry of its current lease on 31 December 2000. (8) Is he able to say whether the school council has been obliged to condemn his Departments statements concerning the Bundock Street site and the future of the School as generally misleading and in some instances completely false. (9) Is he aware that his Department's actions have caused enormous anxiety amongst the school community and threatens the school's viability and survival. (10) Will he intervene in this matter and ensure his Department does not force the closure of The Children's Garden Rudolf Steiner School.21970Moore, John, MPMr MooreEI4RyanLPMinister for Defence10—The answer to the honourable member's questions is as follows: (1) Yes. (2) Yes. (3) I am aware of the School and its activities. (4) Defence has not been advised of the total amount of money spent by the School on the buildings it occupies. Defence understands that the works were undertaken to refurbish the building and to cover contaminated material with landscaping. (5) No commitment has ever been given by Defence for the School to remain in its current location as part of the proposed development of the Bundock Street site. (6) A press release issued in October 1999 included an offer for the School to lease a different part of the site, anticipated to be adjacent to a proposed new community facility included in Defence's development application for the surplus land at Randwick. Prior to December 1999, it was expected that the site would be ready for development at the end of 2000. This will not occur, as there have been delays in progressing the disposal planning with the Randwick City Council. The offer was also dependent on the School providing a submission on its future plans and agreeing commercial terms. The School was informed in November 1999 that any such arrangement would be short term. (7) The School was advised in December 1999 that the current lease would not be renewed. There are contamination issues associated with the existing site and pre-disposal activities need to be undertaken. The School has been encouraged by Defence to address its future plans, but despite many requests from the Department, a submission was not provided until June 2000. The submission, which sought a 49 year lease, did not provide the information required by the Department and the School was advised of the inadequacy of the submission. In the meantime, there have been delays in relation to Randwick Council's consideration of Defence's development applications and the subsequent requirement for a site Masterplan. The opportunity to accommodate the School within the new development as originally envisaged has now passed. (8) I cannot comment on the views of the School Council. The Department of Defence has endeavoured to assist the School establish itself in the Randwick area and cannot be held responsible for the current predicament of the School. (9) See answer (8). (10) No. The Department is not responsible for the current situation.